On Assignment in Washington

Gilbert E. Metcalf, known as Gib to friends and colleagues, has traded in his syllabus and class assignments for life in the nation’s capitol, at least for now. The economics professor is serving as deputy assistant secretary for the environment and energy at the U.S. Treasury Department and is on leave from Tufts until September 2013.

Metcalf is no stranger to Washington. Because his academic work focuses on evaluating policies related to energy and climate change, he has often been asked to testify before Congress and has served as a consultant to a range of organizations.

As deputy assistant secretary, Metcalf took part in the climate negotiations in Durban, South Africa, last December, in which 194 countries participated. He led a U.S. Treasury team in negotiating the new Green Climate Fund, a program through which wealthy countries have promised to help poorer countries cut emissions and adapt to climate change, assisting with flood control, for example.

A Tufts faculty member for 17 years, Metcalf is also a research associate at the National Bureau of Economic Research and for MIT’s Joint Program on the Science and Policy of Global Change.

What do you do in your job at Treasury?

I oversee energy, climate and finance activities. For example, Treasury provides oversight for the United States’ involvement in two World Bank environmental trust funds. One is the Global Environment Facility, which helps developing countries address such problems as ocean pollution, climate change and land-use degradation. The other is the Climate Investment Fund, which finances clean energy and climate resilience investments in developing countries.

I am also involved through the Treasury Department in annual climate negotiations organized by the U.N. Framework Convention on Climate Change. We lead the U.S. effort to eliminate fossil fuel subsidies which were agreed to at the G-20 meetings in 2009. My office participates in reviews of proposed EPA regulations, as well as other domestic energy and carbon-related policy discussions within the administration.

In addition, we work closely with the World Bank and other multilateral development banks on their energy and environmental initiatives, including efforts to integrate development and environmental goals.

What is the federal government doing about climate change?

The administration is committed to international negotiations that result in reduced greenhouse emissions in developed and developing countries alike. In the end, however, each country on its own has to take responsibility for reducing emissions.

The administration has several proposals that will reduce emissions, while also cutting back on oil consumption and adding to our energy security. These include eliminating fossil fuel subsidies and carbon pricing—which could be achieved through a carbon levy as Australia is currently doing or a cap-and-trade system such as the Waxman-Markey Bill, which was debated in Congress in 2009. The administration has also proposed higher fuel economy standards for cars. In addition, we have offered a clean energy standard that would double the share of electricity from clean sources by 2035.

What was accomplished at the UN climate change summit that you attended in South Africa?

The summit established a platform for a future international agreement that could lead to significant emission reductions by both developed and developing countries. In addition, a plan was developed to establish a board to govern the Green Climate Fund, which will provide climate financing to poorer countries. We are pleased with the progress made on the fund in Durban, especially in the areas of private sector engagement and in establishing financial safeguards and standards for the fund. Private sector activity is critical because of the role it plays in financing clean energy internationally. Our discussions will continue in Qatar this December.

Was the Durban agreement good for the United States?

Greenhouse gas emissions are what economists call a “global externality,” meaning that greenhouse gas emissions anywhere in the world affect people everywhere in the world. The source of emissions is irrelevant for climate change. What matters is the concentration of gases in the atmosphere. For a global pollutant, it is essential to have all major emitters agree to reduce emissions.

The U.S. is committed to an agreement in which all major emitting countries take meaningful actions to reduce emissions. The Durban agreement is a small step towards bringing developing countries on board with that goal. That is important, given that China, which attended the conference, has now surpassed the United States as the leading CO₂ emitter in the world. The other major emitting countries are the United States, India, Russia and the European Union.

How will the Green Climate Fund be paid for during a time of global fiscal upheaval?

It is premature to talk about financing the Green Climate Fund. Much remains to be done before countries understand exactly how their contributions will be managed and when they will be prepared to pledge to the fund. If the design process for the Green Climate Fund proceeds in a way that gives us and other donor countries confidence that this will be a well-managed and effective fund, the United States and other donor countries will support it.

It is important to note that spending in the budget on environmental funds is not charity. These funds not only improve environmental quality; they also provide opportunities for U.S. companies to expand their businesses abroad and save us money in the future. A World Bank and U.S. Geological Survey study estimates that every dollar spent on disaster preparedness saves seven dollars in response funding. Climate funding will provide for just the sort of disaster preparedness that this study envisions.

What of your government experience will you bring to bear on your teaching at Tufts?

Tufts has a strong tradition of supporting active citizenship. I firmly believe in the concept and have always tried to stress how academics can contribute to constructive citizen engagement. For me, serving in government is simply another way to demonstrate the link between academics and active citizenship. I have the opportunity to apply the principles of economics in government policy discussions. Economic considerations are just one of a number of factors that go into policy decisions, but there are many opportunities to use good economics to improve policy initiatives without sacrificing other objectives.

Having taught classes on the economics of energy markets and on climate policy, I now have a deeper and more nuanced understanding of many of these issues, which should enliven classroom discussions. I also have a growing list of research questions that should provide opportunities for students to pursue their own work, either through classroom research projects or senior theses.

Marjorie Howard can be reached at marjorie.howard@tufts.edu.