[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
ADMINISTRATION PERSPECTIVES ON UNITED NATIONS CLIMATE CHANGE CONFERENCE
IN BALI
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HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND AIR QUALITY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
JANUARY 17, 2008
__________
Serial No. 110-80
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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47-819 PDF WASHINGTON : 2008
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COMMITTEE ON ENERGY AND COMMERCE
JOHN D. DINGELL, Michigan, Chairman
HENRY A. WAXMAN, California JOE BARTON, Texas
EDWARD J. MARKEY, Massachusetts Ranking Member
RICK BOUCHER, Virginia RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York J. DENNIS HASTERT, Illinois
FRANK PALLONE, Jr., New Jersey FRED UPTON, Michigan
BART GORDON, Tennessee CLIFF STEARNS, Florida
BOBBY L. RUSH, Illinois NATHAN DEAL, Georgia
ANNA G. ESHOO, California ED WHITFIELD, Kentucky
BART STUPAK, Michigan BARBARA CUBIN, Wyoming
ELIOT L. ENGEL, New York JOHN SHIMKUS, Illinois
ALBERT R. WYNN, Maryland HEATHER WILSON, New Mexico
GENE GREEN, Texas JOHN B. SHADEGG, Arizona
DIANA DeGETTE, Colorado CHARLES W. ``CHIP'' PICKERING,
Vice Chairman Mississippi
LOIS CAPPS, California VITO FOSSELLA, New York
MIKE DOYLE, Pennsylvania STEVE BUYER, Indiana
JANE HARMAN, California GEORGE RADANOVICH, California
TOM ALLEN, Maine JOSEPH R. PITTS, Pennsylvania
JAN SCHAKOWSKY, Illinois MARY BONO, California
HILDA L. SOLIS, California GREG WALDEN, Oregon
CHARLES A. GONZALEZ, Texas LEE TERRY, Nebraska
JAY INSLEE, Washington MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin MIKE ROGERS, Michigan
MIKE ROSS, Arkansas SUE WILKINS MYRICK, North Carolina
DARLENE HOOLEY, Oregon JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York TIM MURPHY, Pennsylvania
JIM MATHESON, Utah MICHAEL C. BURGESS, Texas
G.K. BUTTERFIELD, North Carolina MARSHA BLACKBURN, Tennessee
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
______
Professional Staff
Dennis B. Fitzgibbons, Chief of Staff
Gregg A. Rothschild, Chief Counsel
Sharon E. Davis, Chief Clerk
Bud Albright, Minority Staff Director
(ii)
Subcommittee on Energy and Air Quality
RICK BOUCHER, Virginia, Chairman
G.K. BUTTERFIELD, North Carolina, FRED UPTON, Michigan
Vice Chairman Ranking Member
CHARLIE MELANCON, Louisiana RALPH M. HALL, Texas
JOHN BARROW, Georgia ED WHITFIELD, Kentucky
HENRY A. WAXMAN, California JOHN SHIMKUS, Illinois
EDWARD J. MARKEY, Massachusetts JOHN B. SHADEGG, Arizona
ALBERT R. WYNN, Maryland CHARLES W. ``CHIP'' PICKERING,
MIKE DOYLE, Pennsylvania Mississippi
JANE HARMAN, California ROY BLUNT, Missouri
TOM ALLEN, Maine STEVE BUYER, Indiana
CHARLES A. GONZALEZ, Texas MARY BONO, California
JAY INSLEE, Washington GREG WALDEN, Oregon
TAMMY BALDWIN, Wisconsin MIKE ROGERS, Michigan
MIKE ROSS, Arkansas SUE WILKINS MYRICK, North Carolina
DARLENE HOOLEY, Oregon JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York MICHAEL C. BURGESS, Texas
JIM MATHESON, Utah JOE BARTON, Texas (ex officio)
JOHN D. DINGELL, Michigan (ex
officio)
------
Professional Staff
Sue D. Sheridan, Chief Counsel
John W. Jimison, Counsel
Rachel Bleshman, Legislative Clerk
David McCarthy, Minority Counsel
C O N T E N T S
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Page
Hon. Rick Boucher, a Representative in Congress from the
Commonwealth of Virginia, opening statement.................... 1
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 2
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, opening statement................................. 4
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 6
Hon. Mike Doyle, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 7
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 8
Hon. Tammy Baldwin, a Representative in Congress from the State
of Wisconsin, opening statement................................ 10
Hon. G.K. Butterfield, a Representative in Congress from the
State of North Carolina, opening statement..................... 11
Hon. Joe Barton, a Representative in Congress from the State of
Texas, opening statement....................................... 13
Witnesses
James L. Connaughton, Chairman, White House Council on
Environmental Quality.......................................... 15
Prepared statement........................................... 19
Answer to submitted question................................. 123
Submitted Material
"U.S. Clean Technology Development," presentation by Alexander
"Andy" Karsner, United States Assistant Secretary of Energy.... 60
"Actions to Address Climate Change in the Land Use Sector,"
presentation by William Hohenstein, United States Department of
Agriculture Global Change Program Office....................... 91
Bali Action Plan................................................. 103
"Methane to Markets, Partnership Overview and USG
Accomplishments," presentation by William Irving............... 108
ADMINISTRATION PERSPECTIVES ON UNITED NATIONS CLIMATE CHANGE CONFERENCE
IN BALI
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THURSDAY, JANUARY 17, 2008
House of Representatives,
Subcommittee on Energy and Air Quality,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:05 a.m., in
room 2123 of the Rayburn House Office Building, Hon. Rick
Boucher (chairman) presiding.
Members present: Representatives Boucher, Butterfield,
Melancon, Barrow, Markey, Doyle, Gonzalez, Inslee, Baldwin,
Matheson, Dingell (ex officio), Upton, Hall, Whitfield,
Shadegg, Buyer, Walden, Sullivan, Burgess, and Barton (ex
officio).
Staff present: Bruce Harris, Sue Sheridan, Laura Vaught,
Chris Treanor, Rachel Bleshman, Alex Haurek, Kurt Bilas, David
McCarthy, Tom Hassenboehler, Garrett Golding.
OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF VIRGINIA
Mr. Boucher. The subcommittee will come to order. I want to
begin this morning by welcoming to the position of ranking
Republican member of the subcommittee our friend and colleague
from Michigan, Mr. Upton. I have long admired Mr. Upton's
legislative work whether on energy policy or in his previous
position as chairman of the Telecommunication Subcommittee, and
most recently ranking member of that subcommittee. And I very
much look forward to working closely with him as we undertake
the challenges that lie ahead for the subcommittee this year.
I have also been asked by Mr. Wynn to express that the
reason for his absence from the subcommittee this morning is
that he is attending a funeral in his district and will make
every effort to join us later during the hearing.
Today the subcommittee resumes its examination of climate
change and the determination of an appropriate legislative
response. Last year we conducted extensive hearings which
helped to lay a foundation for the development of climate
change legislation. We published a position paper announcing
our intention to produce a mandatory greenhouse gas control
program relying on cap-and-trade as the control methodology.
For the past 6 months our focus was the drafting and
passage of the Energy Independence and Security Act of 2007.
While that new law makes important contributions to the
reduction of greenhouse gas emissions by increasing auto fuel
economy, enhancing energy efficiency, and requiring the greater
use of renewable fuels it does not address the climate change
challenge in a comprehensive manner. Separate economy-wide
legislation will be necessary to meet that challenge. It is our
intention to produce that separate legislation during the
current year.
We will publish additional position papers focusing on
various components of the legislation to come. We will conduct
additional hearings. We will seek to involve all members of the
subcommittee in a bipartisan process as the legislation is
developed, as it is considered in the subcommittee, and as it
is brought to full committee and subsequently to the House. We
will consult with the Administration, with the private sector,
and also with environmental advocates, and we will process
through subcommittee, full committee, a bill for House
consideration later during this year.
The legislative response to climate change will be the
subcommittee's major focus, not our entire focus but certainly
our major focus during 2008. Appropriately, we begin that work
this morning by examining the process by which the nations that
are signatories to the U.N. Framework Convention on Climate
Change will address global climate change challenges after the
expiration of the Kyoto Treaty in the year 2012. A key step in
that process was the conference held in Bali in December which
created the Bali Action Plan, sometimes referred to as the Bali
road map. That plan forms the parameters for negotiations among
the parties to the Framework Convention as they decide over the
course of the coming year and for a portion of 2009 what
agreement will replace the Kyoto Protocol in the post-2012 era.
This morning our sole witness was the key U.S.
representative in the Bali conference. He will also lead United
States negotiations between now and the time of the Copenhagen
conference in 2009 at which it is expected that a final post-
2012 agreement will be concluded among the convention parties.
We are pleased to have as our witness this morning the
Honorable James Connaughton, Chairman of the White House
Council on Environmental Quality. He is the principal advisor
to the President on among other subjects climate change, and we
very much welcome him and are pleased that he could join us
today.
We will turn to his testimony following the receipt of
opening statements by other members of the subcommittee, and at
this time I am pleased to welcome the new ranking member of the
subcommittee, and ask for the opening statement of Mr. Upton.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. I thank my Chairman, and I thank him for his
very kind words at the start, but I also thank him for the
years of relationship that we have had and also serve in the
same hallway, and we pass each other and walk to the floor
quite often, but I too am very excited about this new role for
myself, and obviously working with you and with Chairman
Dingell and my great friend, Mr. Barton. I also want to thank
our distinguished witness today, Mr. Connaughton, for being
with us. I had the opportunity to travel with him earlier last
year along with Chairman Boucher and Ranking Member Hastert on
energy and climate change and I look forward to your testimony
today.
Much of the focus of this committee over the next year will
be on climate change, as the Chairman indicated. The U.N.
Framework Convention on Climate Change and the Bali Action Plan
are just in fact the beginning of what has shaped up to be a
global issue of concern. Emphasis must be placed on the word
global. While I feel strongly that addressing climate change is
certainly important, I believe that we must address this
through a global voluntary framework that focuses on
innovations and technology and efficiency rather than a pure
government mandate, and at the end of the day we will need to
demonstrate that the price paid in both jobs and dollars
equates to some tangible environmental benefits to the American
people.
In my view, spending trillions of dollars and losing a
countless number of jobs to maybe alter temperatures by a tenth
of a degree while China and India continue to spew emissions is
not the option that we are looking for. By the year 2030 our
energy needs are going to grow by more than 50 percent. Let me
say that again. By the year 2030 our energy needs are going to
grow by more than 50 percent. That is a fact that we are going
to have to deal with regardless of climate change. The cost and
supply of energy have a direct impact on jobs in our economy.
We cannot cap our economic growth and trade it away to China or
India. We cannot cap American jobs and trade them to China or
India. As far as I am concerned, these are not valid options.
Unless we want to put a lid on our economy and burden consumers
with a multi-billion dollar cost increase, energy demand must
be met with reliable sources of energy that are also clean.
While I support reducing greenhouse gas emissions,
thoughtful choices need to be made on how we are going to meet
increasing energy demand. I support renewable energy. We do
need to expand the use of wind and other means. I support
energy efficiency. That was my provision along with Ms. Harman,
the Harman-Upton provision to increase lighting efficiency
standards saving over 120 million tons of CO2 per
year while simultaneously saving consumers billions in energy
costs. I support clean energy. I am a strong advocate for
nuclear which has a life cycle emission equal to wind and
hydro. However, as we move forward and try to meet our energy
demand, we must take a common sense approach that doesn't
needlessly pick winners and losers. Congress must not place
mandates on the market that will only serve to increase energy
costs for hard-working Americans while at the same time sending
jobs overseas.
I believe that a voluntary framework is best to insure that
our future energy demands are met with clean and affordable
power. For example, the so-called RPS that passed the House
last year excluded new hydro and nuclear, two of the cleanest,
most cost-effective energy sources available. The RPS won't
give us energy security. It won't be effective in reducing
greenhouse gas emissions. What we really need is a flexible
clean portfolio standard that includes any source of power like
nuclear that is both clean and affordable. If the goal is to
reduce greenhouse gases, why pick the winners or losers? Let us
be realistic. Currently we get approximately 20 percent of our
electricity from nuclear. By comparison, France gets nearly 90
percent. Seven percent of our generation comes from hydro. Just
to stay even with these two zero emission sources, we would
need to build by 2030 over 50 new nuclear plants and almost
2,000 hydro plants, and that is just to stay even if we keep
those same ratios.
If we are serious about cutting emissions, our usage of
nuclear needs to be much higher than 20 percent. During the
climate debate it is easy to toss around numbers without a real
understanding of perhaps what they mean. One gigaton of
CO2 equals 273 zero emission, 500 megawatt coal-
fired plants or 1,000 carbon sequestration sites, we have only
three today, or 136 new nuclear plants at 1 GW each, or 270,000
wind turbines of 1 megawatt each or 125 times the current
global solar photovoltaics generation or convert a barren area
of almost two times the size of England for bio-mass
cultivation, or a barren area larger than Germany and France
combined for a CO2 storage in new forests.
Many nations that attended Bali and many members of this
committee advocate cutting greenhouse gases by 50 percent by
2030, approximately 4 gigatons of CO2. Are we
willing or able to build 550 new 1 gigawatt nuclear plants,
over a million new wind turbines, or 1,000 new zero emission
coal-fired power plants? Current legislation measures seek to
pick winners and losers, and will lead to higher costs for
consumers, sending our jobs overseas, and disproportionately
harming perhaps the poorest in our population. I do support the
goal of cutting emissions but let us do it in a way that is
least harmful to our economy. I yield back to my chairman.
Mr. Boucher. Thank you very much, Mr. Upton. I am now
pleased to recognize for his opening statement the Chairman of
the full committee, the distinguished gentleman from Michigan,
Mr. Dingell.
OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Dingell. Mr. Chairman, thank you, and I want to thank
you and commend you for holding this hearing. I begin by
welcoming my colleagues to this new session of Congress. We
have a new ranking member on this subcommittee, my dear friend
from Michigan, Mr. Upton, who I know will provide exceptional
leadership and competence, and I welcome him with particular
enthusiasm. We look forward to working with him as we continue
to grapple with difficult energy issues in matters relative to
climate change. Today we will embark upon what I believe is the
third phase of this committee's work on climate change in this
Congress. The first phase was the intensive set of hearings
convened by you, Mr. Chairman, last year. It served as the
foundation for all members to become familiar with the
difficult terrain on this issue.
These hearings were very instructive, and I commend you,
Mr. Chairman, for your leadership, and, quite frankly, for your
stamina and patience. The second phase was the legislation
introduced by this committee that was ultimately enacted into
law as it provided the framework of the legislation that was
adopted by the Congress last year. It contained landmark
provisions on CAFE, bio-fuels, and energy efficiency. The
energy efficiency provisions alone will remove 10 million tons
of carbon dioxide from the atmosphere by 2030, the equivalent
of taking all cars, trucks off the road, and all planes out of
the skies for a period of 5 years. That is a remarkable
achievement but it is only the beginning of what must be done.
Now we begin the third phase of our work, crafting climate
change legislation that will protect our environment without
putting the American economy at a disadvantage. This
undertaking will require us to work through an enormous amount
of information in order to arrive at the best public policy in
our nation.
It will also require us to commence the assembling of a
piece of legislation and the drafting of a very difficult piece
of legislation in a rather constrained time frame. In doing
this work, we must be mindful of the need to coordinate U.S.
domestic policy with ongoing international negotiations
pursuant to the recently adopted Bali Action Plan. We must also
do something else which is important, and that is to see to it
that the United States does carry out its responsibilities but
also to see to it that we are not stuck with the entire bill
for addressing the problem of climate change and global
warming. This was one of the defects of the Kyoto plan, which
left the United States with a significant burden and very few
others with any burden of consequence. The end result of that
was that it was rejected by the Senate which informed the
Administrations then and now by a unanimous vote that there
will be no legislation which does not impose burdens on others
if the United States undertakes its responsibilities. This is
something we are going to have to keep in mind both because of
fairness to this country and because of the fact that we have a
certain duty to our constituents to see to it that we do not be
the only ones who do this thing as we move forward.
We are going to require then bipartisan cooperation, and I
hope my friends on both sides of the aisle will come to this
task with an open mind and a willingness to be helpful. It is
going to require active engagement in the Administration,
something which remains to be seen. I would note that we had
very small involvement with the Administration in our
undertakings last year. I hope that that will significantly
improve. Judging from the rather thin testimony presented to
this subcommittee by our witness today, I must confess that I
am less than optimistic. I hope that the remarks of our witness
before the subcommittee will answer our questions and will be
more forthcoming. Mr. Chairman, again I commend you for holding
this hearing, and for initiating a very important phase of an
extremely important undertaking. I yield back the balance of my
time.
[The prepared statement of Mr. Dingell follows:]
Statement of Hon. John D. Dingell
Chairman Boucher, thank you for holding this hearing. I
want to begin by welcoming my colleagues to this new session of
Congress. We have a new Ranking Member on this Subcommittee, my
good friend from Michigan, Mr. Upton, who I know will provide
exceptional leadership. We look forward to working with him as
we continue to grapple with energy issues and climate change.
Today we embark on what I believe is the third phase of
this Committee's work on climate change in this Congress. The
first phase was the intensive set of hearings convened by
Chairman Boucher last year that served as a foundation for all
Members to become familiar with the difficult terrain of this
issue. Those hearings were very instructive and I commend
Chairman Boucher for his leadership - and his stamina.
The second phase was the legislation produced by this
Committee that was ultimately enacted into law and contained
landmark provisions on CAFE, biofuels, and energy efficiency.
The energy efficiency provisions alone will remove 10 billion
tons of carbon dioxide from the atmosphere by 2030, the
equivalent of taking all cars, trucks, and planes off the road
and out of the skies for 5 years. That's a remarkable
achievement, but it's only the beginning.
Now we begin the third phase of our work: crafting climate
change legislation that will protect our environment without
putting the American economy at a disadvantage. This
undertaking will require us to work through an enormous amount
of information in order to arrive at the best public policy for
our Nation.In doing this work, we must be mindful of the need
to coordinate U.S. domestic policy with ongoing international
negotiations pursuant to the recently adopted "Bali Action
Plan."
This will require bipartisan cooperation and I hope that my
friends on the other side will come to this task with an open
mind. It will require as well the active engagement of the
Administration, which remains to be seen. Judging from the
rather thin testimony presented to the Subcommittee by our
witness today, however, I am less than optimistic. I hope his
remarks before the Subcommittee and answers to our questions
will be more forthcoming.
Again, Mr. Chairman, I commend you for holding this hearing
today and initiating the next phase of this important
undertaking.
----------
Mr. Boucher. Thank you very much, Mr. Dingell. The
gentleman from Kentucky, Mr. Whitfield, is recognized for 3
minutes.
OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Whitfield. Mr. Chairman, thank you very much. And like
others on this subcommittee, we look forward to working with
Ranking Member Upton and congratulate him on his new position,
and all of us have some important issues in energy facing our
country that we look forward to the opportunity to move
forward. I want to welcome Chairman Connaughton and look
forward to his testimony today and working with him as we move
forward. I think today obviously we are going to be focused on
the post-Kyoto world and a goal of reaching an agreement by
2009 that most countries in the world can sign and agree to.
And I think that obviously as has been stated earlier, this is
really going to be a balancing act because we are going to have
to determine what responsibilities did the developing countries
in the world have as well as the developed countries of the
world.
And as we move forward, I believe that we have to recognize
that since the U.S. has a 250-year reserve of coal, and that
coal has to continue to play an important part in meeting our
energy needs. Fred Upton mentioned that our demand for energy
is going to increase by 50 percent over the next 10, 15, 20
years, and we are not going to be able to meet those energy
demands without using coal. And we know that in China they
continue to develop coal-fired plants, and we do have the
technology to use clean coal. But I think ultimately we simply
have to look at what is the cost of making sure that we reduce
these greenhouse gas emissions, what impact or steps that we
take are going to have on employment in the United States and
how is it going to affect our competitiveness with other
economies around the world.
So we have a great opportunity. All of us are looking
forward to trying to solve this problem and I look forward to
participating in today's hearing as we move forward. Thank you
very much.
Mr. Boucher. Thank you very much, Mr. Whitfield. The
gentleman from Georgia, Mr. Barrow, is recognized for 3
minutes.
Mr. Barrow. I thank the Chairman. In the interest of time,
I will waive an opening.
Mr. Boucher. The gentleman from Georgia waives his opening
statement, and I would note for the benefit of other
subcommittee members that in accordance with the rules of the
subcommittee and full committee any member who waives an
opening statement at this time will then have 3 minutes added
to that individual's time for propounding questions to the
witness. The gentleman from Pennsylvania, Mr. Doyle, is
recognized for 3 minutes.
OPENING STATEMENT OF HON. MIKE DOYLE, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Doyle. Thank you, Mr. Chairman. I also would like to
welcome back all of our colleagues. I hope we have all returned
well rested and ready to roll up our sleeves and begin working
together to produce a comprehensive legislation to address the
dangers of global warming. This monumental challenge is one I
believe we can and must meet so that this Congress can deliver
a workable solution to the American people this year. As
everyone on this dais knows, I am firmly committed to insuring
that our nation not only dramatically decrease our global
warming gas emissions but leads the world to insure that all
other nations do their part to reach our common goal.
One thing is clear, Mr. Chairman. If we do nothing, others
will do nothing. It is critical that we put our money where our
mouth is so that we can push others to do the same. The
meetings in Bali were an important step towards achieving this
goal of a world of nations united to combat global warming.
Development such as launching negotiations with developing
countries instead of simply holding discussions are very
important. I was also happy to see that the Bali Action Plan
takes into account the challenges these nations face as they
strive to do their part, and I think the plan's focus on
measurable, reportable, and verifiable mitigation plans based
on individual country's needs and resources will go a long way
to achieving our shared goal.
However, we are a long way from turning these commendable
words and statements into action. We need a firm commitment
backed up by concrete action, not words. I have to say in
reviewing our witness' testimony that I can't remember another
time during my service in Congress when a witness testified for
a hearing and his testimony is a mere 1-page document that
describes a slide presentation and a statement from the
President. I would hope that this Administration doesn't think
that this committee is not worth preparing comprehensive
testimony for.
We need, Mr. Chairman, concrete action. I stand ready to
work with you and any member of this committee that wants to
address the real world challenges that global warming presents.
This is a global problem. It requires a global solution. I
would hope that this Administration will join us in this
critical effort as we move forward. With that, Mr. Chairman, I
will yield back my time.
Mr. Boucher. Thank you very much, Mr. Doyle. The gentleman
from Texas, Mr. Burgess, is recognized for 3 minutes.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. Thank you, Mr. Chairman. I certainly want to
welcome our witness, Mr. Connaughton. Thank you for testifying
before us today. It is timely that you are here to talk about
the role the United States will play in global climate change
negotiations over the next couple of years. It is also timely
that we are having a hearing about the economic stimulus
package that Congress is currently preparing or at least
rumored to be preparing, so I am pleased we have held off on
voting on that package long enough to consider the impact of
our climate change plan on our efforts to stimulate growth in
the American economy.
Mr. Connaughton, from what I have heard, your
representation of the United States in Bali was commendable,
and I want to thank you for meeting the objectives and
challenging all countries to participate. Global problems
require global solutions, and I hope we can continue to pursue
that goal. From your statements at the conference I understand
that we want the United States to take a lead in the
negotiations. That is as it should be. Your hand-outs from the
conference show that since 2001 the United States has invested
more money, $37 billion, into global climate change than any
other country represented at the conference, including Kyoto-
compliant countries. Let us state that again for emphasis. The
United States has invested more money than any other country,
including Kyoto-compliant countries.
We often hear about the lack of United States support for
global climate change initiatives, so I hope you can shed some
light on what we have provided so far and how we can engage in
the negotiation process over the next 2 years to put together a
package that would be workable in the future. Anecdotally, this
committee took a field trip to Scandinavia in August, 2006.
Many members who are on this subcommittee participated. We
talked about energy and telecom issues. And in the country of
Norway we met with some of our counterparts in the Norwegian
parliament. Norway produces most of its power from
hydroelectric, which obviously is carbon neutral, but they had
a tough series of years where it didn't rain for 3 years so
their production was low. Well, they get a lot of natural gas
from the North Sea so instead of liquefying it and putting it
on the big orange boat over to Ed Markey's district maybe they
could just open up a couple of gas-fired electrical plants so
that their constituents didn't freeze to death during their
winter. But they can't do that because they are signatories of
the Kyoto so they can't burn the natural gas because that will
put carbon into the atmosphere.
So in order to meet the demand of their constituents they
would buy power from Denmark and provide power to their
citizens that way, buy electricity from Denmark. How does
Denmark generate their power? They burn coal. It is this sort
of circuitous logic that goes on that just defies gravity, and
this is one of the challenges that of course you and this
committee have to confront is the myths that surround this
global concern. In Texas on the way to the airport to fill up
before coming here this week gasoline cost $3.10. January is
the cheapest gas in Texas because the summer driving period
isn't here and we don't have all the expensive ethanol blends
that the Clean Air Act demands that we have. So Texans, I
suspect, are going to be paying in excess of $4.00 a gallon for
gas around Memorial Day. We have the economic stimulus package
coming up. Every dollar that we provide, whatever we do, every
dollar that we provide is going to be immediately eaten up in
increased energy cost at least as it will affect the
constituents in my district.
Again, Mr. Chairman, I thank you for holding this hearing.
I think it is timely. I think it is important work, and look
forward to the testimony of our witness today. I yield back.
[The prepared statement of Mr. Burgess follows:]
Statement of Hon. Michael C. Burgess
Thank you Mr. Chairman,
I would like to welcome our witness, Mr. Connaughton, and
thank him for testifying today.
Mr. Connaughton, it is timely that you are here to talk
about the role that the United States will play in global
climate change negotiations in the next two years. It is also
timely because we have been hearing about an economic stimulus
package that this Congress is preparing. I am pleased that we
have held off on voting on that package long enough to consider
the impact of our climate change plan on our efforts to
stimulate growth in the American economy.
Mr. Connaughton, from what I have heard, your
representation of the United States in Bali is commendable and
I want to thank you for meeting the objectives and challenging
all countries to participate. Global problems require global
solutions and I hope we can continue to pursue that goal. From
your statements at the Bali Conference I understand that we
want the United States to take the lead in these negotiations.
Your power point handouts from the Conference show that, since
2001, the United States has invested more money ($37B) into
global climate change initiatives than any other country
represented at the Conference, including Kyoto compliant
countries. We often hear about the lack of United States
support for global climate change initiatives, so I hope you
can shed some light on what we have provided so far and how we
can engage in the negotiation process over the next two years
to put together a package that will be workable after 2012.
Mr. Chairman, I am concerned that as a nation, we cannot
expect to engage in economic growth if we continue to avoid the
uncertainty of the cost of climate change compliance. All of
our constituents are worried about the rising cost of energy
and the uncertainty in our markets. In fact, last week in Texas
I stopped and filled up with $3.10 gasoline. As I am sitting
here today, I am trying to calculate exactly how much we are
going to pay for a gallon of gasoline next spring. It is
concerns me greatly to know that we may see gas prices as high
as $4.00 per gallon when summer blends are mixed in.
In our continued negotiations with the other participants,
I hope we raise the question, "how do we build a global
consensus to implement an environmental protection plan that
not only does no harm but actually builds our global economy?"
I believe that sustaining our planet and avoiding catastrophic
global climate change are not separate from a successful global
economy model, they are actually mutually dependent.
I hope that through the next phase of negotiations we can
build a consensus that helps grow our domestic renewable and
alternative energy programs and allows us to create new jobs
producing the products and fuel that our planet needs to
sustain growth. I hope we can strengthen our global energy
trade and investment in cutting edge technology. Ultimately, I
also hope that the developing world is willing to join us in
these efforts because, as we have seen, when the cost of
compliance is high, developing economies simply sustain growth
in exchange for mitigating the effects of climate change.
Mr. Chairman, we cannot avoid indicators that point out
that global demand for energy is going to increase regardless
of our efforts to cap and control carbon. Global energy demand
growth has been projected at 50-60 percent due to improved
living standards and population growth in developing countries.
ERCOT, the Electric Reliability Council of Texas, has said that
unless new generation capacity is built in Texas, we will not
have enough electricity to ensure reliability within the next
5-10 years. In addition, the fossil fuel market is a global
market and we cannot operate as a protectionist society that is
only looking to sustain our growing demand while our economy is
struggling--we must also work to seek out new sources of
domestic energy to provide the production that fits the growing
demand within this global market.
Mr. Connaughton, I hope that the United States can take the
lead in these negotiations and make a real global impact. By
leading the way, we can create a platform that is not only
measurable, reportable, and verifiable but is also transparent,
predictable, and spreads compliance evenly across the
participants. I hope that we can do this while at the same time
boosting our lagging domestic economy by providing the products
that sustain growth at home and in the developing world.
With that Mr. Chairman, I yield back.
----------
Mr. Boucher. Thank you very much, Mr. Burgess. The
gentleman from Texas, Mr. Gonzalez, is recognized for 3
minutes.
Mr. Gonzalez. Waive opening.
Mr. Boucher. The gentleman waives his opening statement.
The gentleman from Washington State, Mr. Inslee, if he is here.
The gentlelady from Wisconsin, Ms. Baldwin, is recognized for 3
minutes.
OPENING STATEMENT OF HON. TAMMY BALDWIN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WISCONSIN
Ms. Baldwin. Thank you, Mr. Chairman. The attention focused
on the issue of climate change has clearly reached a new level.
We are no longer questioning whether we should act but rather
how and when we will act, and as participants in the U.N.
climate change conference arrived in Bali the answers were
clear. We must act now with firm, bold, and decisive actions
that push the envelope and provide us with a road map for
repairing the damage we have done to our planet. I am
continuously struck by the efforts to combat climate change in
our country whether through environmental advocacy, private
sector initiatives or local, state, and regional agreements.
These programs demonstrate America's commitment and drive to be
stewards of our environment. But I often wonder is the rest of
the world aware of most of these efforts. Do they know that
there is a movement here in America to reduce greenhouse gas
emissions, increase our energy efficiency, and protect our
planet for generations to come.
Unfortunately, I believe too often what the international
community hears is how our Administration has done everything
in its power to stifle the debate on climate change through
sidelining science, editing government reports out of EPA or
NASA or refusing to back firm goals for reducing emissions. It
is clear that not only do we lack a strong national strategy
for addressing climate change but also that we are missing the
leadership that is committed to set one in place, and herein
lies the problem with the agreement reached in Bali. Our
Administration sent representatives poised as our nation's
voice to lead the talks in Bali, and rather than uniting around
a policy that reflects the views of Americans, one that
demonstrates a finite commitment to addressing climate change,
the agreement reached shows how our leaders can water down,
avoid, and delay our actions to reduce greenhouse gas
emissions.
The perception of the United States through the eyes of our
international friends has taken a hit. Criticism has been
widespread and the calls for true leadership from our country
have been loud and clear. As one participant put it during the
debate, the international community looks to us for leadership
but if we are not going to do so, we must move out of the way.
Mr. Chairman, the climate in Bali and the rest of the world may
be changing for the better but the forecast here in Washington
for the next year appears to be politics as usual. Our
Administration had the opportunity to catch the momentum and
bring our nation up to speed, and I just hope that by the time
the temperature changes it won't be too late for us to take
action. Thank you, and I yield back the balance of my time.
Mr. Boucher. Thank you very much, Ms. Baldwin. The
gentleman from Indiana, Mr. Buyer. The gentleman waives his
opening statement. The gentleman from Oklahoma, Mr. Sullivan is
recognized. Mr. Sullivan also waives his statement. The
gentleman from North Carolina, the Vice-Chairman of the
subcommittee, the gentleman from North Carolina, Mr.
Butterfield, is recognized for 3 minutes.
OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NORTH CAROLINA
Mr. Butterfield. Thank you very much, Mr. Chairman, for
convening this important hearing today, and I thank the witness
for coming forward today with his very important testimony. I
appreciate the witness' willingness to come today to speak to
us about the Administration's perspective on the recent U.N.
climate change conference in Bali, but I must admit that I am
mystified to some extent about how concise or inconcise the
written testimony that has been provided to us appears to be.
Most of the members of Congress were not able to participate in
the conference and so I am looking forward to hearing the
testimony today and hopefully we can be provided more details
than have been forthcoming.
We have all heard the phrase, Mr. Chairman, about kicking
the can down the road. Well, I am worried that if we don't take
immediate action on this subject there won't be much of a can
to kick anymore or even a road for that matter. Thankfully,
parties were able to agree upon a framework while continuing
discussions by way of the Ad-Hoc Working Group that will meet
at least 4 times this year, and it is my sincere hope that the
U.S. will have something more substantive to contribute in
April than an innocuous agreement or technology transfer with
other nations. And the world in 8 months will witness the
Olympics. They will be in China, the country that now holds the
distinction of being by some estimation the world's largest
emitter of greenhouse gases. China's capital, which is the City
of Beijing, is currently attempting at this late hour to reduce
its crippling level of smog and pollution so athletes traveling
there will be able to compete without covering their faces.
I am not sure if the Chinese will get things under control
by then but the point is that this country, the United States,
cannot chastise the Chinese for their chronically bad pollution
levels because we are in no better position than they are to
throw accusations. Since the beginning of this Administration,
it has consistently undermined world bodies that were put in
place to facilitate order and compromise on some of the world's
most pressing concerns. My point is that these actions continue
to undermine our historically strong position to negotiate in
good faith with the rest of the world. With 1 more year left of
this Administration, I am not sure what the Administration has
to gain by continuing this line. Cynicism has become so evident
that the delegates moved the goal post a little and decided
that negotiations should have agreed upon by December of 2009,
not really enough time for whatever the new Administration has
in place but enough time to move past the inaction that has
crippled us to this point.
I would like to hear more from the witness about 2
principal concerns that I have as a member from a coastal state
who will undoubtedly be the first to bear the brunt of whatever
adverse effects of climate change this country experiences. Mr.
Chairman, I have run out of time. I am going to reserve the
remainder of my statement. I will include it in the record, and
I will ask the appropriate questions at the appropriate time.
Thank you.
[The prepared statement of Mr. Butterfield follows:]
Statement of Hon. G.K. Butterfield
Good morning Mr. Connaughton, Happy New Year. I appreciate
you coming to speak to us about the Administration's
perspective on the recent United Nations Climate Change
Conference in Bali but I must admit I am mystified about how
concise your written testimony you provided this Committee was.
It is my hope that you will speak to us in greater detail since
most Members of Congress were not able to visit the Conference.
I'm not so sure how Happy 2008 will end up being if your boss,
the President, decides to maintain the status quo instead of
being the Decider as he would have us believe him to be. We've
all heard of the phrase, "kick the can down the road", well,
I'm worried if we don't take immediate action, there won't be
much of a can to kick anymore. Or a road for that matter.
Thankfully, parties were able to agree upon a framework for
continuing discussions via an Ad Hoc working group that will
meet at least four times this year and it is my sincere hope
that the US will have something more substantive to contribute
in April than an innocuous agreement on technology transfer
with other nations.
The world in eight months will witness the Olympics in
China, the country that now holds the distinction of being, by
some scientist's estimation, the world largest emitter of green
house gases. China's capital city, Beijing, is currently
attempting at this late hour to reduce its crippling level of
smog and pollution so athletes traveling there will be able to
compete without masks covering their faces! I'm not sure if the
Chinese will get things under control by then but the point is
that this country, the United States of America, cannot
chastise the Chinese for their chronically bad pollution levels
because we're in no better position than they are to throw
accusations. Since the beginning of this administration, it has
consistently undermined world bodies that were put in place to
facilitate order and compromise on some of the world's most
pressing concerns. My point Mr. Connaughton is that these
actions continue to undermine our historically strong position
to negotiate in good faith with the rest of the world. With one
more year left, I'm not sure what the Administration has to
gain by continuing down this line. Cynicism has become so
evident that the UNFCCC delegates moved the goal posts a little
and decided that negotiations should agreed upon by December of
2009. Not really enough time for whatever new Administration is
in place but enough time to move past the inaction that has
crippled negotiations up to this point.
I would like to hear more from you about two principle
concerns that I have as a Member of Congress from North
Carolina, a coastal state that will undoubtedly be the first to
bear the brunt of whatever adverse affects of climate change
this country experiences. North Carolina has already had more
than it's fair share of hurricanes and other acts of God that
have left some municipalities like Princeville in my District,
still recovering from Hurricane Floyd. It has been almost nine
years since September 16th, 1999, when Floyd ravaged huge
swaths of eastern North Carolina killing 52 people in its path.
North Carolina has been fortunate since then but other Atlantic
and Gulf coast states have not been so lucky. I do not mean to
suggest that the rash of hurricanes we have recently
experienced are somehow directly related to ongoing climate
change but I am stating that coastal states and cities,
including here in the Chesapeake Bay region with well over 16
million people, should be very concerned about global warming.
Despite current restoration efforts, the Chesapeake Bay is
still one of the most sensitive ecosystems in the US and there
is no plan in place to address potential rising of sea levels
or a significant plan to restore the marshes and wetlands in
Florida, Louisiana or North Carolina for that matter. My second
concern deals with the Administration's plan to help developing
nations deal with adaptation to an ever changing world that has
already seen significant impacts from global warming. There are
a plethora of anecdotal observations as well as empirical data
that clearly states that Africa, Asia and the Caribbean will be
the first to suffer the ravages of global warming despite being
the lowest greenhouse gas contributors. Since the US has been
the world's largest emitter of GHG's for the past 100 plus
years, we have a unique role to play in helping mitigate the
changes and assist with the deployment of affordable
environmentally sound technologies and sustainable forest
management and degradation procedures to help these countries
cope. We are intimately tied to these developing nations given
our high level of contribution to this radically changing
environment.
Congress and the President recently passed a bold and
innovative Energy bill this past December and I look forward to
working together to utilize the momentum we've generated to do
greater things in 2008. Eight years of inaction have cost us
dearly but I pledge my support in creating an atmosphere where
we can work together for the good of our children and
grandchildren. We must not continue to kick this can down the
road, thank you.
----------
Mr. Boucher. Thank you very much, Mr. Butterfield. The
ranking member of the full committee, the gentleman from Texas,
Mr. Barton, is recognized for 5 minutes.
OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Barton. Thank you, Mr. Chairman. It is good to have
this subcommittee back in action. It started off with a flurry
early in the first session and then along around the summer
time it kind of went into hibernation so we are glad to have
you back on the front lines here. I want to welcome some people
today. I want to first welcome our new ranking member, Mr.
Upton. Mr. Upton has been on the committee for quite a number
of years. He has made his major contribution as the past
subcommittee chairman, ranking member of the Telecommunications
Subcommittee, but he has switched over to Energy and Air
Quality with the departure of former Speaker, Mr. Hastert. He
has got big shoes to fill. Mr. Hastert and Mr. Hall, who is
another ranking member of the Science Committee, and way back
when one of the former chairman, myself. I started out as the
chairman of this subcommittee so I am very, very happy to have
nominated Mr. Upton to this position.
I also want to welcome Mr. Connaughton. He and I have had
an ongoing relationship and a number of discussions for I don't
know how many years but a fair number. He just got back from
Bali. We are going to hear his insights, but I think it is safe
to say of all the people in the world Jim Connaughton is one of
the most knowledgeable on the issue that you got on the hearing
schedule today which is global warming and climate change. We
have had a lot of hearings about this issue in the last several
years. I am still not convinced that the science and the
economics of the issue are settled. I know a lot of people want
to move on and look at solutions but I don't think we can have
a very good chance to develop an optimal solution if we really
don't understand the problem, and a very large number of
skeptics still out there about what causes climate change and
what mankind can do about it.
I hope some of your hearings this spring touch on that. As
I have said before, when we get ready to consider legislation I
have 4 issues or goals, I guess, that I want to try to meet. I
do want to keep electricity affordable and plentiful in
America. I also want to keep our transportation sector viable.
It is interesting to know that in the euphoria over passing a
CAFE increase at the Detroit auto show this week our
manufacturers said that legislation, if implemented, is going
to raise the price of an American vehicle approximately $6,000
per car. I want you to tell me how that helps our economy when
the price of automobiles goes up $6,000 per vehicle. I want to
keep our natural gas prices as affordable as possible because
many, many Americans heat their homes with natural gas, cook
their meals, and we still have an industry that uses natural
gas as a raw material.
And obviously I want to protect American jobs. We can have
the most perfect climate change bill in the world, and it is
not going to do us a lot of good if we raise the unemployment
rate 5 or 10 points to do that. You indicated that you want to
introduce a cap-and-trade bill sometime this spring, Mr.
Chairman. I hope we can dissuade you from that position. The
great experiment in Europe with cap-and-trade so far is an
absolute failure. There is no other way to put it. The prices
their economies are paying are going up and their emissions are
going up too. Now their apologists say that it is just because
they don't have it just right, but I predict that no matter how
much they tinker with it when you are trying to cap-and-trade
something as ubiquitous as CO2, most of which is not
man-made, it is folly. It is an impossible situation.
So hopefully you will also really get into the details of
just exactly what a cap-and-trade program would look like here
in America. I also want to make a point that a number of other
people have made. We are in a global economy now. We are the
world's largest economy but if we do some things that are very
draconian on our emissions here in the United States, and
really all it does is cost us jobs, I am very skeptical that
the rest of the world is going to follow suit. There is no
nation in the world in the last thousand years that when faced
with a choice of poverty or a better standard of living for
their population has chosen poverty, and it is absolutely
ludicrous in my opinion for us to ask China and India and
Brazil and Mexico and all the developing world to adopt some of
these very, very stringent controls on CO2 when if
they do that it is an absolute recipe for making sure that
their people don't move forward and have a better standard of
living.
We made that choice beginning in the late 1800s and all
through the 1900s as we electrified America, put in our
transportation system, created an economy literally based on
the automobile, and the result has been the highest standard of
living the world has ever known, so it is silly for us to ask
the rest of the world to not move forward as we have moved
forward in the last 125 years. So, Mr. Chairman, I am glad to
have this subcommittee back in action. I do think climate
change is a real issue. I do think to the extent that we can do
things that make economic sense and environmental sense we
should try to move forward, but I do not believe that we should
just jump off the cliff in the name of political correctness.
And with that, Mr. Chairman, I very, very respectfully yield
back to you.
Mr. Boucher. Well, thank you very much, Mr. Barton, and
very respectfully let me say that we were really not in
hibernation. During the course of the last 6 months we were
intensely focused on drafting and passing the 2007 energy
security legislation, and as the gentleman knows I differ with
his characterization of the European cap-and-trade program but
these will all be matters we discuss during the course of this
year. The gentleman from Utah, Mr. Matheson, is recognized for
3 minutes. Mr. Matheson waives. The gentleman from Louisiana,
Mr. Melancon, do you care to make an opening statement? The
gentleman waives. Are there other members seeking to make an
opening statement? Apparently not.
Mr. Connaughton, we are delighted to have you with us this
morning. I said some introductory words about you. Let me
commend you for your successful efforts during the Bali
conference. I think all of us were impressed with the skill
with which you and your partners representing the United States
advanced our position. Congratulations on the agreement which
was concluded during that conference, and we look forward to
your description of it and a statement of your intentions with
regard to your leadership of the U.S. negotiation efforts
between now and the Copenhagen conference which will occur in
2009. Without objection, your statement will be made part of
the record, and we welcome your oral presentation.
STATEMENT OF JAMES L. CONNAUGHTON, CHAIRMAN, WHITE HOUSE
COUNCIL ON ENVIRONMENTAL QUALITY
Mr. Connaughton. Thank you, Mr. Chairman, and I am very
pleased to be here in front of this committee, and particularly
this point in time after a very constructive last year in
setting the stage for what I think will be a fairly important
conversation here in the United States as well as globally on
next steps. And we are pleased that you are helping to lead
this effort, Mr. Chairman, particularly with Fred Upton at your
side as the new ranking member. I think it is a powerful
combination. I was also pleased to see Chairman Dingell here. I
am sorry he had to leave for the moment. I hope we see him a
little bit later. And also to have ranking Chairman Barton as
well. It is nice to see the group of 4 focused on this issue in
the way that it deserves.
Members of the committee, the Bali Action Plan, which you
have now heard about, also known as the Bali road map, was in
fact a major achievement adopted by more than 190 countries
which is no small order who are the parties to the United
Nations Framework Convention on Climate Change. This document,
which reflects my testimony, is a 4-page, highly detailed
negotiation guide for how we will develop a comprehensive new
post-2012 climate change arrangement, and we want to try to do
that by 2009. Our 3 negotiating objectives going in were to
launch negotiations, which had not taken place for 10 years, to
be sure that we had a comprehensive set of negotiations,
including participation by major developing countries as a
critical condition well recognized in a bipartisan way here in
the United States, and to do so rapidly by 2009 so there is
time to prepare for its implementation which would start in
2012. All 3 of those objectives were met.
Also included as part of my testimony were the actual
presentations that I and others gave in Bali outlining the
steps that the United States is taking and will be taking with
respect to our contribution both domestically and
internationally, and if you have not taken a look at those I
would encourage the members to thumb through those materials.
It is 70 pages of quite substantial discussion. The United
States is committed to working with other nations to agree on a
global outcome, and it is important that that global outcome is
both environmentally effective to do the job and economically
sustainable, which means it should do the job smart. Only an
arrangement that meets both of these objectives can win public
support. To be environmentally effective a new approach must be
truly global and has to involve measurable, reportable, and
verifiable actions by the world's largest producers of
greenhouse gas emissions, that is developed and developing
countries alike.
The basic truth is this. Without substantial participation
by major developing economies greenhouse gas emissions will
continue to rise rapidly over the next 50 years even if the
U.S. and other developed countries cut their emissions to zero.
We are in this together. To be economically sustainable our
actions must uphold the hopes of people everywhere for economic
growth, energy security, and an improved quality of life.
Lowering the cost of emissions is critical to that equation but
that will require speeding up the development and the
deployment of technologies that will fundamentally improve the
way we produce and consume energy. These include the capture
and storage of carbon emitted from coal power plants, more
affordable nuclear, and gigawatt scale renewable power, bio-
fuel, electric, natural gas, hydrogen, and other clean
alternatives to petroleum, and of course greater efficiency. In
the absence of technology advances and cost reduction advances
in these areas reducing global emissions on the scale necessary
will be impossible without significantly sacrificing economic
growth globally and then the social consequences that come from
that sacrifice.
Last May President Bush announced that the U.S. would work
closely with other Major Economies to contribute to a new
global agreement under the U.N. Framework Convention on Climate
Change. I would note that this initiative has now received
broad international support as a contributing, as a supportive
effort to achieve the Bali road map. This includes the G-8
leaders, the Asia-Pacific Economic Cooperation leaders, so
these are the 20 plus leaders of the Asia-Pacific rim, and even
U.N. Secretary General Ban Ki-moon. The U.S. has hosted the
first meeting in late September that brought together 17 Major
Economies accounting for more than 80 percent of the world's
economic output, energy use and greenhouse gas emissions.
Now guided the consensus in Bali the Major Economies plan
to meet again at the end of January for a series of meetings
that will discuss a work program that can advance the key
elements of Bali. In our view, such a work program should
include a discussion of a long-term global emission reduction
goal, national plans that include mid-term goals backed by
nationally appropriate mix of strategies, regulations,
incentives, and public-private partnerships. We need all the
tools in the tool kit. Cooperative technology and other actions
in key sectors, we need to focus especially on fossil power
generation, personal transportation, and sustainable forest
management because together they represent more than 80 percent
of future greenhouse gases.
We need to focus on innovative financing mechanisms
importantly coupled with the elimination of tariff and non-
tariff barriers for the clean energy goods and services that
that would finance, and then an approved emissions accounting
system to verify our progress and then ways to help countries
adapt to climate change and gain access to technology, and that
is important particularly for developing countries. In
addition, we think it is going to be important to discuss ways
of structuring a post-2012 arrangement in a way that will
encourage rather than deter actions by the major developing and
developed countries so we need to do it in a way that
incorporates positive, not punitive ways to insure
accountability. This issue is big. It does cover really all
economic activity and so we need a constructive way to create
the framework.
We hope that these discussions can produce tangible
outcomes that can be endorsed at a Major Economies leaders
meeting that the President has called for later this year. This
would fulfill the G-8 pledge last year for the Major Economies
to make a detailed contribution to the U.N. negotiations. Now I
just want to give a couple examples of what we are doing from
the U.S. perspective already that are tangibly contributing to
this next conversation. So first, and let us look at the
international level, last year the U.S. joined with some key
developing countries, helped to forge a global legally binding
agreement to accelerate the phase-out of hydrofluorocarbons
under the Montreal Protocol. These are also potent greenhouse
gases. This was an agreement that China and India joined. They
were developing countries but they joined in the legally
binding agreement that would reduce greenhouse gases by at
least 3 billion metric tons which would probably meet or exceed
what the Kyoto Protocol might achieve by 2012 so just to give
you a sense of the scale of a sector-based agreement.
Here at home this committee knows better than any committee
because of the hard work they did last year in just 1 year to
provide legislation that President Bush was pleased to sign
that mandates substantial mid-term requirements and objectives
for vehicle fuel efficiency, for renewable fuels, for appliance
efficiency, lighting efficiency, and the efficiency and
renewable fuel use of government operations, 5 brand new mid-
term mandates with hard objectives. Other countries are looking
very closely at what we did this year to see how that might
apply--they might apply similar approaches in their countries.
This law is mandatory. This law is binding. And this law will
produce some of the large emission cuts in our nation's
history.
I was pleased to hear Chairman Dingell's estimate of more
than 10 billion metric tons I conservatively estimated at 6 but
let us just say it is big. It is very big in terms of the
greenhouse gas benefits of that legislation. The U.S. is also
working with other countries to establish a new, multi-lateral
financing mechanism that is going to help accelerate the use of
cleaner, lower carbon technologies and infrastructure.
Importantly, this Congress and this committee have created
similar tools for use in America so we are accelerating the
deployment of these technologies here at home and now we want
to come up with financing mechanisms to help sell good clean
American technology overseas.
The U.S. and the EU, who are often seen as disparate on
this subject have jointly proposed in the World Trade
Organization the rapid elimination of the tariff and non-tariff
trade barriers that impede investment in clean technologies and
services. There is absolutely no reason why we are charging
tariffs on each other for these goods and services that are
very important to reduce greenhouse gas emissions. Removing
such barriers would not only lower the cost of cutting
emissions, they would increase our 2-way clean technology trade
by up to 14 percent per year. That is a lot of good old-
fashioned American know how finding its way into the global
market place. And then along with Japan the U.S. will continue
its massive investment, nearly $18 billion since 2001, in the
technology research development and deployment effort. The U.S.
and Japan account for most global spending in this area. We
encourage other countries to step up their efforts.
Finally, deforestation, a subject that has been somewhat
overlooked, accounts for roughly 20 percent of global
emissions. The U.S. is enhancing its efforts to work
cooperatively internationally to help other countries find ways
to sustainably manage their forests the way we do here in
America, and we are providing some good measurement tools to
enable that as well. I look forward to a very aggressive year
of activity. If we want to reach final agreement in 2009 the
work we do this year is critical because moving from the
domestic discussion to a Major Economies discussion to a 190-
nation discussion requires a lot of work so we look forward to
working constructively with this committee on that. Thank you.
[The prepared statement of Mr. Connaughton follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release September 28, 2007
REMARKS BY THE PRESIDENT
AT MAJOR ECONOMIES MEETING ON
ENERGY SECURITY AND CLIMATE CHANGE
U.S. Department of State
10:09 A.M. EDT
THE PRESIDENT: Good morning. Thank you. Welcome to the
State Department. I'm honored to address this historic meeting
on energy security and climate change. And I appreciate you all
being here.
Energy security and climate change are two of the great
challenges of our time. The United States takes these
challenges seriously. The world's response will help shape the
future of the global economy and the condition of our
environment for future generations. The nations in this room
have special responsibilities. We represent the world's major
economies, we are major users of energy, and we have the
resources and knowledge base to develop clean energy
technologies.
Our guiding principle is clear: We must lead the world to
produce fewer greenhouse gas emissions, and we must do it in a
way that does not undermine economic growth or prevent nations
from delivering greater prosperity for their people. We know
this can be done. Last year America grew our economy while also
reducing greenhouse gases. Several other nations have made
similar strides.
This progress points us in the right direction, but we've
got to do more. So before this year's G8 summit, I announced
that the United States will work with other nations to
establish a new international approach to energy security and
climate change. Today's meeting is an important step in this
process. With the work we begin today, we can agree on a new
approach that will reduce greenhouse gas emissions, strengthen
energy security, encourage economic growth and sustainable
development,and advance negotiations under the United Nations
Framework Convention on Climate Change. (Applause.)
I thank the State Department for hosting this event. I
appreciate members of my Cabinet who have joined us today. I
thank Jim Connaughton, who is the Chairman of the Council on
Environmental Quality, for being here. I appreciate you being
the personal representative of this, and I hope you're doing --
I hope you think he's doing a fine job. (Applause.)
I welcome Minister Rachmat, the Minister of Environment of
Indonesia, who is the Chairman of the upcoming U.N. climate
meeting in December. I welcome Mr. de Boer, who is the
Executive Secretary of the United Nations Framework Convention
on Climate Change. I welcome all the ministers and delegates
who are here. We really appreciate you coming. I thank the
ambassadors for joining this august group. I thank members of
the Congress who have taken time to come by: Congressman Ed
Markey of Massachusetts and Congressman Bart Gordon of
Tennessee. I appreciate you taking time to come by and
participate in these meetings.
Every day energy brings countless benefits to our people.
Energy powers new hospitals and schools so we can live longer
and more productive lives. Energy transforms the way we produce
food, so we can feed our growing populations. Energy enables us
to travel and communicate across great distances, so we can
expand trade and prosperity. Energy sustains the world's most
advanced economies, which makes it possible for us to devote
resources to fighting hunger and disease and poverty around the
globe.
In this new century, the need for energy will only grow.
Much of this increased demand will come from the developing
world, where nations will need more energy to build critical
infrastructure and grow their economies, improve the lives of
their people. Overall, the demand for energy is expected to
rise by more than 50 percent by 2030.
This growing demand for energy is a sign of a vibrant,
global economy. Yet it also possesses -- poses serious
challenges, and one of them, of course, is energy security.
Right now much of the world's energy comes from oil, and much
of the oil comes from unstable regions and rogue states. This
dependence leaves the global economy vulnerable to supply
shocks and shortages and manipulation, and to extremists and
terrorists who could cause great disruptions of oil shipments.
Another challenge is climate change. Our understanding of
climate change has come a long way. A report issued earlier
this year by the U.N. Intergovernmental Panel on Climate Change
concluded both that global temperatures are rising and that
this is caused largely by human activities. When we burn fossil
fuels we release greenhouse gases into the atmosphere, and the
concentration of greenhouse gases has increased substantially.
For many years those who worried about climate change and
those who worried about energy security were on opposite ends
of the debate. It was said that we faced a choice between
protecting the environment and producing enough energy. Today
we know better. These challenges share a common solution:
technology. By developing new low-emission technologies, we can
meet the growing demand for energy and at the same time reduce
air pollution and greenhouse gas emissions. As a result, our
nations have an opportunity to leave the debates of the past
behind, and reach a consensus on the way forward. And that's
our purpose today.
No one country has all the answers, including mine. The
best way to tackle this problem is to think creatively and to
learn from other's experiences and to come together on a way to
achieve the objectives we share. Together, our nations will
pave the way for a new international approach on greenhouse gas
emissions.
This new approach must involve all the world's largest
producers of greenhouse gas emissions, including developed and
developing nations. We will set a long-term goal for reducing
global greenhouse gas emissions. By setting this goal, we
acknowledge there is a problem. And by setting this goal, we
commit ourselves to doing something about it.
By next summer, we will convene a meeting of heads of state
to finalize the goal and other elements of this approach,
including a strong and transparent system for measuring our
progress toward meeting the goal we set. This will require
concerted effort by all our nations. Only by doing the
necessary work this year will it be possible to reach a global
consensus at the U.N. in 2009.
Each nation will design its own separate strategies for
making progress toward achieving this long-term goal. These
strategies will reflect each country's different energy
resources, different stages of development, and different
economic needs.
There are many policy tools that nations can use, including
a variety of market mechanisms, to create incentives for
companies and consumers to invest in new low-emission energy
sources. We will also form working groups with leaders of
different sectors of our economies, which will discuss ways of
sharing technology and best practices.
Each nation must decide for itself the right mix of tools
and technologies to achieve results that are measurable and
environmentally effective. While our strategies may be
differentiated, we share a common responsibility to reduce
greenhouse gas emissions while keeping our economies growing.
The key to this effort will be the advance of clean energy
technologies. Since I became President, the United States
government has invested nearly $18 billion to research, develop
and promote clean and efficient energy technologies. The
private sector here in our country has responded with
significant investments, ranging from corporate research and
development to venture capital. Our investments in research and
technology are bringing the world closer to a remarkable
breakthrough -- an age of clean energy where we can power our
growing economies and improve the lives of our people and be
responsible stewards of the earth the Almighty trusted to our
care.
The age of clean energy requires transforming the way we
produce electricity. Electric power plants that burn coal are
the world's leading cause of greenhouse gas emissions. The
world's supply of coal is secure and abundant. And our
challenge is take advantage of it while maintaining our
commitment to the environment. One promising solution is
advanced clean coal technology. The future of this technology
will allow us to trap and store carbon emissions and air
pollutants produced by burning coal. Since 2001 the United
States has invested more than $2.5 billion to research and
develop clean coal. And in partnership with other nations and
the private sector we're moving closer to a historic
achievement -- producing energy from the world's first zero-
emissions coal-fired plant.
We also need to take advantage of clean safe nuclear power.
Nuclear power is the one existing source of energy that can
generate massive amounts of electricity without causing any air
pollution or greenhouse gas emissions. Without the world's 439
nuclear power plants, there would be nearly 2 billion
additional tons of carbon dioxide in the atmosphere each year.
And by expanding the use of nuclear power, we can reduce
greenhouse gas emissions even more.
The United States is working to reduce barriers to new
nuclear power plants in our country without compromising
safety. Just last week, a company applied for approval to build
the first new nuclear reactor in my country since the since the
1970s. As we build new reactors here in the United States,
we're also working to bring the benefits of nuclear energy to
other countries.
My administration established a new initiative called the
Global Nuclear Energy Partnership. This partnership will work
with nations with advanced civilian nuclear energy programs,
such as France and Japan and China and Russia. Together we will
help developing nations obtain secure, cost-effective and
proliferation-resistant nuclear power, so they can have a
reliable source of zero-emissions energy.
We'll also need to expand our use of two other promising
sources of zero-emissions energy, and that's wind and solar
power. Wind power is becoming cost-effective in many parts of
America. We've increased wind energy production by more than
300 percent. We also launched the Solar America Initiative to
lower the cost of solar power, so we can make -- help make this
technology competitive, as well. Taken together, low-carbon
technologies like wind and solar power have the potential to
one day provide up to 20 percent of America's electricity.
The age of clean energy also requires transforming the way
we fuel our cars and trucks. Almost all our vehicles run on
gasoline or diesel fuel. This means we produce greenhouse gas
emissions whenever we get behind the wheel. Transportation
accounts for about 20 percent of the world's greenhouse gas
emissions every year. To reduce these emissions we must reduce
our dependence on oil. So America is investing in new, clean
alternatives. We're investing millions of dollars to develop
the next generation of sustainable biofuels like cellulosic
ethanol, which means we'll use everything from wood chips to
grasses to agricultural waste to make ethanol.
We're offering tax credits to encourage Americans to drive
fuel-efficient hybrid vehicles. We're working to develop next-
generation plug-in hybrids that will be able to travel nearly
40 miles without using a drop of gasoline. And your automobile
doesn't have to look like a golf cart. (Laughter.)
We're on track to meet our pledge of investing $1.2 billion
to develop advanced hydrogen-powered vehicles that emit pure
water instead of exhaust fumes. We're also taking steps to make
sure these technologies reach the market. We've asked Congress
to set a new mandatory -- I repeat, mandatory -- fuel standard
that requires 35 billion gallons of renewable and other
alternative fuels in 2017, and to reform fuel economy standards
for cars the same way we did for light trucks. Together these
two steps will help us cut America's consumption of gasoline by
20 percent in 10 years. It's an initiative I've called 20-in-
10.
Ushering in the age of clean energy is an historic
undertaking. We take it seriously here in the United States.
Achieving this vision will require major investment in
innovation by all our nations. Today the United States and
Japan fund most of the research and development for clean
energy technologies. Meeting the objectives we share and the
goal we're going to set will require all the nations in this
hall to increase their clean energy research and development
investments.
We must also work to make these technologies more widely
available, especially in the developing world. So today I
propose that we join together to create a new international
clean technology fund. This fund will be supported by
contributions from governments from around the world, and it
will help finance clean energy projects in the developing
world. I've asked Treasury Secretary Hank Paulson to coordinate
this effort, and he plans to begin exploratory discussions with
your countries over the next several months.
At the same time, we also must promote global free trade in
energy technology. The most immediate and effective action we
can take is to eliminate tariff and non-tariff barriers on
clean energy goods and services.
As we work to transform the way we produce energy, we must
also address another major factor in climate change, which is
deforestation. The world's forests help reduce the amount of
greenhouse gases in the atmosphere by storing carbon dioxide.
But when our forests disappear, the concentration of greenhouse
gas levels rise in the atmosphere. Scientists estimate that
nearly 20 percent of the world's greenhouse gas admissions
[sic] are attributable to deforestation.
We're partnering with other nations to promote forest
conservation and management across the world. We welcome new
commitments from Australia, Brazil, with China and Indonesia.
The United States remains committed to initiatives such as the
Congo Basin Forest Partnership and the Asian Forest
Partnership. We will continue our efforts through the Tropical
Forest Conservation Act, which helps developing nations
redirect debt payments toward forest conservation programs. So
far my administration has concluded 12 agreements, concluding
[sic] up to 50 million acres of forest lands.
America's efforts also include an $87-million initiative to
help developing nations stop illegal logging. These efforts
will help developing nations save their forests, and combat a
major source of greenhouse gas emissions.
The United States is also taking steps to protect forests
in our own country. It's one thing to help others; we got to
make sure we do a good job here at home -- and we are. Since
2001, we've provided more than $3 billion to restore our
forests and protect them against catastrophic fires as part of
a Healthy Forest Initiative. In partnership with our farmers
and ranchers, we're providing tens of billions of dollars in
incentives for conservation. We're promoting sustainable public
and private land-management policies. By taking these steps,
we've helped increase the amount of carbon storage in our
forests, and we've helped safeguard a national treasure for
generations to come.
What I'm telling you is, is that we've got a strategy;
we've got a comprehensive approach. And we look forward to
working with our Congress to make sure that comprehensive
approach is effective. And we look forward to working with you
as a part of this global effort to do our duty.
And we've done this kind of work before. And we have
confidence in the success of our efforts. Twenty years ago
nations finalized an agreement called the Montreal Protocol to
phase-out substances that were depleting the ozone layer. Since
then, we have made great strides to repair the damage. Just
last week, developed and developing nations reached consensus
on speeding up the recovery of the ozone layer by accelerating
the phase-out of these harmful substances. This accelerated
phase out will bring larger benefits because they'll
dramatically reduce greenhouse gas emissions.
We have seen what happens when we come together to work for
a common cause, and we can do it again. And that's what I'm
here to urge you. The United States will do our part. We take
this issue seriously. And we look forward to bringing a spirit
of cooperation and commitment to our efforts to confront the
challenges of energy security and climate change. By working
together, we will set wise and effective policies. That's what
I'm interested in, effective policies. I want to get the job
done. We've identified a problem, let's go solve it together.
We will harness the power of technology. There is a way
forward that will enable us to grow our economies and protect
the environment, and that's called technology. We'll meet our
energy needs. We'll be good stewards of this environment.
Achieving these goals will require a sustained effort over many
decades. This problem isn't going to be solved overnight. Yet
years from now our children are going to look back at the
choices we make today, at this deciding moment: It will be a
moment when we choose to expand prosperity instead of accepting
stagnation; it will be a moment when we turn the tide against
greenhouse gas emissions instead of allowing the problem to
grow; it will be a moment when we rejected the predictions of
despair and set a course of a more hopeful future.
The moment is now, and I appreciate you attending this
meeting. And we look forward to working with you. May God bless
you all. (Applause.)
END 10:29 A.M. EDT
----------
Mr. Boucher. Thank you very much, Mr. Connaughton, and we
look forward very much to our working in collaboration with
you. Do you have any sense of when in 2009 that final meeting
in Copenhagen is likely to take place?
Mr. Connaughton. It will occur in December. Typically it is
some time in December.
Mr. Boucher. And that date has been set?
Mr. Connaughton. I don't think they have got a--well,
actually the date has been set but I don't know specifically
what it is.
Mr. Boucher. So you have now almost 2 full years within
which to carry forward the negotiations pursuant to the Bali
road map?
Mr. Connaughton. That is correct. The first big meeting
occurs again in December in Poland this year, and then the next
big one will be in December in Copenhagen.
Mr. Boucher. In the fall of last year your office convened
on behalf of the President a Major Economies meeting here in
Washington to which you invited I think it was the 12 largest
emitting nations in the world, and I think you intend to have
further meetings of that group over time. Describe, if you
will, the way that that process of major economy nations which
the United States is directing will coincide with the Framework
Convention meetings under the Bali road map. They are happening
at about the same time. Do you view them as being in
competition or do you view them as being complimentary one of
the other?
Mr. Connaughton. The intention of the meetings is actually
to be strongly in support of the broader discussion that will
occur under the U.N. so it goes beyond complimentary. It is
targeted at the specific subjects that the large economies
really need to grapple with. We are the big emitters, and those
who are the big emitters with the biggest technology challenges
should be getting together early and fast to see how we can
advance this discussion and bring that to the broader U.N.
grouping. It is actually about 17 countries depending on how
you treat the EU but as it happens those 17 account for most of
what needs to be done.
The Bali road map, which is 4 pages long, has many, many
elements. I highlighted about 6 core elements the Major
Economies will probably focus on, and then there will be a
whole series of other conversations in the U.N. process so this
is a subset of that.
Mr. Boucher. Well, thank you very much. I personally think
that you are taking the right step in this Major Economies
meeting because to the extent you can have the developed world
come to some agreement about how it will govern emissions in
terms of their own emissions and also interact with developing
countries that should be helpful to the overall Bali process.
As you noted in your testimony, the Bali Action Plan
contemplates action being taken in order to prevent tropical
rain forest deforestation and deforestation in other regions in
the developing world, and the plan basically says that it would
encourage incentives being provided toward that objective.
Do you have any thoughts today about what kinds of
incentives would be appropriate within that context realizing
that the Administration does not have a formal position with
regard to any specific legislation at this point? Assuming that
we come forward with a mandatory control methodology relying
perhaps on cap-and-trade, would the allowance of the purchase
of credits or offsets for tropical rain forest and
deforestation efforts be one such incentive?
Mr. Connaughton. First, in terms of incentives the United
States is actually one of the leading countries already with
the Tropical Forest Conservation Act which provided several
hundred million dollars of incentives through debt relief for
some of the most important tropical forest conservation areas.
Let us focus on tropical forests. But those are critical to
climate change discussion. We also through USAID do a lot of
direct incentive payments for sustainable forest management and
a significant amount of money flows through that program. We
also are contributing under the President's initiative against
illegal logging to one aspect of the deforestation issue and
that is illegal harvest of timber and providing enforcement and
money to enhance enforcement capacity and that really hurts our
guys because our guys sustainably manage, put the effort in,
and then they are out competed in the global market place by
those that don't.
One other highlight that is currently underway is the 2
other root causes of deforestation are taking down forests for
energy to burn wood like we used to in the 1800s. That is an
issue of providing resources for access to more affordable
energy services. That is the solution, and we are doing a lot
of work with countries on that. The other is taking down
forests for agriculture, and the answer to that actually is
access to energy to do more productive and modern agricultural
activities and to clean water, so we have a lot underway and we
want to expand that effort. We have proposed some new financing
through the World Bank to a forest partnership fund and of
course our NGOs are putting a lot of money into this.
I say all of that, Mr. Chairman, with respect to the offset
issue in terms of cap-and-trade. We do not have a formal
Administration position on this so I will just give you my
reflections, which is it does create some challenges because it
is very, very difficult to know that you are getting what you
are paying for. And so what we have done in Bali is we have
committed to doing a series of pilot projects to see if we can
bring integrity to that kind of a financing tool and the
international community agrees that we need that pilot testing
first before we start making commitments of this type. The
second issue that we have concerns with, Mr. Chairman, is if
you are going to increase the cost of electricity to someone on
a fixed income or if you are going to increase the price at the
pump for someone that is using gasoline to get to work, we
think that it is politically a little bit more understandable
to see that money going into buying technology that is going to
solve the problem rather than paying for forest projects
overseas, so I would just suggest that if we are going to move
toward further pricing of carbon, we should keep our eye on the
ball and focus it on the technologies that we need and then use
the economy to get those technologies broader in the global
marketplace.
Mr. Boucher. Thank you. We will have further discussions
about that.
Mr. Connaughton. I know we will.
Mr. Boucher. I do have some contrasting views which I will
withhold for the moment. My final question to you is this. Will
it be helpful to you as you carry forward the U.S. position in
negotiations over the coming 2 years if the Congress passes
legislation that sets targets and announces what is expected in
terms of greenhouse gas reductions across this entire economy.
That target setting exercise will be as we have described the
product of a broad consultation. Once it passes and is
presented to the President hopefully to be signed into law
later this year it would be a set of commitments that the
United States really could keep, something that would enjoy
reasonably broad support across our society, otherwise, we
won't be successful in passing the bill at the outset.
And so is that exercise helpful to you? If we are able to
put those targets into law, does that strengthen your ability
to make firm commitments in terms of what the United States
will be able to advance and adhere to in terms of international
negotiations?
Mr. Connaughton. Mr. Chairman, when the history is written,
I think one of the challenges of Kyoto was that it put the cart
before the horse. International negotiators set domestic policy
in an international negotiation. What you have just asked is
very consistent with what the President has suggested that what
we need is actually a domestically defined set of objectives
and then bring that to the international conversation, and that
is a core part of the Major Economies process how to frame up
what we would like to see in domestic commitments. Now this
committee broadly had already made a major contribution in that
respect because you did announce 5 new objectives that are
backed up by 5 major new programs. That is something most of
the other countries have not done yet in the sectors where this
Congress is active.
So ultimately international acceptance by the United States
is going to turn on a bipartisan and across Pennsylvania Avenue
agreements on what we think this outcome should be.
Mr. Boucher. Well, thank you very much, Mr. Connaughton.
Your views and mine on that issue are completely in accord. Let
me just finally compliment you on the role that you are playing
and the success that you are achieving in re-involving the
United States internationally and playing a leading role in
doing that. I think that was very important for us to do and in
my view you have done it well. The gentleman from Michigan, Mr.
Upton, is recognized for 5 minutes.
Mr. Upton. Thank you, Mr. Chairman. And again, Mr.
Connaughton, thanks very much for your testimony. As we hit on
here earlier as part of your testimony the Congress did act in
a number of processes that really induced emissions, lighting,
fuels, automobiles, et cetera. What kind of reaction did you
get from the folks in Bali that in fact we have actually done
something that perhaps they have not? I have not traveled
extensively around the world hardly at all, and I look and see
what we have done. I don't think any nation is as close as we
are whether it be Europe or other places around the world as it
looks to real changes in the way that we consume energy down
the road in terms of legislative language. What type of credit
did we get because that was bill was pretty close to fruition.
In fact, that is one of the reasons why the congressional
representation was so low was because we were literally in the
midst of debating that legislation on the House floor but they
knew that it was coming. What type of credit did we get for
that?
Mr. Connaughton. In terms of Bali itself the bill was
agreed as we were wrapping up so it was swallowed by the last
minute skirmishing around the agreement. I would observe though
that we made a substantial presentation on what was coming to a
very large session of NGOs and other countries, and to a person
what happens is when we present a total U.S. effort at the
Federal, state, and local level people are amazed because of
the misperception in the media. As Congresswoman Baldwin points
out, I think, Congresswoman, it is a lack of awareness that is
bigger. It is not lack of action. It is a lack of awareness. I
would suggest probably many of us don't have a keen sense of
what Europe is actually doing or what Japan is actually doing
either. We need much more understanding of what we are actually
doing because when we presented the CAFE piece and we presented
the fuels piece no country on CAFE or on fuels is as aggressive
as we are under alternative fuels. The lighting piece, there
are only a couple countries that have looked at lighting the
way that we just did, and so now this is inspiring, some focus
thinking by their countries.
So again this bipartisan agreement, when the United States
comes together bipartisan agreement it has a big effect
globally, and I think you will see the repercussions of that
this year. I need to also observe those, not just the
regulatory side, the work that was done in the '05 energy bill.
When we talk about $35 billion of loan guarantees other
countries aren't doing that so that makes them think, hey,
maybe that is a tool we can look at. When we talk about $2
billion of incentives for the purpose of highly fuel efficient
vehicles again other countries are not doing that at the scale
we are doing it. So it is not just the regulatory side, it is
the incentive side and the technology investment side that is
going to have that influence so we need to again continue to
put that comprehensive package together.
Mr. Upton. This week the German steel industry is on record
warning of huge job losses if the European Commission went
ahead with the current schedule that they have got. In fact,
they actually indicate that there could be as many as 50,000
jobs that leave Germany. The Financial Times earlier this week
had a quote I think from the new French Prime Minister Sarkozy
who said that it could unfairly penalize France and pose a real
threat to the European industry if these targets continue to be
mandated. When you look at that angle of it all of a sudden
Europe is beginning to wake up to see what those changes are
going to be not going ahead with some of the changes that we
have already done, lighting, automobiles, et cetera, and then
you take a peek at what China and India are also not doing, how
do you see all these pieces coming together or apart?
Mr. Connaughton. I think one of the most important issues
for this committee to explore this year and for all the members
to become pretty savvy in is this concept of what is called
leakage, leakage of jobs, leakage of emissions, so there are
many strategies we can employ that produce technology and new
jobs in America so there are many that work that way so that is
good. But if we are not careful in the design of our policy, we
can end up driving up electricity prices, driving up gas
prices, and moving manufacturing overseas so you not only lose
the jobs but the emissions go up overseas so you don't get the
environmental outcome either so you just need to be thoughtful
in your policy design to be sure not to create that kind of a
consequence.
Now one way you do that is get China and India in
particular sectors to make similar commitments. I will give you
a hard example of that. Through the Asia-Pacific Partnership we
got the aluminum sector together, the Chinese and the Indian
aluminum sectors, committing to similar objectives with our
aluminum guys and the Japanese aluminum guys on very specific
time lines for reducing the greenhouse gas emissions. They are
equally and jointly shared.
Mr. Upton. So they are the same.
Mr. Connaughton. They are the same, so you are not talking
about them coming in later, you are not talking about them
doing less in the aluminum sector. They are committed to doing
the same thing. Now that is where we need to go.
Mr. Upton. Thank you.
Mr. Boucher. Thank you very much, Mr. Upton. The gentleman
from Georgia, Mr. Barrow, is recognized for a total of 8
minutes.
Mr. Barrow. Thank you, Mr. Chairman. Thank you, Chairman
Connaughton, for being here today. I want to talk carbon
sequestration with you for a little bit because it is important
to a lot of the big emitters in the area that I have the
privilege of representing. But at the outset I can't help but
observe we want to digest what it is you have to say. We want
to digest what it is you have to offer, but I will note that
the digestion process begins with chewing and there is very
little to chew on in your written statement. There is a lot to
chew on in your extemporaneous opening statement though, and so
I would like to offer and invite you in the future to help us
get going on this process by giving us more to chew on in your
prepared statement than you gave us here opening here today.
Now on the subject of carbon sequestration, I know that
there are a lot of technical issues and I know that there are a
lot of legal issues. Folks in my part of the country don't want
the Floridian aquifer to be turned into one great big old
carbonated water deposit. We want to get the carbon out of our
water, our ground water, for example. I understand that at Bali
there was some talk about trying to bring international science
and resources to bear on actually studying the technical and
the legal issues involved with the notion or the idea that we
can take all this carbon out of the coal that we are going to
use and stick that in the ground somewhere and store it safely.
I also understand that there was some objection from some of
the developing countries to going down this path and as a
result the idea was essentially, if I am understanding
correctly, that this notion is going to be shelved until the
next COP meeting some time toward the end of this year,
December of 2008.
My question to you is in two parts. First, is this
Administration committed to an international study that brings
all the best science and scientists to bear on the issue of the
technical and legal issues surrounding carbon sequestration in
geological formations or not?
Mr. Connaughton. Yes.
Mr. Barrow. What can we expect to get done about that in
the last year of this Administration's term in office?
Mr. Connaughton. Let me outline that for you, Congressman.
Let me briefly make an aside with respect to my testimony. No
offense was intended, please. The Bali Action Plan is 4 full
pages. It is the statement of administration policy because we
agreed to it, and in fact reading it from end to end is
probably the most important thing we could be doing right now
and understanding, so please know that was my intention.
Mr. Barrow. Well, in your Power Point presentation I just
find two very brief, which is incorporated by reference in your
testimony, two brief references to the subject of carbon
sequestration and no explanation of what we want and what we
plan to do in the last year of this Administration's term.
Mr. Connaughton. Well, let me map this out. First, it is
probably the single most important thing we need to be doing
because as we go forward the use of coal to make power will
account for more than 50 percent of global emissions and so if
we don't find a pathway with respect to this source----
Mr. Barrow. We already know how important it is. What does
this Administration hope to do before it leaves office?
Mr. Connaughton. So, one, we have a full plan that will run
over the course of the next 10 years or so of the research, the
demonstration, and then the policy so it will help the
deployment to do large scale demonstration projects for all the
components that carbon capture and storage possible.
Mr. Barrow. A 10-year plan is going to last longer than the
next two administrations.
Mr. Connaughton. Well, actually what we have done,
Congressman, is we have requested and gotten mostly from the
Congress the budgets necessary to build the world's first zero
emission coal-fired plant known as the FutureGen Project. The
President's budgets have requested and we have received from
the Congress tax credit authority to the tune of $1.8 billion
this year and next year----
Mr. Barrow. Back to the subject of my question though which
is an international study of the technical and legal issues
involved with sequestering carbon in geological formations as a
solution as a part of the overall picture.
Mr. Connaughton. Five years ago, Congressman, the U.S.
launched what was called the Carbon Sequestration Leadership
Forum, and that forum was set up to specifically engage those
issues, and in fact a lot of work has been done in that forum
on that broader range of issues, policy type issues and design
issues that you discussed. What we have done since then is we
are now turning that into our domestic policy that is backed up
by both the effort in EPA and the other agencies on the legal
side, backed up by the Treasury on the----
Mr. Barrow. What is that policy, and what is it going to
accomplish by the end of this year?
Mr. Connaughton. By the end of this year, we will be
underway with project planning and design to actually break
ground on the FutureGen project.
Mr. Barrow. Back to the study though--the subject of my
questioning is the need for an international study to ascertain
what really are the technical issues and the legal issues
involved with the whole notion of sticking this stuff in the
ground and building a zero emitting plant is a good idea of
going around the problem. My question is what are we going to
do about the carbon we are taking out of coal that burns to
make energy.
Mr. Connaughton. On the specific issue of the study MIT has
produced a state of the art study that the rest of the globe
has been working with. The Department of Energy has produced
its own road map and plan with respect to this. The Electric
Power Research Institute of America has also conducted their
own evaluation of this. What we are doing now is bringing that
to the international community to see if we can then develop a
joint road map that will build on the work that the U.S. has
now pulled together. So on that specific issue it is our
intention this year to get agreement among the Major Economies,
especially the coal-using countries to a joint effort, but not
just a study, Congressman, a joint effort and a joint
commitment to put the resources necessary to begin to build the
demonstrations that will make this possible and to do it as
fast as we can. It goes beyond just a study.
Mr. Barrow. Are you telling me we already understand the
technical and legal liability issues well enough to be able to
actually try and implement a program of carbon sequestration in
geological formations? Do you think we can do that by the end
of this year?
Mr. Connaughton. I am telling you, Congressman, that we
have identified a lot of the issues and we have done a lot of
evaluation of those issues.
Mr. Barrow. I have identified an issue. We have identified
the issue of the technical problems of sticking it under ground
and storing it hopefully for a long time and getting into other
things we don't want to get into. That is an issue, and what
the legal liability issues are if it doesn't work out. I mean
is Georgia Power and the Southern Company going to be liable to
get the carbon out of water that they put into the ground if
they are trying to follow your road map and your plan for
storing this stuff underground? Where are we on that track?
Mr. Connaughton. Specifically on that track with respect to
the FutureGen Project, we have already set up the legal regime
and that is going to be put in place to make that project
happen as a research plan and then the Environmental Protection
Agency is working on the regulations, Congressman, to do what
you just described more broadly.
Mr. Barrow. What legal regime are you talking about, Mr.
Chairman?
Mr. Connaughton. I am sorry?
Mr. Barrow. What legal regime, what are the steps that have
been taken to create a legal regime for dealing with the issues
of geologically stored carbon that leaks into other things?
Mr. Connaughton. There is a team in the executive branch
that is working through the regulatory design and needs to be
sure to address the liability issues and the regulatory issues
associated with those practices.
Mr. Barrow. Seven minutes into my 8-minute period of
questioning, my question now is what is that team going to
produce for us by the end of this year?
Mr. Connaughton. They are working on the very specific
recommendations for policy that can be effectuated without need
for congressional action and policy that may require
congressional action to make these projects----
Mr. Barrow. By the end of this year they are going to be
able to tell us what they think Congress has to address and
what Congress doesn't have to address?
Mr. Connaughton. A lot of that has been identified already,
Congressman, and now we are working on specific
recommendations.
Mr. Barrow. Not in this Power Point presentation, which is
what I am asking for. Can you tell us that by the end of this
month, for example, we will have a full and comprehensive
report on the issues that have been identified by this study
group on the subject of carbon sequestration and geological
formations?
Mr. Connaughton. I would be more than happy to provide you
with the materials that have been prepared by DOE to date, by
EAP to date, by MIT to date, and by the Electric Power Research
Institute. I think you will find----
Mr. Barrow. How about the working study of this
Administration?
Mr. Connaughton. I am sorry?
Mr. Barrow. How about the study group of this
Administration?
Mr. Connaughton. We have DOE work, and we have EPA work on
this. I am happy to share that with you.
Mr. Barrow. I have your assurance on that by the end of
this month?
Mr. Connaughton. Absolutely.
Mr. Barrow. I am through.
Mr. Connaughton. I welcome your engagement on it,
Congressman.
Mr. Barrow. Thank you, sir.
Mr. Connaughton. It is critical.
Mr. Boucher. Thank you very much, Mr. Barrow. The gentleman
from Texas, Mr. Barton, is recognized for 5 minutes.
Mr. Barton. Thank you, Mr. Chairman. My friend from
Georgia's questions just kind of highlight some of the Alice in
Wonderland aspects of this debate. The more questions he asks
the more CO2 he created. The more Mr. Connaughton
tried to answer the questions, the more he created, the very
thing that we are trying to sequester. I guess my first point,
Mr. Connaughton, just to kind of set the ground rules, what is
the most prevalent greenhouse gas in the world?
Mr. Connaughton. Total volume, it is CO2.
Mr. Barton. I thought water vapor was classified as a
greenhouse gas, H2O. Am I wrong on that?
Mr. Connaughton. It is a greenhouse gas. It is a forcing
agent so you don't think of water vapor as a gas, but, yes,
that is the most prevalent. That is the most prevalent forcing
agent, yes.
Mr. Barton. Pure chemical, clinical terminology, water
vapor is in fact, I think, over 90 percent of the greenhouse
gases in the world, is that correct?
Mr. Connaughton. I believe you are correct.
Mr. Barton. Okay. Does the Bush Administration have a
proposal to regulate H2O?
Mr. Connaughton. No, we do not.
Mr. Barton. What is the relative volume of water vapor in
the atmosphere as compared to CO2?
Mr. Connaughton. I don't have those technical answers, Mr.
Chairman.
Mr. Barton. Just give an approximation, kind of a back of
the envelope estimate. You know it.
Mr. Connaughton. Actually I don't have the specific ratios
in my head. I would be happy to----
Mr. Barton. Isn't it like 1 to 1,000, something like that?
How far off would I be on that? It is not anywhere close to 1
to 1, is it?
Mr. Connaughton. It is not. I think the issue, Mr.
Chairman, as we look at this is the question of the--we measure
these forcing agents in parts per million, and we are talking
about additions or subtractions at the margin. I think the
question that the scientists are exploring is whether the
changes at the margin are of consequence in the overall climate
balance. And so that is where the scientists are really focused
so when you are talking about there is a lot of natural
CO2 in the atmosphere, there is a lot of natural
methane in the atmosphere, a lot of the natural water vapor in
the atmosphere, then the question we ask ourselves is even if
we had a tiny bit more from humans can that effect the balance.
Mr. Barton. We are talking about orders of magnitude of
thousands or tens of thousands. I mean to me it is a little bit
hard to accept from an engineering standpoint, we are talking
about regulating man-made CO2 when the elephant in
the room is God-made H2O vapor. I mean nobody is
talking about regulating H2O vapor, water vapor,
because you can't do it and you don't want to do it. Even in
the famous U.N. studies in their little table of what causes
warming or cooling their big variable, their big forcing agent,
I think is the term you used is H2O, is cloud
formation, which they don't accurately know how to model and
are just now beginning to understand, and yet again my good
friend from Georgia rightfully so because his constituents are
worried about the legal liability of carbon sequestration,
CO2 sequestration, that is such a minor part of the
overall total global forcing agent that it is--I mean if you
did any kind of a rational engineering analysis it wouldn't
even be a variable or if it would, it would be such a minor
variable that it would be de minimus.
Let me ask another question. The cap-and-trade system in
Europe, has it resulted in emissions going down, staying the
same or going up?
Mr. Connaughton. We actually don't have the data from
Europe yet for the last 2 years. The U.S. is way out in front
of other countries in our ability to get our data out so I
couldn't speak specifically to that. We have data through 2005
which shows a trend line in Europe of increasing emissions
slightly higher than the U.S. 2005, that is the first year of
their emissions training program.
Mr. Barton. Wouldn't you think if the cap-and-trade program
were really successful that their emissions rate would be going
down? I mean the trend should be down, not up. Isn't it kind of
contradictory that the trend seems to be the opposite of what
the proponents hoped it would be?
Mr. Connaughton. Well, there are 2 features to that. One is
their emissions training system only applies to power plants
and industrial sources. It doesn't apply to the rest of the
economy. Secondly, they brought aboard all the eastern European
economies which are heavily fossil fuel dependent but they
didn't originally have caps of any kind, and so--or
consequential ones, I guess is probably the fair way to say it,
and so their current program was quite limited to begin with
anyway. There were also some design issues with that program
that many people have highlighted in my view not the least of
which is how much the European industries are buying compliance
by investing in efficiency projects overseas, so that allows
emissions to increase in Europe. Theoretically they decrease in
China but we have at least some examples, we don't have good
studies on this, but some examples that appears to be creating
an incentive in China for entities to increase their emissions
in order to be paid to decrease them and we want to avoid that.
Mr. Barton. My time has expired, and the Chairman has been
very gracious. Thank you, Mr. Chairman, and, thank you, Mr.
Connaughton, for your service to the country.
Mr. Boucher. Thank you very much, Mr. Barton. The gentleman
from Pennsylvania, Mr. Doyle, is recognized for 5 minutes.
Mr. Doyle. Thank you, Mr. Chairman. Well, after just
listening to my good friend from Texas speak, and he is my
friend, this shows you how tough this debate is going to be.
Some people on this panel don't even believe this is a problem
and that we should be regulating water vapor so it is a tough
challenge. I have a couple questions. I don't think there is
anything more important to our national security and our
economic security than extricating us from petroleum, and it
seems to me that in the process if we can do that and develop
alternative energy sources, increase some of our nuclear
capacity here, learn how to burn coal cleaner, we can kill two
birds with one stone. We can address greenhouse gases, and we
can start putting our country on a path to energy independence,
which I think is very, very important for our future.
When you look at all the most troubled parts of the world
the people leading those countries are sitting under a bunch of
petroleum that we still have to have and as a result we get
ourselves mixed up in a lot of foreign policy debacles we
shouldn't be in. Having said that, when President Kennedy
decided we were going to put a man on the moon, and we didn't
know how to do that at the time, one of the things he did do
was he marshaled the resources of this country, he doubled the
Nassau budget several times, and something that was thought to
maybe take decades was done in less than 10 years.
One of the most frustrating things for me as a member of
this committee and someone who has been in Congress 14 years
now is to watch energy secretary after energy secretary, it
doesn't matter what the Administration is, through the Clinton
Administration, through the Bush Administration, sit before
this committee on budget time and tell us how they don't need
any more money and watching them take programs that rob Peter
to pay Paul, whatever the program de jour is that year, and
then that seems to fade aside. Fuel cells was big, and then we
get near commercialization and we pull the plug on them and we
are funding FutureGen. FutureGen is now the big thing we want
to talk about and what comes next. Where is the commitment on
this Administration and hopefully future administrations to
finally put our money where our mouth is and put the dollars
necessary so that instead of these different constituencies,
you know, the battle we hear from the alternative energy people
is don't put money into clean coal, you are stealing money that
could go into renewables.
It is always people see the pie as just constant and that
their slice of the pie is going to get smaller if we move into
these other fields. We have to do all of this. We have to do
all of this. We have to burn coal clean. We have to increase
nuclear. We have to bring alternative energy sources into the
market. We have to commercialize these things. Carbon
sequestration, we can't wait 10 years for a study. We need to
be able to deploy that technology in this country in the next
few years. We need to make it a national emergency. It has to
get done, and we have to marshal the best and brightest minds
in our country and say if we can spend $10 billion a month in
that black hole called Iraq, we certainly can start spending
some money in the United States of America to extricate this
country from this addiction we have to petroleum which is
absolutely crushing our kids and grandkids and give them a
worse quality of life than we enjoy today if we don't start
doing something about it.
I have yet to see an administration on Democrat or
Republican that is serious about tackling this problem. Can we
expect next year when the Secretary of Energy and when this
Administration starts to put their budget together a real
commitment in terms of dollars and resources in the Department
of Energy and other agencies that shows a true commitment to
the American people and the rest of the world that the United
States is serious about two things, getting us off petroleum in
the near future, and at the same time curbing greenhouse gases,
and as an added bonus to that creating new industries in this
country where we will start to export that technology to other
countries to help them also comply to cut their carbon
emissions? What can we expect next year from the Administration
in terms of an energy budget request in these other agencies?
Mr. Connaughton. Well, first, as a general matter with the
possible exception of your comments on Iraq, I just need to say
I agree and the President strongly agrees with your perspective
and the passion you are bringing to this. I would also note I
think you may be selling your own committee short, Congressman,
the bill you just passed was a major step forward and actually
unrivaled if you look around the world in terms of putting in
place the pieces to set that in place. Now we came up a little
bit short of the broader approach the President called for in
the State of the Union last year but we can continue to work on
that because I think you have been doing great work in
Pennsylvania about looking for all the opportunities for
replacing petroleum, not just focusing on a particular one, and
so I think that is where we need to take the conversation next.
In terms of the----
Mr. Doyle. Our bill was a baby step, not a big step. It was
a baby step. It was a step in the right direction but it is
miniscule in terms of what we need to do to make ourselves
independent on energy for the future and at the same time cut
greenhouse gases. We need to do 100 times more than what we are
doing right now for our own good. Forget the rest of the world.
For the good of the United States of America, we need to do a
lot more than we are doing.
Mr. Connaughton. And let me agree with you especially in
light of what it takes to really cut greenhouse gases and
displace petroleum in the way you have described. Secondly and
importantly, and this goes back to questions that Congressman
Barrow was asking as well, on replacing petroleum we have good
tools now from the Congress. We have good budget aspects from
the Congress that are going to enable us to move beyond just
studying and begin to start demonstrating. We are already
deploying the resources to build 3 of the world's--among the
world's first major cellulosic ethanol production plants, and
the venture capital folks are coming in behind that and we have
to go there because that is low greenhouse gas profile and
really sustainable.
We now need to do the same thing on coal and capture and
storage of coal, and again move beyond just the research and
that is important. Don't get me wrong there. But get the big
plants built, get the commercial scale capture experiments
done, get the commercial scale sequestration experiments done
so we can show the thing works and then in the legal liability
regime that people will invest against and we are committed to
this.
Mr. Doyle. The Chairman has been very generous with my time
and I appreciate it. I would just say, Chairman, whatever you
are thinking of doing multiply it times 10 and cut the time in
half. Thank you, Mr. Chairman.
Mr. Boucher. Thank you very much, Mr. Doyle. The gentleman
from Arizona, Mr. Shadegg, is recognized for 5 minutes.
Mr. Shadegg. Thank you, Mr. Chairman. You caught me a
little bit by surprise. I thought there were others ahead of
me. I am fighting a cold, and I apologize for that. Mr.
Connaughton, I want to thank you for your service to the
country. We bumped into each other in China last summer, and I
know you were working on these issues then. In your testimony
you mentioned that there are several existing programs that are
promoting energy efficiency and environmental quality that have
led to reduction in greenhouse gas emissions here already. This
committee and this Congress appear to be hell bent on a major
policy change, specifically a cap-and-trade system.
I have concerns about a cap-and-trade system. I have
concerns that a cap-and-trade system would be so confusing the
American people will not understand it. They will not
understand why the cost of goods is going up, and they will be
frustrated if they learn at a later point in time that the cost
of goods and services went up but greenhouse gas emissions did
not go down. And Mr. Barton pointed out that at least in Europe
as a result of some problems in the implementation of their
cap-and-trade system greenhouse gas emissions in fact have not
gone down. I am familiar with stories about producers in Europe
who are going outside of Europe, moving the production, for
example, of cement from France to Algeria outside the European
cap-and-trade structure.
I guess I have a broad question for you. I largely agree
with my colleague from Pennsylvania about the need to move
forward on efficiency, and I am concerned that if we do a
radical policy change in the nature of cap-and-trade, we could
spend a lot of energy trying to implement that without in fact
reducing greenhouse gases and at the same time doing
substantial damage to the economy. I do agree that we need to
get off of oil. I completely agree with my colleague from
Pennsylvania with regard to our dependence on oil from people
who hate us, which not only puts us into a difficult economic
situation but has us funding our enemies, and I think with the
war on terror and the commitment of radical Islam to destroy us
that is a serious policy mistake in itself.
My broad question to you is do you think that we need to
move as quickly as this committee is talking about towards a
cap-and-trade program? If so, are there things you would
caution us to do or not do? How do you feel about a carbon tax
instead? Is it more transparent? Would it be easier to
implement, and are there other things that can promote
efficiency or reduce our reliance on foreign law that you would
recommend?
Mr. Connaughton. Thank you, Congressman. You have asked
many, many questions so let me see if I can address them.
Mr. Shadegg. I wanted to get them all in. I have a cold so
I don't have to talk again.
Mr. Connaughton. Let me see if I can address them as a
package. As I indicated at the beginning, we have a portfolio
of strategies that includes regulations, some of the new ones,
which by the way are market based, the CAFE piece and the fuels
piece, used as something alike. You know, it is a cap with a
flexible trading system involved in it. We have technology
mandates like we did for efficiency of appliances. We have good
old-fashioned incentives and those are very powerful to opening
up markets where the marginal cost is just within reach. And so
the challenge for us as we get into this year is taking stock
of what we have got where the Congress has already declared
goals, and then seeing what more we might need, and we should
be looking at the full range of options for that. Some suggest
tax, some say incentives. Some say cap-and-trade. Some say
technology mandate. Some say let the sectors come up with a
compact and commit to it and hold them to it and come back at
them if they don't make it.
So there are a variety of approaches, and I have seen them
all work. I have seen all of them also designed badly and fail
so we are at the point where we need to be that specific and
that goes to the heart of your questions. cap-and-trade can be
a very powerful tool when focused, used correctly, and
depending on the market. We did it on SO2 because
there was 500 power plants, 1 pollutant with a very specific
objective in mind with a known technology. It was ready to be
deployed. CO2 is different. When it comes to coal we
do not have the technology available to us today where it can
be--liability can be established, warranties can be given. You
are going to be able to make sure the lights stay on and you
are not going to drive up electricity costs for the poor and
people on fixed incomes.
The Congress is debating LIHEAP today, and our goal can't
be to raise costs of electricity and gasoline on those least
able to afford it. So those become critical factors in this
discussion and debate, and again this committee has the
capacity to be the most thoughtful in addressing those very
important questions. And as I indicated there is the leakage
issue. The leakage issue that if you drive up, for example, if
your policy drives up natural gas prices further that means
even less good high-paying American jobs in commodity chemical
manufacturing and in fertilizer manufacturing. Right now we
have become, I am told, we are now going to import our
fertilizer for the first time. What sense does that make? It is
an area where we are otherwise competitive but because of high
and fluctuating natural gas prices we are now importing. So
that is what we want to just focus on, but I am hopeful that
the Chairman in his effort this year will distill out these
specific issues and then we can begin and then look at policy
designs on the facts and on the economic analysis, and like we
did on CAFE and like we did on fuels find some common ground
that addresses these issues.
Mr. Shadegg. I hope we will continue to work with you and
get your advice as we go forward. Thank you.
Mr. Boucher. Thank you very much, Mr. Shadegg. The
gentleman from Texas, Mr. Gonzalez, is recognized for 8
minutes.
Mr. Gonzalez. Thank you very much, Mr. Chairman. Welcome
and thank you for your service. A couple of observations before
I get to the particular question, and the first one is, and see
if you agree, because I think our concern is to do this and do
it in a way that it doesn't in any way jeopardize our economic
well-being. But it has to be acknowledged, and I think we have
to be honest as elected officials and those that serve in the
Administration such as yourself that it is going to cost more,
and that means it is going to cost more to each and every
citizen, and we need to prepare them for that. And somehow we
have to convince them, of course, that it is an investment now
that will serve us well in the future.
Now do you agree that we should be up front telling the
consumer of America that it is going to cost them more when it
comes to energy in the future, and not--we have costs already
that are skyrocketing in certain areas but just what we
presently have and with the technology that is going to be
employed that is going to add cost, do we not need to be honest
with the consumer that they are going to have to make their
contribution in the way of higher cost?
Mr. Connaughton. I think there are 3 dimensions to that
question, Congressman.
Mr. Gonzalez. And could you be as brief as possible because
that is my observation and I want to get----
Mr. Connaughton. There are some investments that will pay
for themselves over time, and that is the efficiency discussion
and we have the tools for that. There are some investments
where if we are controlling for air pollution where we can
quantify health benefits and also get greenhouse gas reduction
from that. You can actually show there is a net benefit so the
cost is worth the investment. There is then the uncertainty
zone where you are asking for more cost and we just need to be
smart about what those costs are and make sure we are tailoring
them to deliver something that we think will be good, and so
that is my answer to all 3.
Mr. Gonzalez. And I understand, and all 3 equate to greater
cost. It is just how we invest it. I just want to make sure
that we are finally asking our constituents which is the
hardest thing in the world to make their own specific
contribution by way of greater cost, and it is a very difficult
thing for an elected official. The next thing is I know that
there have been certain individuals that observed when we are
dealing with the developing nations that we understand their
concerns and the fact that they can look to the United States
experience and figure, hey, how did you guys get there, how did
your Major Economies get there? You are blocking us off from
the same practices in which you engage to attain that wonderful
lifestyle that you enjoy today.
I think that is a terrible way of looking at it, and we
have to provide developing nations with alternatives to the
traditional ways that many economies arrived to where they are
today, otherwise, we would say, well, we will let you have 100
years of slavery. Or we can just, as a matter of fact, job
waiver, we will give you 50, 60, 70 years of that. Sweatshops,
well, we will give you, I don't know, maybe a half century or
longer maybe of that. And then of course you can pollute your
air and your water and figure a solution later. I think that is
a really dangerous thing to do. I think we have to relate to
exactly where they are coming from and such, and I think you
have pointed out in your testimony, I am not selling it short,
and I am not saying that you are not obviously cognizant of
that consideration, I am just afraid that many individuals,
especially elected officials, are simply saying, well, look how
we got there, how can we be asking that of developing
countries.
Well, very easily. I think they can learn through our own
mistakes. But my central question, and we are going to have
enough time, because I am really concerned and I am not real
sure if I have the latest information, but I know that we
became parties to this Bali road map or whatever it is but we
have also been talking about the Major Economies coming
together. Do we still have something set up in Hawaii at the
end of the month?
Mr. Connaughton. Yes, we do.
Mr. Gonzalez. All right. And it looks like there is going
to be full participation by the European Union. We don't have
any problem with any of these Major Economies participating?
Mr. Connaughton. No. Actually the leader's representatives,
people like me, who are direct reports to their leaders, that
is how seriously this is being taken and that is good.
Mr. Gonzalez. Okay. Now those are obviously the developed
economies, the Major Economies, the major emitters, whatever we
want to call ourselves. Do we have a counterpart with the
developing nations having their own pre-Bali road map meetings?
Mr. Connaughton. We do not in this particular setting.
There is something called the G-77, which is all the developing
countries combined but that actually is beginning to show 2
aspects. There are the major developing countries who are big
energy users and emitters, and then there is everybody else.
And Bali began to show that, which is the China, India, Brazil,
South Africa, Mexico, they are in a slightly different place
because they are big contributors to greenhouse gases and they
are now part of this discussion with us.
Mr. Gonzalez. And of course what we are doing there in
Hawaii and such is not viewed as counterproductive or
subverting or something in addition to or a side show, but
wouldn't you say that whatever decision is reached in that
particular setting is really what we probably would be taking
to the meetings that are set up because we are still trying to
figure out what our domestic bottom line is, right, and so then
we have to get all our major emitters to figure out what their
basic bottom line before we really get to the negotiating table
with all of the parties.
My only concern is all the stakeholders aren't there, and
maybe it is all right to have all these preliminary meetings
that precede whatever is going to happen when all stakeholders
are there, but is there any danger that those that are not part
of this major emitters, Major Economies meetings since they are
not there to engage us because I am so not sure that we are
going to get off our bottom line once we establish it in that
setting and we go to the major meeting. Now if I am a
stakeholder, we are all stakeholders developed and developing,
but I am not included in the developing where you guys are
establishing your bottom line, I am not so sure I am so crazy
when you come to our big meeting and you are telling me this
our bottom line, I never had anything to say about your bottom
line. Is there any danger in what I have just proposed?
Mr. Connaughton. That is always a concern. The same is true
when any sub-group of this committee begins to try to work
something out and brings it to the broader committee, so we are
trying to organize this in a way that we did a lot of
preparatory work, we did a lot of briefing of everybody on what
we are trying to achieve when we were in Bali. There is now
greater acceptance that this was a useful tool recognizing that
whatever the output of this has to be brought back to
everybody, and so the U.N. process will start in April so we
will have a couple meetings in advance of that and bring our
ideas to that. We will have a couple after that first U.N.
meeting and then hopefully the leaders will be able to get
their heads together around this so that in plenty of time for
polling at the end of this year, there will be 3 or 4 or 5
months where we can have even the broader stakeholder
discussion.
Surely, Congressman, you can agree starting on a few of
these with the countries that are most responsible is probably
a good step, and you can also understand having a room filled
with 190 people as an initial opening place for the
conversation is a little bit tricky. But that is what we did
with Bali. We had 190 nations giving a big outline of what we
need to do. Now we can break it into its parts and get the
countries that have a role in those parts bringing some real
concrete ideas forward. We are trying to be quite constructive.
Mr. Gonzalez. But even in Bali wouldn't you admit that
towards the end there if the United States had made its own
adjustments to the outcries and concerns of developing nations
more than anyone else we probably wouldn't be where we are
today with the road map. My last observation, with 15 seconds,
you said something about we should understand even with our
subcommittee structure and our committee structure and in the
full Congress I trust the Bali road map and what you all are
going to do doesn't exactly follow that model because we don't.
And again I just want to say thank you for your service and
your testimony today.
Mr. Boucher. Thank you very much, Mr. Gonzalez. The
gentleman from Oregon, Mr. Walden, is recognized for 5 minutes.
Mr. Walden. Thank you very much, Mr. Chairman. I want to
thank Mr. Connaughton for his work for the country and for the
President and appreciate your testimony today. I want to follow
up on a couple of points you made just to make sure I heard
them correctly that with the $35 billion in loan guarantees the
U.S. has put forward we lead the world, is that correct?
Mr. Connaughton. Yes. That is a substantial backing of the
investments necessary to get low carbon technologies.
Mr. Walden. And then you said $2 billion in incentives for
highly fuel efficient vehicles. That is also leading the world
in that area?
Mr. Connaughton. We are among the leaders. Germany and a
couple of other countries are right up there with us but just a
few of us.
Mr. Walden. And do they have the same clean air
requirements in Europe and Germany that we have here? I mean
they have been out front with diesel for a long time. Hasn't
that had health implications?
Mr. Connaughton. Actually right now our clean air
requirements for diesels is more stringent than Europe's.
Because they are so heavily invested in diesel, they have been
a little more forgiving on their clean air for the sake of fuel
efficiency.
Mr. Walden. And has that had a health impact?
Mr. Connaughton. Yes, it has had a negative health impact.
Our diesel-related illnesses and deaths are in the thousands.
Theirs are in the tens or hundreds of thousands.
Mr. Walden. Deaths as a result of diesel burning vehicles.
Mr. Connaughton. Or hospitalizations. Yes.
Mr. Walden. All right. When you talk about forest issues, I
know you raised those, and you have been very aggressive at the
international problem, one of the issues I know is out there is
the use of palm oil for bio-fuels. Now Mr. Doyle talked about
we needed, I think he said a 10 fold increase in whatever it is
we are doing now in half the time. Now we just passed a very
aggressive increase in bio-fuels. Is that the most aggressive
in the world?
Mr. Connaughton. It is. It is. In fact, Europe has a stated
goal that is less aggressive and they are having trouble
getting the programs in place to meet it.
Mr. Walden. And isn't the EU presently evaluating
restricting the source of inputs for their bio-fuels program
because they are discovering not all bio-fuels are as
environmentally friendly as others, and in fact they are
working on regulations as we speak to limit or prohibit the use
of palm oil because in many countries aren't they ripping out
their forests to produce palm oil?
Mr. Connaughton. Actually EU is headed down the road to a
very aggressive regulation of alternative fuels, and by the way
some of that is based on then misplaced facts and information
which remains a challenge in terms of on the issue of palm oil
there are a few very bad examples that overwhelm the potential
ability of palm oil to be done well, and what is happening is I
think the EU is taking a classic approach. They are abandoning
the entire thing for the sake of a problem that could otherwise
be well regulated.
Mr. Walden. And is that an area that we need to focus on
now that we have this enormous bio-fuels mandate in statute? Do
we need to set up some side boards around that? I know in the
energy bill one of the things I was frustrated about, and I
voted for it, was the fact that if you produce alternative
fuels from woody bio-mass they count towards renewable fuels
portfolio standard unless, unbelievably unless that woody bio-
mass comes off of Federal land. Can you explain the scientific
reason why woody bio-mass that comes off Federal land should
not be considered a bio-fuel but if it comes off private lands
it does count? Is there any difference in that woody bio-mass?
Mr. Connaughton. There is no difference. And, Congressman,
one of the core concerns that we as the Administration have is
the endeavor to try to cherry pick and narrow down on all of
these alternatives because the fact is the scale that we have
to achieve is so big that we need to find ways to properly
regulate but effectively get many alternatives out there based
on performance, not based on preference.
Mr. Walden. Unfortunately, I have less than a minute left.
One of the other real problems in the energy bill and that I
hear a lot from my state and people who are very concerned
about moving forward with sustainable growth and renewable
energy development is the short-term nature of the production
tax credit. Now I personally believe we ought to extend it out
a minimum of 5 years so that investors can make wise decisions
into the future and get in the cues and get the turbines and
whatever else they have to get, access to the grid, whatever,
takes many years. Can you speak to the Administration's
position on a longer term extension of the production tax
credit?
Mr. Connaughton. We will not react to specific legislation
so let me just deal with the issue generally which is the
short-term nature of the production tax credit is why we are
not seeing enough expansion of manufacturing capacity so we end
up buying a lot of our products from overseas because of the
boom and bust cycle of the production tax credit. And so
whether you redesign that policy or develop a different one, we
should be focused on our own manufacturing capacity so we can
scale up renewables to the gigawatt scale----
Mr. Walden. And create the jobs here. So we could do the
manufacturing jobs here, produce the various components for
renewable energy development in our country ought to be done
here.
Mr. Connaughton. And lower the cost. Right now the price of
solar and wind is going up, not down. That is not what we all
wanted. We wanted it to go down.
Mr. Walden. Thank you, Mr. Chairman, for being generous
with the time. Mr. Connaughton, thanks for your hard work and
your testimony today.
Mr. Boucher. Thank you very much, Mr. Walden. The gentleman
from Washington State, Mr. Inslee, is recognized for 5 minutes.
Mr. Inslee. Thank you. Mr. Connaughton, the last time we
were together was at I think the Schwarze Pumpe coal plant
which may be Europe's first coal sequestration plant if things
go well for them. And we were excited by that because that
technology works. It could be of benefit but the only reason it
will ever be implemented is if we have some economic incentive
for it to be implemented leading us to conclude we need a cap-
and-trade system to create an economic incentive for that and a
whole host of technologies to be implemented. So I would like
to ask you if the President will sign a cap-and-trade piece of
legislation passed by this Congress this year.
Mr. Connaughton. As you know, Congressman, we don't comment
on specific pieces of legislation that haven't been proposed
yet but we have been, as you know, willing to be constructively
engaged in this conversation. I would observe when it comes to
incentives there are positive and negative incentives. We
employ both. And when it comes to carbon capture and storage
because the technology is not yet available, I think most of
the emphasis is going to have to be on the positive incentive
side because of the ease with which we can fuel switch in
America out of coal to natural gas and other sources, and so
that creates its own basket of problems so I just want to be
sure as we work on this together that we are thoughtful about
that unintended consequence.
Mr. Inslee. Are you going to encourage the President to
address the issue of a cap-and-trade system in the State of the
Union speech, and the reason I suggest that would be helpful is
that when we went to the moon Kennedy went and urged us to go
to the moon. We need presidential leadership on this. Will you
be suggesting to the President that he address the parameters
of the cap-and-trade system that could help us in this
challenge?
Mr. Connaughton. One, we don't comment on State of the
Union, and my advice and counsel to the President is between me
and the President. I would observe that we are very focused on
the next steps after last year's energy bill. I would observe
that we do see a lot of common ground on advancing the carbon
capture and storage agenda and doing that appropriately. We see
a lot of common ground on making sure we are on the ball on the
alternatives to petroleum so I think you will see dedicated
action from us on those issues among others. Nuclear is
critical too. I know we have a little bit of difference there.
But these are all critical. We need action on all these fronts,
not just a single front.
Mr. Inslee. So do you believe that we can design a cap-and-
trade system that will inhibit CO2 emissions and
help grow our technological response to this? Do you believe we
can do that?
Mr. Connaughton. I don't know yet.
Mr. Inslee. And what could we do to help you get over that
hurdle to help us develop momentum for a cap-and-trade system
because presidential leadership is important in this and
presidential inertia could also be a drag on our ability to
move this legislation. What can we do to help the
Administration clarify its position because I think clarity in
telling us that this is within something of the realm that the
President could sign would be helpful for us moving forward.
What could we do to help you get over that hurdle?
Mr. Connaughton. Well, I think first it is going to be
important that this committee in particular, and I'm glad the
Chairman has started so quickly with this set of discussions,
is to do a stock taking in what we have got and then tailor
what more we need to that. I haven't seen that occur yet. That
is going to be very important. One thing of concern we would
have is the idea of putting a mandate on top of a mandate and
so we want to make sure that we have got a regulatory system
working in close harmonization with our incentives, the
positive incentives, with also the private sector initiative,
and so that is just going to take a little bit of thought, and
if we do that we can simplify.
Right now what we see in the Senate are a number of
proposals that are highly complicated and highly constituent
interest group focused and I think that is not a recipe for
success.
Mr. Inslee. Well, let me ask you this. It is clear, it is
absolutely clear, if you disagree tell me but I think it is
absolutely clear that for coal sequestration technology ever to
be implemented because it will involve some work, some cost,
some investment, there will have to be some economic incentive
for its deployment. Now that can be a positive incentive or it
can be a negative incentive.
Mr. Connaughton. I agree with that.
Mr. Inslee. You agree with that.
Mr. Connaughton. It has to be positive. We need an
incentive. How we structure it matters but we need an
incentive.
Mr. Inslee. It is certainly my belief, I think most
economists who evaluate it, is that there has to be some
disincentive for putting CO2 in the air to make
carbon sequestration through coal technology economically
viable. Do you agree with that assessment?
Mr. Connaughton. No. I think we are mixing 2 different
pieces. An incentive, whether it is structured as a positive or
negative one generically will drive more investment toward
lower CO2, but when you are looking specifically at
the issue of coal and capture and storage because of the
opportunity to substitute something else or because the
opportunity just to shut down operations and move your
manufacturing and demand some place else, you could actually
delay the desire to make the investment necessary to prove
carbon capture and storage because it is not proven yet. So
step 1 is you got to prove the technology, get the liability
regime in place, and get the cost within reach, then some of
these other deployment strategies, whether it is on the
positive or negative side become effective. That is what we did
with SO2. There was a very dedicated period of
developing the technology before the system of positive and
negative incentives were put in place so we have to sequence
it.
And actually the Chairman I think in some of his white
papers has done some thoughtful discussion of that, and I think
that is where we got some constructive ground, and again happy
to engage daily as need be just to make sure we are getting to
the bottom line on some of these questions.
Mr. Boucher. Thank you very much, Mr. Inslee and Mr.
Connaughton. The gentleman from Texas, former chairman of this
subcommittee, Mr. Hall, is recognized for 5 minutes.
Mr. Hall. Thank you, Mr. Chairman. I have noted concern on
both sides here about different aspects here. I think the
gentleman from San Antonio, Mr. Gonzalez, was concerned about
the cost, and there is a good follow-up question there, I am
concerned about who pays, and I don't know how much discussion
took place on that little bitty island down there. There was
185 nations there and 10,000 or 11,000 people, a little place
no bigger than Delaware. How much concern there was for who
paid or how much talk there was for who paid. It is something
they don't want to talk about. And then the gentleman from
Washington wanted to know, and it is a good question, of what
is the incentive for use of coal.
I don't know. I would ask you that question but I think you
would probably agree with me the incentive is that there is a
lot of it and it is in the right place. I understand we have
more usable coal than just about anybody. Is that close to
being correct?
Mr. Connaughton. That is correct. The United States and a
handful of other countries have lots of reserves of coal.
Mr. Hall. Well, you call that agreement a road map, and I
guess it is a road map just to guide them somewhere around
2012. That gives me some concern too, that figure does. At my
age, George Burns said he didn't buy green bananas. I don't
know if I can wait until 2012 or not, but I do have children
and grandchildren so I am interested in that. But I just
wondered on a road map the building of the road is extensive.
That is a major expense but there are a lot of other expenses
to it. There are overpasses. There are grade separations, I
think, engineers call them. There are detour signs. There are
bridges, and I hope in this road map they got a lot of caution
signs. You see a good many of those on roads and new roads. I
hope they have some bad bridge ahead signs and a lot of stop
signs.
Somebody came along with a lot of no right turn signs in
Washington. I don't know about left turns or who goes left or
who goes right, but this is a situation that really ought to
concern every one of us and our children, and the people we
have to go home to to talk to, and we ought to be honest enough
to talk to them about the cost and, by gosh, who pays. I want
to ask you how different is this framework from the framework
that they limped away from at the Kyoto meeting.
Mr. Connaughton. Well, actually fortunately, Congressman,
this framework is a step forward. The intensity of what you
heard reported out of Bali before we reached final agreement
was really about whether we would fall back to the flawed
approach of Kyoto or step forward to constructive engagement
especially with the major developing countries, and that was a
big battle in Bali. Fortunately, we did come together
recognizing that we have to move on this together if it is
going to work and that the major developing countries have to
take actions too if this is going to work, and now we have to
open up our eyes consistent with your caution point. There are
many, many difficult issues that we have to confront to take
this seriously in particular with the developing countries
because of the aspirations to lift their people out of poverty
and energy is essential to that.
Mr. Hall. How far down the road who pays to get to the
point to where--and I am not among those who say that there is
nothing to it. I think it is good common sense and logic to
pursue it and to seek the technology and try to take care of
the fossil fuels that has taken care of us for so many years or
find technology to make a cleaner place for the people that
will be here after we are all gone, but I think we need to talk
about the cost and we need to have some way of paying that
cost, and we may have some level of place to decide whether or
not we are pouring that cost into something that won't ever
come back to us, ever come to us. We are not assured that it is
going to.
So that is the reason we study and the reason you are being
kind enough, and the President sent one of his finest men down
there to work out something with these folks and you are trying
to do it. I recognize that but we need to--I guess I may ask
you what do you see as a role for the Major Economies meeting
in the Asia-Pacific Partnership and the U.N. process. Do you
want to address that just briefly because I have a lot more
things I really want to say.
Mr. Connaughton. Just the Major Economies we hope to focus
on 5 or 6 elements of this much bigger Bali road map that
relate to those of us who use a lot of energy and a lot of
greenhouse gases. Can we agree to a long-term goal, can we find
some key sectors like fossil power generation, alternatives to
petroleum, forestry, a few others, where we can do joint work,
set joint objectives and actually commit ourselves to achieve
those objectives, and then come up with some broader and more
innovative ways of financing goods and services and removing
the trade barriers to those goods and services so countries
will actually use the technology we have got. Right now we put
up obstacles to that, and that is just nutty, and we can stop
that this year if the leaders agreed on it.
Instead, parochial interests get in the way so there are
some very specific things we can achieve there, and then you
asked about the Asia-Pacific Partnership, and I appreciate that
because we started that 3 years ago, and it is actually
working. We have India and China in key sectors making specific
commitments and holding themselves accountable to meeting those
commitments. We negotiated it in 6 months. This private sector
is working well with the government people. You don't hear
about it because nobody is complaining. Now I think the
Congress didn't help this year that we have got some
restrictions on the funding for that when it is going to
deliver a 2-way trade in clean energy, goods and services in
key sectors, so we hope to work with this committee and maybe
you can help us persuade the appropriators that this very low
cost taxpayer funded activity is going to yield massive
dividends in getting cooperative action with the countries that
we got to find that cooperative action.
Mr. Boucher. Thank you very much, Mr. Hall and Mr.
Connaughton.
Mr. Hall. I wasn't really through, Mr. Chairman.
Mr. Boucher. Well, Mr. Hall, the time unfortunately has
expired. The gentlelady from Wisconsin is recognized for 5
minutes.
Ms. Baldwin. Thank you, Mr. Chairman. Thank you also, Mr.
Chairman. My questions I think follow in an interesting way
although I ask them from a different perspective. You were
talking about some of the crux of the battles that were being
fought and negotiations that were occurring in Bali, and many
had an interest in seeing more specific targets and specific
goals rather than a more generalized road map, and especially
in light of the urgency that many people view this situation
globally and here in the United States. And with the sort of
foundation for a lot of the discussions being the U.N.'s
intergovernmental panel on climate change, and their cited
recommendations that we need to cut emissions by reaching
specific targets of 25 percent to 40 percent for developed
nations by 2020 and the credibility of that report with over
600 participating scientists around the world.
So the European Union obviously came to Bali. Other
government delegations came to Bali wanting to officially
recognize these findings, and yet the United States opposed
having that specific scientific data a part of the agreement
coming out of Bali and in fact you have to dig really hard.
There is a footnote, and that footnote references the IPCC
document in order to even find the reference that I just made
of those strong and urgent recommendations. I am wondering if
the Administration's decision to really obscure these IPCC
findings and specific targets and goals if that decision was
based on other scientific data or whether it was a non-
scientific negotiating position, and then I want to probe a
little further of when do we get to the specifics and the
targets whether it is through the Honolulu discussions or the
ones in December of 2008, but please first tell me if this was
a scientific driven negotiating position or other
considerations.
Mr. Connaughton. Very briefly on that, the work group 3
report which is on mitigation strategies in the overall science
summary effort and these reports summarize the state of the
science. The report that we were dealing with has 177 different
scenarios, the different scientific economists produced around
the world, and so there is a band width of scenarios for how we
can stabilize emissions and meet our goals. And so what
happened is some participants wanted to pick one of the
scenarios at the only path that we could pursue and our
objection, and by this way this isn't just the U.S., it was
many, many companies, not just U.S.
Ms. Baldwin. I understand that. I understand that.
Mr. Connaughton. Was that actually we were given a wide
range of scenarios and I think those would be good for this
community to explore. The U.S. has produced its own set of
scenarios which were included in those and so it all turns on
your curve for slowing, stopping, and then coming down what
that curb looks like depending on your policy choices. If we
could do 100 percent nuclear by 2030, hey, we are in great
shape, but is that really feasible. And then you have other
scenarios where how could you get renewable up to 20 percent,
and what does that mean, and so you have to see what your
policy path is before you can pick that curve.
What was happening is the EU was trying to pre-judge that
discussion and nobody came to Bali prepared to debate picking
the one most extreme scenario when there is actually a range
that are within the range of responsibility, and so that is
really where we wanted to take the conversation.
Ms. Baldwin. Well, I read their bargaining position as a
little--just recognizing the urgent need to reduce emissions
between 25 and 40 percent for developed nations by 2020 doesn't
commit to one of those 176 particular paths. It is basically
one of the headlines from that particular report, but let us
move on. You are about to convene, I think it is next month you
said in Honolulu?
Mr. Connaughton. The end of this month, 2 weeks.
Ms. Baldwin. Two weeks. The largest emitters will gather
there--what are the specific goals for that conference? Will we
see any targets, specific targets, specific goals for emissions
reductions emerging from that particular conference?
Mr. Connaughton. You will not see specifics out of this
first meeting of several meetings leading to a leaders
gathering later this year so the time to look for the outputs
of this will be at the time of the leaders gathering.
Ms. Baldwin. And when and where is that?
Mr. Connaughton. We are working on that right now but as
soon as we know, we will let you know. But I do want to let you
know it is being debated and discussed though. We do want to
see if we can get consensus on a long-term goal for reducing
emissions. We do want to at least put in place the architecture
for some sector agreements and some key benchmarks for real
performance in key sectors, and we do want to see each nation
come forward with a series of mid-term goals. Now I think the
developed countries will be more likely to have that in place
by the end of this year. I think for some of the developing
countries it is just harder for them. They don't have a
domestic process to produce mid-term goals yet, and we want to
see how we can encourage that.
Ms. Baldwin. Well, in terms of sector benchmarks, give me
an example of what you would like to see, whether it is the
leaders meeting in Honolulu, but we are looking, we are
desperate for some specific targets and specific goals rather
than generalized.
Mr. Connaughton. Let me give you an example of a big sector
relatively low on the priority list but it is a big sector,
aluminum. Through the Asia-Pacific Partnership, we have
international agreement now to cut fluorocarbons, which is
1,000 times more potent than CO2, by 80 percent from
aluminum manufacturing globally. They are going to reduce their
emissions by a third by 2010, and then a 10 percent reduction
in average smelting energy usage so these have very specific
benchmarks for the global industry and then the programs----
Ms. Baldwin. How many sectors do you think you might be
able to tackle in the near frame?
Mr. Connaughton. This will be the question. I mean that is
the question. I am hopeful we will at least get 6 top tier
ones, which is fossil power, alternative fuels, forestry,
nuclear efficiency, and renewables, and then maybe a couple of
industry specific sectors. The big ones are steel, cement,
aluminum. Maybe I am leaving one off. And so if you take that
basket, Congresswoman, you are capturing a lot of global
activity and emissions. And then if you can create different--
look at your technology pathways we can create a more tailored
set of commitments. We think that is an approach that will be
more attractive to India and China. Why? Because they have done
it with us this way. When you talk about going after their
entire economy they sort of put up the walls, and they are even
more adamant against the broader discussion in Bali than other
countries.
So we think this approach can draw forward the sectors
because then you have done the math, and then it is
technological feasibility, it is your investment cycles. It is
just easier to figure out when you are breaking it into its
smaller parts.
Mr. Boucher. Thank you very much, Mr. Connaughton and Ms.
Baldwin. The gentleman from Massachusetts, Mr. Markey, has
joined us and is recognized for 5 minutes.
Mr. Markey. Thank you, Mr. Chairman, very much. Welcome,
Mr. Connaughton. I think that 2008 is the year for us to take
bold action to deal with this urgent problem of global warming.
I think we should build on the energy bill's success and this
year pass a mandatory cap-and-trade bill that reduces
greenhouse gases by 80 percent by 2050, and we should do that
here domestically. Internationally, I think we have to move
from aspirational goals which can turn into procrastinational
goals and reach an agreement internationally using the best
science in order to insure that there are global targets that
are going to be met by countries around the world led by the
United States.
My first question to you, Mr. Connaughton, is do
CO2 emissions pose a danger to public health and
welfare?
Mr. Connaughton. CO2 emissions contribute to the
warming of the atmosphere and there is a lot of studies about
the positive and negative consequences of that and I would not
want to get into particular conclusions because when you read
the IPCC reports you have manifold conclusions so I just defer
to the scientists on that.
Mr. Markey. So you haven't reached a conclusion yet as to
whether or not CO2 is a danger to the public health
and welfare?
Mr. Connaughton. With the exception of very high localized
concentrations in terms of its present effects on health and
the environment we are seeing observed effects when it comes to
sea ice melt. You can then attribute to the extent that sea ice
is on land that contributes to sea level rise and right now it
is accelerating the rise.
Mr. Markey. Is that a danger to the public health and
welfare?
Mr. Connaughton. There are a lot of studies doing forward
projections as to whether and the extent to which that could
be, and again there is a wide body of literature on that.
Mr. Markey. So your Administration has spent billions of
dollars trying to get an answer to that question?
Mr. Connaughton. That is correct.
Mr. Markey. And it is touted to be aiming towards the
conclusion, and it just seems to me since the other
industrialized countries in the world have all reached a
conclusion that CO2 is a danger to public health and
welfare, that it would help if this Administration reached that
conclusion because that would then make it easier for us to
reach the decisions as to what we should do about it. When can
we expect a decision from the Bush Administration on the
question of whether or not CO2 is a danger to the
public health and welfare?
Mr. Connaughton. You are speaking specifically, I think, to
the Clean Air Act determination that was remanded by the
Supreme Court to the EPA. That is in the hands of the EPA
administrator. He is in the process of developing both our
rules to implement the recent energy bill and taking a look at
the process by which he will be making that determination one
way or the other. I don't actually know his calendar.
Mr. Markey. The EPA was tasked in the Supreme Court
decision in April of 2007 to make that decision and it is a
decision that is made separate from the energy bill. It is a
specific question because obviously once the EPA makes that
decision, once the Bush Administration makes that decision it
not only triggers action on cars but also on stationary
sources, on factories, on utilities, so it is important to know
when the Bush Administration will be making that decision. And
the longer we wait on that decision is the longer it then takes
to begin to put into place the solutions to that set of
problems that are identified. Can you give us any idea as to
when those decisions will be made?
Mr. Connaughton. Specifically on the endangerment finding,
I can't yet because we are now going back--that was one of the
issues that came up in the context of the development of the
regulatory package we were working on, not as an alternative to
congressional passage of the bill last year and so we didn't--
the President was dedicated to getting these policies through
and we were delighted that Congress was able to act so quickly,
and so now as a result we have to take on board what we just
got from the energy bill and then put that in the context of
what we were working on with the original rulemaking.
Mr. Markey. I do understand that.
Mr. Connaughton. So it has proven to be an interesting
place for lawyers and scientists to engage, and I wish I could
tell you specifically but I really don't know when that will be
made.
Mr. Markey. It is a separate question though. And finally
the Treasury Department recently announced its intention to
establish a multi-million dollar multi-lateral fund for
transfer of clean technology to developing countries. Why given
that initiative did the United States simultaneously oppose
strengthening international technology transfer mechanisms in
the U.N. negotiations in Bali?
Mr. Connaughton. Those are 2 different issues. The fund
that we are working on we hope to provide you details on soon
is our thinking. We have to get other countries to subscribe
to--reach agreement on that is aimed at getting the best of
today's technologies out into the marketplace on a much, much
greater scale. The technology transfer discussion, those are 2
interesting words which in the U.N. context bring with them
many different interpretations, one of which on the part of
some developing countries, is that U.S. technology innovators
should give up their intellectual property and their right to
make any profit off of their innovation, and of course most of
us understand the dramatic negative consequences if we were to
agree to that as a matter of international commitment.
It is our view that innovators are entitled to a reasonable
return on their innovation, and what we want to do then is
facilitate the cost-effective purchase of that while protecting
those rights.
Mr. Markey. We are discussing a specific fund at Bali and
it just seems to me that was a great opportunity for the United
States to be a leader. The Treasury Department had made a
statement and I just think it was a real opportunity for the
United States.
Mr. Connaughton. Those are 2 different issues. We weren't
talking about--those are 2 different issues. There is a lot of
support and interest in the major fund that we are going to be
creating hopefully with your support because it will only work
if we have congressional support. The tech transfer issue was
more one of a matter of policy and principle, not a matter of
funds, and so I want to be clear that those are 2 different
discussions.
Mr. Markey. Thank you, Mr. Connaughton, and thank you, Mr.
Chairman.
Mr. Boucher. Thank you very much, Mr. Markey. And, Mr.
Connaughton, thanks to you also for a very enlightening 2\1/2\-
hour conversation. We will look forward to your return to this
subcommittee in the future as we consult further on the work
that lies ahead for us and for you on climate change during the
course of this year. That being said, there being no further
business to come before us at this time, the subcommittee is
adjourned.
[Whereupon, at 12:25 p.m., the subcommittee was adjourned.]
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