information sharing and data breach notification. additional safeguards to ensure the american public has its privacy and civil liberties protected. to provide for increased information sharing among government entities, and between the government and the private sector. we are hoping the momentum in intowill carry forward 2015 inch we will have progress. it will set us up for increased success. stakeholders,her i will say that twice because there are two more. number one, we talked about the federal government, but there are also state and local entities. at the economic council we participated with governor mcauliffe at an event where the state of virginia announced they would be the first state to mandate that state agencies

would begin accepting chip and transactions. that they would actively, and grow so the issue such cards moving forward. layers ofut a multi our system and how retail transaction at all those layers can be more secure coming forward. local -- inis in other states and entities, we put out a guidebook of sorts, tot part this is, to guide state and local entities so they can work more aggressively and actively to do what other states are doing and issue chip and pin protected cards. i encourage you to go to gsa's website and see how they suggest to follow suit and address transactions more securely. stakeholder, i will do

in my closing. i will close by saying, i think we are at a strategic point. we are positioned for success moving forward with all of the people in the room, and the panel, and the private sector, various government agencies and other entities in the past year. but there is a lot of work that needs to be done. nothing is a silver bullet. puzzled. pieces of the the last thing is the american consumer. thecourage we include american consumer in the conversation. not just how they should start using the chip on their card but managementty threat looks like moving forward. how to move past the password of identity future protection looks like for all of us. thank you. [applause]

berwin: we have an outstanding panel today. are not necessarily going to speak in the order of lined up here. i will ask them to nod as i introduce them and we will get started. is with, lou garner who merchants advisory group. , senior vice president

and senior legislative counsel for the american bankers association. team of ansumer issue member of the national consumers --gue, the vice president of and the president of the american consumer institute. i have had the pleasure of working for many years with both john and steve on a whole host of consumer issues. it is wonderful to have them here to join me. first off, i would like to call on liz to talk to us and explain what retailers are doing to better protect consumers. liz: thank you for having us today. to start, i would like to engage many people how

know how many mastercard's have two compromised in the last years? how many people could name a big retailer or big bank to is been compromised in the last two years? what i hear on the panel. it is our members and our brand who are at stake. it is our relationship with our customer. paramount toata is the community. it is something all of our people take seriously. are thect members finance and treasury professionals. i can tell you that came in security is the number one issue for us. the brand damage and customer service issues like a bank faces. in the wake of a data breach.

here are a couple things we are doing. technologies at market. we're going to talk a lot about emb today. andothers are tokenization and corruption. tokenization masks data. data out of the scope. if it is stolen, it makes it unusable. and corruption is when you protect data in transit. when i swipe a card at my neighborhood grocery store, it goes out through my merchant. goes to the issuing bank and then it goes back to the merchant point of sale. that is not even talking about some of the new transactions. mobile carriers, apple on my and dried, samsung,

someone else who is also going to touch the data. protecting it all the way through the transaction is critical. encryptionn and together. when i talk about tokenization i am not talking about an off-the-shelf brand. i am talking about our own proprietary tokenization that several members have been using. we are all-inclusive. not just credit and debit cards. retail gift cards. those are two of the security technologies we are very focused on employee. emc is the one everybody is focused on. what is emv? european visa mastercard. the computer chip on a card that

helps event against counterfeit fraud on the card. it makes it more difficult or me as a eve to re-create this versus the old mastercard's we still use today. the important thing is this card-present counterfeit fraud. we are the last country in the industrialized world to go there. one,ve the date, over 2015. date, october 1, 2015. i think, if we look at some of the global deployment numbers, it is interesting that worldwide. aboutoption rate is 40-50%, on the merchant side, i

, it ist up the means closer to 80-90%. we're likely to see the same trend in the united states. merchants are more likely to adopt the card if it will reach.e their only one in 10 cards right now americanip that are in consumer wallets. we're close to october 1 now. what does it mean for consumers date?e hit the october 1 some businesses will be ready to accept the cards. some will be able to use it. some businesses will not. i want to go into a few reasons why. it is not for lack of trying. i talked to one of my large consumers yesterday that has not

certified they can accept the cards. he cannot roll out emv acceptance and till it is tested. one reason we are lagging behind is this is a global specification. there are a few card brands that govern the acceptance. one thing we saw was a technology delay, whereby in the united states we have debit domestic cards networks. on the side of the machine you see, halls, star, those kinds of groups. pulse, star, etc. the timeline for technology

deployment even for a simple , processor, everybody has to test and certify it is safe and secure for the consumer to use these product's. we want to make sure it works smoothly for anyone coming into the store. be there october 1 across the board, but we are going to be moving in that direct and. some people ask me, will all merchants employee emv? we have to ask, what is the method? there is a huge benefit to merchants if they can employee this. we are thrilled with the white house initiative. said.llion cards, marissa that is fantastic to already be there. athave that many cards out market. the challenge to get terminals

, i think it is great the government is making such great headway there. i have a friend at the state department who is one of the credit cards. she was excited to get a because she travels in eastern europe all the time and it's a -- and has had trouble using her government cards. we are moving in the right direction. one of the challenges in the united states is we are not a 10 --nd only the chip and we are not adopting the chip and in technology. cardve roadmaps from major brands. there has been more concentrated networks and market share in signature versus penn.

on the issuer's side, as a business, i am very sensitive to the argument that putting a password on one of these cards might make it a little it more friction when i will that card out as a consumer. as a business, i am going to be worried. on the flip side, i question how that risk? that is a business driven decision, not a security driven decision. two-factor authorization is the way to go to increase security for card holders. as someone who is had my phone swiped, not password-protected, i will never not password this again. apple gives me the ability that i have to enter a password to use his.

side, not putting passwords on these products is doing them to service. i mentioned before, we are the last industrialized country to cards.ward chip and pin one of the benefits is we have technology than others. the ability to accept pin numbers online. that is a great feature that several of my members have deployed. if there are pins on these cards, that will help reduce e-commerce fraud. e-commerce fraud is one of the most fastest growing frauds. of fraud.a lot on the merchant side, we're bearing somewhere between 70% and 100% of all that fraud. protectinge --

e-commerce transactions is paramount. aboutst thing i will say pins, you have a chart there from the study that came out last week. look at the fraud loss line. that shows you why we prefer pin in the industry. times more-eight secure if you have a pen-protected transaction. pin-protected transaction. look at the interchange regulators. i would push back significantly that if there is any other rationale behind merchants , we need to be pin-protecting,

password-protecting products. so that we can better protect consumers and businesses from fraud. australia launched a pin campaign that was run by all the to move tobrands pins on credit cards. they did it in a thoughtful way. based on the risk of the transaction. there is a very egg difference we twain a stop in to a mcdonald's or wednesdays at noon on friday the in the areas at noon on friday. if i am borrowing -- buying a or dollars worth of foods, -- admin0, but at noon night or 1:00 a.m., i might want to ask for identification and of there is not a in on that

product i cannot do that for pin -- if there is not a number on that product, i cannot do that. we need to take the technology one step further and pin-protected. we are going to move to bill who will talk about the financial services industry from the american bankers association. talk about your perspective. thank you, bill. bill: thank you for inviting me. impressives is in turnout. i do not know if it is the free lunch, but i am and pressed that you are out here on august recess. your openingl you, remarks weren't terrific. marissa, yours were magnificent. the stage for the talk.

information sharing is huge for us. we appreciate the work at the white house has done. throughrying to get it the senate. you have been very concerned. we agree information sharing is another side to the coin. the most important part is sharing threat information. wereyour arguments terrific. your analogy to late-night transactions, if there is any transaction that is after 10:00 at night that involves me, it is an inherently suspicious because i am in bed by 10 :00. i would appreciate getting a call from my credit card company to tell me about that. i had a recent experience that involved -- that did not involve eight in number at all. it involved a card of a major brand headquartered and

virginia, if you're listening. i had a nice little lunch. i took out my son who is an intern at the american bankers association. and quiet lunch at a restaurant. not a big ticket item. enjoyment of having a conversation with my son, you know with teenagers at does not happen very often. i left an excessive tip, which was over 20%. the next thing that happened was that my institution sent me an e-mail asking me if that was me doing the transaction and looking at the fact that it was in excess of 20%. i think it is my point overall, and i can look up my remarks and we can have added, that the talk pin is the talk about a multisector environment. and ands not the be-all

all of everything. there is technology right now, aometrics that authenticate transaction that is in place that quite frankly, are better than static technology such as pins. call from your institution, almost immediately after a transaction asking if it is fraudulent or not, that is pretty darn good work. we do not want to sit back and just say, if we put in place a four-digit number that will solve all the problems. deal with does not the online transactions. we have got to work together to solve these transactions. we want to work with you, we want to work with consumers. we want to make emv a success. we want to continue to evolve our technology. you have to realize that our

credit market is one of the most complicated and extensive markets and the world. a couple of facts. 1.1 billion credit and debit rightare in circulation now. 1.1 billion. the government noticed, good progress with chip and pin. the government is a huge operation, but it is not like the private sector. of credit cards was .early $5.4 trillion in 2014 the number of card transactions was over 100 billion in 20 14. in 2014. folks, this is a big aircraft carrier. it takes a long time. mentioned, there is an inflection point we are dealing with. i have heard various reports about how many chips have been merchants.e by

from our perspective, from the banks, by the end of this year, there will be 600 million, maybe even more of these cards that have been issued. work with ourcan partners in the merchant community and the consumer sector, we may be able to cover most of the cards out there by the end of 2017. it will take a lot of work. cooperation. if we can continue to have these conversations, we can work towards that goal. i do not need to go into a lot of the migration. there has been a lot of work behind the scenes, between the networks to put into place a uniform date for when this chip pin liability occurs. but it is not a deadline. it is a position point for when the shift occurs. it does not mean that to every

bank has got to issue that kind of card. but it it -- but it encourages the right thing. we want to in sent people -- we incent people to do this. we don't want to encourage -- technology. we need to work together to solve the problem. >> thank you very much, bill. we are going to move from the industry perspective to the consumer perspective. john, with the national consumers league, tell us some of your thoughts about the consumer advocate perspective. quick baseline. mcl is the nation's oldest consumer advocacy organization. around a long time.

the issue we are seeing here is, olde shift away from the magnetic stripe technology to emv, it is a more secure technology. chip and signature, is it as and pin? chip not in our view. that is because of the way you authenticate a cardholder. that said, it is a significant improvement in card security versus traditional men neighbor stripe only -- versus traditional magnetic stripe only. physical cardyour and someone takes your card into a retailer to try to use it, in would and pin world that

be practically impossible, although there certainly are, and we just saw this morning, a writer talked about new skimming technology coming out of mexico that may make chip cards more vulnerable than we previously suspected. emv.e moving to i do not think there is any question that is happening. there are millions of these cards that are being provided to consumers. this is something consumers are going to get used to having in their wallet. going to be the silver bullet against fraud. we have seen it in the u.k.. much of the fraud that was associated previously with card duplication or card content fitting, instead moved to card not present fraud.

that is online fraud. consumers are going to have to maintain vigilance. we are going to continue to have to recommend to consumers they pay attention to their credit card statements, flag any suspicious charges, so that certainly that is one area we expect to see based on international experience. on the legislative side, i am glad you raised this earlier in your remarks. this is an area that despite the technology advances we are seeing in the industry, there remains a very strong need for baseline security legislation from the u.s. congress. billas supported a provided by senator leahy. a bill that will soon be introduced. we think that is a bill which not only provides baseline security protections that would

require all businesses to adhere to a certain level of data security protection, but also provides a standard that raises as opposed to looking for a least common denominator approach that would reduce consumer protections. we are going to be supporting a thatill in illinois strengthens their existing security data legislation. look to states like illinois and massachusetts as templates for good security or texans that could be considered as a national template. concerned about with regards to getting back to tail ofssue is the long small businesses. many of the largest retailers will be implementing chip and able to terminals.

-enabled terminals. places, they are already turning on the chip technology. thismentioned earlier, will take a while. consumers should not expect that by october 1 their cards will be secure when they go to their local retailer. forthey should look retailers that have the chip turned on. that will take consumer education to make consumers understand why chips are a better way to pay. the benefits the chip technology brings. but they will also continue to stripe. gas stations, for example, their terminals will subject to liability until the end of 2017.

in addition to that, you are going to have many small businesses that simply are going to make the decision their liability for fraud is not enough to outweigh the substantial cost of acquiring a new payment terminal. we will continue to see small stores continue to take mag foreseeablethe future. in closing, we are glad to see emv rolling out. we do think it is more secure, but it is not the silver bullet. i think the federal government can lead by example here in a. more secureng payment technology. we are happy to be here. thank you for inviting us to speak on this important issue. one quick plug, if you are

interested in consumer data security issues, we have just launched a new publication called our data insecurity links that will include thank you john.icles about>> steve, you are up. stephen: thank you very much for inviting me. i am president of the american consumer institute. we are in educational research institute. it is a pleasure to be here. havee just -- i think we heard a good baseline here for this discussion. i just want to emphasize a few point and then add in a few new ones. this will be pretty brief. there are a lot of statistics that have been used out here about how bad things have been last year and the are before that. some of the statistics, like one

third of americans had their information compromised. there was another one it was somewhere between 40% and 45% of companies had data breaches in the last year. i mean the importance of this issue can't be overlooked. we're talking about the need for better security for better protection against data breaches. and herenk fraud -- with the signature still in place, we are talking about reducing forgery if we can move nowards a pen system -- pi system. i think it is so important that we talk about building confidence between consumers and credit card companies. i think we are just a little bit out of sync here when we are taking an incremental step inwards adding the pain -- p but still leaving a signature in place, when after all we could have, in that instance, asked

merchants to change out their point-of-sale terminal. we're talking about a technology that has been in use for over 10 years. all the major economies in europe and parts of south america and other places, they use the technology. they have the technology. there are studies that show reduction in fraud that resulted from that, but still we are relying on signatures. we are relying on this 1970's technology. it is kind of -- why are we doing that? if we are just going to make the increment. , why don't we just put in what works today. we have issues and still with online, we want to make sure we have the multi factor on -- authentication. but now we are taking the step of having merchants put something in place that is already out of date. to me that is the why? why are we doing this?

i'm at a little bit of a loss. some explanations i am hearing are that the major merchants in the u.s., which will soon be put they areome october, potentially facing higher cost. we have consumers potentially at risk because of these data breaches with their personal information being identified. but to me the credit card companies themselves are not taking as much of the risk. what we see here is the fact that the signature system allows them to take a higher transaction fee than the pin system does. if you look over in europe where they are able to do this, there is more competition in these systems. and that goes with a lower transaction fee. if you look at the difference between the signature fee -- the transaction fee versus the signature fee, that represents a

segment of market power. that is our -- that is what it represents. let's look back at some of the major breaches. pins been required on the current magnetic stripe systems that we have, they would hinder of seeds to monetize these stolen cards. and that would make these cards lest -- less valuable. we are talking about the breaches that happen in target. if you think about acs as running their own business, what you want to do -- acs -- a thief, you want to raise your margin cost. the end of that is fraud. it is as simple as that, but we are not moving towards that. i think what we are heading towards is market failure.

if you look at the transaction fee for the signature versus the chip, if you look at that, that represents market power. just speaksfailure to the need for a remedy to address. ieves will be smarter in the future and we will always need something new in place, but right now we have something better and we are not taking that step. we are still sitting around with that 1970's technology. that's a shame. because it is going to require the merchants to go out and get another terminal down the road, and most of these firms -- 80% of them have one employee or less. essentially, many of these are proprietors. so what we are doing is we're adding cost instead of trying to impose the cost on the cease -- thief. that is something that needs to change. , and thank youu

to all the panelists. a couple of out great issues here. there are a few i want to get back to. and that is the issue of online transactions. i heard john and steve bring it up, you mentioned that chips and should be used for online transactions. so i was wondering if you could just expand on that a bit. you even mentioned mobile transactions as well. >> i think it comes back to the point of, we are such late adopters of emv. why are we such late adopters? there are movements online to adopt pins over the internet. that is one consumer protection we could put in.

as john pointed out, we could see an uptick. some large margins are able to solve for that. their business is inherent upon solving for that. r&d are putting their own into coming up with their own transaction monitoring. but there are so many small businesses that are really disadvantaged here if they don't have the wherewithal to find their own means to protect data better. whereas there is a solution they can go by where they can protect internet trends -- transactions. i think it was back to what steve with saying about issuing emv without pins is a very incremental step. it does not make sense here in the u.s.. i want to point out one thing. merchant terminals, because chip and pin is a universal standard, they all have that spot -- chip

spot most merchants who are using this terminals could accept chips tomorrow. it is more so the technology. you have to get in the recent queue. -- resource to -- i think the challenge we are facing here is, fraud is going to reduced -- to be reduced by so much, and are we creating a false sense of consumer confidence? debra: there's another consumer concern i have heard, and that is consumers would have a tough time remembering a four digit pin. cardl have our money atm

with a four digit pin number, and i am wondering if anybody wants to talk about that. steve? just one thing. there was a study a few years ago that said consumers on remember eight pin numbers. it's hard for me to understand why that would be an obstacle to be able to function. people do it today. i going to my garage door and i put my number in, otherwise i don't get into my house. this would be a two factor step that i think is crucial. i don't think consumers are stupid enough that they care over that number. i don't see that as a roadblock. >> alloway and here too. i think it is important for us

to work together. data shows that combined we do bear probably 90% of the costs out there. i think information sharing has been key and we have made great strides. the federal government is doing great things as well. want to appear to rigid on pins, but you brought it up as a static data point and i think as we are talking about it, it is one of the best means of two factor cardholder authentication out there today. point is the little cdb code on the back of my credit card. if somebody steals this they can it.ut and use they don't know the pain i have in my head. that would be very strange.

i think there are other forms of multifactor authentication. that is one of them. also you can easily lift a finger can -- fingerprint. that's a little more difficult, but i think we need to see how biometrics are going to scan out. again, i can lift it off as i touched with my fingerprint. there is some security there but it is not finite. i want to be reasonable here. if your issuer thinks tore is a better technology authenticate a cardholder in you are willing to put them forward at atms, i think we would definitely want to work with you in a blessing that. >> there's a lot here. i have to say, i had to step back from it. we agree with you on the need for data protection legislation. , don't know all the specifics

but i know it has a strong data protection standard. we in the financial industry are very much supportive of that sort of thing. that is why we, quite frankly, have been strong supporters of the bill in the house and also the blood bill in the senate. they do have strong data protection standards and attempts to raise people up to relatively the same level of protection of data. that if we all got together on some sort of legislation that would do that, i think we would all be better off. to you that our industry is willing to work with you on that, and hopefully we can work with the merchants and consumers on legislation that deals with that. the other things -- the other thing on pins, it's really interesting. what they are-

trying to do is really get at most of the fraud that is going on today, which is counterfeit cards. the pin would deal with a certain segment -- a declining area -- of fraud. what we are dealing with has nothing to do with pins. it was because they did not protect their systems. they did not protect their back doors. it was their system for protecting their data and how they store their data that was the problem. two source of analogizing that analogize to sort of that the pin would have somehow alleviated that is misunderstanding the situation. in fact i understand that some data was-- pin compromised, and with some of get your pin, a have the keys to the system. if somebody opens your mind and

, you are in a world of trouble. we are trying to deal with majority fraud. lines of,ned on that's great. we love to see those products come forward. it is all part of an overall thing. i am not here to promote any specific technology as the silver bullet. i'm here to say to you, we'll have to work together on multifactor -- all kinds of different, evolving technologies. encryption, tokenization. we are looking at a tree, we are not looking at the forest. pins looking at pens -- as a single tree. all of the other forest is all the other technology going out -- going on out there. i pledge to you, i would like to work with you. why don't we do it. here first. it

and mentioned, tokenization encryption. john: i appreciate you talking about the other bills that have been proposed. i think when we talk about data security -- this panel is focused on card security. we also have to really steve's point earlier about the economics of fraud. fraudsters tend to look for low hanging fruit. will raise their marginal costs. there is no doubt about that. i think we already see fraudsters starting to look at other sectors of information they can sell. medical information, for example, is one where those credentials go perform are -- go for far more on the online dark market and credit card

information. that is because fraudsters understand that credit card credentials are protected by a layer upon layer of bank and retailer protection. and actually turning those card credentials into merchandise that they can resell is becoming harder. but things like medical information, information necessary to connect -- commit tax id fraud, those are all information that are still very viable for fraudsters. my point in mentioning that is that i don't want the debate over emv and card security to hold up data security legislation that addresses in an important way all of the vulnerabilities that businesses and the government in the u.s. have. i think a good first step is going to be a comprehensive law from congress that says, you reasonable data

security. i think that as a baseline we can all agree on. you need to have strong enforcement of that from the federal trade commission, for example, which has done an amazing job on this. i think with more tools and more authority it helps many consumers. unfortunately i think the payment issue is one that we tend to get hung up on and it has prevented some very necessary reform. important.s are i think we will probably get some significant disagreement about preemption and what defines pii. >> strong enforcement will take care of that wanted? i think if we want a national standard, that's fine. let's have a meaningful national standard like we have in place states like california, rather than try to reduce existing protections to it -- to a lowest common denominator.

>> certainly agree with you on that. john: we are in agreement on that. a consumer advocates and the banking industry coming together. consumern't resist -- education is going to play a huge role in all of this. the administration and the federal trade commission have done a great job on this, but i think more resources put in to this. liz, as a nagging consumer advocate, i have to caution you about flashing your credit card on c-span like that. please. that quick i just provide a personal note on flashing your credit card numbers? i guess i'm going to jump in any way. my wife took our car to the

local car repair shop, and again, my famous undisclosed virginia headquarters card was used in a transaction. a trusted merchant. we really love these guys. they do a great job. we sent our cars every year. but, one glitch. my card, unbeknownst to me, someone had taken a picture of my card with their phone, posted it online, and within four hours my information was being used to try to buy a tv in boca raton, florida. my card company called me almost immediately to say they stopped the transaction. i lived inhat virginia and i wasn't in boca raton. they stopped the transaction. that is how sophisticated the single are.

you are taking this right off of the card. that is really dangerous stuff. we need to work together to try to work on that stuff and spot is. and that is why all of these technologies that you are talking about needed to be put in place. tally tosome increment some of the stuff -- incrementality, but we have to work together to get there in the end. thank you all for this great interaction and discussion. in a moment to move to all of your questions. before we do move, i think it is great that we have agreements for cooperative working together. many of our panelists here. . just want to sum things up what i've heard is that most of our panelists have agreed that chip and pin is a better layer of protection for credit card

security, while it is not going to guarantee that there will be no fraud moving forward for consumers, it certainly is a better layer of protection than chip and signature. >> i did not say that. >> i said most. i will allow you to take exception. but i did say most. i know bill is the exception. but most of our panelists did agree that they are a better layer of protection for consumers. with that said, we will move no to questions from all of you for our panelists. going to push back on this pin numbers and issue.

it seems to me that you are comparing apples to oranges. authenticated when they are put in a device. time,ures, 99.9% of the my signature is not checked. not using a machine. i am at a point of sale with a human being. compare if they just check the signature, would it really be that much work? now you are actually a human being standing in front of them, who might have somehow still in the pen. >> why don't they check your license? that happens to me. i'll tell you again, 90% of the time, they don't check. that -- answer

that as the emergent representative on the panel. i would agree, signatures are worthless. they are very easily counterfeited. collect a reason we them, and that is because we get charged back transactions from callss if the cardholder their bank and says we think that this is a fraudulent transaction. we have to show receipts. records of that signature for that process. again, signatures are easy to captivate. it is not a good form of two factor authentication. yes, something that only the cardholder knows, like a pin, is much much better. also there are card network rules, that in the past have been, i, as a merchant, should not decline that sale. if i do, i can be penalized for that.

rationale for merchants who historically have challenges with signature capture. add onto that, speaking as a consumer advocate, i really don't think signature is an authentication method at all. , it is simplyed my signature agreeing to pay my bank back for what i bought from a retailer. i really don't think that the signature is an adequate of -- authentication method. issuersthat for many there is a very significant percentage of purchases that they never required signatures at all. if you have ever purchased a hamburger for mcdonald's with your credit card, they don't require you to sign. if it is below a certain dollar amount. there is a huge percentage of purchases, that just because of card network rules, they don't

require any authentication whatsoever. be thing i guess you should -- we should be asking ourselves, is is a pin is somewhat better than a signature , why doesn't the industry have any incentive to innovate? it would seem like it would be a very simple thing to incorporate. and of course we always hear s arethe way that thieve getting smarter from year-to-year -- once we figure out they will come up with another way of breaking this. but the issue there is, the best thing -- why don't we get the .est thing we have in place now instead what i'm hearing sometimes is well, let's just wait and eventually we will get there. dragging ours just feet and pushing the costs to someone else. >> what are you saying?

, we for our members visually provide liability for consumers. we bear the costs of unauthorized transactions. thatiz mentioned that fact they require a signature in order to protect themselves from that. our members are actually paying for all this and holding the consumers harmless. involved in data breach of, or even just a normal round of fraud, we are highly motivated, highly motivated, to protect and make consumers hold. all -- whole.mers expense toare any protect consumers. they are our lifeblood. it is in our interest. we are trying to work on a variety of different areas, and the pin keeps getting mentioned as the ultimate issue. >> that liability shifts in october right? >> which is going to provide an

incentive for people to beef up their security. >> i direct you back to the chart. onk at the fraud losses regulated versus unregulated. less onsses are much unregulated data. question right here from jason. >> thanks very much. congratulations on a great forum. oxman from eta, felix ran -- the electronic transactions association. of ther the benefit audience, i just wanted to mention something that i think is helpful for understanding why chip and pin are often talked about in the same sentence. steve alluded to this.

ever also the world, particularly in europe, where we mostost related with -- familiar with, when the chip was introduced 20 years ago, it came with a pen -- pin. i think it obvious question is why. why is chip and pin implement it in your objective anyone who has traveled to europe and sat in a cafe and rome -- in rome and had the terminal run out to them knows that. it is actually a telecom reason. john and debbie and i will appreciate it. was a first and lamented 20 years ago in europe, it was the first and of electronic authentication of credit card transactions. whereas in the u.s., our implementation of electronic authorization of credit card transactions was with a magnetic stripe. the technology that was in the cassette tapes that is also 40 years old.

in europe they do not have the telecom infrastructure that we have in the u.s.. so that authorization of transactions and europe actually does not take place online. it takes place on the device. here in the u.s., every time you that -- swipe your card, car transmission goes to the network for authorization, and it is done online. there is actually a real-time authorization that takes place. your card issuer sends a murder -- message back to the merchant. in europe they don't have the infrastructure, so they can't authorize it on the network. they needed to develop a technology that would allow the transaction to be authorized on or device, on the handheld emergence located terminal. that is where chip and pin came in. the pin is actually authorized terminal,dit card which says yes or no on behalf of the issuer. deployedpin are

outside of the u.s. because that is the only way to authorize the transaction. here in the u.s. we do it without that because it is actually authorized online. i thought the history was kind of important. again, it's not an answer as to whether pin is great or only kind of grate. but i do think that history is important, as it explains why we can deploy a chip without a pen and stillthout a pin offers a transaction. great point. i do want to make one clarification on that. cut -- keep going, i'm loving it. >> that was absolutely the case in france. that was a problem. out,the u.k. rolled it they did the type of transaction that we are doing in the u.s.. thats not entirely

communication with the terminal. it was more of an online based transaction. there is historical reference for the type of technology that we are talking about here. because the telecommunications had been built up in europe by the 2000. but i think you are right. historically that is why it was rolled out that way by other people who adopted chip and pin prior to that type of transaction. there is an international precedents for that. >> and that raises another interesting question that comes back to what steve said. sorry to monopolize. >> that will be the final note on this. that merges meant in the u k and france, throughout europe, deployed in pads -- pin pads. here in the u.s. one of the publications is that there are met -- millions of merchants

who don't have those pads because they did not need them stripe was deployed. we are accustomed to getting our card to the waiter and they go out back. we don't have a device presented to us with a pin pad the way they do in europe. >> thank you. >> right here, question. >> lillian county policy director. i had a question about smartphone and credit transactions. if they have the same protections that are provided for a physical credit card or if the transaction is protected by existing law. do these transactions meet that october first deadline? >> which one of our panelists would like to go on? >> actually, i apologize. i did not actually hear the first part of your question.

could you repeat it? >> wait for the mike. -- mic. to know if smartphone enabled transactions are covered under the current limit, if there is some compromise to that system. the second part of the question is are these transactions perfect -- protected by current law? and if so, which law? and do these transactions meet the october 1 deadline? >> yes they are protected by current law. whatever current law applies to the online world applies to these. we could talk about it all morning. there are a whole bunch of laws. transaction,cial basically there are different methods of doing it but

certainly all different laws apply to these transactions. the liability shift is really private sector education. people have different views on that, but that is really just kind of a network rule that we work out in the private sector. that is not a mandated federal role. >> i will also weigh in. the financial product that is taking place -- one thing from the liability shift i will point out is that merchants are encouraged to accept those transactions as part of the emv liability shift. basically the roadmap on emv liability has asked merchants to on any ofcifications the cards that are loaded onto the phone. >> i would just add, whether consumers are using a mobile or the card itself, i would say

that if you detect fraud on there, the same advice applies. they are still protected. even if you just got apple pay and you loaded up your credit card on to that, that still does not mean you should not be checking your credit card and disputing potentially fraudulent charges that may have happened through that system. >> thank you. >> right here in front? >> hi, dave from politico. i wonder if i can ask a question to the opponents of chip and pin. againstat pin protects stolen card fraud, where is the study comparing the cost of pin implementation throughout the entire retailer and credit card processing systems against the fraud it would offset?

study, the lack of that how can you be so certain in your advocacy? >> i have -- i think in my opening remarks i mentioned that chip enabled cards are certainly acceptable for consumers. they are a significant step forward, and it does address much of the frauds that occurs due to counterfeiting today. pinsv, but what about specifically? >> does liz have the data? liz: i would look at the federal reserve study on debit. iny came out with a study 2013. issuers are covered by regulation ii's. it shows that the basis point on thanre significantly lower

signature overall. i think it is something like 11 to 3. why we need to work together more, is that is born predominantly by issuers and merchants. the pin debit fraud is more the issuer side. the signature debit card fraud, 6040 is shared, is about -- 60/40 issuer merchants. but overall, the fraud share is about 60/40. thatyou drill down into number, the fraud losses total are much lower. i think it is very telling as

far as how little fraud losses there are on pin debit. -- where you still is the data point to say that the pain is actually worth the money that it will cost the is actuallypin worth the cost? >> what you mean? >> because it takes money to implement terminals, none of these things are free. >> most merchants are already programmed to accept pins. i started work for the grocery industry, where 40% of those transactions are pin already. losses as much as you can on that transaction, those numbers are absolutely there.

and verticals may be slower adopters. case in point, quick service in -- havehave not not been quick adopters of pins because they are such low incidences of fraud. to date several merchants have been looking at other technology. people set in the audience that pins are part of solving the problem, but encryption is also a very important technology for protecting the ecosystem overall. you are looking at all of these factors, of how can i make the best system possible and how can i accept the most secure transactions in my environments? that most secure environment is a pin. some dataally do have

we would like to share with you, talking about the cost and benefit analysis on this whole thing. again, you have to remember that stolen card fraud is a declining part of the problem. i'll jump in here for a second. i'm just trying to stay out of the battle on this one. have made a specific preference for pin enabled cards. it goes back to what one of the panelists said, at the moment what will most secure the american consumer on individual transactions. that said, we are actively looking at our own transactions and looking at the agency to say, well, what are the next generation of enhanced security features? what more should we be doing now

recognizing that we are a little bit behind the game? , everyoneds to emv else has adopted it ahead of us. we need to catch up on that and to do more on encryption, on other forms of multifactor authentication. other things that are already out there. mastercard announced they were going to do something on biometrics, visa said they were going to do tokenization. amex said they were going to do multifactor authentication. i know that the pin is the focus. everybody, especially with october 1 on the horizon, but i do want to step up back. ok that's october 1, what happens in a year? what happens in five years? we don't just want to catch up with where the europeans were 20 years ago. we want to make sure we continue to be the american innovators that take that next step. it goes back to something i

mentioned in my opening remarks. i do think it is about how we can -- how we include the consumer in understanding identity theft and identity management. it is the pin, it is a biometric, it is multifactor. we know we should not be using passwords anymore. i just wants to get the group to take a moment to step back, especially because i think that means i got the last word. >> i think that is a wonderful last word to end on. it is all about the consumer and protecting the consumer. they do so much for being here today. thank you to our panelists. [applause] [indiscernible] john date reverend reverend bryant talks about race in america.

it is live at 1:00 p.m. eastern from the national press club, here on c-span. today book tv is live with a discussion on the 50th anniversary of the voting rights berman.h author ari he talks about his book "give us strugglet," the modern for voting rights in america. it is light at two -- 7:00 p.m. eastern on c-span two. >> this sunday night on cuba day, antiwar activist phyllis dennis on international relations since 9/11. >> who is isis, what are their origins, why are they so violent? i addressed this in the book, but what i think is more important because it is something we can do something about is, what is the u.s. policy regarding isis?

why isn't it working? can we really go to war against terrorism? are we doing the war wrong, or is it wrong to say there should be a war against terrorism at all? i think those are the questions that are the most important and would be the most useful. aboutday night at it eastern and pacific, on c-span q&a. >> next, the head of the environmental reduction agency, the mccarthy, on the obama administrations standards for reducing greenhouse gas administration -- in missions for states and utilities. this 45 minute event was hosted by the nonprofit group resources for the future. gentlemen, welcome to resources for the future. and i and ray kopp the codirector of our center for energy and climate economics.

today we are honored by the presence of epa administrator gina mccarthy. i think this is her first public appearance since the white house ceremony one week ago. they can bury much, administrator, for sending today. .ust a few quick words i know some of you know is quite well, but maybe there are some folks in the audience who are not familiar with us. we are an organization based on high-quality research with the onective of focusing that energy, natural resources, and environmental policy. as many as you know, we are not an advocacy organization. we are also not cheerleaders for any particular policy or point of view. provide the best scholarly research to the policy community so it can develop the most efficient, efficacious, affordable public policies possible. we have been doing that i think for a little bit more than 60 years now. we have some history in that.

to climate change, we have quite a long history on climate change. over the last two decades, perhaps little more than that, at the federal level we have investigated just about every possible regulatory program that has come down the pipe for controlling greenhouse gas emissions. like many of you in the audience, we did cap and trade. we worked on clean electricity standards. we worked on carbon taxes. at the state level, where a lot of work has been undertaken, we had it -- seven 30 major roles with-- pretty major roles rege, and then internationally we have been heavily involved with the european union. there cap and trade program. we are currently involved with china.

and we are currently working with mexico as they undertake their major energy reform. they are putting in place some fairly substantial and very innovative policies. importantly though, i think for beenast four years we have studying greenhouse gas regulations under the clean air act. we have been doing a pretty intensely. one of the things that i draw the conclusion from that -- and i think most of the stuff that works on the clean air act does, is that the clean power plan, in , is likely them most significant development in u.s. history with respect to climate change. i don't think any of us believe otherwise. it is a tremendously substantial rule and one that will have significant impact. , we kind of take some pleasure in the fact that there is flexibility built into rule and we see it

founded on economic principles. we consider it to be quite beneficial going forward. know,r, as many of you getting to that point comes with a lot of hard work by many people inside and outside of government. and it takes an awful lot of leadership. luckily, gina mccarthy was available, ready, and willing to take that leadership role. for that we are most thankful. she has a natural inclination, as most of you know, to reach out across party and ideological lines. that is not all that common today. in the process of developing the of usrule, many participated in conversations with the administrator. we all know she was trying to get the most effective, efficient rule possible it a rule that would be long-lasting. before i introduced her, let's do a little bit of the flow of

the events today. the administrators going to take the podium and speak, and then she and dallas burtraw are going to take the stage here and engage in a bit of q&a. you have on your seats a card. if you would like to pose a question, please write it as clearly as you can, legibly so our folks can read that. as soon as the administrator is finished speaking, we will collect those cards and they will be passed on. for those of you viewing this thate or some other medium is not available to this room but have access to twitter, you can send a tweet to us. skrff. it is my great honor now to introduce the administrator of the united states environmental protection agency. it has been said by many, i think, that the greatest trait

of the true manager is simply getting the job done. i think i speak for all of us in this room, and many of our folks outside who are watching, thank you for getting the job done. forgetting -- for doing it exceedingly well and shepherding the clean power plan through all of these hurdles that were necessary to bring it to a final rule today. thank you for doing it in an environment for the politics and the rhetoric really make this job as difficult as possible. ladies and gentlemen, epa administrator mccarthy. [applause] >> thank you. my dad used to say half the battle was just showing up. i'm not sure he ever worked in

washington, because delivering is quite a battle as well. before we get into talking about clean power plan, i wanted to just indulge you all a little to and take a few minutes talk about the relief of mining waste in colorado. i did not want to leave that without having addressed it as quickly as i can. waste inse of mining not justis impacting colorado, but it could impact new mexico, utah, the nominations. it is really a tragic and very isortunate incident and epa taking responsibility to ensure that that's bill is cleaned up. the most important effort that we are ensuring right away is the health and safety of the residents and the businesses near the river. we have committed to helping people throughout the four corners region. drinking water, irrigation water, and recreation.

we know how important that river is to them. as we know, there are thousands of abandoned mines throughout the west. with statesy works to clean up these spells. the spill occurred when one of our contracting teams was using heavy equipment. this is an inactive mine just north of the city of durango. to begin the process of pumping and treating the contaminated ther, in response to unfortunate incident we have developed full reviews to respond. other partner agencies are assisting as well. it takes time to review and analyze data. i understand people's frustration, but we have our scientists working around-the-clock. our commitment is to get this right and to make sure we are protecting public health. thankfully there have been no reported cases of anyone's health being compromised. additionally, from initial

the probe result, as has advanced we are seeing elevated levels and as it moves on, we are seeing a downward trajectory. epa has taken steps to capture industry to discharge at the mine its self -- itself. we are reducing the impact of any downstream and we are to burning water and treating it to lower the acidity levels of -- and remove dissolved metals. we have also set up a unified command center in durango as well as emergency centers at epa headquarters in defeat to ensure a seamless and coordinated response in conjunction with all of our local, state, and federal partners. we are working with local officials. epa is providing alternative water supply and free water quality testing for domestic drinking water wells along the river. we have been in touch with state leadership as well as congressional delegations, and we have kept the white house

fully informed. epa is an agency whose core mission is to protect public health. it pains me to no end to see this happen, that we are working tirelessly to respond and we are committed to a full review of exactly what happened to ensure that it can never happen again. with that, i would like to move on to clean power plan. it has been an interesting , has it not?ne did anyone experience summer? i missed it. [laughter] great to be here to talk to you. we have made some incredible progress. ray, thank you for a knology not. i want to commend everybody at epa who spent countless hours dwelling over this final plan. receivedents that we actually significantly impacted

this outcome. we have to make knowledge, and i think we do here, that the effort -- we have to a knowledge -- acknowledge that the effort was worth the lift. climate change is very personal to all of us because it affects everything and everything we know and love. it affects our kids, our communities, even our ability to earn a decent living. climatee all know that change is driven in large part by carbon pollution. heat, storms, buyers, and floods. , for families in the path of a wildfire. or small businesses along our coastline. climate change is very personal. comesw carbon pollution packaged with other pollutions that can lead to lung and heart disease. that threaten our kids health

directly. for parents everywhere and for moms like me, we know that climate change is personal. you got involved and i thank you for it. the bottom line is no matter who you are, where you live, or what you care about, climate change is affecting you and your family today. past any further discussion or debate. scientists are ensure that humans are causing climate change as they are that cigarette smoking causes lung cancer. unless he wants to debate that point, don't debate about climate change -- unless you want to debate that point, don't debate about climate change anymore. it is crystal clear. that is why we have taken action. last week president obama announced the clean power plan which is the biggest step our country has ever taken to

protect this planet. he reminded us that while we are the first generation to feel the impact of climate change, we are the last that can effectively do something about it. he is right. i am so proud to be working for this president, and so excited that our country has that's up. i can stand here today -- that our country has stepped up. i am so excited that i can stand and say we are doing some thing about it. toxics as wellt as pollutants from our power plants, but now we have standards for carbon pollution as well. for the first time in history the clean power plan sets those limits. they said it in common sense, achievable ways that will

our kids health. america's transition to a clean energy future is already happening, and it has been happening. the clean power plan is going to drive that forward and accelerate that progress even more. onh our plan this nation is track to flag carbon pollution by 2030. 2005 levels all the while, we are going to be keeping energy reliable and affordable. the cuts to smog and so it that couple -- soot that come along with this will bring major health benefits to american families. omissions from power plants -- emissions from power plants will drop 22% compared to 2005 levels.

not just as a result of this plan but as a result of six years of concerted efforts to do what the clean air act says we and protect public health and the safety of our communities. as a result, in 2030, we are going to be avoiding thousands of premature deaths and hospital admissions. tens of thousands of asthma attacks. tens of thousands of missed school days and work days. at the same time, in 2030, the average american family will start seeing real savings on their utility bills. all told, climate related benefits from the clean power plan will say this country millions of dollars and far far outweigh its cost. it is a win all around. here is how it works. the clean power plan sets forssion -- emission rates power plants across the country.

we use the same rate for every coal power plant is no matter what state you are in, and we use the same rates for gas fire plants. we know that every state is not starting in the same place. we set goals unique to each state. whatever works best for them works best for the country. they can run their more efficient plants more often or draw more electricity from cleaner fuels or take advantage of energy efficiency options.

no plant has to do this alone, no state must do this alone. they all have the resources of the grid at their disposal. at the request of many states, we are even providing a model rule. it is easy and it can happen right away. it is focused on emission trading. it is a ready-made option guaranteed to get states where they need to be. that is why the economists like it. the point is there is no one-size-fits-all approach. this approach put states in the drivers seat. we will start seeing initial 2016 and there will be

mandatory carbon pollution cuts in 2022. the good news is that we won't need to wait until 2030 to start seeing the benefit. many power companies are already investing to modernize plants and reduce emissions. more than 35 states have already set renewable energy targets. over 1000 cities of already committed to cut carbon pollution. we want to encourage these early wins. we have created a clean energy incentive row graham to help get states ahead of the curve. ,his path forward is reasonable it is affordable, and we know it can be done. epa is not the first time has been in this rodeo. that is why we also know that there will be special interest critics and they will be dusting

off their same old tired playbook's. they will say we have got to focus on the economy at the expense of the environment. they claim our plan will shut the lights off or send utility bills through the roof. they are absolutely wrong. they were wrong in the 1990's when they set exactly the same thing. maybe some of you remember they predict the total doomsday. rain by 60% and the lights stayed on. they will say our transition to a cleaner energy system will kill jobs. i'm not sure they have been following the economics as well as a should is the solar is creating jobs 10 times faster than the rest of the economy is. this is creating jobs, not killing the economy.

over the last 40 years, we have cut air pollution by 70% while our economy has tripled. no one should be saying that we need to move the economy forward at the expense of the environment. it has been proven time and time again that we are text the environment -- protect the environment and grow the economy at the same time. these stale claims will hopefully fall far short of their mark because, by now, the american people have 40 years of history to rely on. american people will know better than to look at these doomsday scenarios and look at history and the challenge we are facing and you know that action is what we must do and concerted, sane, reasonable action is really what we are going to do.

i want to make clear that epa plan is not ppa's about what we avoid. it is also about what we all gain. up plan is projected to lead to $45 billion per year in net benefits in 2030. benefits will continue to accrue. in the same year, the average american family will start seeing $85 in annual savings on their utility bill. that plan will protect americans health and their pocketbooks. frankly, we would not accept anything less.

we have seemed feedback for millions of people on the draft plan. comments andublic hundreds of meetings with stakeholders and those comments in those meetings helped us get to a plan that we know works for everyone. it was feedback from the utilities that made sure our plans mirrored how electricity moves around the grid. it was input from states that make sure we set fair and consistent standards from across the country. it was comments from lots of needed to extend until 2022. that is what we put together. states and utilities told us they needed more time, so we listened.

the final plan reflects all of the needs and voices of our stakeholders and it is stronger as a result. it is clean air act strong. that is why am confident our work will not be undone with so many new voices at the table. we know that they are ready for action. i want to finish up by reminding you just with the clean power plan means moving forward. 75 billion dollars in net benefits by 2030. it means $85 per year in savings on the utility bill. it means driving innovation and creating new jobs. it means writing and accelerating our transition. even faster than it has already been happening.

as a result, it will mean less suffering. in short, it means a brighter future for our kids, in particular the most honorable -- vulnerable in our communities. as we look ahead to paris, it means showing the world just what is possible when you join the fight. climate change is a challenge that we can and must conquer together. now, we moved to the implementation phase. busy puttingtting their plants together and we are here to support them every step of the way. let's get to work. thank you. [applause]

>> thanks so much. fellowintroduce a senior at resources for the future. probably the most knowledgeable person about the clean air act. dallas is going to help with the q&a. ,f you turn in your questions we will pass them over to the left. dallas probably has one teed up. one of the remarkable things has been the process of engagement. is there a theory behind that? >> i think the serious democracy. i think that is how it works.

understanding that we essentially work for the people and their engagement is incredibly important. i don't think there is any issue that is more complicated than climate change. the engagement we have done is unprecedented. this administration has demanded it. the clean power plant is the epitome of engagement. i think one of the things i am most proud of is how much this will change. it absolutely listens to the comments that came in.

>> so far, we have not seen a marshaling of bipartisan support. >> the environment has never been a partisan issue. that people are feeling the constant impact of climate now and the concerns it , one of the values of having this kind of engagement is that you get people excited and interested and willing to speak up. whilek you will see that there is a lot of bipartisan discussion, there is a lot of partisan discussion about it, you will see people doing what they always do. you will see them submitting plans. we will continue the engagement.

we will be out in communities working with states and utilities. that.k the utilities know start going,we people will start to address the challenge. >> the clean power plant comes forward at a time with dramatic technological changes. are we locked into 2030 and beyond? >> we certainly want to to make that we set a long-term market signal.

going against the grain of how the energy world is we wanted to. not want that we did to establish energy policy, we wanted to look at where the energy world was following. energy world is going to had more quickly than we might have been to hated. the great thing is that the united states can grab some leadership here. that is what we are going to be doing with this plan, capturing that momentum. not shifting or changing it, but looking at what the future has.

>> you come from state government. the plan is built around what hasbeen demonstrated as -- been built around what has been demonstrated as technologically feasible at the state level. is there still a role for state leadership? >> i think there will be. there are states that have been doing this for a while. rule is built entirely on already known actions that they found enormously profitable to do. states would not have gone out front at significant detriment to themselves. is the good news. it is profitable. i have every expectation that we will go way ahead.

i think you will see this happen seamlessly. i never regret a regulation i don't have to do. why would i want to continue to rethink this? it is going to read desk get the reductions in pollution i want. it is going to growing market for itself in jobs. >> the economic solution and hingeshich you described on cooperation among the states. what about the states that don't want to cooperate?

>> i think one of the things we realized between proposal and was that we really need to go to these uniforms and are because it becomes a common currency. that, i've had a lot of conversation with states. there are states that don't want to link on with other state. they want their own independence. you can have linkages to the markets without the formal mechanisms because we have a common currency.

you can do it, you can exchange, you can trade, whatever you want. you don't need a formal agreement. it is just a little more complicated and there are a little more rules of the road, but you can use mass-based or so states can enter into markets that the epa will help manage and keep track of. does not require the same level of collaboration that anybody would have anticipated. we think we have allowed states that want to be independent to be as independent as they want, but not to pass up opportunities that are less expensive for them to achieve these goals. >> we are going to collect some questions from the audience and .witter from the audience what would you say to call miners about the

rule? ms. mccarthy: there are communities that are suffering already and see that role is being more challenges to the table for them. i feel like there is an obligation to address those issues as there is in any economic transition. the coal industry has not been gathering steam for quite a few decades. i am excited that the president put together a budget proposal which looks at focusing resources on this communities. they do not need them five 23rd -- by 2030, they need them now. i hope there is an opportunity to refocus attention on that plan which will substantially benefit those communities and allow appropriate transition and services as economies shift.

>> how might the administration unwind the plan and are we certain of the direction we are headed? ms. mccarthy: as people get their arms around the final rule, they will find it is quite legally solid. they will do that endlessly. we feel pretty good about it, we feel it is strong and it will stand the test of time in the courts. the question that many of us ask after that is what about the next administration? you can answer that as well as i do. when you have a final clean air act role, it is a pretty solid obligation. you need to have a substantial record indicating that things like the endangerment finding which the supreme court has spoken to a number of times, maybe we made a mistake.

all of these steps have been litigated and we are on solid ground in the new administration. hopefully we will want to continue to support this and i think they will see state plans in and moving forward a significant number by the time there is any transition and for those that do not want to, it is quite a significant hurdle for them to reverse this. >> you mentioned looking forward to paris. there are a number of other regulations affecting other aspects of the economy whether it is not -- methane or heavy trucks. what can we anticipate with respect to the ability to make these different regulations under a regulatory approach cost effective so we know we are not paying twice of -- twice as much for a loaf of red.

in terms of getting initial reductions out of the economy. how far can we go with the regulatory approach? ms. mccarthy: in terms of the clean power plant, the data seems pretty solid that this is going to be cost beneficial. it is not marginal in any way. i think when you look at the second one we put out, that is following a trajectory of technology improvements that are going to be significant benefits to consumers everywhere. when you look at oil and gas, it any time you leak methane you are leaking product and that will be an up and his people to grab that and the new technologies there and developed to make that more easy to do. i think epa looks for and has been successful in getting to the point where we recognize the limits of technology. we continue to push those limits as much as we can, but not to the point where we are going to do that to the detriment of the economy.

and i think we have looked at this million ways to sunday but at least under the clean air act, we have not seen a detriment to the economy. in fact, it has been worth trillions of dollars of benefits. we need to look at history to know whether or not we have the wherewithal to do this moving forward and i think it will tell you we do. host: to paraphrase what you have said, the regulator can see the low hanging fruit to what about the fruit that is hire up -- higher up? how do we keep pushing? ms. mccarthy: the reason we wanted to move this out to 2030 and if you look at it, we look at the economics all the way along. it is not like we're just jumping to 2030. it is to send that long-term signal.

the clean air act allows us and what we have can -- taken advantage of is looking at market forces to look at where it is heading and to say where does this country need to be? at this point, at least as my reading of this and many others, the science is spoken. a low carbon future is inevitable. do you do this kicking and screaming or do you do it using the markets as a way to generate and leverage that movement, do you do it in a way that is consistent where energy is moving in the u.s., and do you grab that and send it a long-term signal so you become the leader in it area you are the innovator. you are selling the technologies, your growing jobs here. -- you are growing the jobs here. one of the criticism in solar is that too much equipment is being manufactured in china. well, do it here.

we are sending right signals on what at least epa believes to be a future of lower pollution, that is essential for public health and the environment. epa is not just authorized it responsible to acknowledge and push towards. host: ok, reduction credits for -- these are the credits, one of the forms of credits that are created for compliance. why are credits focused on renewables and efficiency energy in low income communities? can guess earn credits -- gas earn credits? ms. mccarthy: these are one of the confusions that i hope people will take a closer look. reduction credits can be earned, not just in renewables and efficiency. emission reduction credits are sort of the -- can be earned in

a rate based system wherein it is allowances. it is a lingo for doing the trading mechanisms to account for the reductions appropriately. what they are talking about is not an early reduction program that we initiated. for essentially two reasons. we were convinced by the comments we received that it was better to start the mandatory reductions in 2022. that there was a significant lift we were asking early on. that would have driven to higher cost options having to have been invested in as opposed to wait a little while longer so that lower cost -- cost options would be available. it ended up in a very significant increase in renewable energy because of the growth we have been saying in

renewable energy. for right policy and legal reasons and technical, it was better. we went to make sure there was not a hiatus. people were not waiting for 2022 and we got a lot of comments from renewable industries saying that people were sitting still now, waiting for the final rule to get done and we were worried and they were worried that it would be sending the wrong signal to have that much empty time. we wanted to continue with the movement we were projecting in renewables. that is why renewables was included was to make sure we were not changing a market that was already projected to accelerate over those years. the second thing we did -- the early credit. this is the federal leverage to help support states who want to go out in front. that is where i think this question is getting confused between the two. the reason why we did low income energy efficiency is we have been doing energy efficiency programs at epa and helping utilities and states to do that and get credit to do it for a long time under a state implementation plan. we wanted to make sure that we recognize it and low income areas, energy efficiency tends to be a much longer time horizon

for it to be implemented and draw the same kind of reduction opportunities. we wanted it to have a head start. one of the things we wanted to make sure is if there is any increase and we are projecting the increase that tapers off to incredible savings by 2030, we know that low income minority communities would be hardest hit and we want to make sure that efficiency programs equally benefit them as they would anywhere else where it may be easier. these are already proven programs in place area we gave added incentive to focus on states that are willing to start those programs early on. that is why those two but those were not the only ways you can earn early reduction. host: there is ample mentation

of the natural. there is potentially new ozone standard. that will affect states. and you give thought to how the clean power plant interacts? >> always. we do that and the utilities are beginning to recognize the fact that we are thoughtfully thinking through these things so we never have any discussion that does not consider what went before and new rules that may be coming up. they were worried about the rules that were in place like the coal ash rule and others and we keep working through these issues. and we will continue to do that moving forward host: time one more question.

i can't resist this question. it comes over twitter. which do you prefer, cap and trade or carbon tax? [laughter] ms. mccarthy: you say potato i say potatahto. i will take anything that reduces carbon pollution. how about that? [applause] >> thank you for coming. i'm sorry we did not get to more of the questions. thank you for joining us. [applause] [captions copyright national cable satellite corp. 2014] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]

[captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> coming up, donald trump speaks to reporters at a campaign event in michigan. followed by former florida governor jeb bush outlining his foreign-policy views. live at 7:00, washington journal looks at donald trump, millennial voters, and infighting at the pentagon about ways to combat china. today, outgoing army chief of staff general rate warty are no nocusses -- rate warty are --