[Senate Hearing 105-304]
[From the U.S. Government Publishing Office]


[[Page 1]]

                                                        S. Hrg. 105-304
 
                         GLOBAL CLIMATE CHANGE

=======================================================================

                                HEARINGS

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                                   ON

REVIEWING THE EFFECTS OF GREENHOUSE GASES ON GLOBAL WEATHER CONDITIONS 
   AND ASSESSING INTERNATIONAL POLICY OPTIONS TO REDUCE THE NEGATIVE 
                       IMPACTS OF CLIMATE CHANGE

                               __________

                          JULY 10 AND 17, 1997

                               __________

  Printed for the use of the Committee on Environment and Public Works





                      U.S. GOVERNMENT PRINTING OFFICE
45-112cc                     WASHINGTON : 1998

_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington DC 
                                 20402



[[Page (ii)]]



               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                 JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire          DANIEL PATRICK MOYNIHAN, New York
DIRK KEMPTHORNE, Idaho               FRANK R. LAUTENBERG, New Jersey
JAMES M. INHOFE, Oklahoma            HARRY REID, Nevada
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
CHRISTOPHER S. BOND, Missouri        JOSEPH I. LIEBERMAN, Connecticut
TIM HUTCHINSON, Arkansas             BARBARA BOXER, California
WAYNE ALLARD, Colorado               RON WYDEN, Oregon
JEFF SESSIONS, Alabama
                     Jimmie Powell, Staff Director
               J. Thomas Sliter, Minority Staff Director

                                  (ii)

  

[[Page (iii)]]





                           C O N T E N T S

                              ----------                              
                                                                   Page

                             JULY 10, 1997
                         REVIEW OF THE SCIENCE
                           OPENING STATEMENTS

Allard, Hon. Wayne, U.S. Senator from the State of Colorado......     9
Baucus, Hon. Max, U.S. Senator from the State of Montana.........     3
Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri.......................................................     5
Boxer, Hon. Barbara, U.S. Senator from the State of California...    16
Chafee, Hon. John H., U.S. Senator from the State of Rhode Island     1
Hutchinson, Hon. Tim, U.S. Senator from the State of Arkansas....     6
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     9
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................    13
Lieberman, Hon. Joseph I., U.S. Senator from the State of 
  Connecticut....................................................    14
Reid, Hon. Harry, U.S. Senator from the State of Nevada..........    11
Thomas, Hon. Craig, U.S. Senator from the State of Wyoming.......     4
Wyden, Hon. Ron, U.S. Senator from the State of Oregon...........     8

                               WITNESSES

Barron, Eric, professor, Department of Geosciences, and director, 
  Earth System Sciences Center, Pennsylvania State University....    17
    Articles:
        Consequences: Nature and Implications of Environmental 
          Change.................................................    69
        Evaluating Policy Decisions Based on Climate Model 
          Predictions............................................    81
    Prepared statement...........................................    63
    Responses to additional questions from:
        Senator Baucus...........................................    90
        Senator Boxer............................................    93
        Senator Reid.............................................    92
Christy, John R., associate professor, Department of Atmospheric 
  Science, University of Alabama at Huntsville...................    19
    Prepared statement...........................................    94
    Responses to addition questions from:
        Senator Baucus...........................................   104
        Senator Boxer............................................   108
Jorgenson, Dale, professor, Economics Department, Harvard 
  University.....................................................    28
    Article, Economic Effects of a Carbon Tax....................   172
    Prepared statement...........................................   158
Lindzen, Richard S., Alfred P. Sloane Professor of Meteorology, 
  Massachusetts Institute of Technology..........................    22
    Prepared statement...........................................   110
    Responses to additional questions from:
        Senator Baucus...........................................   118
        Senator Boxer............................................   119
Schneider, Stephen H., professor, Department of Biological 
  Sciences, Stanford University..................................    25
    Article, Achieving Carbon Dioxide Targets Cost-Effectively: 
        What Needs To Be Done Now?                                  141
    Prepared statement...........................................   120
    Responses to additional questions from:
        Senator Baucus...........................................   150

[[Page iv]]

        Senator Boxer............................................   155

                                 ------                                

                             JULY 17, 1997
                      INTERNATIONAL POLICY REVIEW
                           OPENING STATEMENTS

Baucus, Hon. Max, U.S. Senator from the State of Montana.........   199
Chafee, Hon. John H., U.S. Senator from the State of Rhode Island   197
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...   199
Kempthorne, Hon. Dirk, U.S. Senator from the State of Idaho......   201
Reid, Hon. Harry, U.S. Senator from the State of Nevada..........   205

                               WITNESSES

Fay, Kevin J., executive director, International Climate Change 
  Partnership....................................................   227
    Letters to:
        President William Clinton................................   249
        Under Secretary of State Wirth...........................   247
    Membership list, International Climate Change Partnership....   261
    Prepared statement...........................................   246
    Proposal, Issues in the Climate Change Protocol Negotiations.   250
O'Keefe, William F., chairman, Global Climate Coalition..........   229
    Letter, response to comments by Under Secretary of State 
      Wirth......................................................   265
    Prepared statement...........................................   255
    Responses to additional questions from Senator Chafee........   267
Wirth, Hon. Timothy E., Under Secretary of State for Global 
  Affairs, Department of State...................................   206
    Prepared statement...........................................   243
Yellen, Janet, chair, Council of Economic Advisers, National 
  Economic Council, Executive Office of the President............   202
    Prepared statement...........................................   236
    Responses to additional questions from:
        Senator Chafee...........................................   239
        Senator Boxer............................................   241
        Senator Lieberman........................................   242

                          ADDITIONAL MATERIAL

Article, Greenhouse Forecasting Still Cloudy, Science magazine...   262
Letter, Association of American Railroad.........................   273

[[Page (1)]]





                         GLOBAL CLIMATE CHANGE

                              ----------                              


                        THURSDAY, JULY 10, 1997

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.

                         REVIEW OF THE SCIENCE

    The committee met, pursuant to notice, at 9:38 a.m. in room 
406, Senate Dirksen Building, Hon. John H. Chafee (chairman of 
the committee) presiding.
    Present: Senators Chafee, Warner, Inhofe, Thomas, Bond, 
Hutchinson, Allard, Sessions, Baucus, Lautenberg, Reid, Graham, 
and Wyden.

OPENING STATEMENT OF HON. JOHN H. CHAFEE, U.S. SENATOR FROM THE 
                     STATE OF RHODE ISLAND

    Senator Chafee. We want to welcome everyone this morning. 
We've got quite a turnout here, so if there are any seats, 
please take them. If people leave, please do so quietly and the 
others fill into the seats quietly.
    This morning, we will receive testimony on one of the most 
important and challenging environmental, economic and political 
matters of our time. That is global climate change. It is a 
serious issue that requires immediate attention.
    To help us better understand some of the fundamental 
scientific and economic issues which underpin the current 
policy debate, we've assembled some of the world's leading 
experts. The full committee will conduct a follow-up hearing 1 
week from today on July 17 to receive testimony from the 
Administration on the upcoming international negotiations over 
amendments to the 1992 Framework Convention on Climate Change.
    The issue of global climate change is certainly politically 
contentious, both here and abroad. For years now, we've had one 
side forecasting a scenario of rising seas, recurrent drought, 
and a blistering heat, all of which they say will result in a 
ravaged economy.
    On the other side are those who claim that meaningful 
policies to control emissions of greenhouse gases are 
premature, unwarranted and unfounded and would result in a 
ravaged economy.
    What's going on here? What are the scientists saying? 
Consider this quotation. ``Would it not be possible that the 
Earth's temperature had decreased during periods of low carbon 
dioxide and increased when the protective carbon dioxide had 
been present to a higher degree.''

[[Page 2]]

    As our distinguished witnesses are aware, this hypothesis 
was not culled from the text of some suspect environmental 
organization's manifesto; it was delivered in an 1896 lecture, 
101 years ago before the Stockholm Physics Society by the Nobel 
Prize winning Swedish chemist, Sevante Arenious.
    Professor Arenious was the first to predict that large 
increases in carbon dioxide from humans could result in warming 
of the globe. What have the world's scientists told us at 
different intervals over the last 101 years since Professor 
Arenious first identified the warming effects of carbon 
dioxide? Here is a sample.
    In 1924, U.S. physicists speculated that industrial 
activity would double atmospheric carbon dioxide within 500 
years, roughly 2424. Current projections are for a doubling 
sometime before 2050, 400 years earlier than predicted 70 years 
ago.
    In 1957, scientists from Scripps reported for the first 
time that much of the carbon dioxide emitted into the 
atmosphere is not absorbed by the oceans as some had argued, 
leaving significant amounts in the atmosphere.
    In 1967, the first reliable computer simulation calculated 
that global average temperatures may increase by more than 4 
degrees Fahrenheit when atmospheric carbon dioxide levels are 
double that of preindustrial times.
    In 1985, a conference sponsored by the United Nations, the 
WMO and the International Council of Scientific Unions forged a 
consensus of the international community on the issue of 
climate change.
    In 1987, an ice core from the Antarctic analyzed by French 
and Russian scientists revealed an extremely close correlation 
between carbon dioxide and temperature going back more than 
100,000 years.
    In 1990, in an appeal signed by 49 Nobel Prize winners and 
700 members of the National Academy of Sciences said, ``There's 
broad agreement within the scientific community that 
amplification of the Earth's natural greenhouse effect by the 
buildup of various gases introduced by human activity has the 
potential to produce dramatic changes in the climate. Only by 
taking action now can we ensure that future generations will 
not be put at risk.''
    In the same year, 747 participants from 116 countries took 
part in the Second World Climate Conference in Geneva. They 
reported, ``If the increase of greenhouse gas concentrations is 
not limited, the predicted climate change would place stresses 
on natural and social systems unprecedented in the past 10,000 
years.''
    In 1992, we had the framework of 153 nations, including the 
United States, sign the Framework Convention on Climate Change. 
In that year, they committed the signatory governments to 
voluntary reduction of greenhouse gases.
    The Senate consented to ratification of this landmark 
environmental treaty on October 7 with a two-thirds majority 
vote. That was in 1992.
    In 1995, the Intergovernmental Panel on Climate Change, 
representing thousands of climate scientists, concluded ``The 
balance of evidence suggests there's discernible human 
influence on global climate.''

[[Page 3]]

    It must be stated that recent IPCC conclusion is based on 
numerous variables and we're all eager to learn more about 
these variables and about the certainties from our witnesses. 
So today we will hear about this evolution of scientific 
understanding.
    I'm convinced the science in this matter has and will 
continue to evolve. The question is, do we know enough to 
support legally binding reductions in greenhouse gas emissions 
as proposed by the United States and numerous other countries? 
Are we prepared to accept the risks associated with the 
decision to postpone further action to address potential 
climate change?
    What is being called for? What might be the impacts to our 
economy? Some say we must stabilize carbon dioxide emissions at 
1990 levels by the year 2010. At least one economic model 
forecast this sort of action would result in economic losses of 
about 2.4 percent of the GDP. This, of course, is significant.
    Others, using more optimistic models, believe that the U.S. 
economy could withstand significant emissions reductions while 
prospering as never before. Some 2,500 economists declared in 
February of this year that cost-effective means are available 
for the United States to address the threat of climate change.
    Let me conclude by identifying what I see as the 
fundamental questions before us today. First, how much warming 
might occur as a result of human actions and how soon might 
such warming occur? What is the range of impacts and when might 
they be conclusively identified? What do economic modeling and 
empirical data tell us about the various policy responses?
    We look forward with great interest to the witnesses.
    Senator Baucus, do you have a statement?

  OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE 
                        STATE OF MONTANA

    Senator Baucus. Thank you, Mr. Chairman. I am looking 
forward to the hearing. We have today scientists and economists 
who are very imminent in their field.
    I was at Rio de Janeiro, as you were, Mr. Chairman, in 1992 
and was filled with the expectation and the promise that we're 
going to finally do something about world environmental 
problems, including climate change.
    Since then, I think the results have been poor, that is 
actions taken by countries and probably for some good reason. 
That is, this is not an exact science. That is, we're making 
lots of guesses here, there's lots of modeling and it's very 
difficult to know exactly what's happening.
    Nevertheless, since 1992, we have a lot more data, we have 
a lot more studies and we're now in a better position than we 
were then to know what we should or should not do.
    I'm also very pleased that today's hearing is somewhat 
focused on the science of climate change and also a bit on what 
some of the actions could be to take to the degree that global 
climate change is causing quite significant adverse conditions 
on this planet. That is, we're not yet getting to the policy 
discussions until next week, but rather, focusing much more on 
the science today.

[[Page 4]]

    I think that's very good and I hope all of us and the panel 
today do focus on the science because it's important to get the 
facts before we then proceed to making policy determinations.
    Thank you, Mr. Chairman.
    Senator Chafee. Thank you, Senator.
    Senator Thomas.

 OPENING STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM THE 
                        STATE OF WYOMING

    Senator Thomas. Thank you, Mr. Chairman.
    I have a statement I wish to put in the record if I may and 
just let me say that I think it's very important that we do 
talk about this as we prepare for the negotiations that will 
take place both in the next month and then in December.
    I happen to be a member of the Energy Committee as well as 
Foreign Relations, as well as this committee, and we've had 
hearings of this nature in all three committees. So far, we've 
focused on the science, we've focused on the policy, but I 
guess it's important to continue to do that again.
    What are the issues? Of course, what should be done; what's 
the United States' role vis-a-vis other countries; do we put 
controls on our country and not on others; and what impact does 
that have? I think those are very important issues.
    I am an original cosponsor of Senate Resolution 98 with 
Senator Byrd calling basically that if we have these binding 
commitments that they also apply to others. I also hope that 
those testifying today might give some thought and some 
consideration to what the EPA regulations that have recently 
been announced might, in combination, mean as we move on to 
this.
    Thank you, Mr. Chairman. I'll submit my statement.
    [The prepared statement of Senator Thomas follows:]
Prepared Statement of Hon. Craig Thomas, U.S. Senator from the State of 
                                Wyoming
    Thank you, Mr. Chairman, for taking the time to schedule this 
hearing to discuss the Clinton Administration's policy on global 
climate change. As world negotiators prepare for meetings in Bonn later 
this month, with an eye toward Kyoto, Japan, in December, it is 
critical that we do all we can to make sure the scientific facts are 
available and credible. Using good science, rather than emotional 
rhetoric, ensures we will be spending our limited resources on actual 
problems.
    As some of my colleagues may know, both the Energy and Natural 
Resources and the Foreign Relations Committees have had hearings on 
this topic. I am a member of both and, if there is one thing I can 
report, it's that the science at this point is not ``clear and 
compelling.'' Furthermore, there is currently no consensus that would 
compel us to rush into an agreement that will hurt America's economic 
competitiveness for questionable benefits. Nevertheless, the 
Administration already seems to have its mind made up by stating that 
``the science is over.''
    Before the United States enters into any formal binding agreement, 
we must first be sure that the effects of global warming are real and 
the economic consequences are better understood. Unfortunately, the 
Administration is withholding the fine print details of its proposal 
from the American people. To the extent that there is a global warming 
problem, all countries must participate and play by the same rules. If 
this does not happen, the result is a diminished American economy and a 
worse worldwide environment. Everyone ought to contribute to the cause. 
Asking all nations to contribute will help the environment, help U.S. 
industries stay competitive, and help build new exports as we send our 
environmental technology and expertise around the globe.
    I have repeatedly stated my opposition to legally binding targets 
and timetables on the U.S. and other developed countries to reduce 
greenhouse gas emissions, while

[[Page 5]]

at the same time exempting heavy polluters like China, India, Mexico, 
South Korea and Brazil from those identical requirements. It doesn't 
take a genius to figure out that they will not have to meet the 
uncompromising restrictions that will be placed on our industries. Mr. 
Chairman, by the product of government regulation, we could potentially 
drive the relatively cleaner U.S. industries out of business, thus 
increasing emissions of dirtier plants in undeveloped nations. That 
just doesn't make sense.
    I am an original cosponsor of Senate Resolution 98, introduced by 
Senators Byrd and Hagel, calling on the Clinton Administration not to 
agree to any measure which would commit the U.S. to a binding 
international treaty for developed countries, but exclude those 
standards on China, India, Mexico and others. Although we should 
constantly work to reduce air pollution around the world, this must be 
done in a manner that does not threaten jobs or our international 
competitiveness. I am pleased to report that 62 of my Senate colleagues 
share this same view and have cosponsored this important initiative.
    In closing, Mr. Chairman, we have some expert witnesses and I look 
forward to their testimony. I would hope that they expand their 
comments and touch on the Environmental Protection Agency's (EPA) 
particulate matter and ozone rule which President Clinton recently 
endorsed. Although 250 Members of Congress, 27 Governors, the U.S. 
Conference of Mayors and many State and local officials and business 
leaders alike have expressed disapproval and opposition to the new 
standards, the president turned a deaf ear. I, for one, believe the 
impacts of a binding global climate treaty, coupled with the EPA's new 
air regulations could prove devastating to America's energy-intensive 
businesses, our Gross Domestic Product (GDP), American jobs and our 
global environment. Thank you, Mr. Chairman.

    Senator Chafee. Fine.
    Senator Bond.

  OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, U.S. SENATOR 
                   FROM THE STATE OF MISSOURI

    Senator Bond. Thank you very much, Mr. Chairman.
    I really appreciate your scheduling this hearing today on 
the science and economics surrounding global climate change. 
Unfortunately, I have to be on the floor to participate in a 
debate on a very important amendment that is up, so I'm going 
to have to read the testimony of these witnesses, but I am very 
much interested in knowing what it is we know on global climate 
change. It is my assumption that after this hearing, we may 
have more questions than answers.
    The chairman read some statements from a century ago, and 5 
years ago, we saw headlines ``As Earth summit nears, consensus 
still lacking on global warming cause.'' Six years ago, the 
Washington Post had articles that we're still trying to find 
answers.
    Yesterday, I read a very interesting piece by Mr. Samuelson 
in the Washington Post ``Dancing Around the Dilemma.'' He made 
some interesting points. He said, ``The problem with global 
warming is that we don't yet know whether it represents a 
genuine national threat, and if so, how large.''
    ``Economic growth requires more energy and fossil fuels 
provide 85 percent of all energy. Without a breakthrough in 
alternative energy--nuclear, solar, something--no one knows how 
to lower emissions adequately without ultimately crushing the 
world economy.''
    He ended, ``Hardly anyone wants to admit candidly the 
uncertainties of global warming. It's politically incorrect to 
question whether this is a serious problem that serious people 
ought to take seriously.'' I'm glad we are taking it seriously.
    Mr. Chairman, in my position as chairman of the Small 
Business Committee, I've been hearing for months from small 
businesses who already have a tough time and have to weave 
through a mo- 

[[Page 6]]

rass of regulations that they are concerned they will face 
unsustainable costs.
    An opinion piece by Karen Kerrigan, President of the Small 
Business Survival Foundation, addressing the proposed global 
warming treaty stated, ``For America's small businesses, the 
treaty could be especially harsh. Energy intensive operations, 
such as bakeries, drycleaners, auto repair shops, small 
manufacturers and ironically, recycling businesses, would be 
immediately hit.''
    Finally, I picked up a book that I have found to be very 
informative, a book called ``Facts, Not Fear, A Parents Guide 
to Teaching Children about the Environment,'' which contains 
information on subjects from endangered species to global 
warming.
    The book points out that back in 1989, ``Some scientists 
were predicting an increase in global temperatures between 
3.5--5 degrees Celsius perhaps as early as the middle of the 
21st Century.
    ``In 1990, an intergovernmental panel of scientists 
projected an increase of 3 degrees Celsius by the year 2100, 
but the latest estimate is that temperatures may increase by 
between 1 and 3 degrees Celsius by the year 2100.''
    Mr. Chairman, some consensus has been reached in the 
scientific community on some very basic points. First, we do 
burn large quantities of fossil fuels that add carbon dioxide 
to the atmosphere which may affect greenhouse gases. Two, the 
Earth's temperature has increased slightly over the last 100 
years.
    In my opinion, that's about all the consensus we have. I 
will be very interested in hearing the chairman's opinion and 
nobody asked for my opinion, but I'm going to give it to you 
anyhow. If and when we can develop consensus that global 
warming really is a problem, then we're going to have to make 
some tough choices.
    Mr. Samuelson said one of the alternatives is to go to 
something or nuclear power. In this country, we've had hysteria 
about nuclear power that shut down our nuclear power generating 
industry. Nuclear fission is something that has engendered a 
great deal of hostility and fear, but it is not a generator of 
carbon dioxide, it is not burning fossil fuel and if we want to 
get serious about global warming, then we have to deal with the 
realities of nuclear power, nuclear fission in the next 10, 20, 
or 30 years until we develop the capability of using nuclear 
fusion energy and that's going to have to be our challenge.
    I hope, Mr. Chairman, that we can develop a sound 
scientific basis for determining whether we are going to get 
serious about global warming, whether it is a serious trend, 
and I look forward to reading, though I will not be here to 
participate in questioning and hearing firsthand the testimony 
of these distinguished witnesses.
    Senator Chafee. Thank you, Senator.
    Senator Hutchinson.

OPENING STATEMENT OF HON. TIM HUTCHINSON, U.S. SENATOR FROM THE 
                       STATE OF ARKANSAS

    Senator Hutchinson. Thank you, Mr. Chairman.
    I would ask that my full statement be entered into the 
record.
    It's interesting when I first came to the Senate, the first 
hearing that I participated in, the first hearing of this 
committee was a

[[Page 7]]

hearing on the science dealing with the proposed clean air 
standards. It's like deja vu and I really applaud the chairman 
for looking at the science.
    If there's one thing I learned from the clean air hearings, 
it is that oftentimes scientists are not in agreement as to 
what the status of true science is regarding any particular 
subject and I suspect that's what we will be hearing today as 
well.
    I, like Senator Bond, am a cosponsor with over 60 other 
Senators, of the Byrd Resolution opposing the United States 
agreeing to any terms in Japan in December that unfairly harms 
the United States.
    If the developed countries alone are responsible for 
reducing the world's emissions, these nations could face 
serious economic disadvantages. In Arkansas, where agriculture 
is the leading industry and is so very important to the 
economic status of our State and to the livelihood of tens of 
thousands of Arkansans, we cannot afford to give such a 
competitive advantage to these developing countries such as 
China.
    We, in Arkansas, are the leading producer of rice--40 
percent of the State's rice is exported out of the country. The 
State's economy relies heavily on rice productions and yet, 
China produces 24 times the rice of the United States. So if we 
limit rice production or hinder it in any way, it will not deal 
effectively with global warming but will put States like 
Arkansas, and particularly the Mississippi Delta area, which is 
already an impoverished area, at a tremendous disadvantage and 
would truly be devastating.
    I want to thank the chairman for calling this hearing and 
for the witnesses who will testify today. I look forward to 
hearing that testimony and hopefully establishing some factual 
basis for the decisions that will be made.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Hutchinson follows:]
Prepared Statement of Hon. Tim Hutchinson, U.S. Senator from the State 
                              of Arkansas
    Thank you, Mr. Chairman.
    I appreciate the opportunity to be here today to hear testimony 
regarding the scientific basis behind the Global Climate. This is kind 
of a deja vu experience, because one of my first hearings in the Senate 
and the first hearing in this committee was a science hearing on the 
EPA's clean air proposal.
    Today we have a similar hearing, this time focusing on the science 
of the greenhouse effect on the United States. If there is anything I 
have learned from the Clean Air hearings is that many times scientists 
do not agree on the science. Despite the fact that it seems to be the 
common assertion that humans are causing the greenhouse effect, in 
reality there is some disagreement regarding our actual effect.
    There is agreement that humans are adding some greenhouse gases, 
the disagreement, however is whether these additions are causing 
significant changes in the Earth's temperature. I have an Associated 
Press article, that if we have time I might ask the panel to comment 
on, which states that it is possible that North America's ecological 
systems have always been in flux.
    According to the article, not long ago ice sheets two miles thick 
covered the entire northern half of the continent. The article goes on 
to say that as recently as 1850, temperatures were few degrees cooler 
than they are today and that any warming we may be experiencing now 
this is merely the continuation of a natural warming trend that began 
150 years ago.
    These scientific uncertainties are disturbing, especially when 
considering we are faced with the administration's support for legally 
binding reductions of greenhouse emissions. Even more frightening, 
perhaps, than the U.S. being legally bound to re- 

[[Page 8]]

ducing emissions, is the prospect that ``developing'' nations, such as 
China and Mexico will not be required to implement similar reductions.
    I question whether this will do any good at all for the reduction 
of greenhouse emissions. If humans are causing a great warming of the 
earth, then all humans must be concerned with this trend, not just the 
countries that are developed.
    This December in Kyoto, Japan, the world will decide what needs to 
be done to reduce the threat of global warming. I, along with 58 other 
Senators, cosponsored the Byrd resolution opposing the United State's 
agreeing to any terms in Kyoto that unfairly harms the United States.
    If the developed countries alone are responsible for reducing the 
world's emissions, these nations could face serious economic 
disadvantages. In Arkansas, where agriculture is the leading industry, 
we cannot afford to give such a competitive advantage to these 
developing countries, such as China.
    Arkansas is the leading producer of rice in the United States. 
Forty percent of the State's rice is exported out of the country. The 
State's economy relies heavily on rice productions, yet China produces 
24 times the rice of the U.S. If we limit rice production, or hinder it 
in any way, the Mississippi Delta, an already impoverished area would 
be devastated.
    Again, I want to thank the chairman for calling this hearing and 
for the witnesses who will testify today. I hope we can establish some 
facts today.

    Senator Chafee. Thank you.
    Senator Wyden.

  OPENING STATEMENT OF HON. RON WYDEN, U.S. SENATOR FROM THE 
                        STATE OF OREGON

    Senator Wyden. Thank you, Mr. Chairman.
    I, too, have a number of meetings this morning but I wanted 
to come especially today because my State is the first State in 
the country to legislate mandatory standards for controlling 
carbon dioxide emissions.
    I think the challenge for this committee as we get into 
this issue is to show that it is possible to lead in this 
effort to control greenhouse gas emissions without producing an 
economic meltdown. For real concrete evidence of that, you can 
just come to our State because what we have shown is that we 
can make this work, both for the economy and for the 
environment.
    Mr. Chairman, just very briefly, there were really three 
things that we sought to do in terms of trying to make this 
system work. The first is we phased in CO2 emission 
standards as part of the siting process for new power plants. 
What happened then was the standards became part of the design 
criteria for new plants so the developers were actually 
encouraged to design plants that are more efficient and we 
reduced the plants' operating costs.
    The second thing we focused on was a market-based approach 
to achieve these standards. We created a bidding process where 
new energy plant developers compete for plant permits with 
CO2 emissions as one of the criteria for awarding 
the permit.
    Finally, we gave credit to developers for creative 
approaches when they were in a position to mitigate 
environmental impacts. For example, developers got credits for 
tree plantings and offset for CO2 emissions because 
trees absorb CO2 from the air, retain the carbon and 
release oxygen.
    Mr. Chairman, I think we all know this is an 
extraordinarily difficult issue. I've heard several of my 
colleagues--Senator Hutchinson--make points that I consider 
extremely important. Certainly we're concerned about the 
question of what happens when the United States takes a 
leadership role on these issues.

[[Page 9]]

    I would hope that as we tackle this issue in the days 
ahead, we could look to my home State because I think we have 
shown a concrete case of how it is possible to control 
greenhouse gas emissions in a fashion that makes sense for 
long-term economic growth that our citizens want.
    Mr. Chairman, I commend you for your leadership.
    Senator Chafee. Thank you, Senator.
    Senator Allard.

 OPENING STATEMENT OF HON. WAYNE ALLARD, U.S. SENATOR FROM THE 
                       STATE OF COLORADO

    Senator Allard. First of all, Mr. Chairman, I'd like to 
thank you for holding this important hearing and I hope that we 
can continue to hold these on an annual basis to continue to 
review the scientific data because I think in order for us to 
make good policy decisions, it has to be based on good science.
    I'm absolutely delighted with the panel that you've brought 
forward which is going to do the best they know how to present 
their scientific view of what is happening as far as global 
warming is concerned. I'm very much interested in hearing what 
they have to say.
    I don't think enough has been said about the buffer system 
within the whole context of ecosystems in the whole world. I 
happen to feel that we do have a total buffer system that is 
very effective.
    For example, people talk about the problem of too much 
CO2 in the air, but they don't recognize as alluded 
to by my colleague that trees use CO2 to kick out 
oxygen and there is a balance between animal life and plant 
life. Obviously because of that, there is a large buffer 
system. Maybe that buffer system is greater in Oregon than it 
is in Colorado where we don't have so many trees.
    I think these are things that have to be thought through. 
I've been searching the scientific literature for good, solid 
facts. I'm aware that we are having some information coming 
down from our satellite systems that indicate there really 
isn't any real change as far as temperature. In fact, I've seen 
one report where maybe it's cooled a little bit.
    I also realize that there is some modeling out there, and I 
think we have to be careful with our modeling, about what we 
put into those models, what we hold as stable fact and what we 
hold as variable fact.
    Again, Mr. Chairman, I'm looking forward to this panel's 
discussion and the committee's discussion.
    Thank you very much.
    Senator Chafee. Thank you, Senator.
    Senator Inhofe.

 OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM 
                     THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you, Mr. Chairman.
    Like the rest, I have a statement to be entered into the 
record. I'll spare you that.
    As those who are testifying this morning, I recall that 
many years ago--in fact, 48 years ago, I was in junior high 
school and I remember a professor who was absolutely convinced 
that because

[[Page 10]]

of the global changes that the southwestern two tiers of States 
in the United States would slide into the ocean and he gave a 
very persuasive case. By Senator Reid's presence here, we can 
see that hasn't happened 48 years later.
    I'm disappointed in the lack of cooperation that we've had 
from the Administration. The Administration has not given us 
information we've requested.
    I was with Congressman Tom Bliley from Virginia yesterday 
and he tells me it's been months now that he's requested 
information that he has not been able to get.
    I've seen some analogous things with what we're going 
through as has been mentioned by some of my colleagues over 
here with the ambient air quality standard changes that were 
proposed by the Administration.
    I, as chairman of the committee, had the scientific hearing 
first and I applaud you for doing the same thing, Mr. Chairman, 
because I think when we listen to the hysterical things out 
there such as we went through on ambient air, they first said 
it was going to result in some 60,000 premature deaths a year, 
then that was dropped down to 40,000 and after about six 
hearings, it's down to below 1,000 now.
    The Administrator had said initially it was going to cost 
$6 billion and now, according to the Reason Foundation in 
California, it's up to somewhere between $90 and $150 billion. 
So we need to get beyond the hysteria and start looking at the 
facts.
    I, too, am a cosponsor of the Byrd-Hagel Resolution. I feel 
if we're going to enjoy this, we want everyone else to get in 
there with us.
    I'll be looking forward to this hearing probably more than 
any others we're having because the science is unclear to me 
and maybe it will be clearer after this hearing.
    [The prepared statement of Senator Inhofe follows:]
 Prepared Statement of Hon. Jim Inhofe, U.S. Senator from the State of 
                                Oklahoma
    Thank you Mr. Chairman for calling this hearing today. The debate 
on global climate change is an important one that deserves considerable 
attention.
    As a cosponsor of the Byrd/Hagel Sense of the Senate Resolution, my 
position has been clear. I do not support a binding committee for 
emissions reductions that does not also bind developing nations. In 
addition, I have serious concerns and questions regarding the 
underlying science and the economic considerations.
    I appreciate Senator Chafee bringing in this panel of experts today 
to help educate the committee. I am concerned that the Administration 
has been unwilling and uncooperative in providing the necessary data to 
Congress regarding the underlying models they are using in their 
international negotiations. I know Congressman Bliley has been 
requesting this information for months and his requests have gone 
unanswered. Therefore we will have to rely upon ourselves to obtain the 
necessary information.
    I know the President has announced that he will convene a White 
House Conference on Climate Change later this year, but because of the 
Administration's past record of withholding information and silencing 
critics, I will be looking at the composition of this panel carefully. 
I hope the President will ensure that all sides of the debate are 
treated equally, if the purpose of the panel is to truly uncover the 
facts.
    As the President also pointed out in his remarks, this debate is 
very similar to the debate on the proposed new standards for ozone and 
particulate matter. He believes that the new standards are the first 
step toward addressing the climate change issue. I am concerned that 
some in the Administration and the EPA are using the ends to justify 
the means for both climate change and the NAAQS debate.

[[Page 11]]

If the climate change science is as incomplete and uncertain as the 
particulate matter science, then the Administration is in trouble on 
this issue.
    Because of this, it is my intention to hold Oversight hearings in 
my Clean Air Subcommittee on the use of the Clean Air Act under this 
Treaty prior to any Senate vote on Treaty ratification. Again I would 
like to thank Senator Chafee for calling this hearing today, and I look 
forward to working with him on this issue in the months to come.

    Senator Chafee. Thank you, Senator.
    Senator Reid.

  OPENING STATEMENT OF HON. HARRY REID, U.S. SENATOR FROM THE 
                        STATE OF NEVADA

    Senator Reid. Mr. Chairman, I say to my friend, Senator 
Inhofe, we, in Nevada, have always been envious of States that 
have beachfront property.
    [Laughter.]
    Senator Reid. I would also say that I'm sorry that Senator 
Bond is gone, my friend from the State of Missouri, but I will 
say to him, and I'm sure the message will be carried by others, 
that maybe some of those old lead mines in Missouri could be 
used for nuclear waste disposal if he thinks it's such a good 
idea.
    [Laughter.]
    Senator Reid. I would ask, Mr. Chairman, that my full 
statement be made a part of the record.
    I'd also say that I'm one of those that appears today to be 
in a minority on this committee that think we do have problems 
with global warming. I think it is a problem, I think that the 
scientific evidence is clear that there are changes in weather 
patterns that are significant in nature, not the least of which 
is on our own continent where we've had these storms, these 
floods that are happening in recent years which just aren't by 
happenstance. It appears that the same amount of water is 
coming from the sky; it's just coming in a much shorter period 
of time.
    I think the hurricanes we've had off the coast of Florida 
are also not just by chance. I think the fact is we know the 
surface temperature of the ocean only has to raise a very small 
amount, less than a degree, to cause problems.
    I think it's very important, Mr. Chairman, that these 
hearings take place. I commend and applaud you for approaching 
this. The hearings are balanced. You have people who have 
different points of view and our job is to weigh the evidence.
    I would say to those who say that the things we do 
legislatively may not be of significance, we look back 25 years 
ago when the Clean Water Act was passed and we did that because 
the Cuyahoga River kept catching fire and the third time, it 
was decided that we should do something about it.
    As a result of that legislation, we've done a remarkable 
job of making our rivers and streams much better than they used 
to be. In fact, about 80 percent of the rivers and streams were 
polluted at the time this Act passed and now, only 20 to 30 
percent of them are polluted. So the things we do here have a 
long-range impact.
    I'm confident that this fact-gathering that we're going to 
be doing here in this committee on global climate change will 
be significant.
    I'm only going to be able to stay through the rest of these 
brilliant opening statements and miss the meat of the hearing 
because

[[Page 12]]

we have overlapping jurisdiction hearings that are taking 
place, but I'm very interested in what is taking place here and 
I'm going to give it as much attention as I can.
    [The prepared statement of Senator Reid follows:]
 Prepared Statement of Hon. Harry Reid, U.S. Senator from the State of 
                                 Nevada
    Good Morning. I want to share a few thoughts on the science and 
economics of the global climate change debate. Although the committee 
has wisely chosen to hold one hearing on science and economics, and 
another on the on-going international treaty negotiations, my comments 
cannot be so easily separated.
    There is a discernible human influence on global climate. Since the 
dawn of the industrial age, the concentration of carbon dioxide in the 
atmosphere has risen by 30 percent. Most experts now agree that the 
buildup of greenhouse gases in the atmosphere due to the combustion of 
fossil fuels and other human activities is happening. To many this is a 
troubling phenomenon. Although we are not sure what the exact adverse 
consequences of this buildup will be, mere common sense dictates that 
we, at a minimum, begin preparing to deal with it.
    The Senate approved the United Nations Framework Convention on 
Climate Change in 1993, which called for all signatory nations to adopt 
policies and programs to limit their greenhouse gas emissions on a 
voluntary basis. The United States had hoped to stabilize emissions in 
the year 2000 at 1990 levels. Unfortunately, we have fallen well short 
of that mark.
    The United States is, at the moment, the world's biggest consumer 
of fossil fuels and producer of greenhouse gas emissions. As such, it 
is important that we must show international leadership in terms of 
analysis, research, and, if necessary, in reducing these emissions.
    As part of the on-going international treaty negotiations, the 
Administration has moved toward supporting mandatory, legally binding 
limitations on greenhouse gases for the nations of the World. Within 
limits, I am supportive of these efforts.
    Unfortunately, I share the concern of many of my colleagues that 
the current negotiations do not seem to require a firm time table for 
reductions from the nations of the developing world.
    The U.S. currently emits more greenhouse gases than developing 
nations, such as China and India. However, this will not be the case 
for much longer, especially if the U.S. begins to curb our emissions. 
While I am not eager to perpetuate the poverty in these nations by 
mandating that they participate equally and immediately in making 
reductions, I have economic and competitive concerns about requiring 
nothing from them.
    I cannot, in good faith, ask the citizens of Nevada, who have 
worked very hard to develop and accommodate environmentally friendly 
transportation policies and clean industries, to now make more 
sacrifices without some guarantee that the developing nations will not 
make similar efforts soon.
    In a global economy, we are often forced to compete with other 
nations that have different labor laws and practices than our own, 
different rules of resource protection, and yes, often weaker 
environmental laws. Unfortunately, cheap labor, wasteful resource use, 
and weak environmental laws often add up to a mighty competitive retail 
price.
    On an issue of such wide-ranging economic impact and consequence, 
it is unfair to our citizens to let other nations do nothing while we 
make the necessary sacrifices.
    Again, I absolutely acknowledge that the United States must do its 
part to try to avert any adverse climate change. We are a part of the 
problem and we will be an important part of the solution.
    I would prefer that Senator Byrd's resolution recognize that the 
nations of the developing world will need some extra time, perhaps as 
much as 10 years, to put their binding reductions in place.
    However, given a choice between sending U.S. negotiators to Kyoto 
offering unilateral economic disarmament on this subject, and sending 
them into final negotiations with a stance that demands worldwide 
equality of treatment now, I must choose to protect the best interests 
of the United States.
    Thank you.

    Senator Chafee. Thank you, Senator.
    Senator Lautenberg.

[[Page 13]]

  OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR 
                  FROM THE STATE OF NEW JERSEY

    Senator Lautenberg. I'll be brief, Mr. Chairman.
    I want to commend you for holding this hearing because with 
all of the doubt and with all of the debate, I think that we 
kind of miss the point. I sense that, as my colleague, Harry 
Reid said, and nobody caught your joke about the brilliant 
opening statements and I don't think mine is going to change 
your mind, but the fact of the matter is we see changes around 
us that we don't understand. We see changes that are making a 
huge difference. I've heard reports of rain at the poles. These 
things aren't just the coincidence of the moment.
    We talk about peer reviews and everybody enjoys kicking EPA 
and some of the agencies around because we disagree with them, 
but given a task and saying, look, we want peer-reviewed 
material, and there was a concern that EPA was using less than 
adequate backup before acting.
    However, the critics who demanded peer-reviewed research 
before we take action seem to have no trouble discounting peer-
review research when it suits their purpose.
    The tobacco industry comes to mind when we saw evidence, 
400,000 people dying each and every year and all kinds of 
respiratory diseases, suddenly learning that 50,000 fatal heart 
attacks take place as a result each year of secondary smoke, we 
had hundreds of thousands of pages of reports galore, the best 
medical research in the world couldn't convince the industry 
that cigarettes cause cancer or are addictive.
    The plea was, listen, we don't want to put these people out 
of jobs. No, I don't want to put them out of jobs either, I 
don't want to prevent the farmers from making a living, but 
frankly, I must tell you I hear some of the same things being 
discussed here today.
    We really don't know--well, thank goodness, we're going to 
have a hearing, we're going to have a chance to find out.
    Mr. Chairman, I ask unanimous consent that my full 
statement be inserted in the record and I would like to make 
one observation because I listened to the Senator from 
Missouri's references to the Samuelson article.
    Through it, he does say that some of this is a gushing 
source of national hypocrisy at the top. That doesn't mean that 
he's right and everybody else is wrong. Throughout the article 
he describes what has to be done politically to make things 
right even though he doesn't buy into the fact that this thing 
is really the kind of threat that many of us feel it is.
    In his last sentence, he says, ``But it would be political 
suicide to do anything serious about it, so shrewd politicians 
are learning to dance around the dilemma.''
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Lautenberg follows:]
  Prepared Statement of Hon. Frank Lautenberg, U.S. Senator from the 
                          State of New Jersey
    The EPA, along with other health, environment and safety agencies 
are under congressional pressure to use good science: peer reviewed 
research before taking actions to protect the Nation's workers and 
children. The concern is that EPA was using less-than-adequate backup 
before acting. However, the critics who demand

[[Page 14]]

peered research before we take action to protect the environment, seem 
to have no trouble discounting peer reviewed research when it suits 
their purpose. The tobacco industry comes to mind. Hundreds of 
thousands of pages of the best medical research in the world can't 
convince the industry that cigarettes cause cancer or are addictive. At 
today's hearing, we are talking about global warming. An unprecedented 
number of scientists around the world, thousands of peer reviewed 
research and projects all point to the fact that global warming is 
happening--it is a threat to our environment and we have a moral 
imperative to act.
    A few fringe scientists, generally paid for by industrial 
polluters, disagree. Essentially, their work is not peer reviewed. 
However, they are heard because millions of dollars are spent to give 
these scientists a megaphone that drowns out the undisputed consensus 
of an overwhelming number of the world's scientists. The threat of 
humankind changing the climate is real. In New Jersey, we are concerned 
that global warming will lead to rise in sea level that will devastate 
our coastal beach resources. As all Americans, we are watchful of 
extreme weather events and wary of changes in precipitation patterns 
that could led to floods, droughts and inadequate water for crops.
    I look forward to these hearings on what many believe is the most 
critical environmental issue facing our globe.

    Senator Chafee. Thank you, Senator.
    I want to remind all the Senators that a week from today, 
namely July 17, we will have an additional hearing and there, 
the Administration will be present, so I hope everybody will be 
present for that hearing likewise.
    I want to explain to the panel that you may see some of 
these Senators come and go. As has been mentioned earlier, we 
have a series of conflicts today with the Thompson hearings and 
the conference with the House on the tax bill and so forth and 
the defense bill on the floor.
    There are statements from Senators Lieberman and Boxer that 
I'd like to have put in the record.
    [The prepared statements of Senators Lieberman and Boxer 
follow:]
 Prepared Statement of Hon. Joseph I. Lieberman, U.S. Senator from the 
                          State of Connecticut
    Mr. Chairman, thank you for holding these hearings on climate 
change. I regret that I will be unable to stay for the testimony and 
questions because this is a very important issue.
    Climate change is one of the most serious global issues we face 
today and in the future. After spending more than 3 years analyzing 
hundreds of peer-reviewed scientific studies, the Intergovernmental 
Panel on Climate Change--a group of 2,500 expert scientists 
representing more than 50 countries--concluded that as a result of 
human emissions of greenhouse gases, particularly by combustion of 
fossil fuels, ``there is a discernible human influence on the global 
climate.'' The IPCC included a diversity of members from individual 
disciplines who, based on sheer odds alone, are likely to hold widely 
ranging views within the scientific community. I've been told that 
getting scientists to agree to anything is as challenging as herding 
cats. So the fact that consensus has been reached within the IPCC on an 
emerging scientific issue of such complexity and variety is remarkable, 
and makes its conclusions very impressive.
    The IPCC has tied the increase of atmospheric greenhouse gases to 
long-term changes in prevailing patterns of temperature and 
precipitation. Without action to reduce emissions of greenhouse gases, 
we are likely to see temperature changes in the next 100 years many 
times those experienced in the last several centuries. The IPCC 
predicts the number of extreme weather events--floods, heat waves, and 
droughts--will increase. We know our weather already is becoming 
increasingly peculiar. In the last few years the frequency and 
magnitude of floods have been altered dramatically in many regions of 
the US, along with heat waves, record heat days, severe rains, and dry 
spells. IPCC experts also predict sea level will rise substantially. 
The number of citizens in the U.S. living in coastal areas at risk of 
serious ocean flooding likely will double due to sea level rise. The 
amount of urbanized

[[Page 15]]

land likely to be vulnerable to extreme weather events is large, 
raising economic issues of disaster relief, damage repairs, and 
relocation in many regions.
    Changes in climate have major implications for human health, water 
resources, food supplies, infectious diseases, forests, fisheries, 
wildlife populations, urban infrastructure, and flood plain and coastal 
developments in the United States. Although uncertainties remain about 
where, when, and how much climate might change as a result of human 
activities, the changes--when they happen--may have severe impacts on 
many sectors of the U.S. economy and on the environment. These are 
serious risks that we must start considering.
    The fundamental question as we consider a climate agreement is 
whether the U.S. can develop policies that will achieve significant 
reductions in greenhouse gas emissions without harming the economy. The 
news here is promising and suggests that we can afford to meet 
realistic emissions reductions. First, the National Academy of Sciences 
concluded in 1991 that ``the efficiency of practically every end use of 
energy can be improved relatively inexpensively . . . and that the 
United States could reduce or offset its greenhouse gas emissions by 
between 10 and 40 percent of 1990 levels at low cost or at some net 
savings.'' More recently, over 2,500 American economists, including 
eight Nobel laureates, stated that there are many potential policy 
options to reduce greenhouse gas emissions for which the total benefits 
outweigh the total costs. These policies would slow climate change 
without harming American living standards, and may in fact improve U.S. 
productivity in the longer run.
    We won't find a silver bullet to solve the problem. Luckily, 
climate change lends itself to flexible solutions. Because it's all one 
atmosphere, it doesn't matter where or how the reductions are made. It 
only matters that fewer greenhouse gases are emitted. The 2,500 
economists found that the most efficient approach to slowing climate 
change is through market-based policies such as an international 
emissions trading agreement. We know from our experience with programs 
like the acid rain title of the Clean Air Act that emissions trading is 
very cost-effective because it provides businesses with the maximum 
flexibility to make choices about how to achieve the necessary 
reductions.
    Given the potential impacts of climate change, it is not surprising 
that nations of the world agreed to find more effective ways to 
understand and deal with the problem. If we don't agree to long-term 
greenhouse gas limits soon, and instead wait to see how our climate 
changes, it may be too late. Greenhouse gases remain in the atmosphere 
for decades to centuries, and there is a long lag time between when 
gases are emitted and when the climate consequences of those emissions 
appear. So we need to begin reductions soon to have any long-term 
effect. And, a new generation of energy-efficient technologies requires 
a long lead time for development and implementation. This won't happen 
without clear signals to the market.
    Recent discussions in the Senate regarding the international 
agreement have emphasized the role of the developing countries. I 
concur that this is an important issue, and developing countries ought 
to make commitments consistent with their historic responsibility for 
the problem, as well as their current capabilities.
    At the same time, I am concerned that elevating one issue to a 
level of importance that will overshadow other key matters may harm the 
United States' efforts to ensure that the climate agreement is 
realistic and achievable. For example, the need for flexibility in 
implementing a treaty is critical. Some countries, such as members of 
the European Union, would prefer highly prescriptive policies and 
measures to meet reduction targets. The United States' negotiating team 
has made flexibility an absolute prerequisite for any agreement, and I 
want to commend them for this approach. I believe that to be 
acceptable, our businesses must have the most flexibility possible to 
find the least-cost ways to reduce emissions. This means the agreement 
must contain provisions that are so important to our business 
community: emissions trading, joint implementation between nations, and 
appropriate credits for those companies that have already made certain 
emissions reductions.
    As we grapple with the human judgments and values that inevitably 
will determine how we handle climate change, we must base our actions 
on the facts--the scientific evidence of climate change, the physical 
effects that are likely to result from it, and the costs of our 
``insurance policy'' to prevent these changes. Mr. Chairman, I look 
forward to working with you and the members of the committee as we face 
these challenges.

[[Page 16]]

                                 ______
                                 
 Prepared Statement of Hon. Barbara Boxer, U.S. Senator from the State 
                             of California
    Mr. Chairman, today will be the first of two hearings dealing with 
global climate change, a topic of critical importance to the citizens 
of our country, and indeed critical importance to all living things on 
our planet. Global climate change does not recognize State or national 
boundaries. We are ALL affected by global climate change.
    Scientists tell us that human activities since the Industrial 
Revolution have contributed billions of tons of carbon dioxide into the 
atmosphere. These activities include the burning of fossil fuels to 
power our automobiles and industries, as well as certain industrial 
activities and deforestation. As a result of these emissions, the heat-
trapping capability of the Earth's atmosphere has increased 
significantly, and a majority of scientists agree that there are clear 
signs of global warming.
    The potential changes we will hear about today are alarming. I am 
very concerned about the potential effects of global climate change 
because the economy and quality of life of Californians is so closely 
linked to climate.
                         effects on agriculture
    California is the No. 1 agricultural State in the Union, 
contributing more than $22 billion per year to our nation's economy 
while employing more than 1.4 million people. Farmers in my State are 
concerned that global climate changes will cause highly unpredictable 
weather and changes in water availability resulting in reduced crop 
yields.
                       effects on water supplies
    Californians depend upon reliable sources of water for their 
livelihood and quality of life. Warmer temperatures due to increased 
greenhouse gases could cause more precipitation to fall in the form of 
rain instead of snow. A reduced snowpack, especially in the Sierra 
Nevada, could lead to a change in the timing of runoff and potentially 
greater flooding during the winter and dryer conditions in the summer.
                           effects on health
    Warmer temperatures will likely lead to increased incidents of 
heat-related mortality and illness, and will have its most disastrous 
effect on infants and the elderly. Air quality improvements we have 
realized over the years in California could be severely affected.
    Other ramifications include adverse impacts upon forestry, tourism, 
animal and plant diversity, and ocean shorelines. These impacts are of 
equal concern for other States.
    Finding a solution to this truly global problem will not be easy, 
nor will it occur overnight. But we must start.
    The United States can have a significant impact on reversing global 
warming.
    First, we must listen to the scientific community. The vast 
majority of scientists agree that global climate change is a reality, 
and that it is attributable to emissions of greenhouse gases associated 
with human activities.
    Second, we must move swiftly to stabilize and if possible reduce 
greenhouse gas emissions. The United States has only 4 percent of the 
world's population, yet we produce more than 20 percent of the 
greenhouse gases. Measures we take within our country will have 
dramatic effects on reducing the amount of greenhouse gases worldwide. 
For example, if we were to raise Corporate Average Fuel Economy 
standards from 27.5 miles per gallon to 45 miles per gallon we would 
reduce carbon dioxide emissions by almost 560 million tons per year. 
Other measures we can take could have similar effects.
    Finally, we must develop policies and technologies that will help 
us meet our global responsibilities and protect our living standards.
    I am convinced that there is widespread agreement within the 
scientific community that global climate change is a reality and a 
major cause of that change is the emission of greenhouse gases. We need 
to bring this portion of the debate to a close and for the sake of 
future generations, focus on solutions. We owe those future generations 
nothing less than our full attention to this critical issue.
    Thank you Mr. Chairman.

    Senator Chafee. I know that Senator Sessions wanted to be 
here. He is chairing a Judiciary Committee hearing today and 
particularly, Dr. Christy, he wanted to welcome you here. He 
spoke to

[[Page 17]]

me about your presence and we're very glad you're here. I know 
that Senator Sessions regrets that he can't be present.
    We will start with Dr. Barron.
    Gentlemen, if you will note, here is the green light, then 
the yellow will come on after 6 minutes and then the red light. 
So you'll get about 7 minutes apiece.
    Go to it and there will be questions for all of you. What 
we're going to do is have each of you give your statements and 
then we will have questions from here.
    Senator Inhofe. May I ask a question, Mr. Chairman?
    Senator Chafee. Sure.
    Senator Inhofe. I notice we have five witnesses and I think 
we only received information from four. Was one added at the 
last moment?
    Senator Chafee. Dr. Barron's testimony apparently came in 
late. We'll get it for you.
    Dr. Barron, go to it.

STATEMENT OF ERIC BARRON, PROFESSOR, DEPARTMENT OF GEOSCIENCES, 
AND DIRECTOR, EARTH SYSTEM SCIENCES CENTER, PENNSYLVANIA STATE 
                           UNIVERSITY

    Dr. Barron. Mr. Chairman, distinguished Senators, members 
of the Senate staff and public participants, I believe that the 
prospect of future human-induced climate change is one of the 
most complex and serious science and societal issues that we 
have to face in this century and going into the next century.
    We know that humans are altering the environment; we know 
that they are altering the land surface; we know the 
composition of our atmosphere has changed. If we look at the 
very best scientific assessment of these changes, it appears as 
if the climate response will be something that is large and 
something that is significant.
    At the very same time we say that, we also have to 
recognize that the air of ours or the uncertainties about those 
predictions are very large. So really, the major question comes 
down to the fact of what do you do when the scientific 
community, and the best scientific assessments we have, suggest 
that the change is going to be large and that in a sense, we 
need to look out because the future climate is going to be 
dramatically different than the present climate.
    At the same time, the scientific community is hotly 
debating the size of the warning label that should be applied 
to this particular problem.
    We have two lines of evidence on which we have to focus. 
One of them is observations and one of them is the development 
of predictive models. If we look at the observational record, 
what we see is that instrumental record is extremely short and 
at the same time, it was never designed to take the temperature 
of the planet or the pulse of this earth.
    Instead, it was designed to provide weather safety 
information and weather forecasting information. This means its 
use in some ways, in terms of climate, has become limited.
    At the same time, when we do look at this record, we're 
beginning to see the signs that the latter half of the century 
is distinctly

[[Page 18]]

different in terms of precipitation and temperature from the 
earlier half of the century.
    If we go back in the geologic record and look further back 
over thousands of years, we even see that in some places on the 
Earth, the record of climate of the 20th Century appears to be 
unique, but at the same time, if we go even further back in our 
history on the order of say 10,000 years and 15,000 years, we 
have to conclude that modern humans have yet to experience the 
extent of natural variations in climate that we see recorded in 
that record.
    What that means is that we have a ways to go before we can 
understand the character of this variability and what the 
distribution of that variability is. We can turn to climate 
models and look at predictive models and look at what is the 
best and most comprehensive assessment of what the climate 
system is like and we also see that there are distinctive 
limitations.
    If we're referring to numbers that are global, what the 
warming might be within 100 years and we provide that answer 
within a range, then we tend to see agreement among the 
scientific community that the warming is likely to occur in 
that range.
    As soon as we move to saying what will happen in a 
particular decade to a particular region of the Earth for a 
particular phenomenon, like whether or not we'll experience 
more intense storms, then we begin to have substantial 
disagreement and controversy. Unfortunately, at that scale is 
the very place the climate intersects and interacts with human 
systems.
    We made tremendous progress in the last decade in 
addressing all of those different issues, but it would be a 
mistake for any of us to promise you that the solutions to a 
lot of those issues are going to be addressed rapidly and are 
just around the corner.
    As a matter of fact, I'm willing to bet that in the 
newspaper articles that we will read 10 years from now, the 
newspapers will continue to seek out the poles of opinion to 
put in those papers in order to appear to be giving a balanced 
view on this particular issue, no matter what the mass of 
scientific sentiment is on this particular field.
    So in the middle of a great deal of public confusion that 
ends up as a product of this combining the poles of opinion 
every time you want to discuss this particular topic, we're 
still stuck with the problem that the models, the records, 
suggest the Earth is changing and the models suggest some of 
those changes may be severe.
    What should we do? What kind of strategy can we come up 
with? I think that strategy has to have two elements. One 
element of that strategy is that we have to maintain a very 
strong research, observation and modeling program in this 
country.
    It's almost tragic that we have an observational system 
that we pay for but we don't spend the additional small 
investment to make sure that observational system can be used 
to assess climate. It's almost tragic that we have a whole 
series of satellite observations providing us all sorts of 
information, but we don't have the continuity of those 
measurements to ensure that our conclusions from them are going 
to be robust.
    We need to make sure that we work hard to advance on the 
limitations and high resolution in climate model predictions. 
We see a number of other countries--Japan and Germany with less 
robust

[[Page 19]]

economies than we have--right now actively pursuing major 
observational and modeling efforts. They do this because they 
realize this advanced information and predictive capability has 
economic significance.
    The second thing is we need some litmus test to be able to 
decide at what point we should worry about these particular 
issues. My particular feeling is this litmus test has to be 
based on the degree to which we're vulnerable or at risk.
    If we look around this Nation and take, for example, water 
resources as an example, if your region, your State is already 
vulnerable to natural variability, there are droughts and 
floods, and in addition to that, you see that in these 
predictions and assessments that there is a continuation of 
this risk or that risk is even enhanced, then it strikes me 
since we're already having problems with that water 
availability, that should be a call for action.
    If you look at other areas in which there is potential for 
significant risk, say for human health issues, so that you see 
a heat wave brings substantial mortality in major cities like 
St. Louis, Chicago, Philadelphia or Washington; if you look at 
the fact that the distribution of mosquitoes that are vectors 
for disease like dengue fever or malaria, have the potential 
because of natural variability or climate change to move into 
more northern States and present the possibility of health 
risks; if you already have evidence that something like the 
deadly hanta virus occurred because of natural climate 
variability in wet-dry cycles or that lyme disease is actually 
closely tied to how warm winter temperatures are; if you begin 
to assess these things and realize you have risk for both 
natural variability and climate change, then I think that 
becomes a call for action.
    The bottom line, basically, of my testimony is that I think 
we're going to have to live with a certain level of 
uncertainty. The only way that we can tackle that uncertainty 
is No. 1, to make sure we have very healthy programs that are 
addressing these issues; and No. 2, that we begin to make 
careful assessments of what the vulnerabilities and risks are.
    Thank you very much.
    Senator Chafee. Thank you very much, Dr. Barron.
    Dr. Christy.

 STATEMENT OF JOHN R. CHRISTY, ASSOCIATE PROFESSOR, DEPARTMENT 
  OF ATMOSPHERIC SCIENCE, UNIVERSITY OF ALABAMA AT HUNTSVILLE

    Dr. Christy. Mr. Chairman and members of the committee, I'm 
honored to be here to provide you with a little bit of 
information about the climate system.
    In the late 1980's, the potential catastrophe of human-
induced global warming began receiving a lot of attention, 
thanks in part to a couple of warm but not recordbreaking 
summers here in the eastern United States.
    The predictions were horrifying--we were going to have 
rapid temperature rises, coastal flooding, massive hurricanes 
and so on.
    As a student of climate, I and others, were concerned with 
the lack of proper data to describe the Earth's system and the 
lack of perspective in which to judge these events as being 
extreme or not.

[[Page 20]]

    In 1989, Dr. Roy Spencer, a NASA scientist with similar 
concerns, and I set out with an agenda to provide an accurate 
dataset of truly global observations of atmospheric 
temperature. These data would not be plagued, as the 
traditional surface data are, by changing locations or 
dependence on transient shipping or lack of coverage in very 
large areas.
    We did not know what that dataset would show. Our goal was 
precision and accuracy, to provide the scientific community 
with excellent, truly global temperature data.
    An added incentive for us, in creating the Microwave 
Sounding Unit dataset, was that two of the atmospheric layers 
we were closely examining happened to be two layers which 
climate models indicated the largest and most rapid responses 
would occur, if climate change were occurring.
    A warming of the troposphere, faster even than the surface, 
and the cooling of the stratosphere--the troposphere is about 
the surface to 20,000 feet and the stratosphere is up above 
50,000 feet.
    Two ways have been used to measure the temperature of the 
lower atmosphere since 1979, our work, the satellites, and by 
instruments carried aloft by balloons. I'm a working stiff 
atmospheric scientist, so I still have transparencies.
    This is just a little picture to show you that satellites 
measure the direct emissions from the atmosphere and balloons 
carry instruments aloft and they can measure the same layers. 
Balloons, however, are only released in scattered locations 
around the Earth where people live and the polar-orbiting 
satellites see the entire planet every day.
    I compared our satellite measurements with those from 
balloons from 97 stations in the western-northern hemisphere. 
That was the result, almost essentially perfect agreement.
    Senator Chafee. I think that will need a little 
explanation.
    Dr. Christy. OK. You see a dotted line and a solid line. 
One is the balloons and one is the temperature of the satellite 
system that we have generated for 97 places on the Earth where 
balloons are located. So it's a satellite looking at the same 
places where the balloons are, a correlation of .97 trends are 
almost exactly the same.
    Senator Baucus. The dotted and the solid lines are the 
same?
    Dr. Christy. Yes, that's what the correlation .97 means.
    Senator Chafee. The balloons must be at a far lower 
altitude. What altitude?
    Dr. Christy. They go up to the upper stratosphere. They 
measure exactly the same layer of the atmosphere. The agreement 
is astounding. These are completely independent ways to measure 
the troposphere.
    So the satellites were providing the precision we had hoped 
for. Again, I did not, nor did Roy, have any agenda in terms of 
what the data would show. We were providing a precise record of 
the atmospheric temperature. This is what we found when we 
looked for the entire globe. By the way, these are in your 
verbal remarks, these transparencies.
    This is what we found, the troposphere since 1979 has gone 
up and down but virtually no trend in either direction. The 
stratosphere has had a significant downward decline in 
temperature. You can see it is truly affected by volcanic 
eruptions. Those two red

[[Page 21]]

spikes in the temperature record in the stratosphere are due to 
volcanic eruptions.
    The year-to-year fluctuations due to volcanoes and ocean 
temperatures affect the top line, the tropospheric temperature. 
All the ups and downs are not caused by anything with long-term 
effects; it's mostly the volcano and ocean situation.
    So you cannot look at that and really judge if a warming or 
cooling is taking place because of the length of record. Dr. 
Richard McNider, a UAH colleague, and I published a paper that 
calculated and removed the impacts of varying oceanic and 
volcanic influences to see if a longer-term trend was present.
    We looked at that temperature record, calculated the 
effects from the ocean, which is the second line, calculated 
the effects from volcanoes which is the two blue impacts there, 
the fourth line, and the fine result is the fifth line which is 
the temperature once these oceanic and volcanic effects are 
removed.
    It does show a slight warming trend of .06 degree per 
decade. It's small enough to be easily placed within the bounds 
of natural variability, but I can't be certain about that. 
Humans may be having a slight impact on the global tropospheric 
temperature. The trend is small.
    Senator Baucus. You go back how many years?
    Dr. Christy. 1979 it begins.
    Senator Baucus. Thank you.
    Dr. Christy. This is a measurement of temperatures from 
1979 to 1996, 18 years for the troposphere at the top. These 
are with balloons and satellites, completely independent 
comparisons of the tropospheric temperature.
    The bottom is the surface record from three different 
surface datasets. We see the temperatures look like they're 
going in different directions. The troposphere is pretty steady 
or slightly downward, we all agree with that. The surface 
records are upward, roughly around a tenth of a degree per 
decade.
    No climate model I have seen indicates the troposphere 
should cool while the surface warms for human-induced climate 
change. With these observations which cover the period of the 
greatest human impacts on climate, if they are to be evident, 
that is what we see.
    If we had regular weather measurements for the past 5,000 
years, we would see centuries in which the temperature rose and 
when it fell. There would be observations of far more 
observations of devastating floods, droughts and blizzards more 
than we have seen in the past 100 years. I'm confident of that.
    Focusing on just the 20 years of the satellite record or 
just 100 years of thermometers doesn't give one a good idea of 
what has happened in the last 5,000 years or so. If we look at 
the somewhat murky world of proxy data--tree rings, et cetera--
most records do not show this century as remarkably different 
from the others.
    Our present weather woes have always been part of the 
planet's history, whether it's a drought in the 1930's or the 
Red River flood in 1997.
    I agree with Eric Barron that without a continuing program 
of observation and research that places climate variations in 
proper perspective and reports with improving confidence on 
their causes,

[[Page 22]]

we will be vulnerable to calls for remedies to combat ``climate 
change'' because climate change now seems to be blamed for 
every weather woe that comes along. Such remedies are likely to 
be unproductive.
    The satellite and balloon data, the top line, show that 
catastrophic warming is not now occurring. The detection of 
human effects on climate has not been convincingly proven 
because the variations we have observed are not outside the 
natural variations of the system.
    The stratospheric temperatures which I showed earlier 
suggest something is going on, but separating the massive 
effects of the volcanoes is not easily done. If the global 
atmosphere is our patient, I would say that we've taken its 
temperature at a few points and there seems to be a slight 
fever, but we're not sure.
    Sensible precautions can be taken. However, my view is that 
the planet needs a thorough physical to more clearly determine 
what might be wrong, along with a complete assessment of how 
effective any medicine would be before it's administered.
    Thank you.
    Senator Chafee. Thank you.
    Dr. Lindzen from MIT.

STATEMENT OF RICHARD S. LINDZEN, ALFRED P. SLOANE PROFESSOR OF 
       METEOROLOGY, MASSACHUSETTS INSTITUTE OF TECHNOLOGY

    Dr. Lindzen. Thank you, Senator Chafee, members of the 
committee and staff.
    You've heard I think already a certain amount of 
conflicting information, although what is interesting is the 
conflict has been larger among the Senators on the committee 
than the scientists thus far.
    I think the reason for that is that 10 years ago when this 
issue became publicized, it was put forward as simple. The idea 
was we have gases that absorb heat or infrared, they're 
increasing, and that will cause the Earth to warm. The gases 
were known as greenhouse gases.
    You perhaps don't understand why such a simple picture has 
become so complicated and why it's called into question. There 
are problems with that picture. The Earth's surface does not 
cool primarily by radiation. It cools by evaporation and 
convection. The main greenhouse gas is not carbon dioxide; it's 
water vapor. Water vapor has phenomenal temporal and spacial 
variability.
    We don't even have records that are worth mentioning for 
water vapor, so we don't even know what's happened to total 
greenhouse gas. It isn't even a matter of total amount of 
greenhouse gas. One molecule of water vapor at 10 kilometers 
has the same effect as 1,000 molecules at the surface.
    None of this would be a problem if the models were 
trustworthy, but satellite measurements of upper tropospheric 
humidity, some of which have come from Marshall Space Flight 
Center, Huntsville, are in complete disagreement with models at 
a level which is profoundly important for climate change.
    I'll give you an example later but I might as well mention 
it now. John Bates at NOAA has analyzed the satellite data and 
he finds

[[Page 23]]

latitude by latitude models overestimate humidity by about 20 
percent. Just for purposes of comparison, 20 percent represents 
five times the radiative forcing that a doubling of carbon 
dioxide gives.
    In any event, that's a place where we are and you would 
think that under the circumstances, the situation would be more 
chaotic than it is. I think, however, there are some areas of 
agreement and one of them is that I think virtually everyone I 
know working on climate dynamics agrees that increasing 
CO2, carbon dioxide, should have some impact.
    The argument is about whether this impact is significant 
and, in this case, significant has a fairly precise meaning. 
It's been repeated several times. We're dealing with the 
climate; it's a naturally variable system. I should point out 
that means even if you change nothing, it varies.
    We've adapted to the natural variability. Significant has 
to mean that it's bigger than the natural variability. 
Otherwise, we pretty much know how to adapt to it.
    The IPCC, which has been mentioned, came out with a 
statement that was quoted by Senator Chafee. I think that 
statement has led to a great many claims by other people than 
scientists.
    The statement is an extraordinarily weak statement. I 
should tell you of over 20 IPCC reports approximately--I think 
it's 17 and one is three volumes--since 1990, this is the 
weakest report. I don't mean weak scientifically but the 
weakest in its claims.
    There hasn't been a progression upward, the numbers go down 
and down, but let me read the full text of the statement that 
Senator Chafee quoted.

    Our ability to quantify the human influence on global 
climate is currently limited because the expected signal is 
still emerging from the noise of natural variability and 
because there are uncertainties in key factors. These include 
the magnitude and patterns of long-term, natural variability 
and the time-evolving patterns of forcing volume responses to 
changes in concentration of greenhouse gases, aerosols and land 
surface changes. Nevertheless, the balance of evidence suggests 
there is a discernible human influence on global climate.

    What it says, they explain, is that it is unlikely that all 
of the change in the last century is due to natural variability 
is simply not true. They make no statement, and they are very 
explicit on this matter, about the amount of expected change. 
We said that's what the argument is about. Indeed, except for 
the peculiar fact that the studies from which the statement is 
drawn probably are wrong, the statement is nothing to disagree 
with. Some impact is likely. They're saying it's some. It may 
be very small, it may not.
    As such, it is virtually a trivial statement except that it 
depends on models replicating natural variability which we know 
they don't. They don't get major sources of natural variability 
correct like Enso and El Nino, the quasi-biennial oscillation, 
etc.
    Indeed, a recent study by Polyak and North showed the 
remarkable fact that models are structurally different from the 
atmosphere.
    The study on which the IPCC study is based is from Santer. 
It fails the most elementary test of statistical significance, 
namely the relation doesn't remain when you extend the data 
record a little. That is the kind of mess we're in: that we 
have weaker and weaker statements after 10 years of saying it's 
a self-evident issue and billions of dollars on research 
expense.

[[Page 24]]

    What is perhaps more remarkable from the point of view of 
policy rather than science are the uses made of this very weak 
statement. It's a statement which is borderline trivial, says 
nothing.
    Senator Chafee. You're referring to the IPCC?
    Dr. Lindzen. Yes, that sentence of discernible influence.
    For instance, environmental groups--I just got a mailing 
from the Union of Concerned Scientists--they do the obvious 
thing, they start out with that sentence, they change and leave 
out the front end, as was done here. They say instead, 
predictions of global climate change are becoming more 
confident and then they associate it, as I'm afraid Senator 
Lautenberg did, with everything from heat waves and droughts 
and forest depletion, forest security and so on, and then 
conclude we should sign a treaty at Kyoto.
    Senator Lautenberg. Are you attributing that whole 
statement you just made to me?
    Dr. Lindzen. No, to the UCS. You only made the one about 
weather variability. I think Dr. Christy correctly pointed out 
there has been no discernible change in that. The IPCC 
certainly hasn't identified any that were predicted.
    There are all sorts of statements that lend themselves to 
misuse. One of my favorites is ``many recordbreaking years,'' 
Andy Solow and Broadus at Woods Hole showed many years ago, as 
did someone called Bassett, that it is an inevitable 
statistical consequence of reaching one record, that you'll 
have many recordbreaking years following; there is independent 
information associated with the claim.
    Let me finish up, since I'm near the end, with what can we 
say about increasing carbon dioxide? What can we say it does?
    If you just increase carbon dioxide alone, leave out the 
feedbacks, you'll get something between \1/3\ of a degree and 
one degree for a doubling of CO2 in equilibrium. 
This depends crucially on what you mean by holding all other 
variables constant. That is generally reckoned not to be 
severe. Everything else depends on feedbacks, of which the 
largest is the water vapor feedback, which doubles the response 
and increases the responsiveness to other feedbacks.
    The data does not support the ability of models to actually 
handle that feedback. I think Senator Allard brought up the 
philosophical issue--I'm not sure if it was he--that in an odd 
way, it's a philosophical issue. Do we believe that the Earth, 
when we perturb it, acts to make everything worse or do we 
believe--I think it was Senator Hutchison who said that--or do 
we believe that it has some resilience; apparently we're 
committed to the first view, that the Earth is vindictive.
    The last thing I want to say is on policy, namely what 
would happen if we stabilize emissions at 1990 levels or reduce 
them a bit because the talk here is climate could be a serious 
problem and we should do something. Is that doing something?
    At MIT at the Center for Global Change Science, what Figure 
4 in my testimony tells you is what will happen is determined 
by the sensitivity of the climate system. We don't know that, 
but if we assume it's a sensitive system, you'll get a lot of 
warming with emissions reductions and you'll get almost the 
same warming, maybe a bit more if you do nothing. If the system 
is not sensitive, naturally policy won't matter.

[[Page 25]]

    So we're not talking about policy to prevent global warming 
if it's going to occur. We're talking about policy that will 
have very little impact.
    Thank you.
    Senator Chafee. Thank you.
    Dr. Schneider from Stanford.

  STATEMENT OF STEPHEN H. SCHNEIDER, PROFESSOR, DEPARTMENT OF 
            BIOLOGICAL SCIENCES, STANFORD UNIVERSITY

    Dr. Schneider. It's an honor and a pleasure to appear again 
before this committee on the issue of climate change and its 
potential impacts, particularly since my initial appearance was 
exactly 20 years ago.
    I decided to skim through that testimony because it's often 
interesting to decide whether you're going to be happy or 
embarrassed at what you said before.
    Several things struck me. First, it was a very cordial 
exchange among ourselves and the panel and Senators then--
Domenici, Wallop, McClure, Gravel and Vincent. If I can indulge 
in a personal note for a second, it was a pleasure for me to 
read a transcript where the issues were the primary question, 
and where the level of contention and personal acrimony was 
low, as I've been personally distressed in the last 10 years 
that such a high level of exchange has not always been there.
    I'm delighted that the chairman and this committee are 
beginning to reverse that acrimonious trend by focusing on 
issues and the questions of science, so I commend you all for 
that and hope we can continue that style. With that personal 
indulgence aside, let me continue the debate and contrast what 
we were talking about then, 20 years ago, to now.
    I was struck by how much of the current debate was already 
anticipated in those days. I think Senator Hutchinson mentioned 
that this was deja vu. I was thinking of the Yogi Berra cliche 
about deja vu--one ``over again'' isn't enough. There are many 
``over agains'' but, on the other hand, that is important when 
issues have lots of uncertainty and lots of contention. I think 
it's necessary that each generation go over the issues and see 
what we've learned in the intervening generations.
    I want to briefly address that rather than all the details 
which are in my written testimony and the other witnesses' as 
well.
    One of the things I had said then, and I'll just quote it 
briefly and see how it stands up over the test of time:

    There are scientists who believe that the particles, the 
aerosols, could lead to cooling and to CO2 to 
warming.
    I personally don't think the issue is resolved, although I 
think the present majority of climatologists would come out on 
the long-term warming side.

    That was 1977. I don't think it's all that different in a 
sense that it reflects some of the debate that we would hear 
now.
    Since 1977, we've still learned a lot. One of the things we 
learned, for example, is that aerosols are implicated not just 
in climate, but in health risks. They're involved in lung 
diseases and other things of concern, and as a result of that, 
we've had a Clean Air Act in an attempt to try to remove the 
aerosol particles.

[[Page 26]]

    What we've discovered is that the control technologies 
which were originally predicted to be highly expensive turned 
out to be not nearly as expensive as we thought when we applied 
market-based systems, such as tradable permits and other such 
things to them. I think there is an instructive metaphor there.
    There is also a climate-related component, which is, if 
aerosols can be removed quickly when people put health as a 
high priority. I think that has occurred in more wealthy 
societies; some of the projections of the amount of aerosols 
we'll see in the next century may not be nearly as severe as 
some people have said.
    Indeed, as we've been talking about the past 20 years, the 
prime problem of the next century may very well be if we 
continue business as usual, then carbon dioxide emissions which 
start to swamp all the other factors.
    So I think there is more confidence today than there was 20 
years ago, as the Intergovernmental Panel on Climate Change has 
stated, that the combination of global warming from greenhouse 
gases, including not just CO2 but methane and other 
greenhouse gases, and a lesser but still significant regional 
cooling from aerosols, has indeed left its ``discernible'' mark 
in that famous sentence that everybody quotes.
    Remember, that discernible remark was in the sense of 
preponderance of evidence, not proof beyond doubt. As one of 
the lead authors of that report, I know we debated that 
sentence quite literally for hours. Many of us wanted to use 
the word ``preponderance'' to convey that sense of civil rather 
than criminal trial levels of evidence.
    The reason that ``preponderance'' was not included was that 
it simply didn't translate well into all the languages of the 
various countries participating and that's why the ``balance of 
evidence'' came out instead.
    So it was in that sense that ``discernible'' appeared. We 
were not using a statistical standard of 99 percent 
significance. In fact, that wouldn't be very meaningful because 
it's hard to define every aspect in those kinds of terms. 
Climate variation isn't a dice game or a coin flip. There's 
lots more complexity here.
    Let me continue and dwell on this issue of uncertainty 
because I would argue that it would be a mistake for us to 
interpret these bland statements about things which are 
uncertain as if somehow all aspects were equally uncertain.
    We have a very ordered set of knowledge here and that is 
the repeated assessment over every 5 or 7 years that keep 
coming out from the National Research Council and now several 
from the IPCC. What they tell us is, there's lots of aspects 
about the problem that are well understood aspects over which 
there is a strong consensus. There are aspects for which we 
have fairly good information and a decent guess and then there 
are aspects that are highly speculative.
    It's always a personal frustration for me when these 
aspects all get lumped together, particularly in the media 
debate, as Eric Barron said earlier, and then people become 
understandably confused and think that nobody knows anything. 
That's simply not an accurate reflection of the state-of-the-
art of the science.

[[Page 27]]

    What we try to do is make sure that through the process of 
assessment where a community of scientists gets together, we 
can point out those aspects where there is strong consensus and 
separate these out from the speculations so that we don't 
misunderstand the nature of the science. That's a tough thing 
to avoid.
    Let me further elaborate on this issue of uncertainty. Of 
course despite the considerable progress mentioned earlier, 
there are still many remaining uncertainties. It's the cliche 
of our era, but as I said, that bland statement by itself 
throws away much useful knowledge that already exists in the 
scientific and policy communities.
    We know, for example, how to separate those aspects with 
strong consensus and those parts which are plausible and thus 
well established and those which are highly speculative, but we 
can go beyond that because we've actually applied scientific 
techniques to tap the subjective judgments of a variety of 
expertise in climatology, atmospheric chemistry, agriculture, 
ecology or economics.
    What such formal studies show is the gradations of 
uncertainty. What they do is quantify the subjective 
probability assigned by surveyed experts on such issues as how 
much the Earth might warm up if CO2 were to double. 
I have a figure in my written testimony, Figure 1, which shows 
examples of 16 different scientists, two on this panel, who 
have made various estimates of that.
    How much the economy might be damaged by different degrees 
of global warming had also been assessed, as has how much of 
that damage would accrue to market sectors, areas like 
agriculture, which is clearly an important market sector, 
forestry or energy demand as opposed to so-called non-market 
damages to amenities like visibility, human health or 
protection of endangered species or habitats.
    So anyone who is a ``rationalist'', meaning we believe in 
looking at balances between costs and benefits, clearly wants 
to quantify both the costs and the benefits. Here is where the 
uncertainty gets in the way because depending upon which end of 
the spectrum of the range of uncertainties you can pick on both 
the cost and the benefit side, you can come out with mild or 
catastrophic conclusions.
    So this is no different, in essence, than most risk 
management problems that corporate executives face all the time 
or that you face all the time in trying to determine how to use 
a limited budget in dealing with a wide range of problems, 
picking which are priorities. Therefore, you want as much 
quantitative information as you can have, not just about what 
can happen but also what are the odds that it can happen. By 
selective information grabbed out of the context of the range 
of the odds it might happen, it's very difficult for us to be 
able to do that risk management job rationally.
    My written testimony gives several examples of these formal 
studies and they all possess a common attribute. Most, but not 
all, experts assign a broad distribution of scientifically-
based, subjective probabilities to a range of climatic effects 
or impacts. In most cases, the vast majority of experts assign 
a small--5 or 10 percent probability--to outcomes like very 
little change or catastrophic change.

[[Page 28]]

    Of course in the value system of a risk prone person, a 5 
percent change of a nasty outcome is small whereas to a risk 
averse person, that possibility might lead to hedging 
strategies like investing in insurance or redundant backup 
systems. Therefore, we need to understand that value aspect all 
the way through.
    Let me conclude with a quote, which I think one of you will 
recognize, and that succinctly summarizes my views--``If there 
is one point I could make, Mr. Chairman, it is this. There are 
a great many questions about the greenhouse effect that can't 
be answered today, but I don't think we ought to let scientific 
uncertainty paralyze us from doing anything. It is always 
convenient to find an excuse not to do something and there is 
always an excuse out there not to do something. I think the 
issue before is what steps should we be taking today to help 
solve the problem in addition to doing more scientific 
research.''
    I trust you remember when you said that, Senator Chafee.
    Senator Chafee. One of the dangers of this job is resurrect 
things you said in the past, but I'll stick by that.
    Dr. Schneider. Good. That was the gamble I was taking.
    Senator Chafee. You thought it was a pretty good statement.
    Dr. Schneider. I thought so too and I think it's still 
true. You said that in June 1988 in front of the Senate 
Committee on Energy and Natural Resources when, in fact, those 
heat waves, which were unusual but not extraordinary generated 
all that public interest to the issue.
    I think, as I said, it's as valid today as 9 years ago 
except today I think we have a stronger consensus for dealing 
with this issue than we did a decade ago. As the recent 
statement calling for modest climate policy actions from more 
than 2,000 economists attests--I will make a bold prediction 
and that my colleague, Dale Jorgenson's testimony will likewise 
conclude--that modest actions which try to balance costs and 
benefits are not premature.
    I thank you for your persistent interest in global 
environmental issues, Mr. Chairman, for inviting me to testify, 
and of course, I stand ready to respond to any of the questions 
or comments each of the committee members may have.
    Senator Chafee. Thank you very much.
    Now, Dr. Jorgenson from Harvard, former chairman of the 
Economics Department and Professor of Economics. We welcome you 
here.

  STATEMENT OF DALE JORGENSON, PROFESSOR OF ECONOMICS, FORMER 
       CHAIR OF ECONOMICS DEPARTMENT, HARVARD UNIVERSITY

    Dr. Jorgenson. Thank you very much, Mr. Chairman.
    Distinguished members of the committee, it's a great 
pleasure for me to be here and to see the breadth of interest 
in the subject that we're here to discuss.
    I think it's very important for me to focus right away on 
the fact that I'm going to deal with the economics of climate 
change and not with the scientific issues that the other four 
witnesses have just placed before you.
    I was the author of the Economists' Statement on climate 
change that attracted, as the chairman said, more than 2,500 
signatures,

[[Page 29]]

including eight Nobel Prize winners. I'd like to use that as a 
point of departure. That's in the material I distributed. It's 
about halfway through the packet. I'm going to start by 
summarizing the statement because it's an attempt to elicit 
what turned out to be close to a consensus about an economic 
approach to the problem.
    First of all, let me say a few things about the economics 
of the situation somewhat in the vein of Senator Chafee's 
opening remarks about the science.
    The science of global change is at least a century old. It 
was originated, as the Senator pointed out, by Svante Arrenhius 
and the qualitative features of the science of the problem 
haven't changed even though the quantitative precision, thanks 
to the excellent observations that you've heard about from Dr. 
Christy and the modeling which Steve Schneider, among others, 
has been involved in, we know a great deal more about the 
quantitative features, but the qualitative features of climate 
change go back at least a century.
    The economics is much more recent and in fact, for the 
benefit of the panel and also for the benefit of the staff and 
maybe some of the members of the audience, I've included a few 
recent references which are research reports that I think have 
moved the economics forward by a good bit.
    It turns out that these are very recent references. One of 
them is to a World Bank report from June 1992. It was intended 
to be available at the same time as the Rio Summit, but in 
fact, arrived just as the Summit was beginning and therefore, 
had no influence on the outcome.
    The other references are to a book by William Nordhaus of 
Yale University. I know, Senator, you are an alumnus of that 
very distinguished university. William Nordhaus is a co-author 
of the Economists' Statement as well as one of the leading 
economists working in this area. Finally, there is a paper by 
myself and Peter Wilcoxen, a former student of mine now at the 
University of Texas, which is dated 1995.
    Notice that all of these references are subsequent to the 
Rio conference. In other words, what we know about the 
economics of climate change is something that has arrived on 
the scene very recently. I think it's very appropriate to 
underline that by referring to the article that appeared 
yesterday in the Washington Post--if your copy of the 
Washington Post has already disappeared, you can find this also 
in Newsweek Magazine, by Robert Samuelson, surely one of the 
most distinguished economic journalists working in the area of 
economic policy.
    The phrase that he used is precisely the opposite of the 
economic consensus. The phrase, which you quoted, I believe, 
Senator Chafee, was that ``Effective action on climate change 
would amount to crushing the world economy.'' That turns out to 
be exactly the opposite of what I believe the economic 
consensus appears to be.
    It reflects a view of the economics of this problem which I 
think goes back to the reactions to the Rio Summit and to the 
definition of the problem that was adopted there which, 
unfortunately, as I've already suggested, did not benefit from 
the recent economic research that I want to discuss.

[[Page 30]]

    Let's proceed with the Economists' Statement. That is about 
midway through your packet if you'd like to refer to it but I'm 
going to summarize it very briefly.
    The first paragraph says that climate change involves 
significant environmental risks and the preventive steps are 
justified. The second paragraph summarizes economic studies 
showing that there are policies available for educing 
greenhouse gas emissions for which the benefits outweigh the 
costs. The third paragraph describes policies in more detail 
and emphasizes the importance of the approach you've heard from 
a number of the other panelists and also from some of the 
opening statements, many of which I found to be brilliant--I 
hope Senator Lautenberg agrees.
    These opening statements, a number of them, refer to 
market-based approaches and that is, in fact, something that is 
gaining a good bit of momentum in this area of environmental 
policy and in others. That is the basic thrust of the 
Economists' Statement.
    Now, I'd like to lay out the approaches to practical 
implementation. Again, this is on page 5 of your handout if 
you'd like to look at that.
    The first thing we have to focus on is how to choose an 
appropriate objective. It's very clear from the testimony that 
you've heard that there is certainly the possibility that 
emissions of greenhouse gases will affect the climate.
    Senator Chafee. Doctor, could you slow up here? I'm just 
trying to get located. You said page 5 in the handout material?
    Dr. Jorgenson. Right.
    Senator Chafee. Is that the big print?
    Dr. Jorgenson. Yes. This is the big print and talks about 
practical implementation.
    Senator Chafee. Yes, all right.
    Dr. Jorgenson. That's exactly the page, Senator.
    The first point is that we have to agree on an appropriate 
target. That is something that was discussed at the Rio Summit 
but in fact, the target that was suggested there, which is 
stabilizing emissions, is not something that can be justified 
on economic grounds. That is the first and most important 
point.
    When we think about setting the target, the Rio agreement 
is the wrong starting point and we'll come back to the setting 
of the target later.
    The second point is we have to think of a means of 
international implementation. This is where we come to the 
issue of market-based approaches. I'm happy to say that the 
Administration, which you will hear from at the next meeting of 
this committee, has proposed a market-based approach based on 
internationally tradable permits.
    That has important limitations, some of which are the 
subject of the Senate resolution by Senator Byrd and others, 
including members of this panel, but that is something we can 
discuss in more detail.
    Now we come to the issue of domestic implementation. Here, 
the issue is how to achieve reductions in emissions that 
balance the costs against the benefits. The answer to that, and 
this is discussed in great detail in my paper with Wilcoxen, is 
that we need to think about a carbon tax, we need to think 
about a tax on energy use

[[Page 31]]

that would have the effect of reducing the growth of carbon 
dioxide emissions, not the most important greenhouse gas to be 
sure, but the one for which atmospheric concentrations are 
changing.
    Now we come to Mr. Samuelson. Mr. Samuelson says, thinking 
we're going to crush the world economy, that to have an 
appropriate effect, the appropriate carbon tax would be $100 
per ton of carbon. The appropriate tax discussed in my 
testimony is, in fact, $10 a ton. In fact, that $10 figure is 
for the year 2025. If we wanted to think about an appropriate 
tax at present, what would be the tax that we should implement 
immediately, the answer is about $5.29 a ton, in other words, a 
totally different order of magnitude than what has been 
suggested.
    The conclusion is then that we have to think of this as a 
three-step process. The first is determining an appropriate 
target for an international agreement. Unfortunately, the Rio 
Summit of 1992 got off on the wrong foot. What is required is 
slowing the growth of emissions, not capping emissions at 
something like 1990 levels.
    The second point is that once we've agreed, hopefully in 
Kyoto, but if not, then at some subsequent meeting, on an 
appropriate target that is justified in terms of the costs and 
the benefits that are associated with slowing climate change, 
we then have to arrive at a means of international 
implementation.
    For that purpose, I think the Administration's position 
involving a system of internationally tradable permits is 
certainly an appropriate point of departure, but it's important 
to combine that with the key feature that has been the subject 
of the Byrd resolution which is bringing in all the parties, in 
other words having an international agreement that is truly 
comprehensive.
    Now we come to the nub of the matter. We have a climate 
change policy. It is, in fact, embodied in the U.S. Climate 
Change Action Plan. If you look at the final exhibit in my 
handout, you'll see the effect of the Climate Change Action 
Plan.
    There was an objective of trying to achieve by voluntary 
methods a reduction in emissions by the year 2000 to 1990 
levels. That was what was called for in the Rio Summit. That 
has been, unfortunately, a total failure.
    What we have found is that the emissions have grown very, 
very substantially. Even by 1996, the last year for which the 
most recent data are available, these have grown far beyond 
what the Administration at that time--Senator Chafee alluded to 
the Senate ratification of the Administration agreement by 
President Bush at Rio--that there would be a growth of 
emissions without this Global Climate Action plan that would go 
far beyond stabilizing emissions. In fact, the growth of 
emissions has been far beyond what was anticipated at the time.
    Nonetheless, we come back to the basic point that the goal 
of climate change has to be reconsidered and that economics is 
really the key to understanding that issue.
    Thank you very much.
    Senator Chafee. Thank you very much, Doctor.
    What we will do is each of us will have 8 minutes to ask 
some questions. I understand there is going to be a vote at 
11:05 a.m., so I'd like to start off. Sometimes votes are 
scheduled and don't occur.

[[Page 32]]

    Dr. Barron, if I understood your testimony correctly, you 
stated as a fact that there has been a global temperature 
increase. Am I correct in that?
    Dr. Barron. If you look at the surface observations over 
the entire century, what you see is the differences that are on 
the order of .4 to .6 of a degree Celsius. I don't think 
anybody argues that over that span of time, that there isn't 
some temperature difference.
    Senator Chafee. You indicated that there must be a strong 
research and observational system and apparently we don't match 
the Germans and the Japanese in that. What are they doing that 
we're not doing? We had the testimony from Dr. Christy about 
the balloons and the satellites.
    Dr. Barron. I think what you're seeing is just somewhat of 
a change in attitude where if you look at our satellite 
observation programs, they are under continual challenge, year 
to year in terms of budget, in terms of scope, to the point 
where we once again are moving into a mode where it will be 
difficult to make sure we have continuity of our observations.
    This was something where basically the United States just 
ruled supreme in terms of these observations. Now we're seeing 
that the Europeans and the Japanese are putting forth very 
strong efforts along those lines.
    If you look at the IPCC assessment, you see the unusual 
circumstance that it is models from other countries providing 
the long-term simulations that were the basis of a significant 
portion of that report and I think much less participation on 
the U.S. side.
    There's a lot of different U.S. activities and a lot of 
very healthy U.S. activities, but I just think it's important 
to make sure that we continue to maintain those.
    Senator Chafee. How do the Japanese make these 
observations? They don't have satellites up there to the extent 
we do.
    Dr. Barron. Yes, they do. Unfortunately, they just lost 
one, Addios, which just went dead because of some sort of power 
failure and they have plans for the next launches of Addios and 
we did have a U.S. instrument on board that satellite, a 
windscatterometer.
    Senator Chafee. Do you believe the global temperature has 
increased due to an abundance of CO2 from the Earth?
    Dr. Barron. I think there is a distinct probability that a 
component of that warming is due to CO2, but I also 
believe we have a very strong natural variability segment in 
there that we have to address.
    If you'll let me go back a little farther in Earth history, 
I would tell you that every single time there was a warm time 
period, there is evidence of higher CO2 and of 
almost all the cold periods we have, there's evidence of 
reduced CO2.
    It's not that it is the primary cause in every single case, 
but if we look through the entire spectrum of Earth history, 
warm time periods have higher CO2, cool periods have 
lower CO2, and it's very hard to escape that point.
    Senator Chafee. How would we get the variations in 
CO2 emissions say going back before the Industrial 
Revolution? Would it be from volcanic eruptions or something?

[[Page 33]]

    Dr. Barron. We have several sources of information. One is 
an ice course.
    Senator Chafee. I appreciate that. That would be a way of 
measuring it, but what would the variations come from? What 
would cause pre-Industrial Revolution variations in 
CO2?
    Dr. Barron. It's probably a whole broad range of factors. 
On a very long time scale, it has to be the volcanic emissions 
and the rate of uptake of that CO2 by actually 
weathering of rocks, but you have all sorts of variations from 
variations in the biology, variations in the climate for which 
it becomes a feedback. It's a broad range of factors.
    Senator Chafee. Dr. Christy, you indicated in your 
conclusion that something is going on but you're not sure what. 
What is the something? You reported since 1979, there's been a 
very small increase in the temperature in the troposphere. Is 
that the something?
    Dr. Christy. No, it was the stratosphere that had the 
largest signal, the remarkable decrease. The cause could be due 
to ozone depletion, that seems to be a good culprit for that, 
or the effects of volcanoes which is quite a natural phenomena.
    Senator Chafee. If you were sitting up here, what would you 
do? Would you worry and do anything or say, well, let's wait a 
little while longer?
    Dr. Christy. I've never been a Senator before.
    Senator Chafee. You can pretend you're one, a lot of people 
do.
    [Laughter.]
    Dr. Christy. I suppose whatever could be done, that which 
is politically feasible, from your point of view.
    Senator Chafee. No, don't put it on that basis. Let's say 
we're trying to do the right thing up here. Long before it was 
popular, we got into the chlorofluorocarbons, the CFCs, and as 
you just mentioned, I think we did some good work there. It 
wasn't immediately popular, but it was the right thing to do. 
Just tell us what your recommendation would be to us.
    Dr. Christy. To find out as much as possible, first of all, 
about what the climate is doing and what effects a particular 
control might have. The modest controls talked about here and 
probably to be recommended will probably not have much effect 
on the global climate, if it is being affected by the 
greenhouse gases.
    I'm not an expert on the economic issues and things like 
that. I only know about pretty much one thing and that's the 
satellite temperatures, so it's hard for me to answer that kind 
of question.
    Senator Chafee. Except that your satellite temperatures, as 
I understood them, indicate some small increases in 
temperature. Am I correct in that?
    Dr. Christy. When adjusted for the natural variations of 
the ocean temperature volcanoes, that's right, less than what 
model projections show.
    Senator Chafee. Dr. Schneider, you indicated that it's 
unfair to label all uncertainties as being equally uncertain. 
How certain are you that there's been an increase in the global 
temperature?
    Dr. Schneider. I'm highly certain that there's been an 
increase in the global surface temperature. I'm less certain 
about what the middle of the atmosphere is doing and I'm more 
concerned about

[[Page 34]]

what happens to the surface because that's where we and the 
bulk of living things are.
    Senator Chafee. Could you put a figure on that?
    Dr. Schneider. Remember, these probabilities are subjective 
because there are many factors involved but so are the opinions 
often of generals, doctors and others, so my subjective opinion 
on this would be 95 percent likely that there is a global 
warming trend, probably even higher than that because it isn't 
just thermometers of the world which average out to show this 1 
degree Fahrenheit warming in a century, but mountain glaciers 
have been largely receding around the world and sea levels have 
risen. There is a consistent pattern.
    The issue isn't so much whether the Earth is warming, it's 
why.
    Senator Chafee. It's also important how much, isn't it?
    Dr. Schneider. Yes.
    Senator Chafee. Could you set a figure on that, how much?
    Dr. Schneider. How much is a little tougher even at the 
surface because you can't just stick a thermometer in somewhere 
and get out the number. That's why many of us are pleased that 
the satellite measurements have come along to provide a 
supplement, yet there is a lot more adjusting that needs to 
take place in coordinating the instruments.
    Unfortunately, satellites were only flying in 1979, so we 
have to try to guess about where there were inaccuracies and so 
forth.
    I think what the IPCC said and the National Research 
Council said before, is that the standard best guess is 
something like a half degree warming over the past century, 
plus or minus a couple tenths of a degree, and there are four 
groups around the world that continuously reanalyze this data 
to try to take out biases and correct errors.
    Senator Chafee. Senator Baucus.
    Senator Baucus. I'd like to see if there is any agreement 
among the panel first as to whether or not there's been an 
increase in CO2 caused by man over the last 100 
years? Does everybody agree there has been a significant 
increase in CO2 caused not by natural causes, but by 
man?
    The figure I have is that 250 ppm to about 360 ppm over the 
last 100 years.
    Dr. Lindzen. It's closer to 280 ppm.
    Senator Baucus. The range is from 280 ppm to----
    Dr. Lindzen. To 360 ppm.
    Senator Baucus. OK. The primary causes of that are what, 
fossil fuels?
    Dr. Schneider. Fossil fuels and deforestation. The initial 
deforestation was in the now-developed countries. If we had a 
balloon and we could have flown from the East to the West Coast 
of the United States before the settlers were here, we largely 
would have seen trees more so than farms and that carbon that 
those trees then represented is now in the air. The same thing 
is true in Europe.
    Now we've been regrowing our forests and the bulk of the 
net deforestation is taking place elsewhere.
    Senator Baucus. So there is agreement that CO2 
caused by man is increasing?

[[Page 35]]

    Dr. Schneider. More than half is probably from 
CO2 due to industrial emission.
    Senator Baucus. More than half due to industrial.
    Is there also agreement that the surface is warming, has 
over the last 150 years? I'm not getting into the cause but 
whether the surface has been warming?
    Dr. Lindzen. I think the IPCC limit is \1/3\ to \2/3\ of a 
degree. There is uncertainty in that. While there is widespread 
agreement, for instance, it's been mentioned that there's 
urbanization, I had to work with these records a few months ago 
and I suddenly realized the IPCC listed Capetown, Johannesburg, 
and Buenos Aires as rural stations.
    Senator Baucus. But there is general agreement?
    Dr. Schneider. There's general agreement, it's got a large 
error bar and nobody knows why.
    Dr. Jorgenson. Let me chime in at this point. if you look 
at Figure 5.4 of my testimony, you can see what appears to be 
the consensus about global mean temperature changing from 1865. 
It's increased by a little over a degree (Farenheit).
    Senator Baucus. The next question I want to ask you 
scientists is to rate the probability of individual causes. The 
cause of today's hearing basically is CO2 and other 
greenhouse gases. Dr. Lindzen, you say water vapors is much 
more.
    Before we get into that, I just want to ask each of the 
panelists to give his view of what's caused this warming, two 
or three candidates and the best you can give a probability to 
each of the two or three candidates.
    I'll start with you, Dr. Barron, and answer very quickly 
because I don't have a lot of time left.
    Dr. Barron. I think there's a significant probability that 
a good portion of that has to do with human activity.
    Senator Baucus. With what?
    Dr. Barron. With human activity.
    Senator Baucus. Which human activity?
    Dr. Barron. Emissions of CO2.
    Senator Baucus. Emissions of CO2. You think 
there is a significant probability?
    Dr. Barron. I think there's a significant probability.
    Senator Baucus. OK. Dr. Lindzen.
    Dr. Lindzen. I would say at this point, the most likely 
candidate is natural variability. As I point out, this is the 
system that vacillates with no forcing, even according to 
models and theory.
    Senator Baucus. Dr. Schneider.
    Dr. Schneider. If you consider the surface warming together 
with the cooling of the stratosphere, which actually I think is 
due not just to depletion of ozone but increased greenhouse 
gases, they actually cause the stratosphere to cool and the 
lower atmosphere to warm, I would say that it is maybe only a 
10 or 20 percent change, in my opinion, that the warming trend 
is a natural event.
    There is an equal probability it could have been a cooling 
event in nature. I don't know which it is, so I would rate it 
more like 80 or 90 percent likely that we're part of the story 
and that the bulk of that is probably emission of carbon 
dioxide.
    Senator Baucus. Dr. Jorgenson.

[[Page 36]]

    Dr. Jorgenson. I'll defer to Dr. Christy.
    Dr. Christy. I look at those records very closely and the 
19th Century was one of the coldest of the last 1,000 years. We 
are coming out of a very cold century right now. Most of the 
temperature rise--and I sat on the IPCC panel that dealt with 
this--the number was .42 was given to us by the latest results 
of a degree Celsius warming.
    Most of that is caused by natural variability, the rebound 
from the 19th Century cold period. What part of that might be 
caused by our activities of the .42, I would say at most, .1.
    Senator Baucus. Caused by man?
    Dr. Christy. Human activity.
    Senator Baucus. Point 1. Did you say there's a 10 percent 
change?
    Dr. Christy. No. I would say at most that warming of .42 
that we see, at most, .1 would be due to human cause, at most.
    Senator Baucus. What lessons are there from the CFC matter? 
Years ago, it was a big debate, were CFCs causing a hole in the 
ozone layer in the stratosphere? Lots of industries said, no, 
but we went ahead and worldwide enacted controls.
    I'm just wondering if the state of knowledge here is in any 
way parallel or similar to the state of knowledge back when we 
first started to debate this issue? Does anybody want to take a 
crack at that? Dr. Schneider?
    Dr. Schneider. Sure. In fact, one of the prime confusions 
in the lay world is that the ozone depletion issue and the 
greenhouse effect question are the same. In fact, they are not. 
They are very different but there is a component of them where 
I think we can draw a lesson as you asked in your question.
    When you use the atmosphere as a free sewer, if you will, 
eventually something nasty might happen. It was determined that 
those chemicals that were injected could be breaking down and 
while nobody could precisely calculate the chemistry 15 years 
ago, there was a possibility it could be significant. It became 
a risk management question about whether to take the chance.
    Now, the ozone hole that you mentioned, the irony in this 
and the chief lesson, is the ozone hole was not anticipated by 
most people. In fact, what we were expecting was a smooth, slow 
loss of ozone. The ozone hole came as a surprise, which was 
interpreted by some people who didn't see this as a problem. 
They were saying, ``You see, we never really understood the 
atmosphere because we didn't predict the hole.'' On the other 
hand, it was interpreted by environmentalists and others as, 
``See, when you mess around with Mother Nature at the global 
scale, you're going to get nasty surprises.''
    I think that it's almost certain that the rates at which we 
modify the environment, both through land clearing and 
atmospheric effects, will give us surprises. Some will be 
pleasant, some will be nasty. The absolute prime message is 
that when you start interfering with the natural rates of 
things, you have to expect changes, as Eric Barron said.
    What we are not capable of doing is honestly telling you 
the precise range and details of those changes. If we did, we'd 
be beyond our capacity. But we can forecast that the more 
rapidly we force

[[Page 37]]

the system to change, the more likely it is that there will be 
surprises like the ozone hole. I think that's a relatively safe 
forecast.
    Senator Baucus. I'd like to follow up very briefly on the 
question the chairman asked, namely how do we go about getting 
more data, either baseline data, more research, more facts so 
that we can be a little more certain that our decisions are 
better founded than they otherwise might be? Where is the 
deficiency in either research or data gathering? What do we do?
    Obviously this is a big problem--global warming, climate 
change--and I think intuitively most people think something bad 
is going on here, but we also want to make sure, as much as 
possible, that we handle it the right way and make the right 
decisions.
    It seems to me that the best way to address that is, as you 
all suggested one way or another, to get more data, do more 
research and so forth. I don't know what it is. What do we do 
to make sure we're getting better information, more facts? Any 
of you?
    Dr. Barron. I'd just add that I think there are some things 
like, for instance, making sure when you're collecting weather 
data that it's suitable for climate. A few simple rules and 
policies and a little bit of investment would go a long way.
    I think it's clear just by the debate where deficiencies 
are in models.
    Senator Baucus. If we could spend more money, where should 
we spend?
    Dr. Jorgenson. Could I check in on that? I think the thing 
to focus on, Senator Baucus, is that we are spending $2 billion 
a year on this problem. It's not as if our efforts are 
insignificant in economic terms. We're putting a lot of money 
into research and we're getting the benefits of that research 
as you see before this panel.
    I don't think it's a question of spending more money. It's 
a question of absorbing the information that we have and 
maintaining, as Dr. Barron suggested earlier, the observational 
system that we've put up, making sure it continues.
    Senator Baucus. But I understand that Japan, Germany, and 
other countries are doing more.
    Dr. Jorgenson. That's simply not true. If you look at our 
effort by comparison with these other countries, it's very 
large by comparison with our R&D effort and by comparison with 
the size and scope of our economic activities. We are the 
leaders in this field by a substantial margin.
    Senator Baucus. Thank you.
    Senator Chafee. Thank you.
    We're in the last part of the vote. This is what I'd like 
to do. We'll take a little recess now and we'll go over and I 
think a lot of us want to hear these answers and we'll come 
right back.
    This is interesting to all of us. Why don't we all go and 
vote and I personally am going to come back very quickly and 
then we'll start again. I hope everybody will be here because 
we're all interested in what you have to say.
    Thank you.
    [Recess.]
    Senator Chafee. In our order of appearance, we had Senator 
Thomas who is not here, Senator Bond is not here.
    Senator Hutchinson.

[[Page 38]]

    Senator Hutchinson. Thank you, Mr. Chairman.
    I want to thank the panel for their testimony and as I 
listened, it seemed to me one word kept popping up and that's 
the word ``uncertainty,'' that there was at least some 
uncertainty regarding the scientific data that we have.
    I think, Dr. Christy, the one thing that almost got lost 
when you were playing Senator, was when you said that we need 
to gather more data. There did seem to be a lot of uncertainty 
to me.
    I read an AP article not long ago that quoted a U.S. 
Geological Survey ecologist who said he was uneasy about 
attributing ecological changes to human-caused global warming 
because North America's ecological systems have always been in 
flux.
    A mere 18,000 years ago, not long in geological time, ice 
sheets two miles thick covered the entire northern half of the 
continent and as they melted away, plants and animals claimed 
the land the glaciers once covered.
    He says there have been smaller climate fluctuations since 
then as recently as 1850 at the end of a period known as the 
Little Ice Age when temperatures were a few degrees cooler than 
they are today and that leaves ecologists wondering whether the 
changes they are now documenting are merely the continuation of 
a natural warming trend that began 150 years ago.
    I think it was Dr. Lindzen who questioned the models, the 
accuracy of the models that are available, so I think of the 
scientific uncertainty.
    As I listened to the testimony, it also struck me that 
there is uncertainty as to the impact of policy changes that 
have suggested as to how dramatic a change we can really affect 
by making the policy changes that have been proposed, 
particularly the ones that have been proposed by the 
Administration.
    So we have, at best, a marginal impact. In fact, I think 
I'm quoting Dr. Lindzen correctly when he said they would have 
very little impact.
    When you consider that the proposals that we have before 
us, the Administration's proposals would limit the regulations 
to developed countries, excluding and exempting the developing 
nations like China and Mexico. It would seem to me that they 
would even further marginalize the impact of any policy 
changes.
    So in the midst of all that uncertainty, it seems to me 
there is one thing that is certain and that is there is going 
to be enormous costs that's going to be imposed. While we are 
uncertain about the scientific basis and that we need more 
data, we're uncertain about the impact of policy changes, that 
it may or may not be beneficial, but there is one thing that is 
quite certain and that is, it is going to be expensive.
    Dr. Lindzen, I'm going to direct this to you and I know 
you're anxious to speak but I want to particularly look at the 
area of agriculture. Agricultural production accounts for 20 
percent of all human-caused greenhouse emissions according to 
the Intergovernmental Panel on Climate Change.
    In their study, they further singled out rice as the No. 1 
agricultural source of human-caused methane emissions, 20 
percent of all human-causes from agriculture and rice being the 
No. 1 contributor

[[Page 39]]

of that. Arkansas is the No. 1 rice producer and the 
Mississippi Delta is the place that's grown.
    Current negotiations only focusing upon developed nations 
will put Arkansas and other areas at a great disadvantage. In 
fact, in 1996, the United States produced 7,771 metric tons of 
rice while China produced 188,000 metric tons of rice, 24 times 
the amount the United States produces.
    It seems to me if we're going to regulate, we're going to 
limit American agriculture, which would be about 4 percent of 
world production of rice, any impact is going to have to be 
very, very minimal.
    Here is the question. Is the proposal the Administration 
has advocated the proper response in light of the uncertainty 
that surrounds the issue?
    Dr. Lindzen.
    Dr. Lindzen. I think the issue of uncertainty has to be 
dealt with with care. There are some things we're uncertain 
about to be sure, but on the issue you asked about, 
surprisingly there is rather less uncertainty than on many 
matters.
    We know, for example, that projected increases in methane 
will contribute very little of any putative warming, no matter 
what you think will happen; CO2 will dominate.
    We know that stabilization of emissions involving India and 
China at 1990 levels will, if you expect 4 degrees warming, 
doing nothing much, knock you down to maybe 3 degrees.
    We know that the No. 4 is very uncertain but we know if 
that were the number, the proposed actions will not reduce it 
to a number that would be small climate change.
    Senator Hutchinson. You're saying the certainty is that the 
policy changes would have minimal impact?
    Dr. Lindzen. That's the part we're far more confident of 
than the specific number we expect to be achieved in 2100, if 
we do nothing.
    Senator Hutchinson. Dr. Jorgenson.
    Dr. Jorgenson. I'd like to expand on that. I think that 
what you said, Senator, whatever we do is going to be very 
costly is precisely the point of view that was expressed by 
Robert Samuelson in his Washington Post piece.
    That is predicated on the idea that we're going to continue 
our failed policy of 1992. That's the policy that involves 
stabilizing emissions at 1990 levels by the year 2000. That is 
not economically justified.
    If you look at the figure in my testimony, Figure 5.2, what 
you'll find is that the economic--this is at the end of the 
handout and it's Figure 5.2 and describes greenhouse gas 
emissions under the optimal economic policy.
    Senator Chafee. This is a chart?
    Dr. Jorgenson. That's a chart. What this shows is that the 
optimum policy is one that does not stabilize emissions. That 
scenario would indeed, Senator Hutchinson, be extremely costly, 
and that's what Dr. Lindzen was alluding to.
    Senator Hutchinson. That would be ineffective also.
    Dr. Jorgenson. Not that it would be something that would be 
effective in stopping climate change; but the point is it is 
not economically justified.

[[Page 40]]

    Weigh the costs against the benefits--as you have with your 
example based on rice culture in Arkansas--but I think is 
appropriate. Farming is the industry that is going to be most 
affected by this policy. Whatever we do, we need to think about 
very moderate measures.
    Instead of Samuelson's $100 tax, what we need to think of 
by the year 2025 is something like a $10 tax per ton of carbon. 
That's a difference of order of magnitude. That is where the 
economics of this boils down to. We need to take very moderate 
measures, but we need to start now.
    As far as the developing countries are concerned, the 
important thing to focus on there is that at the present time, 
developing countries are not going to be very substantial 
emitters. However, we can anticipate the growth of emissions 
from countries like China is going to be substantial. 
Therefore, we need to bring them into the discussion.
    Senator Hutchinson. Dr. Jorgenson, if China produces 24 
times the rice that the United States produces and if it is 
only a modest tax as you're advocating that would be imposed, 
even a small differential between a developed nation like the 
United States and China which is producing 24 times, it's hard 
for me to imagine that's not going to have a dramatic impact in 
markets and costs on American agriculture.
    It also seems to me to argue that China is not a 
significant emitter if it's producing 24 times the rice. That 
doesn't equate with me.
    Dr. Jorgenson. No, at the present time, China certainly is 
a significant emitter. My point is that if you take developing 
countries as a whole, they are far less significant than the 
developed countries.
    Focusing on the role of China, China, like the United 
States, will have opportunities to participate in an 
international agreement. They will benefit from looking at the 
costs on the one side and the benefits on the other and what we 
should try to achieve is an international consensus based on 
the idea that we minimize the cost of whatever we do. We want 
to minimize the cost of climate policy, whatever that policy 
turns out to be.
    For that purpose, I think the Administration's proposal of 
internationally tradable permits, when expanded in due course, 
to the developing countries, would be an appropriate market-
based instrument.
    Senator Hutchinson. Mr. Chairman, I know my time has 
expired but Dr. Schneider was wanting to respond and I would 
like to ask permission.
    Senator Chafee. Go ahead.
    Dr. Schneider. I just wanted to clarify something. In the 
charts that Dale Jorgenson showed with economic justification 
for certain actions, including figures with three and four 
decimal places of precision, although I agree in principle with 
what he's trying to say, I have to remind us that these are 
based upon economic models which assume what cost profiles will 
be because they assume what the cost of technology will be. 
They also assume what the damages to the economic system will 
be from various levels of climate change.

[[Page 41]]

    There is a wide range of uncertainty on both of those 
factors. One of the things we learned after the OPEC price 
rises, which were induced by political action, was that the 
economy responded to those price rises through inventing much 
more efficient technologies. We now have the indelible benefits 
of the improved technology because of the inventive genius we 
had once we had an incentive.
    One of the hopes of those people who call for modest 
solutions like a low carbon tax, for example, is not that it 
will, under present assumptions, eliminate the climate problem, 
but will help to induce the kind of learning by doing and 
technological changes that can make it much, much cheaper to 
abate carbon in the future and that those steps need to begin 
now in order to get that process going.
    I would commend the idea of what he said, not the three 
decimal place precision. It's not conceivable that we could 
have that kind of precision, given that we don't know yet what 
our technology would be.
    Just in your State, think about rice as you mentioned. 
You're already in a warm summer state and therefore, the 
question isn't just what the cost is of the rice emissions, 
it's also what is the damage to the rice farmers if you 
increase the numbers of a certain kind of heat waves. That's 
what we call climate damage.
    What we're trying to do in these optimizations is balance a 
guess of how the world would be damaged by climate change 
against a guess of what the costs would be to the economy of 
say, increasing the price of energy.
    That leaves out the whole range of surprises like the ozone 
hole and other factors, so it could very well be cost effective 
to have much more control than is on this chart if we were 
unlucky and it turned out the damages were higher than the best 
guess.
    Senator Hutchinson. I'd like to agree completely with 
everything Mr. Schneider just said.
    Senator Chafee. Excellent.
    Senator Allard.
    Senator Allard. Thank you, Mr. Chairman.
    I'd like to direct a couple or three questions to Dr. 
Barron.
    Dr. Barron, according to the 1995 IPCC report, there has 
been some pretty substantial strides differentiating greenhouse 
gases released naturally and greenhouse gases caused by humans. 
Do you agree with that?
    Dr. Barron. Do I agree with the precise numbers?
    Senator Allard. No. Do you agree there has been substantial 
advancement scientifically in being able to measure greenhouse 
gases caused by natural causes as opposed to human origin?
    Dr. Barron. I think that makes sense.
    Senator Allard. Could you detail for me the amount of 
greenhouse gases you would attribute to human sources as 
opposed to natural sources?
    Dr. Barron. I don't think in some precise number, it's a 
number that I know what it is. Sorry. I work more on the 
climate modeling side of things and less on the biologic-
chemical flux side of this.
    Senator Allard. Do you know whether or not there's been an 
attempt by the committee or anybody to break down these 
emissions

[[Page 42]]

by country so that we would know the impact of the Annex I 
countries, for example, versus developing countries?
    Dr. Barron. There are all kinds of assessments that go 
country by country.
    Senator Allard. Did the IPCC try and break those down and 
you do have some conclusions on that. OK. I'll want to run down 
those conclusions and review those.
    The 1995 report seemed to modify greatly certain 
predictions that were made earlier, particularly if we look at 
the 1990 report. The 1995 report estimates for an increase in 
global mean surface air temperature one-third lower than those 
estimated in the 1990 report.
    The 1995 report indicated that sea level changes are 25 
percent lower than estimated in 1990. Many of you had indicated 
that there was considerable modification. If that's the case, 
why shouldn't we maintain a good case of skepticism on the 1995 
report? What's changed?
    Dr. Barron. I think you should maintain a level of 
skepticism and I think several people have mentioned this 
uncertainty issue. Of course you've got to realize we're 
trained basically almost at birth as prenatal scientists to 
question everything and to focus on all the uncertainties of 
every particular issue. It doesn't really release us from 
responsibility on some of the decisionmaking.
    Part of the progress that you will make over a period of 
time between those assessments is that in some cases, you're 
going to see that a focal point like aerosols and aerosol 
effect on clouds wasn't as clearly recognized and for which 
over 5 years, people began to look at that particular factor 
may cause the estimates to be smaller or extend the time scale 
of the warming.
    You also see that there are time periods that the advanced 
knowledge adds a level of uncertainty. We're just beginning to 
realize that vegetation, if it changes with the climate that's 
projected, is going to contribute to the climate change in 
itself. It isn't just something that's passive.
    So these things become initially areas of uncertainty and 
as progress goes on, then we begin to add higher levels of 
uncertainty. To tell you the truth, if I look back over the 
broad history of this problem, the things we've had questions 
about, we've had questions about for about 20-25 years because 
it takes a long time to solve some of these things.
    The broad picture of the warming is not dramatically 
different.
    Senator Allard. You bring up the balance of the plants and 
the interaction. I'm trying to think in my own mind. If we 
assumed on the plant side we had adequate nutrients and we 
increase water or water vapor, we increase humidity and we 
increase temperature, I would expect plants to grow more, 
bigger, faster and I would expect the by-product from that 
would be more oxygen.
    I'm not sure there is enough discussion. In my comments, I 
talked about the buffer part of the system. I don't think 
there's enough discussion about that.
    Dr. Barron. That is an issue that is really just beginning 
to come on line in terms of how high latitude plants will 
respond because we've gone from the point of looking at the 
atmosphere with

[[Page 43]]

trying to couple all these different components of the system. 
I know that's going to introduce uncertainty.
    There are some areas that also build a little bit of 
confidence that you know the climate system is sensitive and 
you know these models can't be too far wrong in some ways. I'll 
just give you one example.
    We're now at the point where there have been literally 
hundreds of experiments in trying to predict past planets 
because we can predict the present day but that's how we built 
the model. You predict the future, you don't know whether 
you're right or wrong.
    You can go back in the past and try to predict the last Ice 
Age or the last warming episode. In the hundreds that have been 
done with models all over the world, there is not a single case 
of a model overpredicting the climate of the past, cold or 
warm.
    Senator Baucus. What do you mean by overpredicting?
    Dr. Barron. That means that the geologic record says it was 
cold and you used one of these climate models and it said it 
was colder than what it actually was or you use one of these 
climate models to predict a time period that was warm and it 
actually made it warmer than it actually was in the past.
    Senator Baucus. So they didn't overpredict?
    Dr. Barron. In every single case, it underpredicts. There's 
a lot we don't know.
    Senator Baucus. Underpredict cold and warm?
    Dr. Barron. Underpredict cold and warm. There's a lot we 
don't know about the climate system, there's a lot we don't 
know about that data, but it begins to be suspicious when you 
look at every single time period and you discover you 
underpredict.
    One other example, you can take that same range, severe 
storms leave a remarkable record in sediment, ripping up 
sediment stones. You can take different continental positions, 
different CO2 levels that geologists think occurred 
and almost every storm deposit that we have that's been 
recorded in the geologic record comes up under the model 
predicted storm tracks.
    I would say there's something about the characteristics of 
those simulations that must be fairly robust. There's a lot of 
things in there I wouldn't trust at all. I think you can come 
up with this ordered list, but I think there's evidence that we 
have a sensitive system on our hands.
    Senator Allard. If I have time, I do have a question for 
you, Dr. Schneider, but go ahead and respond.
    Dr. Schneider. Briefly, I was going to clarify that the 
comment you made before about how early reports suggested 
warmings on the order of five degrees as the top number, then 
that went down to three and the sea levels come down. There is 
an important clarification and distinction I wanted to make.
    There was no difference from the first report to the second 
report of the IPCC or, in fact, over the last several reports 
of the National Research Council, on the basic sensitivity of 
the climate to a given change in carbon dioxide. That's not 
what changed.
    What changed was the assumption of what human behavior 
would be, how much sulfate aerosols would be generated, for 
example, and the assumption that was made in the 1995 report 
was that China would have uncontrolled coal burning that would 
produce

[[Page 44]]

lots of sulfate aerosols that would offset some of the global 
warming.
    Now the current assumptions are that they will not allow 
that on health grounds and therefore, those combined global 
warming numbers will probably, in the next assessment, creep 
right back up. It was the difference in the assumptions as to 
what people will do, not a difference in the sensitivity of the 
models that caused the change in projections.
    Senator Allard. I've been called to order by the chairman, 
but hopefully we can come back and maybe continue some of this 
discussion later.
    Senator Chafee. Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman. I'm going to cut 
mine down to only 4 minutes because I'm running out of time. If 
you can keep your answers short, I'd appreciate it.
    Dr. Barron, I didn't see your testimony before the meeting, 
but you said we maintain a sophisticated observation system. We 
have the satellite but not the continuity. I don't know what 
you mean by ``not the continuity.''
    Dr. Barron. You can take, for instance, the MSU records. 
There's a paper that just appeared in Nature which basically 
looks at other techniques and thought there was an issue about 
the trends because it's not a single satellite.
    I have a great deal of faith that John Christy knows that 
data inside and out, but here it becomes a matter of some 
debate because it's multiple satellites. Now we've set about in 
this Nation to create an earth-observing system with which we 
can address issues like that and make sure that we can begin to 
have this long-term record.
    That system has gone through a tremendous amount of debate 
and we don't want to launch the same thing over again. We've 
finally come down to the point where we're going to launch a 
couple of these satellites. We've got about 9 months to decide 
on what the next set of satellites are like and we're not 
ready.
    Senator Inhofe. Dr. Christy, do you have any response to 
that?
    Dr. Christy. Just that, yes, we used nine satellites to 
piece the record together but as I showed by the independent 
validation, it was done correctly.
    Senator Inhofe. Dr. Barron, you are predicating a lot of 
these predictions on the computer models and I think last April 
there was an article in the Washington Post, if you can help me 
through this, where the National Weather Service was trying to 
predict the cresting of the river in North Dakota. In a 2-week 
period, they went from 49 feet to 50 feet to 52.5 and 54 and so 
forth.
    I guess the question I would ask is aren't there more 
variables in predicting, as in your discussion, than there 
would be in something like this? When you talk about a 
timeframe of 2 weeks, wouldn't the incidence of accuracy be 
damaged a little by looking at 100 years versus 2 weeks?
    Dr. Barron. It's true, except you also have to realize that 
weather prediction is quite different than climate prediction. 
In weather prediction, you're basically starting at an initial 
stage which is observed and you're carrying that forward based 
on laws

[[Page 45]]

of physics into the future and you're updating it with the new 
observations as you go along.
    What that means is the error grows the farther you go into 
the future and so that's basically weather prediction. To 
predict something 2 weeks in advance is a very challenging 
issue.
    In climate prediction, you're basically looking at a set of 
factors that forced the system to change and you're attempting 
to see what is in equilibrium or balance with those particular 
forcing factors. It has a completely different set of problems 
and errors. We don't want to just accept what it says, it has a 
completely different set but the two issues are quite distinct.
    Senator Inhofe. Dr. Jorgenson, I have a quote from your 
book. You submitted kind of an outline as opposed to the test 
of your remarks, so one of my staff read your book, ``The 
Economic Effect of Carbon Tax.'' It says, ``Stabilizing the 
atmosphere and concentration of carbon dioxide which would lead 
to an eventual stabilization of temperature would require 
reducing emissions by 50 percent relative to 1990, a very 
costly policy.''
    My question would be, a minute ago you said we're not 
talking about capping, we're talking about reducing the growth. 
When I read this, my interpretation was capping. Was my 
interpretation wrong?
    Dr. Jorgenson. What I did in that paper was to look at the 
consequences of various policies. I considered stabilizing the 
climate, which is what you're referring to; I considered 
stabilizing emissions, which is the objective of the Rio Summit 
Agreement; and what I put in my written testimony and in the 
outline you referred to is the economist's best policy defined 
by the one that produces the most benefits relative to the 
cost.
    That doesn't involve capping the climate or capping 
emissions. What it involves is reducing the growth of emissions 
very, very modestly. That means that the climate is going to 
continue to change and that we're going to have to learn to 
adapt to that.
    Senator Inhofe. But the treaty that we're going to be 
looking at is talking about capping, isn't it?
    Dr. Jorgenson. I think that it's to be determined because 
at the moment, there are a number of proposals on the table. 
The small island states needless to say, a relatively 
insignificant group from the political point of view, is 
talking about reducing emissions by 20 percent. The Europeans--
they don't agree on this, in particular the British don't agree 
with this--have talked about reducing emissions by 15 percent.
    The goal that is to be advocated by our Administration in 
the Kyoto meetings and the meetings that lead up to it is to be 
determined. They don't actually say what the goal is. What I'm 
saying is it is up to you to determine that. That is what I 
suggest you do. I've laid out what I believe that should be, 
namely a very, very modest reduction.
    Senator Inhofe. I am out of time. I have one last question 
I'd like to ask. I know scientists cannot answer questions yes 
or no, but I'm going to ask you to do that or not answer it at 
all, starting with Dr. Barron.
    It's a yes or no question. You mentioned, Dr. Barron, in 
your testimony that the models have limitations causing 
uncertainties. The

[[Page 46]]

Administration is moving forward with a treaty which will be 
finalized in December. Will we have these uncertainties 
answered by December, starting with you?
    Dr. Barron. Absolutely not.
    Dr. Lindzen. No.
    Dr. Schneider. No.
    Dr. Jorgenson. No.
    Senator Inhofe. I do have other questions I'll submit in 
writing.
    Senator Chafee. Dr. Jorgenson, as I understand what you're 
advocating is that we don't try and stabilize our emissions at 
some year, but that we seek, I believe you used the term modest 
reductions. Those I think you were seeking to achieve by what, 
2023, or something like that?
    Dr. Jorgenson. No. This would be a continuous process. I'd 
like to begin as soon as possible and continue indefinitely. 
This is not a problem that's going to go away.
    Senator Chafee. The trouble is we have to have incentives 
to make us take that tact, that approach, limitations of some 
type. In other words, some witness said when the oil embargo 
came, the country responded and came up with alternatives and 
lowered fuel consumption. Yes, that's absolutely true but there 
was a driving force; the driving force was the oil embargo.
    We had the reduction in CFCs because we mandated them 
pursuant to the Montreal protocol and so forth.
    Therefore, it seems to me that in order to get these, we've 
got to have some mandate to force us in that direction. This is 
not easy. Let me just give you a tiny illustration.
    Because of the Social Security Fund problems in 1983, we 
enacted some social security reforms and indeed, increased the 
retirement age from 65 to 67, being gradually phased in 
starting at the turn of the century and extending up to 2023.
    Also, many of us voted to make the Medicare age correspond 
with that. You think that's pretty gentle, 2023. Nobody can get 
too excited about that, but it doesn't turn out that way. There 
is a lot of resistance to that. The House of Representatives, I 
think will see that as this conference goes along.
    Just because something is in the out years doesn't 
necessarily make it much easier to achieve. It should work out 
that way, but we've got to have a driving force. What are you 
suggesting be that driving force?
    Dr. Jorgenson. Senator, the driving force I think in 
environmental policy is always the same, namely it's the 
damages. These damages sometimes take the form of health 
effects, as in the case of the Clean Air Act, we've talked 
about sanitation associated with clean water standards, 
cleaning up the Cuyahoga River and things like that.
    In this case, we now have a substantial amount of economic 
evidence and it's based on the following idea. That is that 
changing the climate with all the uncertainties that have been 
described by this panel is something that is going to have a 
negative, not gigantic, but a negative effect on agriculture. 
It's going to have a negative effect on forestry, it's going to 
have a negative effect on our requirements for energy, for 
heating and cooling. It's going to have a negative effect on 
the coastal areas.

[[Page 47]]

    It's easy to exaggerate that but nonetheless, we will be 
confronted by coastal damage which will require efforts at 
mitigation that involve building dikes and the sort of thing 
that has been done in the Netherlands for centuries. All of 
those things add up to about the equivalent of a whole year of 
economic growth over the next century. That is not the most 
dramatic problem you're ever going to confront in the 
environmental arena, but it is nonetheless a very substantial 
amount of damage.
    That is the motivating force for the concern of scientists, 
economists and others. How do we mitigate that damage? The 
answer is that we do it very gradually. It's not something that 
is dramatic and overwhelming. It's something that requires 
modest but nonetheless substantial measures. That's what I've 
tried to place before you.
    I'd like to make one qualification. That is the emphasis in 
this panel, both in terms of the questions that the panelists 
have asked and the responses that you've heard from the 
scientists is uncertainty. That is an argument in favor of 
action, not an argument in favor of inaction.
    That leads to the recommendation that now is the time when 
we need to think about these things as you and your fellow 
panelists have decided to do. I think that's the driving force. 
It's the damages to our economy, the damages to our ecology, 
the damages to our environment that will result from global 
warming with the uncertainties that we've heard about.
    Senator Chafee. Let me ask the panelists. You heard Dr. 
Jorgenson recite the potential problems as he sees them. Do you 
agree those problems exist--shall exist.
    Dr. Barron. I think that if you start to make a list and 
you go sector by sector. If you start to do that, then I think 
there is a lot of reason to be concerned.
    Senator Chafee. What do you say?
    Dr. Lindzen. Yes, I'm very perplexed by Dale's remarks. If 
the emission caps and emission reductions will lead to very 
little mitigation of climate, then your more relaxed approaches 
would have an unmeasurable effect on climate. So if they have a 
benefit, it must be something unrelated to climate. What is the 
benefit?
    Dr. Jorgenson. I'm sorry. Maybe I didn't make myself clear. 
The policies that I've advocated are precisely those that 
reduce the damages and do it at minimum cost. That's the 
economist's approach.
    Dr. Lindzen. What damages with respect to climate do they 
minimize?
    Dr. Jorgenson. The measures that I proposed are measures 
that involve reducing emissions and thereby gradually reducing 
the change in the climate. That's something that will have 
benefits for farming, benefits for forestry.
    Dr. Lindzen. Excuse me, Dale. You keep saying that but what 
you're proposing by emissions reductions, rate of increase will 
have almost no impact on climate.
    Dr. Jorgenson. It will have a very modest impact on 
climate. I emphasized in my presentation, I hope, that the 
climate will continue to change. We not only need to mitigate 
the change in the way I've suggested, we need to adapt to the 
change that's going to

[[Page 48]]

take place, which is your point. Therefore, I think we're in 
agreement unless I misunderstood you.
    Dr. Lindzen. No, no. I just didn't understand what the 
point was at all in reducing the emissions vis-a-vis climate.
    Dr. Jorgenson. Not to eliminate climate change. I certainly 
didn't mean to suggest that there's any way that is 
economically attractive of putting climate change at an end. 
That is not the objective of the policy that I'm advocating.
    What we need to do is to mitigate that change, to slow the 
change, but the climate, as you've emphasized, will go on 
changing.
    Senator Chafee. I think you left him perplexed. You've got 
me semi-perplexed. Now that I understand what you're saying, 
I'm not sure I agree with you.
    What you're saying is the climate is going to change 
because of man's actions.
    Dr. Lindzen. No. He's saying if it changes, any policy will 
not impact that. If it isn't changing----
    Dr. Jorgenson. That's not right. Why don't you try, 
Senator.
    Senator Chafee. Doctor, you can mark my blue book.
    Dr. Jorgenson. I've never marked the blue book of a Yale 
man.
    [Laughter.]
    Senator Chafee. What you're saying is that man's actions 
are causing climate change. It will have, as we go into the 
next century, significant effects on agriculture, forestry, the 
oceans and so forth.
    By starting now with modest mitigation efforts, namely 
reducing some of the CO2 that we're releasing into 
the atmosphere, we will reduce the effects. We're not going to 
eliminate them, but we will reduce the effects and presumably 
by reducing these effects, we will be able to adjust to these 
effects as we go along.
    Dr. Jorgenson. If you don't mind my marking that blue book 
as A-plus. You got it exactly right.
    Senator Chafee. I'll take it and move on.
    Senator Baucus.
    Senator Baucus. I'd just like to follow up. Frankly, I 
think we're in a real dilemma here because if the efforts are 
modest--$10 a ton by 2025, whatever--I don't know if that's 
going to have a significant reduction on emissions.
    At least now the economy is doing OK. As I see the utility 
vehicles that people buy and the gas guzzlers, they buy big 
cars and so on, I just don't know if that level is going to 
have a significant effect at all which gets a little bit into 
the other side of the coin. Sometimes we just need a shock to 
force changes in peoples' actions, to develop new technologies 
and so forth. The oil shock did it. Sputnik sure did. We woke 
up and saw Sputnik flying around and that galvanized us into 
action.
    Generally it's my judgment politically nothing really 
happens unless either there is a crisis or there is 
extraordinary leadership. I don't see a lot of the latter.
    Dr. Jorgenson. I think although it's invisible, we've had 
serious efforts inside the Administration to formulate a 
climate policy that would meet the objectives that I think all 
of you are concerned about. I think you're going to hear more 
of that. There is a lot of concern politically out there in the 
population about climate issues.

[[Page 49]]

    I think the focus needs to be the following. If we look at 
the impact of the oil crisis--I think it's important to come 
back to that--we had the benefit there of experience, namely 
that increases in prices, just increases in prices by 
themselves had the effect of stabilizing emissions.
    Senator Baucus. Dramatic increases in prices.
    Dr. Jorgenson. Dramatic increases in prices, stabilizing 
emissions from 1973, the beginning of the oil crisis until 
1987. That's the longest period in recent history for which 
we've been able to stabilize emissions. So we know how to 
achieve the goals of climate policy.
    Now we come to the question Senator Chafee addressed which 
is, what should those goals be. There, I think we don't need to 
be dramatic. We need to say there is a need which I think 
you've heard testimony on this morning and you're going to hear 
more testimony on.
    Senator Inhofe. I understand that but I think there's a 
dilemma here. I don't think it's going to shock people into 
change frankly and change behavior. I just don't know that.
    Another question I have is with respect to other countries. 
You mentioned developing countries don't produce much. An 
exception is China.
    Dr. Jorgenson. Right.
    Senator Inhofe. I heard someone mention not too long ago 
that if there is about 3 billion more tons of carbon produced 
in the world in the next 20 years and one-third of it will be 
produced in China because of their power plants primarily. 
That's significant.
    Dr. Jorgenson. That is significant, Senator, but let's just 
focus on China. China is a country which has undergone a lot of 
economic reform and it's been very successful in producing 
economic growth.
    The one thing they have left untouched is their market for 
energy. They have continued to maintain energy prices well 
below world levels. Think, by contrast, with the countries of 
the former Soviet Union and Eastern Europe, which are also very 
energy intensive. Those economies have reduced their emissions 
dramatically as a result of moving their energy prices to world 
levels. That is essentially the policy that we need to think 
about for China, not something that involves endorsing an 
international agreement. We need to get them to focus on 
reforming part of their economy which is the energy sector. We 
need them to move their energy prices, especially the price for 
electricity to which you alluded, to world market levels.
    What does that mean in practice? That means that they will 
need fewer power plants than they otherwise would need. It 
means they're going to make efforts to reduce their reliance on 
coal. You can already see them moving in other directions just 
by what they know about the forces that will be at work in the 
future.
    They have not taken the critical step and that's where we 
can play a role. Namely, they have not decontrolled energy 
prices in the Chinese economy, so they have not had the kind of 
dramatic reductions in energy use that we've seen in the former 
Soviet Union, another ex-communist country or in the countries 
of Eastern Europe.

[[Page 50]]

    I think there is an opportunity to do something about China 
entirely outside the framework of the kind of international 
agreement that will be debated at Kyoto. That should be the 
goal of our diplomats specifically Under Secretary Wirth, the 
Under Secretary of State in charge of global affairs. I hope 
he's going to focus on that in Kyoto.
    Senator Inhofe. Is El Nino at all relevant to anything 
we're talking about here today?
    Dr. Lindzen. Can I answer that a little bit?
    Senator Inhofe. Yes.
    Dr. Lindzen. There have been a number of studies while 
Wallace, Zhang and others at the University of Washington and 
elsewhere. These are leading scholars on El Nino, looking at 
the changes in El Nino and trying to decide whether they have 
produced the changes of temperature in the 1970's or whether it 
goes the reverse.
    By and large, changing patterns associated with Enso seem 
to have played a major role according to Wallace's papers in 
the temperature change observed in the 1970's. This is part of 
the autonomous variability of the system.
    Dr. Barron. But that begs the question of why El Nino 
changed.
    Dr. Lindzen. That's all right but you take the view that 
all changes occur because something forced them.
    Dr. Barron. No, I wasn't. I was just saying there wasn't an 
answer to a question there.
    Senator Baucus. Dr. Schneider.
    Dr. Schneider. First of all, El Nino is a natural phenomena 
and has been for a long time, although there have been some 
very unusual El Ninos in terms of prolonged ones and some very 
intense ones, which has naturally raised the question, ``Gee, 
it happened at the same time the climate was changing. Maybe 
these are not independent events.''
    The answer is we haven't got a clue what the answer is. 
This could be another one of those imaginable surprises. It's 
simply one of the risks we take when we modify the system. We 
do not know if they are connected or disconnected--yet.
    However, one thing we do know from El Nino is that social 
and economic systems still remain vulnerable to extremes of 
climate and weather. We can quantify how those rapid changes 
can lead to significant impacts in terms of droughts, floods 
and so forth.
    That lesson tells us that we're vulnerable to natural 
variability. But are we vulnerable to unnatural variability? 
The answer is probably yes, but if we had some advanced 
warning--that's where the research comes in--and if we knew 
exactly what would be happening, we'd be more able to adapt 
than otherwise.
    The question is how can you reduce the most rapid rates of 
change which, I would argue, would be more likely to cause 
unpredictable extreme variability than slower rates of change.
    Senator Baucus. What's your reaction to Dr. Jorgenson's 
comments?
    Dr. Schneider. I'm glad you asked but the red light kept 
coming on so I kept not having them.
    I was going to call your attention to a figure I had in my 
written testimony, Figure 3, which Bill Nordhaus prepared. He 
was frus- 

[[Page 51]]

trated when he was trying to do exactly the same thing many 
years ago as a pioneer of this kind of work--to try to balance 
in an optimizing framework, the mitigation costs and damages 
due to climate.
    What you want to reduce first is the cost of abatement, 
trying to mitigate CO2 by increasing the price of 
energy, which might hurt the economy. He was attacked from all 
sides because he picked 1 percent loss of GDP for his climate 
damage function.
    He was attacked by environmentalists because this value 
underestimated, in their opinions, damage to nature and it 
neglected health effects. He was attacked by others for the 
point about resilience, that his 1 percent GDP damage estimate 
neglected CO2 fertilization effects--which could be 
benefits.
    So he asked a number of people, about 18 or 19 people--I 
was one of them--and he conducted a survey and said what do you 
believe climate change damages would be? We recognize you can't 
calculate it precisely, but you study the fields, so give your 
best guesses.
    In my testimony Figure 3 shows the two different scenarios 
of change, 3 and 6 degrees, and what he found is that the 
economists as a group tended to have lower climate damage 
estimates but they were not negligible. They would assign a 10 
percent chance of a benefit. Their 50th percentile estimate was 
about half of a percent loss of GDP and then their 10th 
percentile radical number on the high side was several percent 
loss of GDP. So again, it's a risk question. They viewed 
climate damage across a wide range.
    When Nordhaus asked the natural scientists, they gave a 
factor of 20 higher in their estimates of climate damages, to 
which Bill quipped that, ``those who know the most about the 
economy aren't so worried.'' I counter-quipped, ``those who 
know the most about nature are.''
    Part of the difference is that the natural scientists were 
less optimistic about the resilience of nature than the 
economists. But you can't know for certain. We're not going to 
have the uncertainties resolved in time either. The sword of 
uncertainty has two edges and one edge is we might be lucky and 
things will come down. The other edge is we might not be so 
lucky and it's back to risk management again.
    To me, the best way to manage risk is to have flexible 
management, because in a state of large uncertainty, you don't 
want to make irreversible decisions. You don't want to make 
irreversible decisions that damage the economy, nor do you want 
to make irreversible decisions that damage the ecology.
    My support for Dale Jorgenson's call for a modest tax is 
not because I think that over the long term, I want to see only 
a small percentage of climate change be mitigated, but I'd like 
to get the experiment started of finding out how that tax would 
induce technological change, how the prices of alternatives 
would come down so there isn't an economic catastrophe from a 
big change being needed later on.
    If we don't start that process now, we'll be building power 
plants which have 40-year life times that will emit a lot.
    Senator Baucus. Thank you.
    Senator Chafee. Senator Sessions.

[[Page 52]]

    Senator Sessions. Thank you, Mr. Chairman.
    It's a fascinating subject and I'm not going to ask a lot 
of questions. I'm sorry I was unable to be here. I consider 
this a most important hearing but I did have markup on a 
juvenile justice bill on a committee I chair and it was 
important for me.
    Dr. Christy, first, I want to welcome you here. I'm 
delighted that the chairman could invite you. I've read about 
some of your work and have not had the chance to meet you.
    I know you are funded by NASA and have done extensive work. 
In some respects, it shows that parts of the atmosphere have 
actually cooled in the last number of years, is that correct?
    Dr. Christy. Yes. We're looking at the troposphere, a 
region that should have warmed if climate models are correct in 
their projections and that has not been the case to the extent 
that the climate models have indicated.
    Senator Sessions. Mr. Chairman, I know Dr. Jorgenson 
indicated that the cause is uncertain and there may be even 
more need to act, but there are certain things that we can know 
with certainty. That is, if we spent more money on emergency 
rooms and certain medical treatment programs, we could save 
large numbers of lives. So we have to decide what we're going 
to expend our resources on as a Nation.
    We're talking about a major environmental commitment when 
we may have little, if any, benefit from it when we know there 
are alternatives that we could expend our resources on that 
would preserve benefits.
    You see the situation about the Third World. How many lives 
would be saved if throughout the Third World there were 
electric generating plants as good as the ones in the United 
States, polluting somewhat, but how many lives would be saved 
if they had cheap electricity as we do in the United States.
    That's really all I have to say. I'm interested in this 
subject. I consider it important for the Nation and the world 
and hope to learn more about it as we go.
    Senator Chafee. Thank you, Senator.
    Senator Warner.
    Senator Warner. Thank you, Mr. Chairman.
    As you know, I've associated myself with the efforts of 
Senator Byrd and others on this issue. The main reason I've 
done so is couched in the question I'll put to all members of 
the panel.
    Given that the current negotiations are focused on 
stabilizing and reducing greenhouse gas emissions from 
developed nations only, has the Intergovernmental Panel on 
Climate Change determined if there will be any discernible--
that's the word I use, maybe there is a better one--discernible 
environmental benefit in terms of the amount of projected 
temperature increase or sea level rise as a consequence from 
implementing these proposals only on the developed nations?
    Dr. Christy or Dr. Schneider, why don't you start off?
    Dr. Schneider. I want to make sure I understand the 
question. The discernible benefit of?
    Senator Warner. If you just apply it to the developed 
nations and not the undeveloped, is there any likelihood there 
is going to be any benefit?

[[Page 53]]

    Dr. Schneider. Yes. I think there would be several benefits 
but it would not be an optimal benefit.
    Senator Warner. Not a what?
    Dr. Schneider. Not an optimal one. It would be much better 
to have everybody play. In that sense, I agree with you, but 
let me clarify that. I'll try to do it briefly.
    If nobody takes a first step, there will never be a step. 
Who should take the first step, one would assume that those 
people in a more economically favorable position to do so, and 
that's been considered in the world forum to be at least the 
richer nations.
    The second reason is that since the richer nations have 
contributed the largest amount of cumulative emissions, that 
is, if you look back between now and what's been emitted over 
the last century, the bulk of what's out there is due to our 
activities.
    In the future, that will change, there is no question of 
that, but we got the problem started. We had the victorian 
industrial revolution which even if powered by dirty power 
sources led nonetheless to an improved standard of living and 
there are other countries that would like to copy us in doing 
that.
    They see our attempts to impose higher prices on them as 
trying to prevent them from doing what we were freely able to 
do and we polluted and now we're asking them not to. I think in 
that sense, there is a fairness argument.
    However, you're all correct in saying that if we continue 
the policy of just having small segments of the world reducing 
emissions, that would not have nearly the impact as otherwise, 
so what we're trading off is essentially an efficiency versus 
equity argument.
    If you'll indulge me in a cliche, I agree in this sense 
with the Byrd resolution, that everybody has to play for us to 
be effective but not necessarily everybody has to pay. We can 
argue that within the next couple of decades China will have 
larger emissions than the United States, but that will be in 
absolute terms, not per capita terms. Therefore, we could, in 
the sense of the planetary bargain in the international forum, 
argue about what is fair for the distribution of cost. 
Certainly you cannot have the developing world as nonplayers 
for a long time and then make a difference.
    Senator Warner. I think we've got your perspective. Anyone 
else?
    Dr. Jorgenson. Yes. I'd like to chime in on this. I think 
the important thing is to think about the time dimension for 
policy. You and your colleagues every year have to consider 
taxes, you have to consider the budget, every year.
    Senator Warner. We try to do it every other year. You're 
speaking to very senior members of the tax panel when you look 
at the chairman and ranking member of this committee.
    Dr. Jorgenson. Right, but this is something that was 
considered in 1992 and ended up with the treaty that was 
ratified by the Senate in 1994. We are now 3 years later if 
there is a treaty proposed in Kyoto, it will take a while to 
ratify. I would say it's something that will extend over a 
period of about 5 years.
    There will undoubtedly be further climate negotiations. 
That's the point. Bringing in the developing countries is going 
to have a time dimension to it that will provide opportunities 
to take advan- 

[[Page 54]]

tage of the benefits of having those countries play. Who pays 
remains to be determined by the negotiations.
    It's not something that is a matter of great urgency and 
it's not a reason that we ought not to take action now. We will 
sacrifice some efficiency but that is going to be very, very 
modest. What we ought to focus on is setting in course a 
process that will bring those countries into the negotiating 
arena and get them to be players at the appropriate time.
    Senator Warner. Dr. Lindzen.
    Dr. Lindzen. Yes. Could I answer it briefly? If you do not 
bring in China, no matter what you believe about climate----
    Senator Warner. You say if we do not bring China in?
    Dr. Lindzen. If you do not bring in China and India, no 
matter what you believe about climate, the impact on climate 
will be very little.
    I guess I hear underneath what you're saying is, the reason 
you want to do something is to see how people would respond to 
such regulations to get a better idea. That may be an 
advantage, but the advantage will not be for climate due to 
these actions.
    Senator Warner. I thank the chair.
    Senator Chafee. Thank you.
    Senator Sessions, do you have any other questions?
    Senator Sessions. Again, I'm troubled by the thought you're 
willing to sacrifice some efficiency but I've learned in the 6 
months or so that I've been here that group after group after 
group comes before the U.S. Government and ask, it only cost a 
little bit to do this program or this regulation only increases 
costs a minimal amount, so incrementally pretty soon you have 
hampered this Nation's ability to be competitive in the world.
    We already are losing large numbers of jobs around the 
world. I think, I for one, want to know that there is 
identifiable sound science that indicates to a significant 
degree we can improve this global climate before we take 
action.
    Would anybody like to comment on that and correct me if I'm 
wrong in my thoughts?
    Dr. Schneider.
    Dr. Schneider. I certainly agree with you that we need to 
base all judgments on sound science, but we have a definition 
problem. Sound science does not necessarily mean certain 
science. To me what sound science means is the best judgment of 
the state-of-the-art of the community of the range of possible 
outcomes.
    That is what these reports (e.g., IDCC) try to do and in 
that communication, there is always a fair degree of 
uncertainty. As I said earlier, that uncertainty includes mild 
and catastrophic outcomes as relatively low probability 
possibilities and almost everything else in between more 
likely.
    As we continue to do more research, hopefully we'll be 
narrowing those ranges of uncertainties but everybody agrees 
they won't narrow that rapidly. Therefore, the question is 
whether we fear more investing present resources as you said, 
which have many good competitive uses, as a hedge against some 
potential risk in the future or whether we fear more the 
investment or whether we fear more having those risks unfold.

[[Page 55]]

    What Dale Jorgenson was suggesting is a modest policy to 
get started is probably a good way to go. I personally share 
that view. It is an experiment on how well we can do things and 
it is absolutely essential to reevaluate after every assessment 
which pops up every 5 years--in my testimony I refer to them as 
``rolling reassessments.''
    We must continue to reassess, knowledge may change of both 
the climate system and its impacts and the economic costs as 
new technologies are developed and we need a policy instrument 
flexible enough to crank up or down our concern as new 
information occurs.
    Senator Sessions. Dr. Lindzen.
    Dr. Lindzen. I think Steve likes to emphasize the consensus 
on certainty and he always likes to point to a survey where I 
suggested there was less uncertainty, at least if I had to make 
a best guess.
    The authors of the study, which Steve never quotes, point 
out that the behavior they see for the consensus is a herd 
instinct, not a scientific instinct. I think one issue we'll 
have to deal with in time, and I think John has been 
contributing to that, is we've had for over 20 years the 
estimates being based on models and the assumption that one of 
them must be right. It hasn't changed in 20 years.
    As Steve said, what has changed is they put in different 
forcing by assuming that. That is a horrendous state that we 
haven't focused in 20 years on pinning down this answer better. 
I think some efforts are beginning to go toward that.
    I think if you listen carefully to what you've heard here, 
you'll find that John finds it's not warming. The models say it 
should be warming throughout the atmosphere. Steve says let's 
look at the surface.
    If you wanted to focus, you'd say if there is a discrepancy 
between the air and the surface, the surface then is not 
greenhouse. You'd begin to focus on the problem, pin down the 
science and get a firmer answer. I think we have to be worried 
about a science that isn't doing that for 20 years.
    Senator Sessions. Dr. Barron.
    Dr. Barron. I was just going to say if you believe you 
should control emissions, I think the developed countries have 
to go first or else you're not going to get any of the other 
countries to follow.
    I also agree if you don't get China and India involved in 
there eventually, the impact is going to be minimal.
    Senator Chafee. When you say the impact will be minimal?
    Dr. Barron. The impact on mitigating the projected climate 
change.
    Senator Chafee. The impact to the other nations.
    Dr. Barron. Yes. I asked a class of 200 students every 
semester to take all the numbers from emissions from different 
countries and the United States and come up with a strategy 
that would reduce them. It's practically impossible.
    Tell you the truth, I personally, even though I also agree 
this might get us some efficiencies and learn how to do things, 
I personally don't think we're going to be successful until 
there are emergencies.

[[Page 56]]

    I suspect that the strategies we should involve ourselves 
in are ones that are adaptation oriented. I think the focus we 
have to take is to balance the economic issues that people are 
talking about against the vulnerabilities to all these changes 
and include natural variability. If you're vulnerable to 
natural variability, then I think it suggests you have to make 
an investment in these directions.
    Dr. Jorgenson. Could I underline my agreement with what Dr. 
Barron just said? The real issue in this area, Senator, is 
adaptation. That's the most important, single issue we need to 
focus on.
    What we've been focusing on here to a good extent is the 
need for mitigation. I've stated I think there is a need for 
mitigation, but if you ask where the dollars are, where can we 
do the most good, there's no doubt adaptation is far more 
important and mitigation is something that has to take second 
role.
    Dr. Schneider. May I briefly add to that. There's an area 
where mitigation and adaptation become almost the same thing.
    For example, suppose it turned out that the damages were at 
the more serious end--I would give that a coin flip, I don't 
know in advance whether it's going to come out on the less or 
more serious end--suppose we get a dramatic event or several 
events in the weather that mobilized public opinion rightly or 
wrongly, demanding urgent action and like the OPEC embargo, and 
the damages to the economy were done because of the sharpness 
of the price rise, not because of the price rise itself. Long-
term benefits came from the price rise but there was 
significant damage from the sharpness. To return to my point, 
if sudden events came along and the politics changed and there 
was action with dramatic reversal of the nature of the energy 
system (e.g., from coal to solar or nuclear), I think that 
would be vastly more costly than if it were to take place 
slowly.
    So one potential form of adaptation is an R&D policy. 
Whether that's direct subsidies or taxes or cap and trade or 
other factors as I discuss in the appendix to my written 
testimony and others can address, but if we could invest now in 
making those future alternatives both possible and cheaper, 
then you avoid the potential risk to the economy should that 50 
percent eventuality come out that people want to really control 
the climate problem more so in the future and you wouldn't be 
hurt as badly.
    In a sense, it is also adaptation to do that development of 
the alternatives that allow you to mitigate at a lower cost in 
the future.
    Senator Sessions. I would just say it seems to me from what 
I've heard, and I'll be studying this with my staff and reading 
the transcript, but it seems to me what you're saying is it's 
uncertain that we have global warming. No. 2, it's pretty 
certain that if we act unilaterally, it's not going to have any 
impact on the environment.
    I'm worried about working Americans who would bear the cost 
of a policy that wouldn't be effective if it were implemented. 
I guess that's my troublesome position.
    Senator Chafee. Dr. Lindzen, if I understand what you're 
saying, it seems to me that your point is it doesn't make any 
difference what we do.
    Dr. Lindzen. It depends on what you mean not making a 
difference. I'm saying if you believe models that say we're 
going to get four degrees warming by 2100, which is well in 
excess of what the

[[Page 57]]

Intergovernmental Panel on Climate Change is saying, then if 
you were to reduce emissions to 20 percent below 1990 levels, 
which as everyone seems to agree, we can't do, you would end up 
maybe with three degrees instead of four degrees.
    I'm saying if you expect two degrees in 2100, we're not 
sure, then the proposed policy which is again, this exceedingly 
difficult policy, might bring it down to 1.6. At that point, 
you're already at the level of natural variability.
    However you view natural variability, we've shown we can 
adapt to it, so I'm saying yes, no policy discussed and no 
argument made so far would, if you believed in global warming, 
stop it.
    Obviously, if you think that global warming is not 
occurring, it also has impact, but I make the point in my 
testimony if our successors 50 years from now find there has 
been very little warming, and we do introduce stabilization, 
the one thing we can be sure of 50 years from now is if there 
wasn't warming, it was not due to the stabilization. It was due 
to our overestimate of the sensitivity.
    Dr. Jorgenson. But there is a very important point I think 
needs to be added and that is, among the different alternatives 
that Professor Lindzen just rehearsed, the economic costs 
differ enormously. The economic costs of reducing emissions to 
something like 20 percent below 1990 levels are astronomical by 
comparison with the benefits.
    Therefore, what we need to do is focus on something that is 
far more modest. That, I think, is what you should take away 
from this, that if we take the uncertainties that are involved 
and balance the cost against the benefits, we need to take a 
modest step, not a dramatic step.
    Senator Chafee. It seems to me that we don't know. There is 
a lot we don't know about all this. However, there does seem to 
be some global warming taking place. If that is so--I think it 
is so--then we ought to do what we can about it.
    Your point is there are some modest steps we can take that 
aren't going to wrench around the economy and devastate it but 
that would have some effects. I take it, Dr. Lindzen would say 
those steps you're suggesting don't amount to much. Is that 
unfair?
    Dr. Lindzen. No, that's unfair. I'm saying more than that. 
I'm saying what Dale is proposing, take the scenario you expect 
four degrees, that would knock it down to 3.95. We couldn't 
measure that impact, we couldn't even tell that it had an 
impact. So you're engaging in a policy where no one can assess 
whether you did anything.
    Dr. Jorgenson. I beg to differ. If you look at Figure 5.4 
in my testimony, the effect on global mean temperature in the 
year 2105, which is the end of this graph, it's a good bit more 
than that under the policy I would propose. It eliminates about 
10 percent of the warming that would otherwise take place.
    Ten percent is not a dramatic number. It's not 100 percent. 
That is Professor Lindzen's point and I agree with him, but I 
think you shouldn't underestimate the changes that would be 
required and that can be justified on economic grounds.
    I would say we need to focus on adaptation but there are 
steps to mitigate the effects of climate change that could have 
the effect of reducing some of the global warming. They are 
not, as Professor

[[Page 58]]

Lindzen wants to emphasize, steps that will end global warming. 
We are going to have some global warming if these figures are 
correct.
    Dr. Lindzen. Could I ask for one change in vocabulary? 
We're using warming in two senses. We're using it in the 
passive sense of change of temperature and we're also using it 
in the active sense of man having done something to warm the 
atmosphere.
    So far there's data that suggests there's been very modest, 
passive warming of the climate system over the last century. As 
the IPCC made very clear, we're having almost no luck in being 
able to attribute anything of this to man's activities.
    I think if we could be careful in the use of the word 
warming to distinguish the two rather than mixing them.
    Senator Chafee. Wait a minute. That's quite a statement 
you're making. If I understand what you're saying, it's yes, 
indeed, the globe has warmed up, temperatures are higher but 
it's due to passive activities.
    Dr. Lindzen. No, no. I'm saying it's a matter of the 
English language. We used the word ``warm'' to mean change of 
temperature and we also use it as an active verb meaning we 
have caused something.
    I'm saying the passive part is the temperature has changed 
a little bit. It really has been a little bit. Half a degree 
centigrade is what the temperature change is while you wait for 
the street light to change.
    On the other hand, the IPCC has been very clear that they 
have been unable to tell what fraction of that very small 
temperature change has been due to man's activities. So we've 
been unable to pin down what we're doing to it.
    Dr. Christy. I'd like to add something there. I was on that 
panel that looked carefully at the temperature record of the 
past and we included a statement in the IPCC that this century 
was the warmest of the past six. That's not a very remarkable 
statement when you think about it, but you looked at the data 
that we did have available to us but we're not quite as sure 
about, centuries in the past were warmer than the present 
century.
    You go from one century to the next and there are large 
changes. The 21st Century will be different than this current 
one. It's definitely the case that the 19th Century was 
unusually cool. Bouncing back from that, as Dr. Lindzen said, 
is part of the natural variability which is why in my comment 
earlier, I made the statement that most of what we've seen is 
due to natural variability.
    Dr. Barron. You just don't know whether we're bouncing back 
from anything.
    Dr. Schneider. How do you know we're bouncing back? How do 
you know it wasn't stopped by the increase of emissions from 
initial deforestation and industrialization? You're 
presupposing you know the climate is random. We don't know 
that. That's what we're interested in figuring out.
    Dr. Christy. We're looking at temperatures that were warmer 
in past centuries than today.
    Dr. Barron. But how do you know that it wouldn't have 
continued?

[[Page 59]]

    Senator Chafee. What does he know what wouldn't have 
continued?
    Dr. Schneider. That the recovery is in fact a recovery. 
Maybe it's induced. We don't know that. That's one of the 
difficult issues where it might be partly related to some 
changes in the energy output of the sun. There are a number of 
aspects we can debate. That's what we're trying to figure out, 
the relative amounts, but you can't presuppose that the recent 
variations in the system are all natural.
    Once we know that humans started changing the land surface 
and started changing the atmosphere, which we began to do 
significantly in the 18th Century, so we cannot actually rule 
that potential influence out yet. That's part of the debate.
    Dr. Barron. The objection occurs when he says the world is 
bouncing back from an unusually cold period. It's just as 
possible, because of the way natural variability works, that it 
was in the midst of bouncing to an even colder century and 
therefore we have an even bigger problem than we're thinking.
    By saying that, he's presupposing he knows the mechanisms 
and the way natural variability works.
    Dr. Christy. I would say most of that occurred before these 
events you're talking about affected the climate.
    Dr. Schneider. I'm not saying humans created a little Ice 
Age. What I'm arguing is that it's often said this is just the 
recovery from that. Well, it's the recovery but that doesn't 
mean that there wasn't a human component of that recovery and 
that's what we're trying to figure out.
    Dr. Christy. There's a variance about that and that's what 
we said here earlier.
    Dr. Schneider. The word modest has been the word of the day 
and it's a very good word and it's one to which I subscribe. 
I'd like us to have some modesty also as I said earlier, and 
let me reinforce it, about let's not underestimate what the 
technological capacity and the inventive genius our society is.
    If engineers and the companies of the world, with I think 
some government involvement as well--and that balance is for 
you to decide--made it a determined plan to find alternative 
technologies that could produce the service--we're not 
interested in whether it's carbon dioxide, we're interested in 
energy, the service that counts--we can abate carbon cost 
effectively.
    If we could produce the service by alternative means at 
lower prices, then some combination of economic and ecological 
environmental wisdom would move us in that direction, but those 
technologies don't invent themselves.
    Therefore, what we're talking about is what are the modest 
policies that can help us as an insurance policy to develop 
those technologies so we have that standby capacity should the 
future lead us to, by bad luck, more serious outcomes.
    Let me recall Dale's presentation--with Dick and Dale 
arguing about how many tenths of a degree would be saved by 
various optimized policies. Tim Roughgarden, an undergraduate 
student who is in our senior honors program at Stanford, took a 
look at the Nordhaus climate energy-economy model and instead 
of using the damage function that Bill did--the 1 percent loss 
of GDP--we used

[[Page 60]]

five published damage functions from other economists, 
ecologists and others and he found there is about a factor of 
10 difference in their estimate of climate damages.
    The amount of carbon tax varies by a factor of five in the 
optimum calculations just depending upon which one of those 
damage functions you used. We don't know the answer to which is 
correct yet and there may even be others.
    Therefore, the amount of climate change policy response 
needed substantially varies depending upon what you assume 
about climate damage. I hope our modesty extends to also 
understanding that optimal tax calculations have a very wide 
range of uncertainty and there are many estimates that are much 
larger than those used in Bill Nordhaus' study for which there 
is a substantial scientific justification, although you can 
also justify the more modest kind. Therefore, flexible 
instruments seem to be the most important message of the day.
    Senator Chafee. In that quote you had from that certain 
Senator Chafee, I think it was 10 years ago?
    Dr. Schneider. Nine.
    Senator Chafee. As I recall, it was about doing something. 
We don't know what's happening, but we'd better plan. Don't 
take the rosiest view, take a different view because it might 
occur. Could you read that quote?
    Dr. Schneider. Sure. I'd be delighted to.

    If there is one point I could make, Mr. Chairman, it is 
this. There are a great many questions about the greenhouse 
effect that can't be answered today, but I don't think we ought 
to let scientific uncertainty paralyze us from doing anything. 
It is always convenient to find an excuse not to do something 
and there is always an excuse out there not to do something. I 
think the issue before is what steps should we be taking today 
to help solve the problem in addition to doing more scientific 
research.

    That was your quote from the Senate Energy Committee 
testimony in 1988.
    Senator Chafee. I approve of that quote.
    Do you have anything else, Senator?
    Senator Sessions. I would like to ask one question. Are you 
satisfied as a Nation and the world, have we properly focused 
on establishing the best science that we can to answer where we 
are and do we need to do anything to improve our scientific 
gathering of evidence?
    Dr. Jorgenson. Senator, you came in, as you said, after 
some of the presentations, but a number of people quoted a 
Washington Post piece by Robert Samuelson that appeared 
yesterday and that is also in the current issue of Newsweek in 
which he presented his view of the economics of the problem.
    I think great advances in the economic understanding are 
called for. He was talking about measures that would involve a 
$100 tax on carbon as opposed to the kind of measures that I've 
been talking about which are $10, a totally different order of 
magnitude.
    Although I think a great deal of progress has been made in 
the science, I think there is a great deal of need for better 
economic understanding.
    Senator Sessions. Dr. Christy, is anyone asking you from 
the Environmental Protection Agency?
    Dr. Christy. Give me more satellites and data.

[[Page 61]]

    Senator Sessions. And you think you could determine whether 
or not this is happening?
    Dr. Christy. The upper atmosphere or the tropics, that's an 
area where we have little understanding. Climate models are 
clearly in error in that region. Balloon networks are falling 
apart around the world. This is an international problem when 
you're talking about surface observations.
    Data is becoming very hard to get from other countries and 
that hurts us in trying to understand how the system varies. So 
if those barriers can be reduced and a systematic measuring 
system carried forward, that would be my goal.
    Senator Sessions. Dr. Lindzen.
    Dr. Lindzen. Yes. I have a slightly oddball suggestion, but 
I think if you want to solve problems with science, you need a 
stable funding base for science so that scientists do not feel 
that if a problem gets solved, there goes their funding.
    Senator Sessions. Time and again, we do have groups come in 
from various independent agencies and you wonder if they all 
got together under good leadership and hammered out these 
differences, could we reach a consensus.
    Mr. Chairman, thank you for having this hearing. I 
congratulate you on your leadership on this issue over the 
years.
    Senator Chafee. Thank you.
    Let me ask one final question if I might. The question is, 
do you believe we know enough about the prospect of climate 
change to embark upon a program to address it, some program? 
I'm not saying x billion but some program in order to address 
it?
    Dr. Barron. I personally think a combination of what we 
know about the potential for human-induced changed and what we 
know about natural variability suggests to me there is a lot of 
practical, maybe what you'd call win-win things that you can 
and should do, so I do think you need to embark on something.
    Basically, I look at this as say the issue is health and 
you see the health is tied to both natural variability and 
potential for climate change, it suggests that surveillance 
efforts on some of these viruses, on the distribution of 
vectors, the mosquitoes, an ability to have advanced warning 
systems, and public awareness are all things that become 
logical for which you can substantially reduce what the risk is 
and it helps you adapt.
    The same thing occurs in water resources. If you're sitting 
there and you're in a state and you're living on the edge of 
your resources, and in the case of natural variability, you go 
through tremendous hiccups, problems or issues in terms of the 
availability of the resource just by natural climate 
variability, I think it makes sense to have some call to action 
there.
    In a lot of cases, it's win-win in the sense of the 
benefits you'd get in not having the natural variability affect 
you to such great degree, but we also discover that, for 
instance, industry collocates with water availability.
    Right now, in every single State in this Nation, they use, 
withdraw from streams about 25 percent of the available 
resource and there's a big difference in the availability of 
resources across this Nation. That means the industry is 
sitting there locating next to rivers and the same thing occurs 
for recreation.

[[Page 62]]

    So if you're at risk, just a natural variability and you 
see this risk extends also to climate change. I think there is 
a good reason to something now, but these are protection 
against adaptation and the expectation that in doing something 
now, you've saved yourself money.
    Senator Chafee. Dr. Lindzen.
    Dr. Lindzen. I think what Eric has said is hard to disagree 
with. Fundamentally, one is saying no, we don't know--we know 
enough right now to know there is no action we will take that 
will change what will happen vis-a-vis climate, but there are 
actions we can take to make our society more robust.
    As has been said in the past, if you can think of things 
that are worth doing anyway, my argument has been to justify 
them on what they will do anyway. I think the difficulty here 
is there may be things that can make the society more robust to 
climate change. There is very little we can do to affect 
whether there will be climate change or not.
    Senator Chafee. Dr. Schneider.
    Dr. Schneider. You called on us to make a conclusion, which 
as you know, is a value judgment, namely do we fear more 
investing present resources against something which might 
happen or do we fear more letting it happen without trying to 
slow it down.
    Then you said how much information does it take for us to 
make such a judgment. That's exactly the same question of how 
much information does it take to decide how much insurance to 
buy or how much national security to buy through military 
investment. This is exactly that same kind of problem.
    I'm a risk averse person. I have earthquake insurance. A 
lot of my colleagues don't, living in California and the 
question is, how much of it do we want to purchase.
    Frankly we've been talking about what we've been saying 
over the last 20 years. I thought we had enough scientific 
information 20 years ago to do the kinds of policies Eric 
Barron talked about, namely make ourselves less vulnerable to 
the natural kind of variability. Dick Lindzen says, ``Well, do 
that but don't say it's climate.''
    I would disagree with Dick in this sense. I would say, ``Do 
a little bit more as the insurance premium to deal with climate 
change.'' I'm willing to make that investment personally and 
try to convince people out in society they should make that 
small investment in that insurance premium at the scale of our 
planet to reduce the likelihood of the negative outcomes. If we 
can make those investments in something that makes sense anyway 
such as developing alternative energy systems that have less 
air pollution, that can be cheaper in the future and be more 
reliable, so much the better.
    Dr. Jorgenson. Senator Chafee, I'd just like to sum up my 
remarks. As you suggested, I've already laid out my proposals 
but let me be explicit about it.
    One thing we could do right away that would have a major 
impact and is a ``win-win'' situation is to eliminate $14 
billion in energy subsidies through the Tax Code and through 
our expenditure programs that distort energy markets in the 
direction of using too much energy.
    Second, in terms of the Kyoto Summit, here is where we come 
to Senator Sessions' very well taken point. We have an 
opportunity

[[Page 63]]

to act in a way that is not unilateral. That's the point. It 
doesn't make any sense to think about what I'm about to say on 
a unilateral basis, but at Kyoto we have the opportunity to 
bring about some kind of international agreement.
    That would involve the kind of ideal agreement about a $5 
tax beginning immediately on carbon. That's a very modest step 
but it's one I would add to the $14 billion in subsidy removal.
    Senator Sessions. How would that translate on a gallon of 
gas?
    Dr. Jorgenson. That translates to about 5 cents on the 
gallon.
    Let's focus on what we should recommend to China by our 
diplomatic efforts and by efforts at the Kyoto Summit. We 
should urge China to do what, in the last 10 years, almost 
every developing and formerly socialist country has done, which 
is to move energy prices to world levels.
    That would have a tremendous benefit to China, it's a win-
win for them; and to the world economy. It's a win-win for the 
rest of us as well.
    I think there are concrete steps we can take and that would 
be my list of three.
    Senator Chafee. Thank you.
    Do you list in here where that $14 billion comes from? Is 
that in your testimony?
    Dr. Jorgenson. That is not in my testimony, I'm sorry to 
say. That is a study that was done by the Department of Energy 
and I'd be happy to provide a reference and I'll send it to 
you.
    Senator Chafee. Could you? That would be helpful. Thank 
you.
    Dr. Christy.
    Dr. Christy. To answer your question, it's a fairly vague 
question so I think I could vaguely say yes, if you include the 
conservation efficiencies and improved technologies and so on, 
that kind of program would be worthwhile.
    I agree pretty much with the generalities that have been 
stated thus far.
    I would say I use less energy today than I did before 
because I have a daughter in college and that requires me to 
not be able to spend as much on doing things and buying stuff. 
So that's my level of conservation at the moment. I think it 
will improve.
    Senator Chafee. We thank you all very much for coming.
    [Whereupon, at 12:58 p.m., the committee was adjourned, to 
reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
Prepared Statement of Eric J. Barron, Earth System Science Center, The 
           Pennsylvania State University, University Park, PA
    The prospect of future human-induced climate change represents 
perhaps one of the most challenging science and society questions of 
the century. There is no doubt that humans are altering the 
environment--both in terms of the land surface and the composition of 
the atmosphere. In particular, greenhouse gases (carbon dioxide, 
methane, nitrous oxides) in the atmosphere have increased substantially 
in concentration over the last several decades.
    The best scientific assessments available suggests that the impacts 
of these changes will be significant, yet the error bars, or 
uncertainties, are also very large. The real question is how should 
society respond when the best available science suggests that human 
activity may substantially alter climate, but at the same time the 
scientists are seriously debating the magnitude, timing and 
distribution of the climate changes. Answers to this question depend on 
two basic sources of information, climate observations and model 
predictions.

[[Page 64]]




[[Page 65]]


Figure 1b. Temperature trends for the United States. Solid circles 
represent increases in temperature and open circles, decreases. The 
size of the circle indicates the magnitude of the increase or decrease.

    Karl's analysis also indicates (figure 2) that there has been an 
increase in the amount of precipitation from extreme precipitation 
events (daily events at or above 2 inches of rainfall). 





Figure 2. Percent area of the USA with a much above normal proportion 
of total annual precipitation from extreme precipitation events [daily 
events at or above 2 inches (50.8mm)]

    Combined land and ocean surface temperatures (figure 3) provide the 
basis for examining global trends in temperature, and are the basis for 
speculation on the importance of anthropogenic greenhouse gas increases 
as an explanation of the warming. These analyses indicate that global-
mean surface temperatures have increased by .4 to .60 deg.C during the 
20 Century.

[[Page 66]]



Figure 3.

    However, our observations of climate change from instrumented 
records are very short, and they rely on systems designed for weather 
prediction--not one designed for taking the temperature or pulse of the 
earth. We lack continuity of satellite observations, surface 
instruments are subject to change and the level of accuracy is based on 
weather safety and forecasting needs and not global temperature 
analysis. Geologic records from ice cores, tree rings, corals and other 
sources of data suggest that the Earth's climate is naturally highly 
variable. The record of snowfalls on Greenland (figure 4) illustrate 
this variation during the last 18,000 years. Changes in snow 
accumulation rate are often abrupt, suggesting remarkably large climate 
changes over periods of decades.

[[Page 67]]



    Figure 4. Greenland snow accumulation rates

    Tree ring data are equally intriguing. For example, Jacoby et al. 
(1996; Science) report on Mongolian tree rings which indicate much 
wider tree ring widths for the recent century--a phenomena associated 
with warmer annual temperatures. The 20th century warming appears to be 
unique over the last 450 years (Figure 5).




    Figure 5. Ring widths for the last 450 years from Mongolia 
illustrating a unique 20th century record indicative of warming.


[[Page 68]]


    The recent record appears to be unique, but the simple fact is that 
modern humans haven't experienced the range of variations which occur 
naturally, nor do we have a real sense of their character or spatial 
distribution. The record describes change, but without clear 
attribution as to the causes. Significant natural variability should be 
expected during the coming decades.
                     results from model predictions
    The results from model predictions also have limitations. In large 
measure, scientists agree when the topic is global and the predicted 
changes are given as a range (e.g., a doubling of CO2 will 
yield 1 to 4.5 deg.C globally averaged temperature warming), but we 
have greater and greater uncertainty when we look at specific regions, 
specific decades or specific phenomena, such as changes in hurricane 
intensity or numbers. Yet it is at these scales that human systems 
intersect and interact with climate.
    The reprint that follows is a summary of predictions from climate 
models with a ``ranking'' of the uncertainty associated with the 
predictions. The rankings are based not on some specific criteria, but 
rather the considered opinions of a large group of climate experts who 
have sought to place model predictions in an ordered context which 
would readily be understood by the educated United States citizen. 
Within the text are two figures which illustrate results from 
comprehensive climate models. Figure 1 in the reprint illustrates the 
range in predicted changes in global-mean surface temperature, in 
degrees Celsius, for the next 80 years based on results from seven 
different General Circulation Models (the most comprehensive climate 
models to date) with carbon dioxide increases included at the rate of 1 
percent per year (IPCC 1995 assessment). All seven models suggest an 
additional 1 degree global-mean increase in temperature by the year 
2050. Figure 2 in the attached reprint gives the predicted geographic 
distribution of an increase in mean-annual surface temperature that 
would result from a doubling of carbon dioxide based on the GCM 
simulation of Manabe and Stouffer (1994; Journal of Climate). Increases 
for the United States range from 3 to more than 5 deg.C. The predicted 
changes are substantial given that the 1988 heat wave and drought in 
the Ohio River Basin was on average less than 1 deg.C above normal.
    Climate model experiments designed to predict past climates, which 
are very different from today also yield valuable insights. During the 
last decade, hundreds of GCM simulations have been completed by a wide 
variety of models in an attempt to predict climates both substantially 
warmer and substantially cooler than at present. In no case did a GCM 
overpredict the warming or the cooling in the geologic record. This 
suggests that the GCMs may have a sensitivity to factors such as carbon 
dioxide which is less than that required to explain past climates. 
Other factors may also be important (e.g., identification of all the 
factors which may have influenced past climates and difficulty in 
extracting correct climate information from fossils), but the fact that 
the models always have underpredicted the changes in the past may be 
telling. It is also interesting to note that the major warm episodes 
during the past are also associated with geochemical evidence for 
higher atmospheric carbon dioxide levels.
    The reprint which follows details the strengths and weaknesses of 
current modeling programs nationally and internationally. It also notes 
that progress on both observational and modeling fronts over the last 
decade have been clear, but it is a mistake to promise quick answers. 
Solution of many of the remaining issues will undoubtably take decades. 
I suspect that for many years to come, newspapers will continue to 
explain topics like global warming by quoting scientists who are poles 
apart on specific points. Yet in the midst of the public confusion that 
this approach promotes, we can't ignore the fact that even within the 
range of climate model predictions, the consequences have significance 
for our economic vitality and national security.

[[Page 69]]





[[Page 70]]



[[Page 71]]



[[Page 72]]



[[Page 73]]



[[Page 74]]



[[Page 75]]



[[Page 76]]



[[Page 77]]



[[Page 78]]



[[Page 79]]



[[Page 80]]



[[Page 81]]

     evaluating policy decisions based on climate model predictions
    Policy decisions about climate change are particularly challenging 
given that (1) the results from comprehensive climate models suggest 
significant changes over the coming decades, but the uncertainties are 
also large--particularly when examining the aspects of climate model 
predictions which are most significant for human activities and (2) the 
increased surface temperatures and changes in precipitation patterns 
recorded from surface instruments may be a result of human-induced 
climate change, but may also be a product of natural climate 
variations. Two types of actions address this conundrum.
    (1) We must ensure that we have a healthy observing system and 
modeling effort in this nation. Obtaining useful climate records is a 
secondary priority of our current observing systems which has been 
designed for weather safety and prediction. Relatively modest increases 
in funding could address this issue. Programs designed to provide 
continuity of satellite observations (e.g., NASA Earth Observing 
System) are subject to annual review and budget reductions, increasing 
the risk that continuity of critical measurements will be lost. 
Interestingly, European countries and Japan are promoting strong space-
based observation programs as they recognize the value of these data 
sets for decision-making and scientific advancement.
    The U.S. climate modeling community has expressed strong concerns 
about the effectiveness of our efforts in climate modeling, with 
particular emphasis on the fact that IPCC assessments are increasingly 
being based on long-term simulations completed by other nations. 
Interestingly, countries like Japan, the United Kingdom and Germany are 
promoting strong observation and modeling programs with less robust 
economies than the U.S. The simple fact is that advanced knowledge has 
economic and societal value.
    There is also considerable prospect for advances in knowledge, and 
at scales which allow us to examine more closely the potential impact 
of climate change on societies. For example, recent techniques have 
been applied to produce high resolution climate simulations by 
embedding or nesting high resolution, limited area climate models 
within global models. Global models provide the coarse spatial 
resolution predictions of the large-scale atmospheric circulation, 
while the high resolution model allows the incorporation of more 
realistic elevations and model physics. Figure 3 in the reprint 
illustrates the improvement in the prediction of precipitation for the 
United States comparing (a) observations for spring 1980, (b) a GCM 
prediction for spring 1980 showing a relatively poor simulation of this 
important variable, and (c) the results for the same period from a high 
resolution model embedded within the same GCM shown in figure 3b. The 
improvement is dramatic, giving confidence that higher resolution 
models may provide more useful predictions. Figure 6 illustrates the 
results from this technique for a doubled concentration of carbon 
dioxide. The results suggest substantial differences in precipitation 
(figure 7). Winter precipitation is predicted to increase in the 
Northwest and Northeast with modest increases across the northern 
states. California and Arizona show significant decreases in winter 
precipitation. In summer, the model simulation suggests the largest 
increases in precipitation occur from Louisiana-Mississippi-Alabama 
across the across the central U.S. to South Dakota. Again, California 
has significant decreases. Such results must be viewed with caution--
they are a preliminary analysis using a new, and not thoroughly tested 
technique to achieve high resolution predictions for specific regions.

[[Page 82]]





[[Page 83]]



[[Page 84]]



[[Page 85]]

    (2) We need to develop and apply a litmus test to action 
which is practical and most likely to achieve positive results. 
Risk and vulnerability to natural variability and climate 
change must be a key aspect of this test. For example, if a 
region is already historically and economically vulnerable to 
droughts or floods, and predictions of fixture climate change 
also exhibit such tendencies, or even enhanced tendencies, then 
this should be a call to action. Water and water resources 
provide a key example of potential vulnerabilities. Two figures 
follow which describe vulnerability associated with water 
availability and water quality. Figure 8 illustrates regions 
with water demand problems in 1980. Each dot or shaded area 
indicates a problem where water demand approached or exceeded 
supply during the period of analysis. This suggests a 
vulnerability to natural variability and to climate change (see 
figure 1 and 7, for comparisons). Figure 9 illustrates water 
withdrawals by industry. Note that the industrial withdrawal of 
water is basically a percentage of the available resource (near 
25 percent). This suggests that water is a critical resource to 
industry and that industry is co-located with water, using far 
more in regions where water is abundant. Many regions are 
susceptible to water quality problems as a result of climate 
variability or change. Interestingly, decreased river flow, or 
increased extreme events with decreased median rainfall events, 
has the potential to dramatically change the dilution power of 
rivers for pollutants. Water quality may be an unheralded 
global change issue.
    Economic and societal risk should also be a key aspect of 
decision-making. For example, the emergence or re-emergence of 
infectious diseases, which are closely related to climate, have 
become an issue of growing concern in the health community. 
Human health issues have potential for tremendous costs 
associated with human life. Human health risks are governed by 
a large number of factors, ranging from socio-economic status, 
to the availability of clean water and nutrition, to the 
quality of the health care infrastructure--factors which 
generally serve to limit U.S. risks. However, over the last 
decade, climate and climate change have become recognized as 
one of the significant factors influencing health risk within 
the U.S. Climate change and variability can effect health 
directly, through extreme thermal events like heat waves and 
cold episodes, and through severe weather such as hurricanes 
and tornadoes. Climate change can also influence human health 
indirectly. The majority of the indirect influences involve (1) 
changes in the range and activity of vectors and infective 
agents, (2) changes in water and food-borne infective agents, 
and (3) altered food (especially crop) productivity. A number 
of examples of human health vulnerability in the United States 
serves to illustrate the nature of this problem.
    The increases in average temperatures associated with 
global warming or with extremes in natural climate variability 
will probably be accompanied by an increase in the number of 
heat waves. The deaths of 726 people in Chicago during the 
summer of 1995 heat wave is an example of the potential direct 
impact of thermal extremes. Mid-latitude cities, already 
characterized by large urban heat island effects, appear to be 
the most susceptible to heat waves. The heat-related mortality 
that has occurred in cities such as Chicago, St. Louis, 
Washington D.C., and New York City disproportionally affect the 
young, elderly, the economically disadvantaged, and the ill.
    Phenomena, such as El Nino, are associated with changes in 
rainfall, producing flooding and droughts in different regions. 
Based on climate model predictions, climatologists have 
speculated about whether anthropogenic warming will produce 
increased intensity or an increased number of severe hurricanes 
along the east coast of the U.S. Severe weather has well-known 
potential to increase the number of deaths and injuries.

[[Page 86]]





[[Page 87]]



[[Page 88]]

    Vector-borne diseases are a major cause of illness and 
death across the world. These disease vectors (e.g., mosquitoes 
and rodents) are strongly influenced by climate. For example, 
Dengue fever is transmitted by the bite of a mosquito (Aedes 
aegypti and Aedes albopictus). Both mosquitoes are currently 
present in Florida and Texas (an outbreak of Dengue occurred in 
south Texas in 1986) but U.S. cases are uncommon, most probably 
because of high standards of housing, adequate water, sewer and 
waste management systems. However, the mosquitoes that transmit 
Dengue are strongly controlled by winter temperatures. Warming, 
particularly in terms of minimum winter temperatures could 
substantially increase the range of this Dengue vector, 
including regions north of the mid-Atlantic states. Figures 10 
and 11 show regions of potential outbreak, and the association 
of the Dengue vector with warm winter temperatures. Malaria, 
caused by the protozoan parasites of the genus Plasmodium and 
transmitted by Anopheles mosquitoes, would also substantially 
extend its range and activity under conditions of global 
warming.
    Wet-Dry cycles also influence human health risks because of 
its influence on predator-prey relationships. Historically, 
moving into a wet period following a few years of severe 
drought, provides advantages to rodent populations which can 
reproduce faster that their predators (e.g., owls, etc). 
Population explosions of rodents eventually leads to invasions 
into human habitats and human food stocks, increasing the risk 
of disease. This is the primary explanation for the outbreak of 
the deadly Hanta virus in the Four-Corners region of the U.S. 
(figure 12).
    Lyme disease, which is caused by a bacterium, has a strong 
climatic association as well. Lyme disease is transmitted by 
the bite of a tick (Ixodes scapularis) which feeds on the 
white-footed mouse, the white-tailed deer and other mammals. 
The number of Lyme disease cases is strongly correlated with 
the size of the deer population, and in turn, the size of the 
deer population is correlated with the severity of winter 
conditions in the northeastern U.S. (figure 13).
    The U.S. is less susceptible to problems of malnutrition 
and crop productivity compared to much of the world because of 
the breadth of food production and our capability for 
technological adaptations. None-the-less, climate change and 
variability may result in the need to change crops and planting 
practices, and may also influence the activity or emergence of 
crop diseases.
    Health risks associated with climate change and variability 
have implications for policy. Such policy should involve (1) 
surveillance efforts, (2) increased research on changes in 
range and activity of vectors associated with climate change, 
(3) disease prevention programs, (4) education for medical and 
public health communities, and (5) public outreach.

[[Page 89]]





[[Page 90]]

                                summary
    Two examples are given where action makes sense because of the 
level of risk and the level of our vulnerability to natural variability 
as well as the potential for future climate change. In the face of 
uncertainties associated with the observed record and model 
predictions, we must adopt practical strategies for dealing with the 
potential impact of climate variability and change. These strategies 
should be based on two elements: (1) a strong observation and modeling 
research program within the U.S. designed to enhance economic vitality 
and national security, and (2) a litmus test for decision makers based 
on the level of risk and vulnerability to natural variability as well 
as future climate change. These two elements provide the most logical 
basis for policy decisions.
                                 ______
                                 
   Responses by Dr. Eric Barron to Additional Questions from Senator 
                                 Baucus
    Question 1. During the hearing, you stated that our strategies to 
address increasing concentrations of greenhouse gases should be 
adaptive in nature. In your opinion, what would be the most important 
adaptation strategies to pursue.
    Response. Decisions concerning adaptation strategies should be 
based on assessments of risk and vulnerability that involve natural 
variability in climate as well as the prospect of future climate 
change. If society already exhibits vulnerability to natural 
variability, and the prospect of climate change due to increases in 
greenhouse gases may exacerbate that vulnerability, then the argument 
for adaptive strategies becomes stronger. In my opinion, the strongest 
arguments to pursue adaptive strategies because of climate and climate 
change are for water resource availability and water quality, severe 
weather hazards, and human health. The types of strategies to pursue 
for these three areas are illustrated by examples. First, we already 
have considerable problems with water resource availability associated 
with climate variability. Water quality also frequently depends on the 
dilution power of rivers and streams, and thus is dependent on water 
availability. The adaptive strategies for this problem are varied and 
range from protection of groundwater resources (e.g., controls on 
growth and development in local recharge regions), assessment of water 
use and priorities under different climate and climate variability 
scenarios, planned changes in storage facilities where demand already 
frequently exceeds supply, and efforts to promote greater water use 
efficiencies. Second, increases in severe weather, as a product of 
natural variability or human induced changes, would have a major impact 
on property and human life, and has the potential to dramatically 
change the insurance and re-insurance industry with an impact on 
economic growth (based on the number of billion dollar natural 
disasters during the last decade). This implies that we limit 
rebuilding, for example in disaster-prone coastal regions, or 
individuals should assume the risk. Third, the emergence and re-
emergence of infectious diseases and the heat-elated mortality of the 
last decade are also suggestive of considerable vulnerability to 
climate and climate vulnerability. In this case, the adaptive 
strategies should involve such actions as disease surveillance, public 
education, and maintenance of health care and research facilities. Each 
of the above strategies has the potential to have positive impact on 
society regardless of whether human-induced global change becomes a 
major factor in the future.

    Question 2. Dr. Schneider stated in his testimony that it was 
difficult for plants and animals to adapt to a temperature increase of 
5 deg.C over the 10,000 year period following the last Ice Age and that 
many species would likely go extinct with a kind of rap id temperature 
increase projected for the next century. Assuming, for the purpose of 
this question, that the Earth experiences a temperature increase of 
greater that 1.5 deg.C over the coming 100 years, what is the 
likelihood that species will successfully adapt? If in your opinion, 
this represents a threat to preserving biological diversity, to your 
knowledge has there ever been a period in the paleoclimate record where 
climate change has resulted in significant loss of species?
    Response. Largely because of changes in the land surface due to 
human activities we have already experienced, and will continue to 
experience, major changes in biological diversity. I suspect that this 
factor will continue to play the largest role in modifying biological 
diversity, while a climate change of 1.5 deg.C would be a secondary 
factor. However, there are two issues to consider. First, a 1.5 deg.C 
temperature change is in the global average. Some areas, notably higher 
latitudes and the continental interior regions of the mid-latitude 
continents, are likely to experience substantially greater temperature 
and water balance changes. Therefore, the vulnerabilities of species 
may be very different from region to region. Second, human land use may 
present a major issue in the migration and adaptation of different 
species to climate

[[Page 91]]

change--in other words farms, cities and other human habitations may 
present considerable barriers to migration. Adaptation may then also 
depend on human actions and assistance. Given the importance of human 
land use in biological diversity, I suspect it would be very difficult 
to estimate how well species will adapt to climate change. There have 
been numerous abrupt changes in biological diversity during earth 
history, with multi-million year times for recovery of biological 
diversity and the development of numerous new species. The causes of 
such extinctions are a matter of considerable debate, but often climate 
change is included as one of theories offered to explain these events.

    Question 3. Dr. Lindzen referred in his testimony to a natural 
mechanism that would be employed by the Earth to counteract the 
predicted climatic changes due to the effect of increased water vapor 
in the atmosphere. Are you aware of any historic reference or specific 
research that would support a theory of the existence of such a 
mechanism?
    Response. Dr. Lindzen's argument has been seriously debated by the 
scientific community, with several research projects (particularly 
associated with research in the Pacific tropics) directed to test these 
ideas. To my knowledge, no conclusive proof that this mechanism exists 
has yet been offered and some evidence has been supplied which is 
negative. In my view, Dr. Lindzen's mechanism is far from acceptance, 
however, he has provided an important service in focusing attention on 
how poorly we currently measure water vapor in the upper troposphere 
and in the dry regions of our atmosphere. I believe that he is correct 
in recognizing that uncertainties in our observations in these regions 
produces uncertainties in climate model predictions.

    Question 4. Dr. Lindzen stated in his testimony that one specific 
feature that led to the IPCC conclusion of a discernible human 
influence on global climate, ``. . . disappears when additional data is 
considered.'' Are you aware of specific ``additional data'' that was 
not considered or erroneously applied that would cause the IPCC to 
reach a different conclusion? Are you aware of a specific research 
result or model that supports Dr. Lindzen's claim? If so, did you know 
whether the IPCC considered it? Are you aware of other factors that the 
IPCC relied upon to conclude that human activities were impacting 
global climate?
    Response. I am unaware of any specific ``additional data'' that was 
not considered or erroneously applied that would cause the IPCC to 
reach a different conclusion. On the contrary, I do believe that the 
evidence is growing stronger. In my opinion, the IPCC assessment 
process is well-reasoned and broadly reflective of the weight of 
scientific opinion and evidence.

    Question 5. Do you believe there is sufficient evidence of a 
problem with human-induced climate change for us to keep pursuing some 
kind of policy to limit CO2 emissions? If not, should we 
stop funding research that would tend to prove or disprove the theories 
that human activities are impacting global climate? If there is 
sufficient evidence, what more, if anything, should we be doing?
    Response. My answer to this question is based on several views. 
First, 1 think the best scientific evidence available supports the view 
that a 1.5 to 4 deg.C increase in globally averaged temperature will 
occur with a CO2 concentration doubling. In my view, a 
climate change of this magnitude will have severe consequences. Second, 
I believe that continued increase in atmospheric CO2 
concentrations are inevitable for many years to come because of the 
increase in world population, the abundance of fossil fuels like coal, 
and the push for higher standards of living in many developing 
countries. Regardless of U.S. actions, the global experiment in 
atmospheric chemistry will continue. Therefore, I personally believe 
that much of the climate change due to greater concentrations of 
greenhouse gases is inevitable unless the whole world takes action. 
Third, as the greatest per capita user of fossil fuels, I believe that 
concerted international efforts will not happen without the U.S. taking 
action first. The problem is that any action by the U.S. which might be 
publicly acceptable in our country is likely to be too small to impact 
climate change because of world fossil fuel use. The argument for 
emissions controls then becomes one of taking action for the purpose of 
promoting efficiency (a valuable effort in its own right) and providing 
the leadership necessary to begin a process of reduced global 
emissions. My feeling is that such steps have the potential to bring 
unexpected positive surprises, delays in the time of CO2 
doubling, and greater efficiencies with positive benefits, but that 
adaptive strategies are likely to be the major way we address 
greenhouse warming over the next 50 years.
    Research remains critical for several reasons. First, I believe 
that observations and predictions, as they improve, will become 
increasingly valuable. They may minimize risk and vulnerability and 
they are likely to have positive economic value

[[Page 92]]

given the importance of most ``advance knowledge'' in our society. 
Second, I believe that the ozone depletion problem and the greenhouse 
gas problem are just examples of what lies in store for the world 
population. Given the growth in population and the breakneck speed of 
technologic change, humans are ever more capable of impacting the 
nature of our environment. Greater knowledge of how the earth system 
works will become increasingly important for each generation, because 
our response time for providing solutions to problems may well get 
shorter as world population grows.

    Question 6. In your professional opinion, what is the probability 
that there will be a doubling of CO2 concentrations since 
pre-industrial times by the year 2100? A tripling? what are the impacts 
of a doubling? what are the impacts of a tripling?
    Response. In my opinion, the probability that there will be a 
doubling of CO2 concentrations by the year 2100 is very 
high, while the probability that there will be a tripling is much 
lower. The article submitted as part of my written testimony on the 
reliability of climate model predictions gives a precise account of my 
views of the most likely impact of a doubling of carbon dioxide. The 
impacts of a tripling of carbon dioxide are much less studied, but are 
likely to be similar to the impacts of a doubling, but of greater 
magnitude.
                                 ______
                                 
 Responses by Dr. Eric Barron to Additional Questions from Senator Reid
    Question 1. Much has been made of the newfound general consensus 
that there is a ``discernible human influence on global climate.'' What 
exactly does this mean?
    Response. Climate varies on many different time scales in response 
to many different factors (as a product of volcanic eruptions, or 
simply the way that the atmosphere and ocean interact). Changes in 
climate on the time scales of decades to centuries is therefore not at 
all unusual. At the same time we know that human activities, 
specifically the burning of fossil fuels, is increasing the level of 
greenhouse gases in our atmosphere and that this increase will cause a 
greater absorption of the energy being radiated to space from the 
earth's surface, thus promoting warming. Therefore, we have more than 
one factor operating which has the potential to influence our weather 
and climate--the so-called natural variability and the human-induced 
changes. We also know that the earth has experienced a global warming 
of .4 to .6 deg.C over the last century. The question is one of 
attribution, is this warming a product of human activity or of natural 
variability. The consensus cited in the question means that the way 
climate has changed over the last century is suggestive of a warming 
due at least in part to the increases in greenhouse gases. Such a 
conclusion depends on evidence that the nature of the change is unlike 
the natural variations recorded in the past and that the changes have a 
``fingerprint'' which matches the expected changes due to increased 
greenhouse gases.

    Question 2. During the 1980's, we heard a lot about global warming. 
Now we are hearing a lot about global climate change. Are they the same 
thing? How are they different?
    Response. The topic hasn't really changed, only the perspective. 
The nature of the climate changes associated with higher greenhouse gas 
concentrations involves much more than temperature changes (e.g., 
changes in precipitation, sea ice distribution, snow cover, etc.). 
Climate change incorporates a spectrum of factors that is greater than 
just temperature. Second, greenhouse gases are not the only human-
induced changes. We are also changing the land surface dramatically and 
the amount of aerosols (fine particles) in the atmosphere. Each of 
these factors can influence climate. The term climate change is more 
comprehensive than the term global warming.

    Question 3. Assuming for the moment that greenhouse gases are 
accumulating in the atmosphere, how long will it take to get them out? 
If we are not likely to face real problems for 20 to 40 years or more 
from now, is it really necessary to begin making reductions now? Would 
the Nation be better served by waiting for the technology and other 
efficiency improvements to develop further?
    Response. Numerous studies have recently been undertaken to 
determine how long the greenhouse gases that are accumulating in the 
atmosphere will remain. Basically, the mechanisms for removal include 
the productivity of plants, the uptake by the ocean, and the weathering 
of rocks and minerals. Major increases in plant productivity would 
remove carbon dioxide, but such changes are not rapid. Uptake by the 
ocean, largely dependent on the sinking of water masses to depth is 
very slow--centuries to thousands of years, and rock weathering 
processes are even slower. Most studies suggest that if emissions were 
to stop today, many centuries would be required for the atmosphere to 
return to pre-industrial levels.

[[Page 93]]

    Scientific certainty over having some level of impact grows after 
the concentrations of CO2 in the atmosphere approaches 
levels of a doubling, but this does not mean that we are necessarily 
unlikely to face real problems for 20 to 40 years. In terms of human 
health issues, water resource availability, water quality and weather-
related natural hazards, we are already experiencing problems due to 
some combination of natural variability and human-induced climate 
change. However, as stated in my testimony, I believe that some climate 
change is inevitable even with reasonable plans for emission reductions 
because of the growth of world population and because the desire by 
many nations to increase their standard of living will cause 
CO2 concentrations in the atmosphere to continue to rise. In 
my view, the efforts to control emissions are unlikely to make a marked 
impact of the climate of the next 50 years because, in themselves, they 
won't dent the level of global emissions. Rather, such emissions 
controls would serve to promote the technology and efficiency 
improvements that may lead to unexpected positive surprises, as well as 
provide needed U.S. leadership in the world.

    Question 4. Germany and the United Kingdom seem to be the only 
nations that have made real progress toward achieving their voluntary 
emissions reductions goals. How did they do it and are there lessons in 
this for the United States?
    Response. Although I am not a social scientist and have not studied 
the spectrum of factors in other countries which promote emission 
reductions, personal experience suggests that the higher prices for 
fuels in the U.K. and Germany, combined with their records of economic 
growth, are likely to be a reasonable explanation. Higher fuel prices 
certainly promote greater efficiency or conservation.
                                 ______
                                 
Responses by Dr. Eric Barron to Additional Questions from Senator Boxer
    Question 1. Are the effects of increased greenhouse gases 
reversible?
    Response. The earth system has many different feedbacks, and if 
greenhouse gas emissions by humans were to be reduced substantially and 
concentrations in the atmosphere were to return to pre-industrial 
levels, the climate system would likely return to a state more similar 
to the pre-industrial level after many centuries. However, climate 
change is caused by many factors, including human-activities, and 
therefore it is unlikely that any future climate will be identical to 
the pre-industrial era.

    Question 2. If we halt the increase in production of greenhouse 
gases, would temperatures continue to rise or would they remain steady?
    Response. If the increase in greenhouse gas emissions were halted, 
then the concentration of greenhouse gases produced by humans would 
tend to stabilize, and then the climate ``forcing'' of these gases 
would tend to stabilize. Therefore the added tendency to promote 
warming would be removed. However, the response time of the atmosphere 
and ocean is not immediate, and the modem climate is unlikely to be in 
balance with the current level of carbon dioxide in the atmosphere. For 
this reason, I believe that it would still be a matter of decades 
before the majority of the climate change due to current CO2 
levels would be realized.

    Question 3. In your opinion, should the lack of complete certainty 
regarding the science of climate change result in a wait-and-see 
approach?
    Response. For many decades to come, there will remain substantial 
uncertainty about global change. The question facing society is a tough 
one. Climate models provide the best currently available assessment of 
future climate change, and these models suggest substantial change due 
to human greenhouse gas emissions, yet the models are associated with 
substantial uncertainty. In my view the solution to this conundrum must 
be to assess how vulnerable we are to climate change. Further, I 
believe that we are already vulnerable to natural climate variability, 
and climate change may exacerbate this vulnerability, and this is 
sufficient reason to take action. In many cases this action should 
involve adaptive strategies.

    Question 4. We hear about natural climatic cycles. For example, we 
know from geologic evidence that the earth has naturally gone through 
cooling and warming cycles, usually on a scale of 10's of thousands of 
years. Is it possible to identify cycles of a shorter scale?
    Response. Geologic evidence suggests that the earth experiences 
climate change on many different time scales from decades to millions 
of years.

    Question 5. Would we be able to detect variations attributable to 
human activities in this natural cycle?
    Response. It is not a simple task to attribute any climate change 
to human activities precisely because of the natural variations that 
occur. The key is to detect

[[Page 94]]

changes which are unlike the spectrum of natural variations over the 
last several thousand years and to detect changes that ``fingerprint'' 
changes caused by a particular human-induced forcing factor, like 
increased concentrations of carbon dioxide in the atmosphere. Through 
model and laboratory studies we expect specific types of changes (e.g., 
cooling of the stratosphere at the same time the lower atmosphere 
warms). These lines of evidence are the reason why the IPCC report now 
states that some level of human-induced change is now detectable.

    Question 6. We know that CO2 has the potential for 
affecting the climatic balance of our atmosphere. Would it not make 
sense to limit the amount of CO2 we put into the atmosphere 
until we more fully understand the effects CO2 has on our 
atmosphere?
    Response. Ideally, it makes perfect sense to limit the amount of 
CO2 we put into the atmosphere until we have more knowledge. 
Unfortunately, carbon-based fuels are a critical underpinning of the 
world economy. To control emissions to the point of having a real 
impact on future climate change is likely to have major economic 
impact. However, actions that begin control emissions may well produce 
unexpected positive impacts on technology and efficiency that may help 
limit the long-term potential for large climate changes. In my opinion, 
over the next half century higher greenhouse concentrations are 
probably inevitable and some level of climate change is likely to occur 
despite efforts to control emissions.
                                 ______
                                 
   Prepared Statement of John R. Christy, Department of Atmospheric 
 Science and Earth System Science Laboratory, University of Alabama in 
                               Huntsville
                     1. concern for climate change
    In the 1980's, Global Warming due to the enhanced greenhouse effect 
came to be perceived as a serious threat to the planet's ecological and 
societal sustainability. This concern was based primarily on estimates 
of global warming and other climate changes from numerical models of 
the Earth's climate system. (This perception was reinforced by a few 
hot, dry summers in the eastern U.S. which constituted for some people 
the ``smoking gun'' of climate change.) While the development of models 
is critical to our future ability to examine what we may be doing to 
alter the climate of the Earth, many scientists acknowledge that models 
are still rather simple representations of the complex processes that 
control the Earth's climate.
    The observational evidence for enhanced greenhouse global warming 
is also less than clearly defined. While all surface-based global 
temperature data sets indicated warming of 0.3 to 0.6 deg.C since the 
last century, the complete source of this warming is still unknown. 
First, the Earth was evidently coming out of a relatively cold period 
in the 1800's so that warming in the past century may be part of this 
natural recovery. Data sparseness and reliability are somewhat suspect 
in the early years of the thermometer climate record and remain a 
concern even today when the shrinking network of stations is attempting 
to capture relatively small variations. Local land use changes may also 
have added additional warming not connected with greenhouse gases.
    With this background, scientists recognized that we did not have an 
observing system in place with adequate means to truly monitor the 
health of the planet or to provide the data needed to validate and 
improve the models of the Earth System. One obvious limitation of 
information about the atmosphere was the lack of true global coverage.
                2. the microwave sounding unit data set
    I am here to report a success story--a story that involves U.S. 
Government scientists and managers who collaborated closely and 
productively with university scientists. In 1989, to test the ability 
of satellites to monitor the Earth, Dr. Roy Spencer, a NASA scientist, 
and I began investigating temperatures measured by the existing TIROS-N 
family of weather satellites (average life span was only 4 years each). 
These satellites were designed to provide information for daily weather 
forecasts, not for answering questions about global climate change.
    The instrument of interest to us was the Microwave Sounding Unit 
(MSU), identical copies of which were flown on all of NOAA's 
operational polar orbiters since 1979. The MSU measures the intensity 
of weak microwave radiation emitted to space by oxygen in the air. The 
magnitude of this intensity is proportional to air temperature, so with 
global coverage by the satellites we could compute the true globally 
averaged air temperature. Two specific layers have lent themselves to 
accurate measurements: (1) the lower troposphere, or the lowest 7 km of 
air next to the surface, and (2) the layer at 17-21 km, or lower 
stratosphere.

[[Page 95]]

    Putting together a climate record from multiple satellites involved 
collecting a huge volume of data and was a remarkable achievement in 
and of itself. It is a tribute to the current government system and the 
vision of scientists at the National Center for Atmospheric Research 
(NCAR) that those data (with little perceived market value at the time) 
were saved and archived. The MSU data products are now almost priceless 
in the global warming debate in having established a precise historical 
record of the Earth's temperature over the last 18+ years.
    It was our good fortune that my call to NCAR asking about the 
possibility of obtaining the MSU data came 1 week before a previously 
scheduled, major NCAR project was to begin to copy all satellite data 
from an old, outdated storage system to a newer one. Thus, forewarned 
that Spencer and I believed the MSU data were of some unique value, 
NCAR kindly extracted the necessary data (only 2 percent of the total) 
for us at only the marginal cost of the extraction process. This 
relatively ``free and open'' attitude concerning data availability was 
the key to our success in creating the MSU data set, since obtaining 
the data from a cost-recovering data center would have been prohibitive 
(the quote was over $1 million) for the speculative value of the MSU 
data for climate monitoring.
    The computing facilities for our own massive processing task were 
provided by NASA's Marshall Space Flight Center, and we had the 
enthusiastic support of the Earth Science and Applications Division. 
After several months of tedious data analysis, we were able to 
construct various data sets with exceptional precision and continuity. 
The particular technique we eventually developed allowed the MSU data 
to be independently validated. In Fig. 1, I show the comparison between 
MSU temperatures and those measured by radiosondes (balloons) in which 
a weather instrument package is carried aloft. These two systems 
(satellite and radiosonde) are completely independent in every way. In 
Fig. 1 it is clear that both systems are measuring the same variations 
in temperature to high precision.
    For long term variations, I include in the table below comparisons 
between large numbers of radiosondes and MSU measurements. It is again 
clear that both systems are telling us the same story on temperature 
variations since 1979. Note that none of the long-term trends differ by 
more than 0.03 deg.C/decade.

  Comparisons of trends since 1979 for MSU lower troposphere vs. various radiosonde-based tropospheric datasets which, except for the 850-300 hPa layer 
                                             temperature, are weighted to match the MSU weighting function.                                             
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Difference                    
                                                                      No. stations    Balloon Tr end   MSU Trend for    (Balloon minus        Years     
                                                                          used            C/dec.        same region          MSU)                       
--------------------------------------------------------------------------------------------------------------------------------------------------------
Global (850-300 hPa)1.............................................         63               -0.06            -0.04            -0.02               79-96 
No. Hemisphere2...................................................       250+               +0.01            +0.02            -0.01               79-96 
So. Hemisphere2...................................................        50+               -0.11            -0.08            -0.03               79-96 
Global2...........................................................       300+               -0.04            -0.04             0.00               79-96 
W. No. Hemisphere3................................................         97               +0.16            +0.14            +0.02               79-94 
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 Angell 1988 and updates.                                                                                                                              
2 Parker et al. 1997.                                                                                                                                   
3 Stations in an area roughly bounded by Truk, South Pacific to Pt. Barrow, AK to Keflavik, Iceland to Trinidad. This is a comparison of sondes with    
  colocated MSU.                                                                                                                                        


    Our datasets begin with January 1979 and continue to this day. We 
have been fortunate that two of the four MSU channels have performed 
exceptionally well on each of the nine satellites that were launched at 
intervals of about 2 years. It was critical that at least one satellite 
in functioning condition was orbiting when a new satellite was 
launched, because we required a period of overlap for precise 
intercalibration. (Only two satellites are operational at a given 
time).
               3. the temperature of the lower atmosphere
    The temperature of the global atmosphere is shown for the lower 
troposphere and lower stratosphere in Figure 2 (courtesy R. Spencer). 
Since we live in the lower troposphere, that time series has received 
the most attention. You will notice that there are large variations, 
both month-to-month and year-to-year. Because these variations are 
independently observed by two satellites, we know they are real. The 
trend in the time series is slightly downward (-0.05 deg.C/decade or 
-0.09 deg.F/decade). It is this relatively flat trend when compared to 
surface data (which show warming trends since 1979 of +0.09 deg.C to 
+0.14 deg.C/decade, depending on which dataset is cited) that has 
attracted attention to the Spencer/Christy MSU dataset.

[[Page 96]]

    Though the MSU temperature record has demonstrated high precision, 
there is also an element of ambiguity in the measurement. The layers 
measured by the MSU are several kilometers deep. Any intra-layer 
variability, therefore, would be masked by the vertical average. For 
example, a warming trend at upper levels and a cooling trend at low 
levels of one layer would be seen as no trend in the MSU vertical 
average.
    One of the reasons the surface thermometer data have shown greater 
warming in the past 18 years is due to the fact that in continental 
regions the surface temperature responds with greater variation than 
the deep layer of air above. Over oceans (and in the global average), 
the opposite occurs. In the past 18 years there has been a tendency for 
the atmosphere over land areas to show warming (which is greater in the 
surface air response) while the atmosphere over oceans has exhibited 
cooling (greater effect in the MSU record). This pattern is thought to 
be due to natural variations. The net effect in the global average is a 
relative difference in the trends between surface air and the deep 
atmosphere. Thus, the uneven warming/cooling distribution of the past 
18 years accounts for part of the difference.
    Other differences are due to areas poorly sampled or not sampled at 
all by the surface network, as well as to some urban warming or land-
use changes around many of the thermometers. It is a monumental 
achievement to construct a record of surface air temperatures, and most 
of these data sets have been subjected to many careful corrections to 
account for these non-natural temperature impacts.
    Because of its precision and true global coverage, we believe that 
the MSU dataset is the most robust measurement we have of the Earth's 
bulk atmospheric temperature. At the same time, it is still a 
relatively short data set for climate studies. As indicated in Figure 
2, the data contain both long and short period fluctuations. To be 
useful in the global warming debate one must understand and carefully 
account for fluctuations in the data that may be masking or dominating 
the anticipated enhanced greenhouse signal.
    Recently, two colleagues have questioned the precision of the MSU 
data. They believe the data have spurious jumps in 1981 and 1991 which 
caused the overall trend to be downward rather than upward as they 
believe it should be. Their basis for this allegation utilized no 
observed data from the atmosphere. Since the time their allegations 
were made public I have shown that the MSU data are indeed precise with 
independent and direct observations of the troposphere (i.e. I used 
real data). For example, in the most serious allegation, my two 
colleagues speculated that the merging of one satellite, NOAA-7, into 
the time series caused a spurious 0.25 deg.C jump in late 1981 in the 
tropical time series. I show in Fig. 3 the temperature anomalies of two 
satellites NOAA-6 and--7 for the tropics during that time. It is 
important to note that these are completely independently calculated. 
One can readily see that whether NOAA-7 was included or not, the time 
series is still the same. Therefore, the addition of NOAA-7 into the 
dataset did not cause a problem and the claim of my colleagues is 
clearly in error.
              4. the causes of the temperature variations
    In a recent study, Dr. Richard McNider, also of the University of 
Alabama in Huntsville, and I looked for the causes of the natural 
fluctuations. We found that by accounting for the influence of tropical 
ocean temperatures (El Nino) and the cooling effect of volcanoes, we 
could explain over 60 percent of the monthly variations (Fig. 4). These 
natural, shorter-term fluctuations indicate to us how much the global 
temperature responds to specific causes. Once calculated and removed, 
we see that without El Ninos and volcanoes, the temperature trend of 
the past 18+ years is upward (+0.06 deg.C/decade or +0.11 deg.F/decade, 
Fig. 4, bottom. The value varies from +0.05 to +0.10 deg.C/decade 
depending on certain parameters specified.). What is causing this 
upward trend? We do not know for sure. It may be the enhanced 
greenhouse effect. At the same time there could still be a longer term 
trend in the data due to variations in aerosols, water vapor, or other 
unknown factors that are masking the true magnitude of the greenhouse 
effect.
    The latest results from global climate models, which include 
improvements and the cooling effects of air pollution, indicate warming 
rates for the Earth of +0.08 deg.C to +0.30 deg.C/decade for the latter 
part of the 20th century. These are about half of the warming rates 
predicted a few years ago, when only increases in greenhouse gases were 
modeled. Note too, that according to the latest models there should be 
more warming in the troposphere than at the surface. Therefore, the MSU 
is ideally suited to provide information on the layers that should show 
the greatest change. The present warming rate of +0.06 deg.C/decade 
observed in the ``adjusted'' MSU data is just outside this model range, 
and is not inconsistent with fully natural variations

[[Page 97]]

on decadal time scales. Therefore, uncertainty remains as to the 
cause(s) of the trend the MSU has measured.
    Why is there a discrepancy between the models' estimate of global 
warming and what the MSU data have shown? One must remember that 
temperature is essentially a response parameter. The MSU data in Figure 
2 show us what has been happening to the climate but not why. A key 
goal of efforts to study the planet from space is to provide heretofore 
unmeasured data that can provide an understanding of why the Earth 
system behaves as it does. I believe that new observables such as 
aerosols, rain structures, water vapor distributions and surface 
characteristics, when used in conjunction with the MSU data set will 
provide answers to these questions. Our work demonstrates that 
satellites can be used to monitor the Earth on decadal time scales and 
that the vantage point of space offers the only truly global view of 
the Earth system that can give robust measures of key variables.
    The Spencer-Christy MSU data set has been used by some as evidence 
that global warming is not important, which then undercuts the need and 
urgency of programs to continue to study the Earth System. I strongly 
disagree with this interpretation. By showing that the Earth's rate of 
warming is slower than predicted by earlier models or surface data sets 
(Fig. 5), it does, perhaps, remove the sense of urgency for those who 
wish to enact greenhouse gas controls or to shut off scientific debate. 
But most importantly, the slower warming rate in the last two decades 
in effect gives us the security of time so that data from future 
observations and research may be used within the debate.
    I believe that honest and open scientific debate with precise data 
is the key to making sound societal decisions. The cultivation of 
diversity of scientific thought is critical to vigorous debate. The MSU 
data set would not have been developed without the competitiveness and 
entrepreneurial spirit fostered by having separate NASA science centers 
and a broad university research program. Industry should recognize that 
good science and good data are their allies, whether in debates on acid 
rain or global warming. It is now more critical than ever that we study 
the planet's health with new diagnostic devices. Any delays in doing so 
may mean that the length of data records available to scientists will 
be reduced and cannot be used in the societal debates.
    The disagreement between models and the MSU simply illustrates how 
little we understand about the complexities and factors that control 
the Earth's climate. Every month Roy Spencer and I process the newly 
arrived data and eagerly look at the month's temperature to see what is 
happening to the Earth. If we knew everything we needed to know about 
the Earth's system, we would not be as anxious about the results. I 
look forward to the time when new data from planned satellite sensors, 
coupled with an understanding of the Earth's climate system developed 
under research programs emphasizing global change, make surprises in 
the MSU global temperature as rare as being surprised by land-falling 
hurricanes in this era of weather satellites.
              5. the temperature of the lower stratosphere
    The record of the lower stratosphere is fascinating in its own 
right. Clearly, here is an example of global change on the scale of 
years to decades (Figure 2). The two conspicuous warming events were 
due to explosive volcanic eruptions--El Chichon (1982) and Mt. Pinatubo 
(1991). The aerosols injected by these explosions high into the 
stratosphere caused the warming through radiative interactions. Notice, 
however, that once the aerosols settled out, the global stratospheric 
temperature fell to levels below those observed at pre-eruption. It is 
widely thought that the loss of stratospheric ozone, both naturally 
from volcanic events and from human-generated chemicals, has caused 
this overall cooling. The increase in greenhouse gases, which will 
cause stratospheric cooling, is probably a factor as well, though 
smaller.
    The 1996 annual stratospheric temperature was the lowest annual 
value ever measured by satellite, and March 1997, was the coldest 
single month on record for the North Polar region. (Globally, the 
temperatures have rebounded a bit for the first half of 1997.) 
Something is changing in the lower stratosphere--the temperature tells 
us that much, but cannot specifically indicate the cause. (Others have 
much more experience here.) The extent of the stratospheric cooling 
trend points to the need to fully understand its cause.
                         6. concluding remarks
    Continued monitoring of global temperature through the Spencer-
Christy method is expected as long as our good fortune holds and the 
two orbiting instruments do not fail (which almost happened recently). 
Thus, we should continue to provide the scientific community with 
precise temperatures for deep atmospheric layers.

[[Page 98]]

    In any weather variable, e.g., temperature, rainfall, etc., it is 
the shorter-term fluctuations (week-to-week) that cause the greatest 
impact on human productivity. One valuable benefit of a program of 
escalating Earth observations is the resulting improvement in weather 
forecasts--particularly out to 2 to 3 weeks and even to seasonal 
averages. The potential economic impact of improved long-range 
forecasts would be enormous. Virtually every sector of our economy is 
sensitive to weather, especially those related to energy production and 
consumption, agriculture, transportation, insurance and recreation. 
Improved knowledge of coming weather situations would be used to add 
value to the products and services generated by these industries.
    A strong and continuing program in atmospheric observation and 
research has this more subtle benefit as well. There will be extreme 
climate events in the near future because that is the nature of weather 
and climate. Without a continuing program of research that places 
climate variations in proper perspective and reports with improving 
confidence on their causes, we will be vulnerable to calls for knee-
jerk remedies to combat ``climate change,'' which likely will be 
unproductive and economically damaging. We can protect ourselves from 
such pitfalls by improving our ability to measure what the climate is 
doing and determine the causes for its variations.
    In simple terms, the ``Global Climate'' is our patient. We have 
taken its temperature in a few places and have seen just enough change 
to cause concern. Before prescribing any powerful medicine though, the 
patient should be given a complete physical as soon as possible, so we 
may then make the proper diagnosis and chart a correct course of action 
for the benefit of all.
                               references
Angell, J.K., 1988: Variations and trends in tropospheric and 
    stratospheric global temperatures 1958-87. J. Climate, 1, 1296-
    1313.
Christy, J.R., 1995: Temperature above the surface layer. Climatic 
    Change, 31, 455-474.
Christy, J.R. and J.D. Goodridge, 1995: Precision global temperatures 
    from satellites and urban warming effects of non-satellite data. 
    Atmospheric Environment, 29, 1957-1995.
Christy, J.R. and R.T. McNider, 1994: Satellite greenhouse signal, 
    Nature, 367, 325 (27 January 1994). (Fig. 4 of testimony, updated, 
    taken from this article.)
Parker, D.E., M. Gordon, D.P.N. Cullum, D.M.H. Sexton, C.K. Folland and 
    N. Rayner, 1997. A new global gridded radiosonde temperature data 
    base and recent temperature trends. Geophys. Res. Lett., in press.
Spencer, R.W. and J.R. Christy, 1990: Precise monitoring of global 
    temperature trends from satellites. Science, 247, 1558-1562 (30 
    March 1990).
Spencer, R.W. and J.R. Christy, 1992: Precision and radiosonde 
    validation of satellite gridpoint temperature anomalies. Part I: 
    MSU channel 2. Journal of Climate, 5, 847-857.

[[Page 99]]

    
    


[[Page 100]]



[[Page 101]]



[[Page 102]]



[[Page 103]]



[[Page 104]]

   Responses by John R. Christy to Additional Questions from Senator 
                                 Baucus
    Question 1. During the hearing, Dr. Barron stated that our 
strategies to address increasing concentrations of greenhouse gasses 
should be adaptive in nature. In your opinion, what would be the most 
important adaptation strategies to pursue?
    Response. In my opinion, preparing an economy to cope with the full 
range of natural weather variations (that will always occur) would 
position society to accommodate any future climate change better than 
simply adapting to a change after it occurs. For example, building a 
typical structure on beach front property along the Gulf and Atlantic 
coasts is not preparing for the full range of natural weather extremes 
because eventually a powerful hurricane will come along and devastate 
the region. However, development of cereal crops that can withstand 
greater extremes while enjoying higher CO2 concentrations is 
an obvious avenue to pursue. (I use the term extremes not to imply that 
the future climate will have greater extremes, but that the crop could 
withstand whatever might come along.) We are a most adaptive and clever 
species, for example, being able to grow a single food (corn) in 
climates ranging from North Dakota to Alabama.
    In an odd sort of way, conservation of carbon is actually one 
adaptive strategy because it is possible that the climate may cool in 
the next century or so. A colder climate is probably far more 
devastating than a warmer climate. Thus having carbon available for 
energy production in such a climate would be wise. An adaptive strategy 
is one that decreases our vulnerability to extreme events of all types.
    As the IPCC has shown we still cannot identify regional weather 
changes due to CO2 increases after over 100 years. And, in 
my view, it will be many more decades before the regional signal may 
(if ever) be extracted from the noise of natural variability. If 
present infrastructures could be designed to cope with 99.9 percent of 
the extremes on both sides (hottest, coldest, wettest, driest, etc.) 
rather than the 90-95 percent as is done now, we will be in much better 
position to handle what may happen in terms of climate change.

    Question 2. Dr. Schneider stated in his testimony that it was 
difficult for plants and animals to adapt to a temperature increase of 
50 deg.C over the 10,000 year period following the last Ice Age and 
that many species would likely go extinct with a kind of rapid 
temperature increase projected for the next century. Assuming, for this 
question, that the Earth experiences a temperature increase of greater 
than 1.50 deg.C over the coming 100 years, what is the likelihood that 
species will successfully adapt? If, in your opinion, this represents a 
threat to preserving biological diversity, to your knowledge has there 
every been a period in the paleoclimate record where climate change has 
resulted in significant loss of species.
    Response. The significant loss of species has always been a feature 
of the history of the planet. I understand that approximately 99 
percent of all species which have inhabited the Earth are extinct. 
Nature has been unmercifully severe for the vast majority of life 
forms. It is difficult to separate out the role of climate as a cause 
for extinction in comparison with other factors such as the evolution 
of competing and opportunistic species or something as exotic but as 
realistic as an asteroid collision.
    Changes in global average temperature do not cause the loss of 
species, rather it is the local change of climate. The greatest rise in 
temperature due to the enhanced greenhouse effect (whatever its 
magnitude) is predicted to occur for those regions which already 
experience significant year to year and decade to decade variations 
(midlatitude and polar regions). I think we shall find that nature is 
rather resilient, though no one would expect the exact geographic 
distribution of populations of various species to remain identical to 
the present day. Perfect stability has never happened before. For 
example, the Southeastern quad rant of the U.S. has experienced cooling 
temperatures over the past 100 years with an associated southward 
displacement of plant species. am told that citrus crops were harvested 
as far north as southern Georgia around the turn of the century, yet 
today they are found commercially only from central Florida southward. 
This is due to the significant cold weather that the region has 
experienced in the last few decades.
    Rapid, natural changes have occurred in the past. Let me quote from 
an issue of PAGES (Past Global Changes Programme, IGBP, 4, #3 Nov. 
1996).

          Climate variability at both a regional and a global scale 
        has, even within the boundary conditions prevailing during the 
        Late-Holocene [last 5,000 years], been significantly greater 
        than has been recorded during the short, recent period for 
        which instrumental records of climate variation exist. This is 
        conclusively demonstrated by recent research, is of crucial 
        significance for predicting future climate change and is not 
        recognized in the recent IPCC Report.


[[Page 105]]


    Since rapid changes have occurred in the past, we may assume that 
not every species survived the change. However, the species we see 
today must have survived some combination of past rapid changes. One 
wonders how many of today's species are actually here because a 
particular rapid change altered the balance between competing species 
in the favor of the present-day survivor. The system of life is 
exceedingly complex, and attributing climate changes to particular 
species survival is beyond my expertise.
    I believe Dr. Schneider would agree that the number of species 
which might experience extinction due to possible global warming is 
much smaller than those we are losing today due to land-use changes, 
poaching, human encroachment, etc. Just as the evolution and 
redistribution of opportunistic species forced vulnerable species into 
extinction in the past, we are seeing human-induced extinction 
happening quite apart from climate change. We as a species are now one 
of those very opportunistic species that is dangerous to many others. 
If extinction is a concern, (and I believe it is) one should assess the 
major causes and then address those with action that has the best 
chance for producing results. However, I understand, having lived in a 
Third World country, that it is a difficult problem to advise other 
countries on this topic because (1) our own past haunts us and (2) the 
idea of loss of sovereignty is keenly felt in any nation.
    I lived in Kenya, East Africa for 2 years and lived among people 
who were making decisions to destroy forests so they could raise food 
to feed their families. I could understand their motivation for 
survival as I witnessed people dying simply because they had no food. 
The population growth in that region, believe, is the cause of 
tremendous suffering and is the primary issue that must be dealt with 
ahead of the issue of climate change (if there is a choice on where to 
concentrate efforts). Of course, controlling population will probably 
have an eventual benefit of lower fossil fuel consumption.
    I suspect I agree with Dr. Schneider in this limited sense: a 
significant fraction of the biosystem, relying only on evolution and 
redistribution, would find it difficult to adapt to a changing 
environment if the change occurred over time scales of centuries when 
research indicates biosystem changes normally take millennia to adapt.

    Question 3. Dr. Lindzen referred in his testimony to a natural 
mechanism that would be employed by the Earth to counteract the 
predicted climatic changes due to the effect of increased water vapor 
in the atmosphere. Are you aware of any historic reference or specific 
research that would support a theory of the existence of such a 
mechanism?
    Response. Global climate models produce most of their warming 
because they cause the troposphere (surface to 10 km altitude) to 
become more moist than is presently observed. In other words, global 
warming in the models is due more to additional water vapor than 
additional CO2 in the atmosphere. This additional water 
vapor enhances the natural greenhouse gas, trapping more radiant energy 
in the lower atmosphere thus causing the surface temperature to rise 
even further. Models are quite primitive in the ``rules'' or equations 
they require the atmosphere to obey. In the case of greenhouse warming, 
the models require that as soon as the temperature rises a little due 
to CO2 radiative forcing, more water vapor is forced into 
the troposphere, thus causing a ``positive feedback'' process: higher 
temperatures lead to more evaporation which leads to more water vapor 
in the atmosphere which leads to higher temperatures which leads to 
more evaporation, etc.
    The real atmosphere does not appear to be so inflexible. Current 
research carried out by my colleague Dr. Roy Spencer of NASA/Marshall 
Space Flight Center (Huntsville, AL), points to the possibility that as 
the tropical system warms, the amount of vapor might actually decrease 
(or at least not increase much) in the troposphere. There are certainly 
periods (months or so, see Sun and Held, J. Climate 1996, pp. 665-675) 
in which warming is not accompanied by the presence of more water vapor 
as inflexible models require. The current warm El Nino event in the 
Pacific will be an excellent test case to check whether the tropical 
troposphere actually moistens or dries as the temperature rises. 
Currently, models give one result: the atmosphere always moistens when 
it is warmed.
    The key mechanism to understand on this issue is that the heat that 
is naturally lost to space is highly proportional to the amount of 
vapor in the troposphere. Thus, the amount of water vapor in the 
troposphere regulates the amount of heat that escapes and which 
therefore would be unavailable to warm the surface. In fact, the vapor 
in the troposphere is more important for this energy balance than the 
vapor at the surface. A slight reduction of the vapor in the 
troposphere (i.e. a drying) leads to a significant increase in the 
outgoing energy. So, if there is a slight drying of the troposphere as 
the world warms a little, the drier troposphere would act as an open 
window to let more energy escape, thus reducing any feedback-warming of 
the sur- 

[[Page 106]]

face. Only slight changes in the tropical tropospheric humidity are 
necessary to reduce the warming due to the enhanced greenhouse effect. 
(The drying results from the fact warmer rain-clouds tend to lose more 
moisture to rainfall than cooler cloud systems, thus expelling less 
vapor to the troposphere.)
    Considerable work is ahead of us on this area of research as theory 
is only now being given observations that may help solve this issue of 
tropospheric water vapor feedback. What we lack at this point is high 
vertical resolution observations of temperature, winds, precipitation 
and humidity of the extensive tropical atmosphere where so many 
questions remain.

    Question 4. Dr. Lindzen stated in his testimony that the one 
specific feature that led to the IPCC conclusion of a discernible human 
influence on global climate, ``. . . disappears when additional data is 
considered.'' Are you aware of specific ``additional data'' that was 
not considered or erroneously applied that would cause the IPCC to read 
a different conclusion? Are you aware of a specific research result or 
model that supports Dr. Lindzen's claim? If so, did you know whether 
the IPCC considered it? Are you aware of other factors that the IPCC 
relied upon to conclude that human activities were impacting global 
climate?
    Response. A paper had been submitted just before the final IPCC 
science authors' meeting in Asheville, NC (Aug. 1995) which compared 
upper air balloon data for 1964 to 1987 and climate model results for 
the same period. The point of the paper was to show that the warming in 
the observations of the troposphere was matched by model results, thus 
the model was in some sense verified. I read the pre-publication paper 
at this meeting.
    I discussed a bit of this paper with one of the authors at the 
meeting, pointing out that the early years were relatively cool in this 
24-year period and the hottest year observed happened to be the last 
year, 1987. Thus, the period selected for the model comparison did not 
represent the actual climate variations for the longer period using 
pre-1964 and post-1987 data, and for which the model results had less 
agreement. The post-1987 data, showing cooling, were available to some 
researchers as I had submitted a paper 2 years before (1993) using data 
from this dataset which at that time were available through 1989. 
However, it could be the case that these post-1987 data may not have 
been in a form usable to the authors.
    In Asheville, the author told me that he did not have available to 
him the post-1987 data and that a follow-up study would be completed in 
which such data would be utilized. I did not feel the author had 
deliberately stopped at 1987 to produce a ``politically correct'' 
result and in my other dealings with the author found him to be highly 
objective and credible. Utilizing the more recent data, however, the 
model in question apparently does not reproduce the observations nearly 
so well, especially the tropospheric non-warming that has occurred in 
the past 18 years (see Michaels, P.J. and P.C. Knappenberger, 1996: 
Sensitivity to the greenhouse fingerprint to data selection. Nature, 
383, 12 December). Thus, the ``discernible human influence'' phrase may 
be viewed as only slightly less strong.
    The main lines of evidence used to substantiate the ``discernible 
human influence'' statement as outlined in the policymakers summary 
were:
    1. The 20th century appears to be the warmest of the past 600 
years.
    2. Several models, using only natural factors, could not explain 
all of the 20th century warming, thus implying that some fraction of 
the warming was probably due to human factors.
    3. The vertical patterns of change produced by models which include 
human-factors match observed patterns of change for 1964-87.
    The first statement is not as convincing as it seems because the 
data we examined (I was a key contributor to the IPCC)--and which were 
then used by the authors of the Policymakers Summary--were quite sparse 
before 1400. We all knew, and stated such in the scientific text, that 
the warming of the 20th century could largely be related to the natural 
``recovery'' from the Little Ice Age, a cold period which existed, more 
or less, in the 15th-19th centuries. Had we used the sparse data prior 
to 1400, we would have reported that in many places on the planet, the 
decades around 1000 A.D. were warmer than even today. In the next IPCC 
report, this issue will probably be addressed in greater detail. What 
caused the earth to cool in the last six centuries is a topic of 
intense scientific research and it highlights the lack of understanding 
we now posses in explaining natural variations in the global climate.
    The second statement comes from several model simulations of the 
last 100 years. These particular models could not reproduce all of the 
0.40 deg.C temperature rise of the last century unless they included 
the human factor of CO2 forcing. We know, however, that the 
models are primitive and are essentially unable to reproduce other 
natural variations (e.g., Barnett et al., 1996; Estimates of low 
frequency natu- 

[[Page 107]]

ral variability in near-surface air temperature. Holocene, 6, 255-263). 
Barnett et al. concluded:

          . . . our results should serve as a warning to those anxious 
        rigorously to pursue the detection of anthropogenic effects in 
        observed climate data: the spectrum of natural variability 
        against which detection claims, positive or negative, are made 
        is not well known and apparently not well represented in early 
        CGCM [coupled global climate model] control runs.

    As I testified before the committee I agree with this second 
statement that some fraction of the observed 0.40+C warming is probably 
due to human factors.
    The third statement relates to the paper I discussed earlier. I 
should add that a source of the relatively high correlation between the 
model and the observations was due to the strong cooling of the 
stratosphere found in the model results and in the observations. The 
main cause of this cooling is most likely ozone depletion, not 
CO2. Thus, the CO2 effects were less involved in 
the ``match'' with observations than was generally perceived by the 
public.

    Question 5. Do you believe there is sufficient evidence of a 
problem with human-induced climate change for us to keep pursuing some 
kind of policy to limit CO2 emissions? If not, should we 
stop funding research that would tend to prove or disprove the theories 
that human activities are impacting global climate. If there is 
sufficient evidence, what more, if anything, should we be doing.
    Response. There are many severe human-induced environmental issues 
that I believe strongly overshadow the potential effects of global 
warming. Dealing with these serious issues would, I believe, lead to an 
associated reduction in CO2 emissions. Population increases, 
habitat destruction, uncontrolled pollution of air and water by toxic 
emissions and effluent (not CO2) are problematic now.
    I believe we should continue supporting observations and research 
of the global system. Some observations are now being scaled back, and 
this reduces the base from which detection of any changes may be 
substantiated. Better observations combined with more research has the 
added advantage that forecasts, particularly extended-range forecasts, 
would likely be more accurate. This would allow the public to plan for 
weather impacts thus increasing their economic viability.
    I can only comment as a non-expert in the realm of economic and 
social consequences of legislative actions intended to deal with 
climate change. What should we do? An idea I would put forth is to let 
the U.S. Government take the lead in generating reductions of 
CO2. The government owns thousands of vehicles, electricity-
intensive appliances, heavy equipment, inefficient buildings etc. By 
setting for itself more stringent standards, and purchasing new 
equipment and services within the free market, the government in effect 
sponsors the R&D for these new products, allowing future costs for 
these more efficient technologies to be lower to the public and 
therefore more acceptable in the long run.
    Such a large government program must begin with accurate data on 
current emissions against which future reductions could be precisely 
assessed. I would think every aspect of government use of 
CO2 would be measured (i.e. field tested) and documented. 
Then, a program to upgrade current vehicles, appliances, building 
environments, and even military maneuvers, to reduce carbon emissions 
could be instigated. The monitoring program would then be in place to 
prove to the interested parties (i.e. international monitoring agencies 
and the American public) that reduction in emissions is occurring. The 
government then would become the laboratory out of which proven 
technologies could be made available for the public, though some form 
of incentives would likely be required to replace cheap but inefficient 
equipment.
    How would this program be paid for? My personal opinion is that a 
nickel tax per gallon of gasoline (i.e. ``A Nickel for Nature''?) would 
not cause great hardship for the vast majority of Americans and would 
raise quite a bit of revenue for the government to proceed. Such a tax 
might even be politically acceptable if promoted as a way for everyone 
to help the environment and which is used entirely for its intended 
purpose.
    It is important to remember that modest reductions in 
CO2 will have an indiscernible effect on climate no matter 
what scenario of warming one may believe. Yet, I suspect modest 
controls are all that the public will accept.

    Question 6. In your professional opinion, what is the probability 
that there will be a doubling of CO2 concentrations since 
pre-industrial times by the year 2100? A tripling? What are the impacts 
of a doubling? What are the impacts of a tripling?
    Response. Thank you for asking this question as an ``opinion'' as I 
do not perform research specifically related to the magnitude of 
CO2 concentrations. I can only read the information 
available, and the IPCC reports are my main source of information.

[[Page 108]]

The rise in CO2 since 1958 has been slightly more than 1 
ppmv per year, and most recently growth has been at a rate of 0.4 
percent per year. The preindustrial concentration was about 280 ppmv, 
with today's value about 360 ppmv. By 2100, at this rate, the 
concentration would be between two and three times the preindustrial 
level. I believe there are factors yet unmodeled that will produce only 
a doubling by 2100. This is strictly an opinion based on my view that 
uncertainties are considerable in the present models and the economic 
and industrial future is rarely predicted with accuracy.
    My opinion (and that is all it is) on the climate effects of 
doubling or tripling is that the effects will be fairly benign overall. 
If warming occurs, it will occur slowly and modestly. I will mention 
again that the effects of natural variability will continue to cause 
the havoc we have always known.
    I would be remiss if I did not address a major aspect of this 
entire debate that has been basically ignored. It is popular today to 
think that burning carbon is an evil and destructive activity. I've 
lived in a Third World country, teaching physics and chemistry and 
sometimes distributing food and medicine to people in great need. These 
Africans were not nameless images on a TV screen to me, I knew them as 
fellow human beings with names, families, friends and hope. We provided 
for them that which they could not provide for themselves. What we gave 
came from an American nation whose economic engine has fueled the 
discoveries that have given our country a standard of living envied 
throughout the world and whose benefits have lifted many millions of 
non-Americans to a better life. I had a small part in that enterprise 
because American people, who burn carbon, were generous in financing 
experiences such as mine in Africa.
    Today, the world's one and only superpower is dedicated to, among 
other noble pursuits, free and open scientific inquiry, freedom of 
faith and freedom of association. Such noble ideas are not expressed in 
the economic models out of which various scenarios of future policy are 
determined. What is their value? say they are invaluable. To be sure, 
we have ``spent'' considerable amounts of carbon to achieve what we 
have, but I believe it has largely been well-spent when one looks at 
the entire picture.
    I realize that reductions of CO2 are eventually going to 
affect us, yet I wonder if those who advocate draconian measures truly 
understand how the world as a whole would be affected. I've lived in a 
part of the world for which a loss of American economic strength and 
world leadership would probably cause greater suffering. As poorly as 
we model the global climate, even these physical results are more 
realistic than predictions of economic and social impacts which 
buildupon the imperfect climate model output. In short, the impacts to 
human existence of a doubling or tripling of CO2 are almost 
impossible to predict when one considers our present level of ignorance 
in these matters.

    Question 7. Dr. Christy, if you add balloon temperature measurement 
records to the 18 years of satellite temperature records, is there an 
observable warming trend? How does that compare with the surface 
temperature records.
    Response. As I reported in the Hearing, the global balloon and 
satellite record both show that the lower tropospheric temperature has 
declined by--0.040 deg.C/decade since 1979. Two years ago I wrote a 
paper which specifically addressed the comparison of various records of 
upper air temperatures for the period since 1958 when balloon datasets 
began: Temperature above the surface layer, Climatic Change, 31, 455-
474, (1995). I found that ``Beginning in earlier years, (relying only 
on radiosonde data before 1979) the estimated warming trend since the 
late 1950's is +0.07 to +0.110 deg.C per decade.'' One surface dataset 
(GISS) shows a trend for the same period of +0.090 deg.C/decade, which 
indicates that over this particular time period (1958-96), the surface 
and troposphere experienced the same trend. It is important to note 
that climate models project greater warming in the troposphere on all 
time scales, a feature which has apparently not appeared in the actual 
observations, and certainly is not verified in the observations since 
1979.
                                 ______
                                 
Responses by John R. Christy to Additional Questions from Senator Boxer
    Question 1. We hear about natural climatic cycles. For example, we 
know from geologic evidence that the earth has naturally gone through 
cooling and warming cycles, usually on a scale of 10's of thousands of 
years.
    Is it possible to identify cycles of a shorter scale?
    Response. Variability of global and regional temperature occurs on 
all time scales from minutes to millennia. Some of this variability 
occurs in a true cyclic fashion, for example, seasonal changes of 
temperature in which summer is warmer than winter or daily cycles in 
which afternoons are warmer than mornings. These two

[[Page 109]]

examples represent the only regular cycles that can be identified. 
understand the comment ``We hear about natural climatic cycles'' 
because I hear it quite often too. However, as one who has poured over 
many records in detail, these alleged cycles are not as apparent as one 
would be led to believe.
    Natural temperature variations due to El Ninos, volcanoes, or 
fluctuations in solar radiation, atmospheric aerosol loading, oceanic 
circulations etc., are sometimes referred to as cycles, but they are 
much less predictable than forecasting that the temperature will be 
warmer in July than January. These other variations would not be 
categorized as strictly cyclic because they do not repeat with 
regularity.
    Part of the problem here is that we are limited by the length and 
quality of our data records. If we accept the ``global'' surface 
temperatures for the past 100 years as having reasonable accuracy, even 
they cannot tell us whether variations on 200, 500 or 1,000 year time 
scales are occurring. Until we understand the magnitude and cause for 
these longer variations, we will be unable to state with any confidence 
that a human-induced global warming signal has been detected (unless 
the world suddenly begins to warm at a very rapid rate). The present 
rate of temperature change is not outside of natural rates observed in 
the past. The IPCC was careful to remind the readers in the 
Policymakers Summary that natural variability was a key uncertainty in 
this scientific endeavor and was a major reason for the cautious words 
``. . . balance of evidence suggests . . .''.
    Further studies of the paleoclimate records will lead to a more 
knowledgeable assessment of the scale of natural variations, and 
therefore provide the context in which detection of human-induced 
changes may be identified.

    Question 2. Would we be able to detect variations attributable to 
human activities in this natural cycle?
    Response. We know that climate models, which try to detect natural 
vs. unnatural changes, are primitive and are essentially unable to 
reproduce natural variations on the longer time scales (e.g., Barnett 
et al., 1996; Estimates of low frequency natural variability in near-
surface air temperature. Holocene, 6, 255-263). Barnett et al. 
concluded

          . . . our results should serve as a warning to those anxious 
        rigorously to pursue the detection of anthropogenic effects in 
        observed climate data: the spectrum of natural variability 
        against which detection claims, positive or negative, are made 
        is not well known and apparently not well represented in early 
        CGCM [coupled global climate model] control runs.

    Thus, separating a slow, modest human-induced warming trend which 
is apparently smaller than changes observed in paleoclimate records, is 
a tenuous exercise at present. The problem here is that even more 
rapid, natural changes have occurred in the past. Let me quote from an 
issue of PAGES (Past Global Changes Programme, IGBP, 4, #3 Nov. 1996).

          Climate variability at both a regional and a global scale 
        has, even within the boundary conditions prevailing during the 
        Late-Holocene [last 5000 years], been significantly greater 
        than has been recorded during the short, recent period for 
        which instrumental records of climate variation exist [last 100 
        years]. This is conclusively demonstrated by recent research, 
        is of crucial significance for predicting future climate change 
        and is not recognized in the recent IPCC Report.

    I prefer the terminology ``natural variations'' vs. ``natural 
cycles'' since the longer term variations are not strictly cyclic. I 
believe future research will continue to show that some of the past, 
natural changes were quite rapid and severe and that changes naturally 
occur from any century to the next. This confounds ones attempts to 
attribute any variation to human-effects. So, the short answer to this 
question is that unless the warming is dramatic (which to date it has 
not been), we will be hard pressed to prove that the present level of 
climate variation is due to human-induced causes.

    Question 3. We know that CO2 has the potential for 
affecting the climatic balance of our atmosphere. Would it not make 
sense to limit the amount of CO2 we put into the atmosphere 
until we more fully understand the effects CO2 have on our 
climate. If the consequences of choosing ``limitations on 
CO2'' vs. ``unlimited CO2'' were similar, I would 
readily agree that ``limitations on CO2'' should be chosen. 
In the real world, however, forcing a limit on CO2 
production has tremendous economic (and thus, political) consequences. 
As we noted in the hearing, small or even moderate reductions in 
CO2 production in the U.S. will do essentially nothing to 
change any possible global warming.
    Response. An idea I would put forth is to let the U.S. Government 
take the lead in generating reductions of CO2. The 
government owns thousands of vehicles, elec- 

[[Page 110]]

tricity-intensive appliances, heavy equipment, inefficient buildings 
etc. By setting for itself more stringent standards, and purchasing new 
equipment and services within the free market, the government in effect 
sponsors the R&D for these new products, allowing future costs for 
these more efficient technologies to be lower to the public and 
therefore more acceptable in the long run.
    Such a large government program must begin with accurate data of 
the current emissions so that future reductions could be precisely 
assessed. I would think every aspect of government use of 
CO2 would be measured (i.e. field tested) and documented. 
Then, a program to upgrade current vehicles, appliances, building 
environments, and even military maneuvers, to reduce carbon emissions 
could be initiated. The monitoring program would then be in place to 
prove to the interested parties (i.e. international monitoring agencies 
and the American public) that reduction in emissions is occurring.
    In this scheme, the government would become the laboratory out of 
which proven technologies could be made available for public 
consumption, though some form of incentives would likely be required to 
replace cheap but inefficient equipment. How would this program be paid 
for? My personal opinion is that a nickel tax per gallon of gasoline 
(i.e. ``A Nickel for Nature''?) would not cause great hardship for the 
vast majority of Americans and would raise quite a bit of revenue for 
the government to proceed. Such a tax might even be politically 
acceptable if promoted as a way for everyone to help the environment 
and the revenues were explicitly used for that program.
    I suppose my point here is this: there are some rather modest 
programs that may be initiated to deal with what appears at this time 
to be at most a modest problem. These programs would have a minuscule 
effect of CO2 concentrations, but would perhaps nudge a new 
set of technologies out into the market place due to the fact the U.S. 
Government is a very, very big customer.
    I would be remiss if I did not address a major aspect of this 
entire debate that has been basically ignored. It is popular today to 
think that burning carbon is an evil and destructive activity. I lived 
in Kenya, East Africa for 2 years, teaching physics and chemistry and 
sometimes distributing food and medicine to people in great need. To 
me, these Africans were not nameless images on a TV screen. I knew them 
as fellow human beings with names, families, friends and hopes. We 
provided for them that which they could not provide for themselves. 
What we gave them came from an American nation whose economic engine 
has fueled the discoveries that have given our country a standard of 
living envied throughout the world and whose shared-benefits have 
lifted many millions of non-Americans to a better life. I had a small 
part in that enterprise because American people, who admittedly burn a 
lot of carbon, were generous in financing experiences such as mine in 
Africa.
    Today, the world's one and only superpower is dedicated to, among 
other noble pursuits, free and open scientific inquiry, freedom of 
faith and freedom of association. Such noble ideas are not expressed in 
the economic models out of which various scenarios of future policy are 
determined. What is their value? say they are invaluable. To be sure, 
we have ``spent'' considerable amounts of carbon to achieve what we 
have, but I believe it has largely been well-spent when one looks at 
the entire picture.
    I realize that reductions of CO2 are eventually going to 
affect us, yet I wonder if those who advocate draconian measures truly 
understand how the world as a whole would be affected. I've lived in a 
part of the world for which a loss of American economic strength and 
world leadership would probably cause greater suffering. As poorly as 
we model the global climate, even these physical results are more 
realistic than predictions of economic and social impacts which build 
upon the imperfect climate model output. In short, the impacts to human 
existence of a doubling or tripling of CO2 are almost 
impossible to predict when one considers our present level of ignorance 
in these matters.
                                 ______
                                 
Prepared Statement of Richard S. Lindzen, Alfred P. Sloan Professor of 
           Meteorology, Massachusetts Institute of Technology
    I wish to thank Senators Chafee and Baucus, as well as the members 
of the Senate Committee on Environment and Public Works, for the 
opportunity to put forward my views on the issue of putative global 
warming.
                              introduction
    The issue of global warming is one of the more contentious issues 
in science today. Superficially, it is frequently portrayed as a 
`simple' issue. Gases which absorb infrared radiation (known as 
greenhouse gases) inhibit radiative cooling of the earths

[[Page 111]]

surface and hence increasing greenhouse gases must lead to warming. The 
issue is rendered more complex by the fact that the surface of the 
earth does not cool primarily by means of radiation, but rather cools 
by evaporation and convection. Moreover, the main greenhouse gas is 
water vapor which is both natural in origin and highly variable in its 
distribution. In the absence of good records of water vapor we aren't 
even in a position to say how much total greenhouse gases have 
increased. If this weren't bad enough, it isn't even the total amount 
of greenhouse gas which matters; for example, a molecule of water vapor 
at 12 km altitude is more effective than a thousand molecules near the 
surface. All of this might not be relevant if models were trustworthy, 
but satellite measurements of upper level water vapor show profound 
discrepancies in model results. Under the circumstances, it is 
surprising that there is any agreement among scientists, but, in fact, 
most scientists working on climate dynamics would agree that increasing 
levels of carbon dioxide should have some impact on climate. The real 
argument is over whether the impact will be significant. The word 
`significant,' in this context, has a rather specific meaning. The 
climate is a naturally variable system. That is to say, it varies 
without any external forcing. Human society already has to deal with 
this degree of variability over which it has no control. For 
anthropogenic climate change to be `significant,' it must be as large 
or larger than natural variability. For smaller changes, the historical 
record demonstrates our capacity to adapt. It is in this context that 
the statement frequently drawn from the 1995 IPCC (Intergovernmental 
Panel on Climate Change) report assumes some relevance. It is 
important, therefore, to know precisely what this statement does and 
doesn't say. Although it is likely that the statement is also 
incorrect, that turns out to be less important.
                         discernable influence
    Let us begin by quoting this statement (which, in contrast to 
earlier IPCC reports, gives considerable more attention to important 
caveats):

          ``Our ability to quantify the human influence on global 
        climate is currently limited because the expected signal is 
        still emerging from the noise of natural variability, and 
        because there are uncertainties in key factors. These include 
        the magnitude and patterns of long-term natural variability and 
        the time-evolving pattern of forcing by, and response to, 
        changes in concentrations of greenhouse and aerosols, and land-
        surface changes. Nevertheless, the balance of evidence suggests 
        that there is a discernible human influence on global 
        climate.''

    What it says is that the climate's behavior over the past century 
appears ``unlikely to be due entirely to natural variability (IPCC 
1995, p. 412).'' As Chapter 8 of IPCC 95 points out, even this trivial 
assertion, which, as I have noted, seems totally compatible with our 
theoretical understanding and makes no claims concerning the magnitude 
of global warming, is dependent on the assumption that natural 
variability is replicated in models (IPCC 95 p. 430) an assumption 
which is clearly untrue since major observed components of natural 
variability like the quasi-biennial oscillation and El-Nino are either 
not replicated at all or replicated very poorly. Indeed the very 
structure of the circulation in models is different from what is 
observed in the data (Polyak and North, 1997). The specific feature 
which led Santer (the lead author of Chapter 8 of IPCC 95) to claim 
discovery of the discernible impact of anthropogenic forcing fails the 
most elementary test of statistical robustness: namely, it disappears 
when additional data is considered. Chapter 8 concludes that our 
ability to quantify the magnitude of global warming ``is currently 
limited by uncertainties in key factors, including the magnitude and 
patterns of longer-term natural variability and the time-evolving 
patterns of forcing by (and response to) greenhouse gases and 
aerosols.'' In brief, a decade of focus on global warming and billions 
of dollars of research funds have still failed to establish that global 
warming is a significant problem. Normally, this would lead one to 
conclude that the problem is less serious than originally suggested. 
While the IPCC 1995 report does not go so far as to state this 
explicitly, it is certainly the most subdued and reserved of the 
numerous IPCC reports issued since 1990.
    It has been a remarkable example of semantic distortion that this 
weak and unsupportable statement has encouraged environmental advocates 
to claim that this report endorses various catastrophic scenarios. An 
appeal issued a few days ago by one such organization, The Union of 
Concerned Scientists, illustrates the general procedure. The statement 
begins with a clear misrepresentation of the IPCC statement: 
``Predictions of global climatic change are becoming more confident. A 
broad consensus among the world's climatologists is that there is now 
`a discernible human influence on global climate.' '' The UCS 
immediately continues: ``Climate change is projected to raise sea 
levels, threatening populations and ecosystems in

[[Page 112]]

coastal regions. Warmer temperatures will lead to a more vigorous 
hydrological cycle, increasing the prospects for more intense rainfall, 
floods, and droughts in some regions. Human health may be damaged by 
greater exposure to heat waves and droughts, and by encroachment of 
tropical diseases to higher latitudes.'' The UCS proceeds to then 
associate climate change with forest depletion, water scarcity, food 
security, and species destruction. It concludes that scientists must 
endorse a strong climate treaty at Kyoto. The implication is that the 
so-called IPCC consensus extends to these claims as well. This is 
clearly a misrepresentation of the IPCC.. I use the phrase `so-called' 
advisedly. The IPCC went to great lengths to include as many names as 
possible among its contributors. Against my expressed wishes, even my 
name was included. I can assure the committee that I (and the vast 
majority of contributors and reviewers) were never asked whether we 
even agreed with the small sections we commented on. Nevertheless, the 
usual comment is that 2,500 scientists all agree with whatever it is 
that the environmental advocates are claiming. To the credit of the 
IPCC, it extensively documented the shortcomings of various 
projections, and made few claims for any confidence. The document was 
deeply biased insofar as it took as its task the finding of global 
warming rather than the more objective approach of determining whether 
it is indeed a significant problem. Such an approach could be 
rationalized on the basis of sincere concern. However, even this 
document puts forward comments which are misleading. For example, on 
page 45 which deals with potential surprises, the possibility of an 
instability of the West Antarctic ice sheet is mentioned without any 
reference to the fact that such an unlikely instability is largely 
unrelated to climate (Bentley, 1997).
Genuinely Misleading Statement




    One of the common claims in support of the reality and seriousness 
of global warming is that we have had a large portion of record 
breaking warm years during the last decade or so. This is not a claim 
used by the IPCC, and its presence in any discussion is a rather clear 
piece of evidence of the intent to deceive (especially when the claim 
is made by a scientist). As noted by Solow and Broadus (1989) and 
Bassett (1992), this is an inevitable occurrence when one has a single 
record breaker in a time series characterized by interannual 
variability, interdecadal variability and an underlying trend or longer 
period variability. Solow and Broadus show the clustered nature of 
record breakers. For those who can follow some mathematics, the 
situation is easily synthesized as follows.

[[Page 113]]

    Let us represent the time series for temperature by the following 
expression:



where the first term corresponds to interannual variability, the second 
term to interdecadal variability, and third to longer term trends or 
variability. This series is shown in Figure 1.
    Not surprisingly, record breakers cluster in exactly the manner 
found by Solow and Broadus (1989) in the observed temperature record. 
The occurrence of such record breakers contributes no additional 
information. Our prime concern remains with the determination of trend 
and the identification of such trends with emissions of carbon dioxide, 
and this remains a difficult and contested issue as the IPCC freely 
acknowledges.
Scientific Waffling
    S. Fred Singer has recently reported that the former head of the 
IPCC, Bert Bolin, has denied claims by Vice President Gore and 
environmental activists that ``any floods, droughts, hurricanes, or 
other extreme weather patterns are the result of rising global 
temperatures.'' Bolin is quoted as saying ``There has been no effect on 
countries from any current change,'' adding that efforts by activists 
to establish such a link ``is why I do not trust the Greens.'' Although 
I was not present at the debate where Bolin is alleged to have made 
this remark, my personal experience suggests that it may be true. In 
1993 at a mock trial of global warming held by the BBC in which both 
Bolin and I participated, Bolin made similar admissions. Nevertheless, 
in response to Singer's claims, Bolin has issued a formal denial. It 
may be of interest to look at this denial in some detail.
    ``Observations show that some extreme events are becoming more 
intense (heavy rainfall events in some regions), some are becoming less 
intense (cold spells), while others show no statistically significant 
changes (hurricanes). These changes are consistent with the kind of 
changes that would be associated with a warmer climate. While it cannot 
yet be concluded that these changes are caused by human-induced changes 
of climate, neither can this association be excluded. To state that 
these sorts of changes that `are consistent' with the predicted effects 
of climate change, as Vice-President Gore is quoted to have stated, is 
a scientifically accurate statement and no cause for criticism.''
    In saying this, Bolin parts company with normative science which 
recognizes the virtual impossibility of disproving unverifiable 
assertions and sticks to statements that are capable of 
`falsification.' `Consistency,' in this context merely means that the 
situation is so unclear that virtually anything is will `be 
consistent.' In the long run, the replacement of the precise and 
disciplined language of science by the misleading language of 
litigation and advocacy may be one of the more important sources of 
damage to society incurred in the current debate over global warming.

[[Page 114]]





    What can be said of the influence of increasing carbon dioxide?

    Since the Charney Report of the NRC in 1979, the range of expected 
equilibrium global warming due to doubling carbon dioxide has been 
stated to be from about 1\1/2\C to 5\1/2\C. This is simply a statement 
of the range of results obtained by existing models, and assumes, 
somewhat illogically, that the correct answer must be in the output of 
at least one model. However, as frequently noted by the IPCC, the 
correct answer depends on correctly simulating feedbacks which, at 
present, are only poorly known and modeled. Despite this 
uncertainty,there are some aspects of the problem that are somewhat 
better known. In general, the response to doubled carbon dioxide (or 
equivalent carbon dioxide where the effect of other anthropogenic 
greenhouse gases is expressed in terms of `equivalent' carbon dioxide) 
in the absence of feedbacks is taken to be the response when all other 
atmospheric parameters are held constant. The changes due to 
concomitant changes in other parameters are called feedbacks. There is 
some disagreement over whether one should consider the distribution of 
temperature change as a feedback. If one does, then the no-feedback 
equilibrium response to doubled carbon dioxide is about 0.3\1/2\C 
(Lindzen, 1995a); if one does not, then the no-feedback response is 
about 1.2\1/2\C. The latter is much larger than the former because it 
includes the warming effect at the surface of cooling in the 
stratosphere. If one takes the latter approach, then the most important 
feedback is due to upper level (above about 2 km) water vapor. In all 
existing models (in the original models by explicit assumption), water 
vapor, the most important greenhouse gas, increases at all levels as 
surface temperature increases, doubling the no-feedback response to 
doubled carbon dioxide. The presence of the positive water vapor 
feedback in current models also increases the sensitivity of these 
models to other smaller feedbacks such as those due to clouds and snow 
reflectivity. The trouble with current models is that they generally 
lack the physics to deal with the upper level water vapor budget, and 
they are generally unable, for computational reasons, to properly 
calculate a quantity like water vapor which varies sharply both 
vertically and horizontally (Sun and Lindzen, 1993, Lindzen, 1995). 
Indicative of these problems is the recent work of J.J. Bates and D.L. 
Jackson at NOAA who found, using satellite data from infrared sounders, 
that, on the average, current models underestimate zonally averaged 
(averaged around a latitude circle) water vapor by about 20 percent. 
This is illustrated in Figure 2. It should be noted that this 
represents an error in radiative forcing of about 20 Watts per square 
meter, as compared with the forcing of 4 Watts per square meter due to 
a doubling of carbon dioxide (Thompson and Warren, 1982, Lindzen, 
1995). More recent observational analyses by Spencer and Braswell 
(1997), using satellite microwave data, suggest that even Bates and 
Jackson have overestimated water vapor, and that the discrepancy with 
models is still greater. Under the circumstances, there seems to be 
little actual basis for the most important positive feedback in models. 
Given our in- 

[[Page 115]]

ability to detect expected warming in the temperature data, one might 
reasonably conclude that models have overestimated the problem.
    In some ways, we are driven to a philosophical consideration: 
namely, do we think that a long-lived natural system, like the earth, 
acts to amplify any perturbations, or is it more likely that it will 
act to counteract such perturbations? It appears that we are currently 
committed to the former rather vindictive view of nature.




 What can be said of the implications of proposed policies for climate?

    The above remarks dealt with the issue of global warming as a 
phenomenon. However, the current political concern deals with the 
proposed setting of firm emission limitations at the forthcoming Kyoto 
meeting in December. The underlying assumption is that stabilization of 
emissions at 1990 levels (or modest reductions of these levels) would 
spare the world from global warming, should the more extreme model 
forecasts prove correct (despite the patent shortcomings of these 
models, and the absence of convincing confirmation in existing data). 
It is important, therefore, to note that such emissions reductions 
would have no such effect regardless of what one believes about global 
warming. The effects of either lesser reductions or of restricting 
emission reductions to the developed world would be even more 
negligible in terms of climate impact. This is illustrated in Figures 3 
and 4 taken from a recent report of Prinn et al (1997) based on the 
model developed for MIT's Program on the Science and Policy of Global 
Change. Figure 3 shows carbon dioxide levels for a variety of 
scenarios. The levels by 2100 vary from about 590 ppmv to 950 ppmv. 
Figure 4 shows global mean temperature change for various conditions 
indicated by three letters. The first letter refers to emissions, with 
H associated with the high values in Figure 3 and L with the low 
values; R refers to a reference case. The second letter refers to the 
ocean delay with H referring to short delay and L referring to long 
delay. The third letter refers to climate sensitivity with H referring 
to an equilibrium sensitivity to doubled carbon dioxide of about 
4.5 deg.C, and L to a sensitivity of about 1.5 deg.C. We see that for 
high climate sensitivity we will get pronounced warming regardless of 
emission scenario, while for low sensitivity, emission scenarios will 
not matter. It is important to note that emission caps proposed for 
Kyoto, as difficult and expensive as they may prove, will not prevent 
global warming if the climate should prove sensitive. The impact of any 
proposed policy, currently reckoned as even marginally feasible, will 
likely be impossible to ascertain regardless of what the climate 
sensitivity is. However, what Figure 4 does tell us is that should 
there be little warming over the next 50 years, it won't be because of 
any policy we implement at Kyoto.

[[Page 116]]




                               references
Bassett, G.W. (1992) Breaking recent global temperature records. 
    Climate Change, 21, 303-315.
Bentley, C.R. (1997) Rapid sea-level rise soon from West Antarctic 
    Sheet collapse? Science, 275, 1077-1078
Bates, J.J. and D.L. Jackson (1997) A comparison of water vapor 
    observations with AMIP-1 simulations. In preparation.
IPCC 95 (1996) Climate change 1995: The science of climate change. 
    Cambridge University Press, Cambridge, UK, 572pp.
Lindzen, R.S. (1995) The importance and nature of the water vapor 
    budget in nature and models. In Climate Sensitivity to Radiative 
    Perturbations: Physical Mechanisms and their Validation, H. Le 
    Treut (editor), pp. 51-66, NATO ASI Series 1: Global Environmental 
    Change, Vol. 34, Springer-Verlag, Heidelberg, 331p.
Lindzen, R.S. (1995a) How cold would we get under CO2-less 
    sky? Phys. Today, 48, 78-80.
Polyak, I. and G. North (1997) Evaluation of the GFDL GCM climate 
    variability, 2, Stochastic modeling and latitude-temporal fields. 
    J. Geophys. Res., 102, 6799-6812.
Prinn, R., H. Jacoby, A. Sokolov et al (1997) Integrated global system 
    model for climate policy assessment: feedbacks and sensitivity 
    studies. In preparation.
Solow, A.R. and J.M. Broadus (1989) On the detection of greenhouse 
    warming. Climate Change, 15, 449-453.
Spencer, R.W. and W.D. Braswell (1997) How dry is the tropical free 
    troposphere? Implications for global warming theory. Bull. Amer. 
    Met. Soc., 78, 1097-1106.
Sun, D-Z. and R.S. Lindzen (1993) Distribution of tropical tropospheric 
    water vapor. J. Atmos. Sci., 50, 1643-1660.
Thompson, S.L. and S.G. Warren (1982) Parameterization of outgoing 
    infrared radiation derived from detailed radiative calculations. J. 
    Atmos. Sci., 39, 2667-2680.

[[Page 117]]

    
    


[[Page 118]]

   Responses by Richard Lindzen to Additional Questions from Senator 
                                 Baucus
    Response 1. Dr. Barron's suggestion was intentionally generic 
rather than specific. Moreover, adaptive policies require something to 
adapt to, and in the words of Bert Bolin, the former head of the IPCC, 
``There has been no effect on countries from any current change. The 
increases in temperature have been so small as to be barely 
detectible.'' Thus, at the moment, there is nothing special to adapt 
to. In the longer term, we can plausibly expect many things to change 
over the next century including the climate (even without any influence 
from man) in almost totally unanticipated ways. It thus behooves us to 
continue to develop a society that can successfully deal with and 
exploit change. The obvious tools for this are wealth and capital, 
information and education, as well as flexibility, freedom and 
intelligence.

    Response 2. Frankly, I do not know the basis for Dr. Schneider's 
remark. However, it is obvious that species respond to local rather 
than global conditions, and locally, changes on the order of 1.5 deg.C 
and more have occurred over the past century or even less. This has led 
to some modest species migration and changes in agriculture, but not, 
to the best of my knowledge, to extinctions. What I suspect Dr. 
Schneider may be referring to is the fact that climate change in the 
past, forced by changing patterns of heating, among other things, 
rather than gross global heating, has been characterized by large 
changes in the temperature difference between the tropics and the poles 
rather than changes in global mean temperature. Thus, by some 
reckonings during the last major glaciation global mean temperature may 
only have been about 8 deg.C colder than at present. Indeed, both 
glaciation and deglaciation led to species extinctions for creatures 
that had specifically adapted to the earlier climate and terrain. Even 
so, these were not among the major periods of species loss.

    Response 3. First, let me state that predictions of large climate 
change already require that these mechanisms act to amplify the changes 
due to increasing anthropogenic greenhouse gases. There is no credible 
evidence for this. The warming expected from a doubling of 
CO2 even in the absence of any natural thermostatic control 
would only be about 1 deg.C (and about 1.5 deg.C for a tripling; the 
effect is not linear). This low level of warming calls for no mechanism 
whatever to counteract the effect of increased anthropogenic greenhouse 
gases. Predictions of greater warming actually require that water vapor 
act in such a way as to increase the warming by a factor of two and 
more. I intentionally refer to the action of water vapor rather than to 
the amount of water vapor. Water vapor in the atmosphere is extremely 
heterogeneous. There are regions that are very dry and regions that are 
very moist. Most water vapor resides in the lowest 2-3 km of the 
atmosphere, but it is water vapor above this level that is most 
important to the greenhouse effect (E. Schneider et al, 1997, Shine and 
Sinha, 1991). Moreover, most radiative cooling occurs in dry regions, 
and cooling would increase if the dry regions increased in area even if 
the net water vapor increased. Understanding the water vapor feedback 
in dry regions is central to determining the feedback. Here, the budget 
of water vapor consists in drying due to subsiding air and moisturizing 
from the evaporation of ice thrown off by clouds rather than directly 
falling as rain (Sun and Lindzen, 1993, describe the water vapor budget 
in detail). If claims of an intensified hydrological cycle in a warmer 
climate prove correct, then the drying term will increase. Moreover, 
the amount of ice thrown off depends on the precipitation efficiency of 
clouds. The more efficient the clouds, the less ice there is to throw 
off According to every text on cloud physics written over the past half 
century, precipitation efficiency increases with increasing temperature 
(Fletcher, 1962, Mason, 1971, Rogers and Yau, 1989 for example). Thus 
we expect the moisturizing to decrease. Both effects should lead to an 
expansion of the dry regions which would counteract the effect of 
increasing CO2. This is the opposite of what current models 
display, which is not surprising since current models completely fail 
to produce dry regions of the sort observed in satellite data (Spencer 
and Braswell, 1997).

    Response 4. The IPCC conclusion was based on the then unpublished 
work of Santer et al (1996). This work used radiosonde (balloon) data 
from sometime in the 70's until 1987. As shown by Michaels and 
Knappenberger (1996) when the available radiosonde data until 1995 was 
used, the effect that Santer et al claimed to have found (a correlation 
between observations and model predictions) disappeared. Another study 
by some of the same authors who participated in Santer et al also 
reached the conclusion that the earlier study was not statistically 
robust (Tett et al, 1996). In fact, studies examining the results in 
Santer et al were not possible until after the publication of IPCC 95, 
since the Santer et al paper had not yet appeared when IPCC 95 was 
published. This, of course, is counter to the claimed policy of the 
IPCC. That said, the Santer et al paper never claimed to quantify the

[[Page 119]]

impact of human activities. The paper, moreover, acknowledged that even 
the meager result claimed was absolutely dependent on the assumption 
that natural variability was well replicated by model variability--a 
dubious assumption at best. Finally, the paper failed to consider 
whether the observed behavior could be due to other factors. The Santer 
et al paper and IPCC use of it are excellent examples of how virtually 
meaningless statements by scientists can be found by non-scientists to 
have dire import. In many cases, the scientists are by no means 
innocent of exploiting this difference in perception.

    Response 5. No, I do not believe there is sufficient evidence to 
continue pursuing ``some kind of policy to limit CO2 
emissions''. If the only reason you can imagine for supporting climate 
research is the likelihood of catastrophe, then by all means stop 
funding research. However, in the light of my answer to your first 
question, this would seem short sighted indeed. Regardless of the 
current evidence or lack thereof, it seems to me that it would be 
unwise to make support of any science contingent on the projection of 
catastrophe.

    Response 6. Predicting industrial trajectories is as difficult as 
any other kind of long term prediction. However, I personally think 
that it is entirely possible, in the light of our present imperfect 
knowledge, that atmospheric CO2 levels in 2100 will be 
double present values. About the only effect of this that we are 
presently reasonably sure of is that plant growth will increase, and 
plant susceptibility to water stress will decrease. As concerns 
climate, we have already had a 50 percent increase in `effective' 
CO2 since the last century, and hardly anyone has noticed. 
There is no compelling evidence that matters will change dramatically 
with further increases.
                               references
N.H. Fletcher (1962) The Physics of Rain Clouds, Cambridge University 
    Press.
B.J. Mason (1971) The Physics of Clouds, Clarendon Press, Oxford.
Michaels, P. J. and Knappenberger, P.C. (1996) Human effect on global 
    climate?, Nature, 384, 522.
Rogers and Yau (1989) A Short Course in Cloud Physics, Pergamon Press.
Santer, B.D., K.E. Taylor, T.M.L. Wigley, T.C. Johns, P.D. Jones, D.J. 
    Karoly, J.F.B. Mitchell, A.H. Oort, J.E. Penner, V. Ramaswamy, M.D. 
    Schwarzkop?, R.J. Stouffer, and S. Tett (1996). A search for human 
    influences on the thermal structure of the atmosphere, Nature, 382, 
    39.
Schneider, E.K., B.P. Kirtman and R.S. Lindzen (1997) Upper 
    tropospheric water vapor and climate sensitivity. submitted to J. 
    Atmos. Sci.
Shine, K.P. and A. Sinha (1991) Sensitivity of the Earth's climate to 
    height dependent changes in the water vapor mixing ratio, Nature, 
    354: 382.
Spencer, R.W. and W.D. Braswell (1997) How dry is the tropical tree 
    troposphere? Implications for global warming theory, Bull Amer. 
    Met. Soc., 78, 1097-1106.
Sun, D-Z. and R.S. Lindzen (1993) Distribution of tropical tropospheric 
    water vapor, J. Atmos. Sci., 50, 1643-1660.
Tett, S.F.B., J.F.B. Mitchell, D.E. Parker, and M.R. Allen (1996). 
    Human Influence on the Atmospheric Vertical Temperature Structure: 
    Detection and Observations, Science, 274, 1170.
                                 ______
                                 
  Response by Richard Lindzen to an Additional Question from Senator 
                                 Boxer
    Response. The most famous cycle of climate change we know of is the 
100,000 year cycle of glaciation usually identified with orbital 
variations. Numerous climate changes on shorter time scales have been 
observed, though it is hardly clear that these are cyclic. Among the 
more famous climate events of the holocene (the period since the last 
ice age) are the mid-holocene optimum, the medieval optimum and the 
little ice age. Traditionally, warm periods were referred to as optima. 
Regionally, many regions have undergone climate change that may be 
peculiar to those regions. In fact, regional variability is generally 
much larger than global variability. Even within this century, there 
appears, for example, to have been a significant winter cooling trend 
in north Florida. On relatively short time scales, climatic variations 
associated with El Ninos are beginning to be understood. However, 
although strong interdecadal variability is evident in the data, its 
cause is not understood. What is increasingly clear is that the 
atmospheric system is capable of variability without external forcing, 
and that variability is the norm rather than the exception. The 
detection of change due to human activity amidst all this natural 
variability is, indeed, a difficult task. However, it would not be 
difficult if warming were to be progressing at the rate suggested in 
the 1990 IPCC report (0.3 deg.C per decade).

[[Page 120]]

    Your last question clearly transcends science. I would normally be 
sympathetic to your suggestion if it were cost-free. However, as I 
noted in my testimony, presently suggested policies like limiting 
emissions to 1990 levels would have little impact on either 
CO2 buildup or projected warming (regardless of model or 
belief). Moreover, without the participation of all nations, the impact 
would be essentially nil. Thus, we are suggesting potentially large 
costs (both in terms of money and regulatory burden) for certifiably 
small benefits. This really does not seem to make much sense on the 
face of it.
                                 ______
                                 
 Prepared Statement of Stephen H. Schneider, Professor, Department of 
                Biological Sciences, Stanford University
           climate change: causes, impacts and uncertainties
I. Does Natural Variability Explain All Climate Change?
    Twenty thousand years ago, a mere blink in geologic time, a visitor 
to the now-productive Corn Belt of Illinois would not be sitting in the 
heart of the world's foremost granary, but rather open spruce parkland 
forest, where many of the tree species seen are the same kinds that are 
found today 500 to 1,000 miles north in the Boreal Forests of Canada. 
Similarly, if we could somehow have been flying over the Great Basin we 
would have seen the massive fossil lakes, some stretching hundreds of 
miles like former Lake Bonneville in Utah, and the now-fossil beaches 
(currently visible flying into Salt Lake City Airport or over Mono 
Lake) from those high water stands that date back 10 to 15 thousand 
years ago. The Ice Age, which at its maximum some 20,000 years ago was 
about 5 deg. to 7 deg.C (around 100 deg.F) colder than our current 
global climate, disappeared in, what is to nature, a relatively rapid 
period of about 5,000 to 10,000 years. The average rate of temperature 
change from the Ice Age to the current 10,000 year period of relative 
climate stability, our so-called Holocene Interglacial, is about 
1 deg.C change for every thousand years. Of course there were more 
rapid periods embedded within this timeframe, but I'm only giving the 
sustained average rates.
    Not only did such change correspond with radical alterations to the 
ecosystems of the earth, but have been implicated in the extinction of 
what is known as the charismatic megafauna (woolly mammoth, saber tooth 
tigers, etc.). Fossil pollen evidence tells us that the vegetation 
habitats during the more ``rapid'' parts of the transition from ice age 
to interglacial around 10 to 12 thousand years ago saw what 
paleoclimatologists call ``no analog habitats,'' that is, combinations 
of pollen abundances which do not exist on earth today. All of this 
change was natural, of course, and there are two reasons for mentioning 
it in our context. First, to remind us that the climate and ecosystems 
change by themselves, without need of humans (the latter is what we 
call anthropogenic causation), and second, that climate change of about 
several degrees on a global average basis is a very significant change 
from the point of view of natural systems.
    Explanations of the Ice Age vary, the most popular one being a 
change in the amount of sunlight coming in between (a) winter and 
summer and (b) the poles and the equator. These changes in the 
distribution of seasonal or latitudinal sunshine are due to slow 
variations in the tilt of the earth's axis and other orbital elements, 
but these astronomical variations alone cannot totally explain the 
climatic cycles. If these orbital variations and other factors (such as 
the increased reflectivity of the earth associated with more ice) are 
combined, our best climate theories (embodied through mathematical 
models that are comprised of the physical laws of conservation of mass, 
energy and momentum) suggest that the Ice Age should have been several 
degrees warmer than it actually was--especially in the Southern 
hemisphere. What could account for this extra cold? Perhaps the models 
are not sensitive enough, that is they do not respond sufficiently to a 
change in so called ``radiative climate forcing,'' that is the change 
in the amount of radiant energy coming to the earth from external 
factors like orbital variations or extra ice. Another (more likely, I 
think) possibility is that something else also changed at the same 
time.
    These theories can be better reconciled with what happened between 
ice ages and interglacials if one assumes that several watts of energy 
over every square meter of the earth were taken away in the ice age by 
some other mechanism at a global scale. But what could be such a 
mechanism? The obvious candidate would be a change in the composition 
of the earth's atmosphere which affects both its reflectivity and its 
heat trapping capacity (e.g., decreases in the well-known greenhouse 
effect or increases in atmospheric dust). But what evidence is there 
that greenhouse gases, for example carbon dioxide, methane, nitrous 
oxide, or water vapor, had lower concentrations 20,000 years ago than 
in the interglacial? About 15 years ago that

[[Page 121]]

evidence came through loud and clear from the ice caps of the world. 
Air trapped in these glaciers provides a library of the history of the 
earth's atmosphere back some 200,000 years. It shows that during the 
past two ice ages carbon dioxide concentration was about 40 percent 
less and methane half of the average value during the current and 
penultimate interglacials. It also shows that since the Industrial 
Revolution carbon dioxide has increased beyond any levels experienced 
in the past 150,000 years (at least) by nearly 30 percent and methane 
by 150 percent--two figures that virtually no knowledgeable scientist 
disputes are a result of so-called anthropogenic emissions which are 
driven by increasing numbers of people pursuing higher standards of 
living and using technology to achieve those growth-oriented goals.
    If the carbon dioxide and methane decreases in the last ice age 
helped to explain the ice age coldness, can they tell us something 
about how the anthropogenic increase of these gases due to human 
activities might cause climate change in the future? The answer is 
``not directly,'' for it is possible that there are other factors we 
have not accounted for in the ice age story that could well have been 
involved, and there are still many unanswered questions associated with 
the Ice Age cycles. It is simply a circumstantial bit of evidence which 
suggests that it is more consistent to explain the ice ages with the 
heat trapping power of the greenhouse effect existing at the magnitudes 
currently envisioned by most scientists--i.e. a doubling of 
CO2 would raise surface temperatures by about 3 deg.C plus 
or minus 1.5 deg.C. This is known as the ``climate sensitivity range.'' 
The magnitude of climate sensitivity that helps to explain the ice age 
coldness best is 2-3 deg.C. If the best estimate were ten degrees 
warming, which is twice the value at the high end of the climate 
sensitivity range thought by the mainstream of scientist today (e.g., 
IPCC 1996a), then the ice ages should have been even colder than they 
were. On the other hand, if the earth would only warm up by half a 
degree or less if CO2 doubled, then it would be tougher to 
explain the magnitude of the ice ages without finding some other 
mechanism not yet understood. Of course, the latter is possible, but 
what other lines of circumstantial evidence or direct evidence do we 
have for estimating climate sensitivity?
    We know from quite literally thousands of laboratory experiments 
and direct measurements, millions of balloon observations and trillions 
of satellites data bits, that the basic structure of the energy flows 
in and out of the earth's atmosphere are relatively well understood. We 
know that water vapor, carbon dioxide, or methane trap enough energy on 
the earth to warm the surface up about 33 deg.C (60 deg.F) relative to 
that which would occur in their absence.
    This well known natural greenhouse effect is not under dispute, and 
has been known for a century and a half. Nor is the 0.5 deg.C (plus or 
minus 0.2 deg.C) globally averaged warming trend at the earth's surface 
over the past century in dispute. In dispute is whether a small 
increment since the Industrial Revolution in this envelope of 
greenhouse gases, which our calculations tell us should have trapped 
about two extra watts of energy over every square meter of Earth, would 
produce a noticeable response (i.e. a ``climate signal''). The debate 
over whether that signal has been detected has been intense lately and 
this intensity has been based upon significant new pieces of evidence--
albeit each piece is circumstantial--and a few loud, well-publicized 
denials that the totality of evidence has any meaning. In the absence 
of clear, direct empirical evidence, one often has to use either 
circumstantial evidence, or incomplete bits of direct evidence with 
uncertainties attached. When the preponderance of such evidence gets 
strong enough, then most scientists begin to accept, tentatively of 
course, the likelihood of causal connections. Some people shed their 
skepticism at different levels than others, so naturally there will be 
a cacophonous debate over whether a climate signal has been detected, 
let alone whether it could be attributed to human activities. One can 
always find some scientist who will want 999 out of a 1,000 probability 
of certainty, and others who will accept the proposition at eight or 
nine chances out of ten. This is not science, but a value judgment 
about the acceptability of a significant, but not conclusive, body of 
evidence. The scientific job is to assess (A) what can happen, and (B) 
what the odds are of it happening (see, for example, this discussion in 
Chapter 6 of Schneider 1997a). Let me discuss this process further.
    I have mentioned the ice ages since this is a ``natural 
experiment'' that we use, not to forecast the future, but to build 
understanding of climate processes and to validate the tools that we do 
use to forecast the future--that is, our climate theories embodied in 
mathematical models. Are there any other such natural experiments? The 
answer is ``yes there are many,'' the two most prominent being (1) 
episodic volcanic eruptions which throw dust in the stratosphere that 
reflects for a few years a few watts per square meter of solar energy 
that otherwise would have reached the lower atmosphere and (2) the 
seasonal cycle. Let's consider volcanic eruptions first. Volcanic dust 
veils should cool the planet. In fact, the last major eruption, Mt.

[[Page 122]]

Pinatubo in 1991, was forecast to cool the earth's lower atmosphere on 
the order of several tenths of a degree by a number of climate modeling 
groups--in advance of the actual data to confirm--and indeed, that is 
roughly what happened. However, it could be argued that a few tenths of 
a degree cooling, or warming for that matter, might be a natural 
fluctuation in the earth's climate system, and indeed, fluctuations of 
that magnitude are a part of the natural background ``climatic noise.'' 
How then could we distinguish the climatic signal of the volcanic 
eruption from the noise of the natural variability? In any one eruption 
it is difficult to do so since the signal to noise ratio is about one, 
i.e. the magnitude of the cooling expected is about equal to the 
magnitude of the natural fluctuations in non-volcanic years, and 
therefore for any one event we cannot have very much confidence that a 
signal has been observed. So the fact that the Pinatubo results showed 
up about as predicted doesn't, by itself, give a lot of confidence, 
although as a circumstantial bit of evidence is quite useful. However, 
another volcanic eruption in 1983, El Chichon, was also followed by 
several tenths of a degree cooling, as was the effect after Mt. Agung 
in 1963 or Mt. Krakatoa in the Victorian period.
    In other words, by looking at the results of several volcanic 
eruptions and compositing, a number of scientists (including Mass and 
Schneider, 1977) used this technique and discovered that indeed there 
was a clear and obvious correlation which suggests that when a few 
watts of energy over every square meter of the earth is removed by 
volcanic dust veils in the stratosphere, the lower atmosphere will 
indeed cool by a few tenths of degrees--the very magnitude predicted by 
the same computer models that we use to forecast the effects of a few 
watts per square meter of sustained heating from global warming.
    What other natural experiments might we have to test climate 
sensitivity? My favorite is one that happens every year--the seasons. 
Winter predictably follows summer, being some 15 degrees colder in the 
Northern Hemisphere and five degrees colder than summer in the Southern 
Hemisphere. The reason the Southern Hemisphere has a smaller seasonal 
cycle is because it has much more ocean than land, and water has a 
higher heat retaining capacity than land or air. Since a season is not 
long enough for the planet to reach an equilibrium temperature change, 
therefore, the more land dominated Northern Hemisphere has lower heat 
capacity and thus a larger seasonal cycle of surface temperature. How 
well do the climate models do in reproducing this change? The answer is 
``extraordinarily well.'' Although what the absolute temperatures 
models may simulate can be off by as much as five or six degrees in 
some regions of the world for some seasons, the models' capacity to 
reproduce the amplitude of the seasonal cycle of surface air 
temperatures, by and large, is quite good. (It is less good for other 
variables, however, particularly hydrological systems.) Now, if we were 
making a factor of ten error by either overestimating or 
underestimating the sensitivity of the climate to radiative forcing, it 
would be difficult for the models to reproduce the different seasonal 
cycle surface temperature amplitudes over land and oceans as well as 
they do. This is another piece of circumstantial evidence suggesting 
that current estimate of climate sensitivity is not off by a factor of 
ten, as some ``contrarians'' assert. Indeed, indirect evidence like ice 
ages, volcanic eruptions and the seasonal cycle simulation skills of 
models are prime reasons why many of us in the scientific community 
have for the past 20 years expected that ``demonstrable'' (e.g., see 
p.11 of Schneider and Mesirow, 1976--in which I projected just such a 
change) anthropogenic climate change was not unlikely by the 21st 
century.
    In summary, then, in my opinion it is unlikely that natural 
variability is the explanation of all climate change, especially that 
which has been documented in the 20th century. However, since much of 
the debate over detection and attribution of human-caused climate 
change hinges on the projections of climatic models, it is necessary to 
have at least a cursory understanding of how they work. Although it is 
impossible to treat more than the highlights of the nature and use of 
climatic models in a dozen pages, I nonetheless offer the following 
section in the hopes of reducing somewhat the confusion that may exist 
in many peoples' minds after listening to the often acrimonious and 
technically complex debate over climatic models and their credibility.
II. Overview Of Climate Modeling Fundamentals
    Engineers and scientists build models--either mathematical or 
physical ones--primarily to perform tests that are either too 
dangerous, too expensive, or perhaps impossible to perform with the 
real thing. To simulate the climate, a modeler needs to decide which 
components of the climatic system to include and which variables to 
involve. For example, if we choose to simulate the long-term sequence 
of glacials and interglacials (the period between successive ice ages), 
our model needs to include explicitly the effects of all the important 
interacting components of the climate

[[Page 123]]

system operating over the past million years or so. These include the 
atmosphere, oceans, sea ice/glaciers (cryosphere), land surface 
(including biota), land sub-surface and chemical processes (including 
terrestrial and marine biogeochemical cycles), as well as the external 
or ``boundary forcing'' conditions such as input of solar radiant 
energy (e.g., see IPCC, 1996a).
    The problem for earth systems scientists is separating out 
quantitatively cause and effect linkages from among the many factors 
that interact within the earth system. It is a controversial effort 
because there are so many sub-systems, so many forcings and so many 
interacting complex sets of processes operating at the same time that 
debates about the adequacy of models often erupt.
    Modeling the Climate System. So how are climate models constructed? 
First, scientists look at observations of changes in temperatures, 
ozone levels and so forth. This allows us to identify correlations 
among variables. Correlation is not necessarily cause and effect--just 
because one event tracks another doesn't mean it was caused by it. One 
has to actually prove the relationship is causal and explain how it 
happened. Especially for cases where unprecedented events are being 
considered, a first principles, rather than a purely empirical-
statistical approach is desirable. However, observations can lead to a 
hypothesis of cause and effect--``laws''--that can be tested (for 
example, see Root and Schneider, 1995). The testing is often based on 
simulations with mathematical models run on a computer. The models, in 
turn, need to be tested against a variety of observations--present and 
paleoclimatic. That is how the scientific method is typically applied. 
When a model, or set of linked models, appear plausible, they can be 
fed ``unprecedented'' changes such as projected human global change 
forcings--changes that have not happened before--and then be asked to 
make projections of future climate, ozone levels, forests, species 
extinction rates, etc.
    The most comprehensive weather simulation models produce three 
dimensional details of temperature, winds, humidity, and rainfall all 
over the globe. A weather map generated by such a computer model--known 
as a general circulation model or GCM--often looks quite realistic, but 
it is never faithful in every detail. To make a weather map generated 
by computer we need to solve six partial differential equations that 
describe the fluid motions in the atmosphere. It sounds in principle 
like there's no problem: we know that those equations work in the 
laboratory, we know that they describe fluid motions and energy and 
mass relationships. So why then aren't the models perfect simulations 
of the atmospheric behavior?
    One answer is that the evolution of weather from some starting 
weather map (known as the initial condition) is not deterministic 
beyond about 10 days--even in principle. A weather event on 1 day 
cannot be said to determine an event 20 days in the future, all those 
commercial ``long-range'' weather forecasts notwithstanding. But the 
inherent unpredictability of weather details much beyond 10 days (owing 
to the chaotic internal dynamics of the atmosphere) doesn't preclude 
accurate forecasts of long-term averages (climate rather than weather). 
The seasonal cycle is absolute proof of such deterministic 
predictability, as winter reliably follows summer and the cause and 
effect is known with certainty.
    Grids and Parameterization. The other answer to the imperfection of 
general circulation model simulations, even for long-term averages, is 
that nobody knows how to solve those six complex mathematical equations 
exactly. It's not like an algebraic equation where one can get the 
exact solution by a series of simple operations. There isn't any known 
mathematical technique to solve such coupled, nonlinear partial 
differential equations exactly. We approximate the solutions by taking 
the equations, which are continuous, and breaking them down into 
discrete chunks which we call grid boxes. A typical GCM grid size for a 
``low resolution'' model is about the size of Colorado horizontally and 
that of a ``high resolution'' GCM is about the size of Connecticut. In 
the vertical dimension there are two (low resolution) up to about 20 
(high resolution) vertical layers that are typically spanning the 
lowest 10 to 40 kilometers of the atmosphere.
    Now, we've already noted that clouds are very important to the 
energy balance of the earth-atmosphere system since they reflect 
sunlight away and trap infrared heat. But because none of us have ever 
seen a single cloud the size of Connecticut, let alone Colorado, we 
have a problem of scale--how can we treat processes that occur in 
nature at a smaller scale than we can resolve by our approximation 
technique of using large grid boxes. For example, we cannot calculate 
clouds explicitly because individual clouds are typically the size of a 
dot in this grid box. But we can put forward a few reasonable 
propositions on cloud physics: if it's a humid day, for example, it's 
more likely to be cloudy. If the air is rising, it's also more likely 
to be cloudy.
    These climate models can predict the average humidity in the 
gridbox, and whether the air is rising or sinking on average. So then 
we can write what we call a para- 

[[Page 124]]

metric representation or ``parameterization'' to connect large scale 
variables that are resolved by the grid box (such as humidity) to 
unresolved small scale processes (individual clouds). Then we get a 
prediction of grid box-averaged cloudiness through this 
parameterization. So-called ``cumulus parameterization'' is one of the 
important--and controversial--elements of GCMs that occupy a great deal 
of effort in the climate modeling community. Therefore, the models are 
not ignoring cloudiness, but neither are they explicitly resolving 
individual clouds. Instead, modelers try to get the average effect of 
processes that can't be resolved explicitly at smaller scales than the 
smallest resolved scale (the grid box) in the GCM. Developing, testing 
and validating many such parameterizations is the most important task 
of the modelers since these parameterizations determine critically 
important issues like ``climate sensitivity.'' The climate sensitivity 
is the degree of response of the climate system to a unit change in 
some forcing factor: typically, in our context, the change in globally 
averaged surface air temperature to a fixed doubling of the 
concentration of atmospheric carbon dioxide above pre-industrial 
levels. This brings us to one of the most profound controversies in 
earth systems science, and one of the best examples of the usefulness, 
and fragility, of computer modeling.
    The Greenhouse Effect. If the earth only absorbed radiation from 
the sun without giving an equal amount of heat back to space by some 
means, the planet would continue to warm up until the oceans boiled. We 
know the oceans are not boiling, and surface thermometers plus 
satellites have shown that the earth's temperature remains roughly 
constant from year to year (the interannual globally averaged 
variability of about 0.2 deg.C or the 0.5 deg.C warming trend in the 
20th century, notwithstanding). This near constancy requires that about 
as much radiant energy leaves the planet each year in some form as is 
coming in. In other words, a near-equilibrium or energy balance has 
been established. The components of this energy balance are crucial to 
the climate.
    All bodies with temperature give off radiant energy. The earth 
gives off a total amount of radiant energy equivalent to that of a 
black body--a fictional structure that represents an ideal radiator--
with a temperature of roughly--18 deg.C (255 deg.K). The mean global 
surface air temperature is about 14 deg.C (287 deg.K), some 32 deg.C 
warmer than the earth's black body temperature. The difference is due 
to the well-established greenhouse effect.
    The term greenhouse effect arises from the classic analogy to a 
greenhouse, in which the glass allows the solar radiation in and traps 
much of the heat inside. However, the mechanisms are different, for in 
a greenhouse the glass primarily prevents convection currents of air 
from taking heat away from the interior. Greenhouse glass is not 
primarily keeping the enclosure warm by its blocking or re-radiating 
infrared radiation; rather, it is constraining the physical transport 
of heat by air motion.
    Although most of the earth's surface and thick clouds are 
reasonably close approximations to a black body, the atmospheric gases 
are not. When the nearly black body radiation emitted by the earth's 
surface travels upward into the atmosphere, it encounters air molecules 
and aerosol particles. Water vapor, carbon dioxide, methane, nitrous 
oxide, ozone, and many other trace gases in the earth's gaseous 
envelope tend to be highly selective--but often highly effective--
absorbers of terrestrial infrared radiation. Furthermore, clouds 
(except for thin cirrus) absorb nearly all the infrared radiation that 
hits them, and then they reradiate energy almost like a black body at 
the temperature of the cloud surface--colder than the earth's surface 
most of the time.
    The atmosphere is more opaque to terrestrial infrared radiation 
than it is to incoming solar radiation, simply because the physical 
properties of atmospheric molecules, cloud and dust particles tend on 
average to be more transparent to solar radiation wavelengths than to 
terrestrial radiation. These properties create the large surface 
heating that characterizes the greenhouse effect, by means of which the 
atmosphere allows a considerable fraction of solar radiation to 
penetrate to the earth's surface and then traps (more precisely, 
intercepts and re-radiates) much of the upward terrestrial infrared 
radiation from the surface and lower atmosphere. The downward re-
radiation further enhances surface warming and is the prime process 
causing the greenhouse effect.
    This is not a speculative theory, but a well understood and 
validated phenomenon of nature. The most important greenhouse gas is 
water vapor, since it absorbs terrestrial radiation over most of the 
infrared spectrum. Even though humans are not altering the average 
amount of water vapor in the atmosphere very much by direct injections 
of this gas, increases in other greenhouse gases which warm the surface 
cause an increase in evaporation which increases atmospheric water 
vapor concentrations, leading to an amplifying or ``positive'' feedback 
process known as the ``water vapor-surface temperature-greenhouse 
feedback.'' The latter is believed re- 

[[Page 125]]

sponsible for the bulk of the climate sensitivity (IPCC, 1996a). Carbon 
dioxide is another major greenhouse gas. Although it absorbs and re-
emits considerably less infrared radiation than water vapor, 
CO2 is of intense interest because its concentration is 
increasing due to human activities. Ozone, nitrogen oxides, some 
hydrocarbons, and even some artificial compounds like 
chlorofluorocarbons are also greenhouse gases. The extent to which they 
are important to climate depends upon their atmospheric concentrations, 
the rates of change of those concentrations and their effects on 
depletion of stratospheric ozone--which in turn, can indirectly modify 
the radiative forcing of the lower atmosphere thus changing climate--
currently offsetting a considerable fraction of the otherwise expected 
greenhouse warming signal.
    The earth's temperature, then, is primarily determined by the 
planetary radiation balance, through which the absorbed portion of the 
incoming solar radiation is nearly exactly balanced over a year's time 
by the outgoing terrestrial infrared radiation emitted by the climatic 
system to earth. As both of these quantities are determined by the 
properties of the atmosphere and the earth's surface, major climate 
theories that address changes in those properties have been 
constructed. Many of these remain plausible hypotheses of climatic 
change. Certainly the natural greenhouse effect is established beyond a 
reasonable scientific doubt, accounting for natural warming that has 
allowed the coevolution of climate and life to proceed to this point ( 
e.g., see Schneider and Londer, 1984). The extent to which human 
augmentation of the natural greenhouse effect (i.e., global warming) 
will prove serious is, of course, the current debate.
    Model Validation. There are many types of parameterizations of 
processes that occur at a smaller scale than our models can resolve, 
and scientists debate which type is best. In effect, are they an 
accurate representation of the large-scale consequences of processes 
that occur on smaller scales than we can explicitly treat? These 
include cloudiness, radiative energy transport, turbulent convection, 
evapotranspiration, oceanic mixing processes, chemical processes, 
ecosystem processes, sea ice dynamics, precipitation, mountain effects 
and surface winds.
    In forecasting climatic change, then, validation of the model 
becomes important. In fact, we cannot easily know in principle whether 
these parameterizations are ``good enough.'' We have to test them in a 
laboratory. That's where the study of paleoclimates has proved so 
valuable (e.g., Hoffert and Covey, 1992). We also can test 
parameterizations by undertaking detailed small-scale field or modeling 
studies aimed at understanding the high resolution details of some 
parameterized process the large-scale model has told us is important. 
The Second Assessment Report of IPCC (IPCC, 1996a) Working Group I 
devoted more than one chapter to the issue of validation of climatic 
models, concluding that ``the most powerful tools available with which 
to assess future climate are coupled climate models, which include 
three-dimensional representations of the atmosphere, ocean, cryosphere 
and land surface. Coupled climate modeling has developed rapidly since 
1990, and current models are now able to simulate many aspects of the 
observed climate with a useful level of skill. [For example, as noted 
earlier, good skill is found in simulating the very large annual cycle 
of surface temperatures in Northern and Southern Hemispheres or the 
cooling of the lower atmosphere following the injection of massive 
amounts of dust into the stratosphere after explosive volcanic 
eruptions such as Mt. Pinatubo in the Philippines in 1991.] Coupled 
model simulations are most accurate at large spatial scales (e.g., 
hemispheric or continental); at regional scales skill is lower''. 
[sentence in square brackets added]
    One difficulty with coupled models is known as ``flux 
adjustment''--a technique for accounting for local oceanic heat 
transport processes that are not well simulated in some models. Adding 
this element of empirical-statistical ``tuning'' to models that strive 
to be based as much as possible on first principles has been 
controversial. However, not all models use flux adjustments, yet nearly 
all models, with or with out this technique, produce climate 
sensitivities within or near to the standard IPCC range of 1.5 to 
4.5 deg.C. Flux adjustments do, however, have a large influence on 
regional climatic projections, even if they prove not to be a major 
impact on globally averaged climate sensitivity. Improving coupled 
models is thus a high priority for climate researchers since it is 
precisely such regional projections that are so critical to the 
assessment of climatic impacts on environment and society (e.g., IPCC, 
1996b; IPCC, 1997).
    Transient versus Equilibrium Simulations. One final issue needs to 
be addressed in the context of coupled climate simulations. Until 
recently, climate modeling groups did not have access to sufficient 
computing power to routinely calculate time evolving runs of climatic 
change given several alternative future histories of greenhouse gases 
and aerosol concentrations. That is, they did not perform so-called 
transient climate change scenarios. (Of course, the real Earth is 
undergoing a transient experiment.) Rather, the models typically were 
asked to estimate how the Earth's

[[Page 126]]

climate would eventually be altered (i.e., in equilibrium) after 
CO2 was artificially doubled and held fixed indefinitely 
rather than increased incrementally over time as it has in reality or 
in more realistic transient model scenarios. The equilibrium climate 
sensitivity has remained fairly constant for over 20 years of 
assessments by various national and international groups, with the 
assessment teams repeatedly suggesting that, were CO2 to 
double, climate would eventually warm at the surface somewhere between 
1.5 and 4.5 deg. C. (Later on we will address the issue of the 
probability that warming above or below this range might occur, and how 
probabilities can even be assigned to this sensitivity.)
    Transient model simulations exhibit less immediate warming than 
equilibrium simulations because of the high heat holding capacity of 
the thermally massive oceans. However, that unrealized warming 
eventually expresses itself decades to centuries later. This thermal 
delay, which can lull us into underestimating the long-term amount of 
climate change, is now being accounted for by coupling models of the 
atmosphere to models of the oceans, ice, soils, and biosphere (so-
called earth system models--ESMs). Early generations of such transient 
calculations with ESMs give much better agreement with observed climate 
changes on Earth than previous calculations in which equilibrium 
responses to CO2 doubling were the prime simulations 
available. When the transient models at the Hadley Center in the United 
Kingdom and the Max Planck Institute in Hamburg, Germany were also 
driven by both greenhouse gases (which heat) and sulfate aerosols 
(which cool), these time evolving simulations yielded much more 
realistic ``fingerprints'' of human effects on climate( e.g., Chapter 8 
of IPCC, 1996a). More such computer simulations are needed to provide 
high confidence levels in the models, but scientists using coupled, 
transient simulations are now beginning to express growing confidence 
that current projections are plausible.
    Transients and Surprises. However, such a very complicated coupled 
system like an ESM is likely to have unanticipated results when forced 
to change very rapidly by external disturbances like CO2 and 
aerosols. Indeed, some of the transient models run out for hundreds of 
years exhibit dramatic change to the basic climate state (e.g., radical 
change in global ocean currents). Thompson and Schneider (1982) used 
very simplified transient models to investigate the question of whether 
the time evolving patterns of climate change might depend on the rate 
at which CO2 concentrations increased. For slowly increasing 
CO2 buildup scenarios, the model predicted the standard 
model outcome: the temperature at the poles warmed more than the 
tropics.
    Any changes in equator-to-pole temperature difference help to 
create altered regional climates, since temperature differences over 
space influence large-scale atmospheric wind patterns. However, for 
very rapid increases in CO2 concentrations a reversal of the 
equator-to-pole difference occurred. If sustained over time, this would 
imply difficult to forecast, transient climatic conditions during the 
century or so the climate adjusts toward its new equilibrium state. In 
other words, the harder and faster the enormously complex earth system 
is forced to change, the higher the likelihood for unanticipated 
responses. Or, in a phrase, the faster and harder we push on nature, 
the greater the chances for surprises--some of which are likely to be 
nasty.
    Noting this possibility, the Summary for Policy makers of IPCC 
Working Group I concluded with the following paragraph:

          Future unexpected, large and rapid climate system changes (as 
        have occurred in the past) are, by their nature, difficult to 
        predict. This implies that future climate changes may also 
        involve ``surprises.'' In particular these arise from the non-
        linear nature of the climate system. When rapidly forced, non-
        linear systems are especially subject to unexpected behavior. 
        Progress can be made by investigating non-linear processes and 
        sub-components of the climatic system. Examples of such non-
        linear behavior include rapid circulation changes in the North 
        Atlantic and feedbacks associated with terrestrial ecosystem 
        changes.

    Of course, if the Earth system were somehow less ``rapidly forced'' 
by virtue of policies designed to slow down the rate at which human 
activities modify the land surfaces and atmospheric composition, this 
would lower the likelihood of non-linear surprises. Whether the risks 
of such surprises justify investments in abatement activities is the 
question that Integrated Assessment (IA) activities are designed to 
inform (IPCC, 1996c). The likelihood of various climatic changes, along 
with estimates of the probabilities of such potential changes, are the 
kinds of information IA modelers need from earth systems scientists in 
order to perform IA simulations. We turn next, therefore, to a 
discussion of methods to evaluate the subjective probability 
distributions of scientists on one important climate change issue, the 
climate sensitivity.

[[Page 127]]

    Subjective Probability Estimation. Finally, what does define a 
scientific consensus? Morgan and Keith (1995) and Nordhaus (1994) are 
two attempts by non-climate scientists, who are interested in the 
policy implications of climate science, to tap the knowledgeable 
opinions of what they believe to be representative groups of scientists 
from physical, biological and social sciences on two separate 
questions: first the climate science itself and second impact 
assessment and policy. Their sample surveys show that although there is 
a wide divergence of opinion, nearly all scientists assign some 
probability of negligible outcomes and some probability of very highly 
serious outcomes, with one or two exceptions, like Richard Lindzen at 
MIT (who is scientist number 5 on Fig. 1 of Morgan and Keith).
    In the Morgan and Keith study, each of the 16 scientists listed in 
Table 1 were put through a several hour, formal decision-analytic 
elicitation of their subjective probability estimates for a number of 
factors. Figure 1 shows the elicitation results for the important 
climate sensitivity factor. Note that 15 out of 16 scientists surveyed 
(including several IPCC Working Group I Lead Authors--I am scientist 9) 
assigned something like a 10 percent subjective likelihood of 
negligible (less than 1 deg.C) climatic change from doubling of 
CO2. These scientists also typically assigned a 10 percent 
probability for extremely large climatic changes--greater than 5 deg.C, 
roughly equivalent to the temperature difference experienced between a 
glacial and interglacial age, but occurring some hundred times more 
rapidly. In addition to the lower probabilities assigned to the mild 
and catastrophic outcomes, the bulk of the scientists interviewed (with 
the one exception) assigned the bulk of their subjective cumulative 
probability distributions in the center of the IPCC range for climate 
sensitivity. What is most striking about the exception, scientist 5, is 
the lack of variance in his estimates--suggesting a very high 
confidence level in this scientist's mind that he understands how all 
the complex interactions within the earth-system described above will 
work. None of the other scientists displayed that confidence, nor did 
the Lead Authors of IPCC. However, several scientists interviewed by 
Morgan and Keith expressed concern for ``surprise'' scenarios--for 
example, scientists 2 and 4 explicitly display this possibility on 
Figure 1, whereas several other scientists implicitly allow for both 
positive and negative surprises since they assigned a considerable 
amount of their cumulative subjective probabilities for climate 
sensitivity outside of the standard 1.5 to 4.5 range. This concern for 
surprises is consistent with the concluding paragraph of the IPCC 
Working Group I Summary for Policymakers quoted above.
    IPCC Lead Authors, who wrote the Working Group I Second Assessment 
Report, were fully aware of both the wide range of possible outcomes 
and the broad distributions of attendant subjective probabilities. 
After a number of sentences highlighting such uncertainties, the Report 
concluded: ``nevertheless, the balance of evidence suggests that there 
is a discernible human influence on the climate.'' The reasons for this 
now-famous subjective judgment were many, such as the kinds of factors 
listed above. These include a well validated theoretical case for the 
greenhouse effect, validation tests of both model parameterizations and 
performance against present and paleoclimatic data, and the growing 
``fingerprint'' evidence that suggests horizontal and vertical patterns 
of climate change predicted to occur in coupled atmosphere-ocean models 
has been increasingly evident in observations over that past several 
decades. Clearly, more research is needed, but enough is already known 
to warrant assessments of the possible impacts of such projected 
climatic changes and the relative merits of alternative actions to both 
mitigate emissions and/or make adaptations less costly. That is the 
ongoing task of integrated assessment analysts, a task that will become 
increasingly critical in the next century. To accomplish this task, it 
is important to recognize what is well established in climate theory 
and modeling and to separate this from aspect that are more 
speculative. That is precisely what IPCC (1996a) has attempted to 
accomplish.
III. Assessing The Impacts Of Climatic Change Projections
    One of the most dramatic of the standard ``impacts'' of climatic 
warming projections is the increase in sea level typically associated 
with warmer climatic conditions. An EPA study used an unusual approach: 
combining climatic models with the subjective opinions of many 
scientists on the values of uncertain elements in the models to help 
bracket the uncertainties inherent in this issue. Titus and Narayanan 
(1996)--including teams of experts of all persuasions on the issue--
calculated the final product of their impact assessment as a 
statistical distribution of future sea level rise, ranging from 
slightly negative values (i.e., a sea level drop) as a low probability 
outcome, to a meter or more rise, also with a low probability (see Fig 
2). The midpoint of the probability distribution is something like half 
meter sea level rise by the end of the next century.

[[Page 128]]

    Since the EPA analysis stopped there, this is by no means a 
complete assessment. In order to take integrated assessment to its 
logical conclusion, we need to ask what the economic costs of various 
control strategies might be and how the costs of abatement compare to 
the economic or environmental losses (i.e. impacts or damages as they 
are called) from sea level rises. That means putting a value--a dollar 
value of course--on climate change, coastal wetlands, fisheries, 
environmental refugees, etc. Hadi Dowlatabadi at Carnegie Mellon 
University leads a team of integrated assessors who, like Titus, 
combined a wide range of scenarios of climatic changes and impacts but, 
unlike the EPA studies, added a wide range of abatement cost estimates 
into the mix. Their integrated assessment was presented in statistical 
form as a probability that investments in CO2 emissions 
controls would either cost more than the losses from averted climate 
change or the reverse (e.g., Morgan and Dowlatabadi, 1996). Since their 
results do not include estimates for all conceivable costs (e.g., the 
political consequences of persons displaced from coastal flooding), the 
Carnegie Mellon group offered its results only as illustrative of the 
capability of integrated assessment techniques. Its numerical results 
have meaning only after the range of physical, biological and social 
outcomes and their costs and benefits have been quantified--a Herculean 
task. Similar studies have been made in Holland by a Dutch government 
effort to produce integrated assessments for policymakers. Jan Rotmans, 
who heads one of their efforts, likes to point out that such modeling 
of complex physical, biological and social factors cannot produce 
credible ``answers'' to current policy dilemmas, but can provide 
``insights'' to policymakers that will put decisionmaking on a firmer 
factual basis (Rotmans and van Asselt, 1996). Understanding the 
strengths and weaknesses of any complex analytic tool is essential to 
rational policymaking, even if quantifying the costs and benefits of 
specific activities is controversial.
    William Nordhaus, an economist from Yale University, has made 
heroic steps to put the climatic change policy debate into an 
optimizing framework. He is an economist who has long acknowledged that 
an efficient economy must internalize externalities (in other words, 
find the full social costs of our activities, not just the direct cost 
reflected in conventional ``free market'' prices). He tried to quantify 
this external damage from climate change and then tried to balance it 
against the costs to the global economy of policies designed to reduce 
CO2 emissions. His optimized solution was a carbon tax, 
designed to internalize the externality of damage to the climate by 
increasing the price of fuels in proportion to how much carbon they 
emit, thereby providing an incentive for society to use less of these 
fuels.
    Nordhaus (1992) imposed carbon tax scenarios ranging from a few 
dollars per ton to hundreds of dollars per ton--the latter which would 
effectively eliminate coal from the world economy. He showed that, in 
the context of his model and its assumptions, that these carbon 
emission fees would cost the world economy anywhere from less than 1 
percent annual loss in Gross National Product to a several percent loss 
by the year 2100. The efficient, optimized solution from classical 
economic cost-benefit analysis is that carbon taxes should be levied 
sufficient to reduce the GNP as much as it is worth to avert climate 
change (e.g., the damage to GNP from climate change). He assumed that 
the impacts of climate change were equivalent to a loss of about 1 
percent of GNP. This led to an ``optimized'' initial carbon tax of 
about five dollars or so per ton of carbon dioxide emitted. In the 
context of his modeling exercise, this would avert only a few tenths of 
a degree of global warming to the year 2100, a very small fraction of 
the 4 deg.C warming his model projected.
    How did Nordhaus arrive at climate damage being about 1 percent of 
GNP? He assumed that agriculture was the most vulnerable economic 
market sector to climate change. For decades agronomists had calculated 
potential changes to crop yields from various climate change scenarios, 
suggesting some regions now too hot would sustain heavy losses from 
warming whereas others, now too cold, could gain. Noting that the U.S. 
lost about one third of it's agricultural economy in the heat waves of 
1988, and that agriculture then represented about 3 percent of the U.S. 
GNP, Nordhaus felt the typically projected climatic changes might thus 
cost the U.S. economy something like 1 percent annually in the 21st 
century. This figure was severely criticized because it neglected 
damages from health impacts (e.g., expanded areas of tropical diseases, 
heat-stress deaths, etc.), losses from coastal flooding or severe 
storms, security risks from boat people created from coastal 
disruptions in South Asia or any damages to wildlife, fisheries or 
ecosystems that would almost surely accompany temperature rises at 
rates of degrees per century as are typically projected. It also was 
criticized because his estimate neglected potential increases in crop 
or forestry yields from the direct effects of increased CO2 
in the air on the photosynthetic response of these marketable plants. 
Nordhaus responded to his critics by conducting a survey, similar to 
that undertaken by Morgan and Keith, but this time focused on the 
impacts of several scenarios of climatic change on world

[[Page 129]]

economic product--including both standard market sector categories 
(e.g., forestry, agriculture, heating and cooling demands) and so-
called non-market amenities like biological conservation and national 
security.
    When Nordhaus surveyed the opinions of mainstream economists, 
environmental economists and natural scientists (I am respondent #10, 
in Nordhaus, 1994), he found that the former expressed a factor of 20 
less anxiety about the economic or environmental consequences of 
climate change than the latter (see Fig.3--Scenario A is for 3 deg.C 
warming by 2100 A.D. and Scenario C for 6 deg.C by 2100 A.D.). However, 
the bulk of even the conservative group of economists Nordhaus surveyed 
considered there to be at least a 10 percent probability that typically 
projected climate changes could still cause economic damages worth 
several percent of gross world product (the current U.S. GNP is around 
five trillion dollars--about 20 percent of the global figure). And, 
some of these economists didn't include estimates for possible costs of 
``non-market'' damages (e.g., harm to nature). One ecologist who did 
explicitly factor in non-market values for natural systems went so far 
as to assign a 10 percent chance of a hundred percent loss of GNP--the 
virtual end of civilization! While Nordhaus quipped that those who know 
most about the economy are less concerned, I countered with the obvious 
observation that those who know the most about nature are very 
concerned.
    We will not easily resolve the paradigm gulf between the optimistic 
and pessimistic views of these specialists with different training, 
traditions and world views, but the one thing that is clear from both 
the Morgan and Keith and Nordhaus studies is that the vast bulk of 
knowledgeable experts from a variety of fields admits to a wide range 
of plausible outcomes in the area of global environmental change--
including both mild and catastrophic eventualities--under their broad 
umbrella of possibilities. This is a condition ripe for 
misinterpretation by those who are unfamiliar with the wide range of 
probabilities most scientists attach to global change issues. The wide 
range of probabilities follows from recognition of the many 
uncertainties in data and assumptions still inherent in earth systems 
models, climatic impact models, economic models or their synthesis via 
integrated assessment models (see Schneider, 1997a,b). It is necessary 
in a highly interdisciplinary enterprise like the integrated assessment 
of global change problems that a wide range of possible outcomes be 
included, along with a representative sample of the subjective 
probabilities that knowledgeable assessment groups like the IPCC 
believe accompany each of those possible outcomes. In essence, the 
``bottom line'' of estimating climatic impacts is that both ``the end 
of the world'' and ``it is good for business'' are the two lowest 
probability outcomes, and that the vast bulk of knowledgeable 
scientists and economists consider there to be a significant chance of 
climatic damage to both natural and social systems. Under these 
conditions--and the unlikelihood that research will soon eliminate the 
large uncertainties that still persist--it is not surprising that most 
formal climatic impact assessments have called for cautious, but 
positive steps both to slow down the rate at which humans modify the 
climatic system and to make natural and social systems more resilient 
to whatever changes do eventually materialize.
IV. Policy Implications
    What Are Some Actions to Consider? Decisionmaking, of course, is a 
value judgment about how to take risks--gambling, if you will--in the 
environment-development arena. Despite the often bewildering 
complexity, making value choices does not require a Ph.D. in 
statistics, political science or geography to comprehend. Rather, 
citizens need simple explanations using common metaphors and everyday 
language that ordinary people can understand about the terms of the 
debate. Once the citizens of this planet become aware of the various 
tradeoffs involved in trying to choose between business-as-usual 
activities and sustainable environmental stewardship, the better will 
be the chances that the risk-averse common sense of the ``average'' 
person may be thrust into the decisionmaking process by a public that 
cares about its future and that of its planet, and knows enough not to 
be fooled by simple solutions packaged in slick commercials or 
editorials by any special interest.
    What are the kinds of actions that can be considered to deal with 
global change problems like climate change. The following list is a 
consensus from a multi-disciplinary, business, university and 
government assessment conducted by the National Research Council in 
1991. It is encouraging that this multi-discipline, ideologically 
diverse group (including economist Nordhaus, industrialist Frosch and 
climatologist Schneider) could agree that the United States, for 
example, could reduce or offset its greenhouse gas emissions by between 
10 and 40 percent of 1990 levels at low cost, or at some net savings, 
if proper policies are implemented. Here is the Council's entire 
suggested list:

[[Page 130]]

    (1) Continue the aggressive phaseout of CFC and other halocarbon 
emissions and the development of substitutes that minimize or eliminate 
greenhouse gas emissions.
    (2) Study in detail the ``full social cost pricing'' of energy, 
with a goal of gradually introducing such a system. On the basis of the 
principle that the polluter should pay, pricing of energy production 
and use should reflect the full costs of the associated environmental 
problems.
    (3) Reduce the emissions of greenhouse gases during energy use and 
consumption by enhancing conservation and efficiency.
    (4) Make greenhouse warming a key factor in planning for our future 
energy supply mix. The United States should adopt a systems approach 
that considers the interactions among supply, conversion, end use, and 
external effects in improving the economics and performance of the 
overall energy system.
    (5) Reduce global deforestation.
    (6) Explore a moderate domestic reforestation program and support 
international reforestation efforts.
    (7) Maintain basic, applied, and experimental agricultural research 
to help farmers and commerce adapt to climate change and thus ensure 
ample food.
    (8) Make water supply more robust by coping with present 
variability by increasing efficiency of use through water markets and 
by better management of present systems of supply.
    (9) Plan margins of safety for long-lived structures to take into 
consideration possible climate change.
    (10) Move to slow present losses in biodiversity.
    (11) Undertake research and development projects to improve our 
understanding of both the potential of geoengineering options to offset 
global warming and their possible side-effects. This is not a 
recommendation that geoengineering options be undertaken at this time, 
but rather that we learn more about their likely advantages and 
disadvantages.
    (12) Control of population growth has the potential to make a major 
contribution to raising living standards and to easing environmental 
problems like greenhouse warming. The United States should resume full 
participation in international programs to slow population growth and 
should contribute its share to their financial and other support.
    (13) The United States should participate fully with officials at 
an appropriate level in international agreements and in programs to 
address greenhouse warming, including diplomatic conventions and 
research and development efforts.
    This NRC (1991) assessment produced a remarkable list, considering 
the diversity of the participants' backgrounds and their varying 
ideological perspectives. But in the crucible of open debate that 
permeated that assessment activity, self-interest polemics and media 
grandstanding are incinerated. This group didn't assert that 
catastrophe was inevitable, nor that it was improbable. We simply 
believed that prudence dictates that ``despite the great uncertainties, 
greenhouse warming is a potential threat sufficient to justify action 
now.''
    Integrated assessments of the policy options offered by the 
National Research Council Report are actively being pursued with a 
variety of models.
    It is interesting that this comprehensive list of 13 
recommendations from the National Research Council report still ignored 
two fundamental aspects: the desperate need for (1) an intelligent, 
non-polemical public debate about global change and (2) 
interdisciplinary public education that also teaches students about 
whole systems and long-term risk management, not only traditional areas 
of isolated specialization.
    Environment and (or versus) Development? While the NRC report did 
acknowledge the importance of international dimensions of global change 
policymaking, it was still largely a developed country perspective. 
Developing countries often have very different perspectives. First of 
all, LDCs are struggling to raise literacy rates, lower death rates, 
increase life expectancy, provide employment for burgeoning populations 
and reduce local air and water pollution that pose imminent health 
hazards to their citizens and environments.
    Protecting species or slowing climate change are simply low on 
their priority lists as compared to more mature economic powers like 
the OECD nations. It is ironic, even if understandable, that LDCs put 
abatement of global change disturbances so low on their priority lists 
despite the fact that nearly all impact assessments suggest that it is 
these very countries that are most vulnerable to climatic change, for 
example.
    There is a phrase in economics known as ``the marginal dollar.'' In 
our context it means that given all the complexity of interconnected 
physical, biological and social systems, climate abatement may not be 
perceived as the best place to invest the next available dollar so as 
to bring the maximum social benefit to poor coun- 

[[Page 131]]

tries. I have heard many representatives of LDCs exclaim that until 
poverty is corrected, preventable disease stamped out, injustice 
redressed and economic equity achieved, they will invest their precious 
resources on these priorities. My response has been that climatic 
changes can exacerbate all of those problems they rightly wish to 
address, and thus we should seek to make investments that both reduce 
the risks of climate change and help with economic development 
(transfer of efficient technologies being a prime example). It is a 
great mistake, I believe, to get trapped in the false logic of the 
mythical ``marginal dollar,'' for it is not necessary that every penny 
of the next available dollar go exclusively to the highest priority 
problem whereas all the rest (particularly problems with surprise 
potential and the possibility of irreversible damages) must wait until 
priority one is fully achieved. To me, the first step is to get that 
marginal dollar cashed into small change, so that many interlinked 
priority problems can all be at least partially addressed. Given the 
large state of uncertainty surrounding both the costs and benefits of 
many human and natural events, it seems most prudent to address many 
issues simultaneously and to constantly reassess which investments are 
working and which problems--including global change--are growing more 
or less serious.
    It takes resources to invest, of course, and since the bulk of 
available capital is in developed countries, it will require 
international negotiations--``planetary bargaining'' it has been 
called--to balance issues of economic parity and social justice with 
environmental protection. Such negotiations are underway under U.N. 
auspices, and will likely take many years to work out protocols that 
weigh the diverse interests and perceptions of the world's nations.
    There is a lively debate among economists, technologists and 
environmentalists about what are the most cost-effective strategies for 
abating carbon emissions which also can reduce potential impacts of 
climatic changes to below the undefined ``dangerous'' levels referred 
to in the Framework Convention on Climate Change language. Most 
economists argue that some policy to ``internalize the externality'' of 
potential climate damage is already appropriate, reflecting the 
recommendations already published by the National Research Council in 
1991. Environmentalists usually argue that major efforts to spur 
immediate abatement of carbon emissions are necessary if climatic 
changes less than one more degree Celsius are to likely be avoided 
(which they typically define as ``dangerous''). Most economists, on the 
other hand, often argue that new technologies will be able to 
accomplish carbon abatement more cheaply in the future as such 
technologies are discovered and deployed (Wigley et al, 1996). Thus, 
their logic suggests that a cost-effective time profile of abatement 
would be to postpone most carbon reductions until later in the 21st 
century. This seemingly implacable debate will echo in Kyoto chambers, 
I am sure, in December 1997.
    My colleague, the Stanford University economist Lawrence Goulder, 
and I have used state-of-the-art economic modeling tools to study this 
debate, and conclude that both the stereotypical environmentalist (who 
argue to abate now) and economist positions (abate later) are actually 
not incompatible, but complimentary! We show (please see the Appendix 
in which our submitted Commentary to Nature magazine is reproduced) 
that although the economist view that future abatement is likely to be 
cheaper is probably correct, so too is the environmentalist argument 
that current actions are urgently needed, since such technologies 
referred to in economic cost-effectiveness studies won't simply invent 
themselves. In other words, policy actions to help induce technological 
changes are needed now in order to bring about a profile of cost-
effective abatement in the decades ahead. We also address the relative 
economic efficiency of alternative policy instruments: contrasting 
carbon taxes versus research and development subsides. Although we 
recognize the political reluctance of many to embrace any new taxes, in 
truth, most economic analyses show that a fee for the use of the 
atmosphere (currently a ``free sewer'') will reduce incentives to 
pollute, increase incentives to develop and deploy less polluting 
technologies, and can be more economically efficient than other 
policies--particularly if some of the revenues generated by a carbon 
tax were recycled back into the economy. R&D subsidies can be 
economically efficient, our conventional economic analyses suggest, to 
the extent that current R&D markets are already subsidized or otherwise 
not optimally efficient--a likelihood.
    Therefore, it is my personal view that all parties should recognize 
that potential damages to a global commons like the Earth's climate are 
not mere ideological rhetoric, nor are solutions necessarily 
unaffordable. Moreover, ``win-win'' solutions in which economic 
efficiency, cost-effectiveness and environmental protection can happily 
co-exist are possible--if only we put aside hardened ideological 
positions.

[[Page 132]]

V. Personal Observations On The Global Warming Media Debate
    A very intense, too-often personal and ad hominem, media debate has 
attended the global warming problem in the past 5 years. As a 
participant in this process, I can attest to the frustration one 
experiences in seeing a complex scientific problem with many policy 
implications often trivialized into an ideological boxing match in 
which polar extremes are pitted against each other and the work of the 
vast bulk of the knowledgeable community is marginalized. A baffling 
array of claims and counter claims appears, particularly in op-ed 
pieces, and a general state of public confusion is fostered. It is my 
belief that this confusion does not reflect the ordered state of 
knowledge, in which many aspects of the climate change issue enjoy 
strong consensual views, other aspects are considered plausible, 
whereas yet others are clearly (to insiders at least) highly 
speculative. Public dialog would be much richer if we all strove to 
separate out what is well known from what is speculative, an effort not 
attempted often enough in most public accounts of the issue. How is 
this best accomplished?
    For 20 years the scientific community, or at least the broad cross 
section scientific community represented by the deliberations of the 
National Research Council, IPCC and other international assessment 
groups, have suggested that if CO2 were to double and be 
held fixed, then at equilibrium (i.e. the change in steady state after 
a few hundred years) the earth's temperature would warm up some one and 
a half to four and a half degrees centigrade--the uncertainty, as noted 
earlier, in this climate sensitivity range largely being associated 
with the well recognized processes that we treat crudely in our climate 
models, mostly clouds and water vapor. The reason that very few 
scientist set the climate sensitivity range above four and a half 
degrees or below one and a half degrees is primarily because of natural 
experiments such as ice ages, volcanoes and seasonal cycles, as well as 
other technical questions dealing with theory and modeling (see IPCC 
1996a for details). Nevertheless, a few have asserted, some with very 
high confidence, that global warming from CO2 doubling would 
only cause a few tenths of a deg.C equilibrium temperature rise, and 
even have argued that certain processes that they can name, but cannot 
demonstrate to have global scale effects, would be responsible for this 
diminishing effect (e.g., Lindzen, 1990). Such debates (e.g., see 
Schneider, 1990) are very difficult for the lay public to penetrate, 
and even for relatively skilled but still non-professional observers, 
they are hard to follow. It is for such reasons that groups like the 
National Research Council or The World Meteorological Organization and 
the United Nations Environment Program have called a community of 
scientists holding a spectrum of views, but all knowledgeable in the 
basic art, to meet together to debate the relative merits of various 
lines of evidence and to provide assessments which give the best guess 
as well as a judgment for the ranges of uncertainty of a variety of 
climate changes, as well as their potential impacts on environment and 
society and the costs of mitigation from alternative policies. Indeed, 
the Intergovernmental Panel on Climate Change (IPCC 1996a, b, and c) is 
now the premier such assessment activity and represents the effort of 
hundreds of directly involved scientists and thousands of indirectly 
involved scientists, industrialists, NGO's or policymakers who serve as 
reviewers and commentators.
    The IPCC Peer Review Processes. Let me contrast the IPCC process 
with that of some of its critics. In July 1996 an extraordinary meeting 
of about six dozen climate scientists from dozens of countries took 
place. It was the third installment of a process to write a Second 
Assessment Report for the IPCC. This meeting, in Asheville, North 
Carolina, was designed to make explicit the points of agreement and 
difference among the scientists over exceedingly controversial and 
difficult issues, including the signal detection and attribution 
chapter--the most controversial. Chapter 8 was controversial since new 
lines of evidence had been brought to bear by three modeling groups 
around the world, each suggesting a much stronger possibility that a 
climate change signal has been observed and that its pattern (or 
fingerprint) is much closer matched to anthropogenic caused changes 
than heretofore believed. Scientists are by nature a skeptical lot, and 
typically submit their work for peer review before publishing. When 
scientists have new ideas or new tests, as the dozen or so representing 
these modeling groups in fact had, they typically write a journal 
article and submit it for publication. The journals, peer reviewed of 
course, typically send the article out to two or three peers, who write 
anonymous reviews, (unless the reviewers have the courage to confess as 
I, the editor of the journal Climatic Change, encourage my reviewers to 
do). The authors then rewrite their article in response to the 
reviewers and the editor serves as referee. The process usually goes 
back and forth several times with several revised drafts of the article 
until a suitable compromise is achieved among reviewers, authors and 
the editor.
    Contrast this normal journal peer review process in which a few 
people are involved, with what happened in Asheville in 1995 at the 
IPCC's third workshop. Ben

[[Page 133]]

Santer from Lawrence Livermore National Lab, who had assembled the 
results of a number of modeling groups and was the first author of the 
submitted manuscript (Santer et al, 1996) on climate signal detection 
and the Convening Lead Author of Chapter 8 of the IPCC report (the 
controversial IPCC chapter on signal detection and attribution), 
presented the results of his group's effort not to just the half dozen 
Lead Authors of Chapter 8, as is typical in IPCC meetings, but to the 
entire assembled scientific group at Asheville. Not only did Santer 
have to explain the work of him and his colleagues (many of whom were 
there) to his most knowledgeable peers, but also to scores of others 
from communities as diverse as stratospheric ozone experts like Susan 
Solomon and Dan Albritton, to satellite meteorologists like John 
Christy or biospheric dynamics experts such as Jerry Melillo. 
Climatologists such as Tom Karl or myself were also present, along with 
heads of weather services and other officials from several countries 
who served on the IPCC's assessment team as a member of the scientific 
delegations of the various nations. Not everybody was equally 
knowledgeable in the technical details of the debate, of course, but 
even these less familiar participants served an essential role: of 
witnesses to the process of honest, open debate. Perhaps only twenty-
five percent of those assembled had truly in-depth knowledge of the 
full range of details being discussed. However, all understood the 
basic scientific issues and most know how to recognize slipshod work--
to say nothing of a fraud or a ``scientific cleansing''--when they see 
it. This remarkable session lasted for hours, was occasionally intense, 
always was cordial, and never turned polemical. As a result, words for 
Chapter 8 were changed, ideas and concepts altered somewhat, but by and 
large basic conclusions were unchanged because the vast bulk of those 
assembled (and no one proclaimed to the contrary) were convinced that 
the carefully hedged statements the lead authors proposed were, in 
fact, an accurate reflection of the state of the science based upon all 
available knowledge--including the new results. This was not only peer 
review, but this was peer review ten times normal! As the editor of a 
peer review journal it would be inconceivable for me to duplicate this 
process, as I have to hope that a few referees and myself can serve the 
peer reviewing role half as well as this remarkable, open process at 
Asheville. Moreover, after the Asheville meeting there were two more 
IPCC drafts written and reviewed by hundreds of additional scientists 
industrialists, policymakers, and NGO's from all over the globe.
    Contrast this open IPCC process then, to the harsh critics of the 
IPCC, alleging ``scientific cleansing'', ``herd mentality'', and first 
presenting their detailed technical counter arguments in such 
``refereed scientific literature'' as the editorial pages of the Wall 
Street Journal (Singer 1996, Seitz 1996,). Some had the temerity, 
although I do not understand how they could do it with a straight face, 
to allege that Chapter 8 conclusions were all based upon non peer 
reviewed work, despite the fact that the Asheville process was ten 
times normal peer review, to say nothing of the hundreds of scientific 
reviewers of the next draft of the IPCC report that followed. In the 
wake of all these reviews, textual alterations needed to be made, and 
these were minor, but were done over the course of time. The last round 
of changes were made by the Convening Lead, Ben Santer. Some interests 
subsequently alleged that these minor changes dramatically altered the 
report and, with no evidence, asserted they were politically motivated 
(``scientific cleansing'' one charged--and launched a vicious personal 
attack on one of the least political, most cautious scientists, Ben 
Santer). Any honest evaluation will reveal that this irresponsible 
charge--published in the unrefereed opinion pages of a business daily--
is utterly absurd. In fact, the most famous line in the IPCC report 
(that there is a ``discernible'' human effect on climate) appeared as 
one sentence in a short paragraph that was 80 percent caveats! The IPCC 
report essentially ``drips'' with caveats.
    Moreover, the ``discernible'' line is not a radical statement, as 
it reflects a lowest common denominator consensus view of the vast bulk 
of people exposed to the evidence. It does not assert climate signal 
detection to be proven beyond any doubt, nor do I or any other 
responsible scientists I know of make such assertions. Nor can such 
evidence of human effects be dismissed as wholly random at a very high 
probability by responsible scientists--except perhaps in the opinions 
section of some newspapers. To ignore such contrarian critics would be 
inappropriate, I agree. However, to give them in news stories 
comparable weight to a hundred-scientists, thousand-reviewer document, 
as if somehow a small minority of scientists who are skeptical deserve 
equal weight, without informing the readership or viewership that the 
contrarians represent a tiny minority, is to mislead a public who 
cannot be expected to look up for themselves the relative weights of 
conflicting opinions. And to publish character-assassinating charges of 
``scientific cleansing'' without checking the facts is simply 
unethical--at least in any system of ethics I respect.

[[Page 134]]

VI. Concluding Remarks
    A condensed summary of the principal conclusions I would like to 
draw is as follows, beginning with the more narrowly technical issues 
and proceeding to broader generalizations about impacts, uncertainties 
and policy choices:
    Hierarchy of models. A hierarchy of models, ranging from simple 
zero or one-dimensional, highly parameterized models up to coupled 
three-dimensional models that simulate the dynamics and thermodynamics 
of connected physical and biological sub-systems of the earth-system 
are needed for climatic effects assessment. The simpler models are more 
transparent--allowing cause-and-effect processes to be more easily 
traced--and are much more tractable to construct, run and diagnose, 
whereas multi-dimensional, dynamical models can provide geographic and 
temporal resolution needed for regional impact assessments and--
hopefully--provide more realistic and detailed simulations, even if at 
much higher costs for construction, computation, diagnosis and 
interpretability. Since the real climate system is undergoing a 
transient response to regionally heterogeneous (patchy) forcings (e.g., 
aerosols and greenhouse gasses combined, which both vary over time and 
space), eventually it will be necessary to run fully coupled three-
dimensional earth systems models in order to ``hand off'' their results 
to a variety of regional impact assessment models. In the interim, 
lower resolution ``simple'' climate models can be hybridized into more 
comprehensive models to produce hybrid estimates of time-evolving 
regional patterns of climatic changes from a variety of emissions and 
land use change scenarios. Such estimates may be instructive to 
policymakers interested in the differential climatic impacts of various 
climate forcing scenarios and/or various assumptions about the internal 
dynamics of both climate and impact models.
    Sensitivity studies are essential. It is unlikely that all 
important uncertainties in either climatic or impact models will be 
resolved to the satisfaction of the bulk of the scientific community in 
the near future. However, this does not imply that model results are 
uninformative. On the contrary, sensitivity analyses in which various 
policy-driven alternative radiative forcing assumptions are made can 
offer insights into the potential effectiveness of such policies in 
terms of their differential climatic effects and impacts. Even though 
absolute accuracy is not likely to be assured for the foreseeable 
future, considerable precision concerning the sensitivity of the 
physical and biological sub-systems of the earth can be studied via 
carefully planned and executed sensitivity studies across a hierarchy 
of models.
    Validation and testing are required. Although it may be 
impractical, if not theoretically impossible, to validate the precise 
future course of climate given the uncertainties that remain in 
forcings, internal dynamics and unpredictable surprise events, many of 
the basic features of the coupled physical and biological sub-systems 
of the earth can already be simulated to a considerable degree. Testing 
models against each other when driven by the same sets of forcing 
scenarios, testing the overall simulation skill of models against 
empirical observations, testing model parameterizations against high 
resolution process models or data sets, testing models against proxy 
data of paleoclimatic changes and testing the sensitivity of models to 
radiative forcings of anthropogenic origin by computing their 
sensitivity to natural radiative forcings (e.g., season radiative 
forcing, volcanic dust forcing, orbital element variation forcings 
etc.) comprise a necessary set of validation-oriented exercises that 
all modelers should agree to perform. Similarly, impacts models should 
also be subjected to an analogous set of validation protocols if their 
insights are to gain a high degree of credibility.
    Subjective probability assessment. In addition to standard 
simulation modeling exercises in which various parameters are specified 
or varied over an uncertainty range, formal decision-analytic 
techniques can be used to provide a more consistent set of values for 
uncertain model parameters or functional relationships. The embedding 
of subjective probability distributions into climatic models is just 
beginning (e.g., Titus and Narayanan, 1996), but may become an 
important element of integrated assessment modeling in future 
generations of model building (e.g., see the discussion of the 
hierarchy of integrated assessment models in Schneider, 1997b).
    ``Rolling reassessment.'' It is obvious that the projection of 
climatic effects and related impacts will continue to change as the 
state-of-the-art in both kinds of models improves over the next few 
decades. Therefore, the most flexible management possible of a global 
commons like the Earth's climate seems a virtual necessity, since the 
potential seriousness of the problem--or even the perception of that 
seriousness--is virtually certain to change with new discoveries and 
actual climatic and other environmental or social events. Therefore, a 
series of assessments of climatic effects, related impacts, and policy 
options to prevent potentially dangerous impacts will be needed 
periodically--perhaps every 5 years as IPCC has chosen for the repeat 
period of its major Assessment Reports that treat climatic effects, 
impacts and policy issues as separable assessments. It seems important 
that whatever policy in- 

[[Page 135]]

struments are employed (to either mitigate anthropogenic forcings or 
help reduce damage from projected climatic effects) be flexible enough 
to respond quickly and cost-effectively to the evolving science that 
will emerge from this rolling reassessment process.
    Consider surprises and irreversibility. Given the many 
uncertainties that still attend most aspects of the climatic change and 
impacts debate, priority should be considered for those aspects which 
could exhibit irreversible damages (e.g., extinction of species whose 
already-shrinking habitat is further stressed by rapid climatic 
changes) or for which imaginable ``surprises'' have been identified 
(e.g., alterations to oceanic currents from rapid increases in 
greenhouse gasses). For these reasons, management of climatic risks 
needs to be considered well in advance of more certain knowledge of 
climatic effects and impacts.
    ``Win-win'' strategies. Economically efficient, cost-effective and 
environmentally sustainable policies have been identified and others 
can be found to help induce the kinds of technological innovations 
needed to reduce atmospheric emissions in the decades ahead. Some mix 
of emissions ``cap and trade'', carbon taxes with revenue recycling, or 
technology development incentives can provide ``win-win'' solutions if 
all parties to the environment-development debate would lower the 
intensity of their ideological preconceptions and work together for 
cost-effective and equitable measures to protect the global commons.
                               references
Hoffert, M.I. and Covey, C. (1992) ``Deriving global climate 
    sensitivity from paleoclimate reconstructions,'' Nature 360: 573-
    76.
Intergovernmental Panel on Climatic Change (IPCC), (1996a). Climate 
    Change 1995. The Science of Climate Change: Contribution of Working 
    Group I to the Second Assessment Report of the Intergovernmental 
    Panel on Climate Change. Houghton, J.T., Meira Filho, L.G., 
    Callander, B.A., Harris, N., Kattenberg, A., and Maskell, K., eds. 
    Cambridge: Cambridge University Press. 572 pp.
Intergovernmental Panel on Climatic Change (IPCC), (1996b). Climate 
    Change 1995. Impacts, Adaptations and Mitigation of Climate Change: 
    Scientific-Technical Analyses. Contribution of Working Group II to 
    the Second Assessment Report of the Intergovernmental Panel on 
    Climate Change. Watson, R.T., Zinyowera, M.C., and Moss, R.H., eds. 
    Cambridge: Cambridge University Press. 878 pp.
Intergovernmental Panel on Climatic Change (IPCC), (1996c). Climate 
    Change 1995. Economic and Social Dimensions of Climate Change. 
    Contribution of Working Group III to the Second Assessment Report 
    of the Intergovernmental Panel on Climate Change. Bruce, J.P., Lee, 
    H., and Haites, E.F., eds. Cambridge: Cambridge University Press.
Intergovernmental Panel on Climatic Change (IPCC), 1997. Workshop on 
    Regional Climate Change Projections for Impact Assessment, Imperial 
    College, London, 24-26 September 1996.
Lindzen, R.S. 1990. ``Some Coolness Concerning Global Warming''. Bull. 
    Amer. Meteor. Soc. 71: 288-299
Mass, C. and S. H. Schneider, 1977. ``Influence of sunspots and 
    volcanic dust on long-term temperature records inferred by 
    statistical investigations''. J. Atmos. Sci. 34 (12): 1995-2004.
Morgan, M.G. and H. Dowlatabadi. 1996. ``Learning from Integrated 
    Assessment of Climate Change''. Climatic Change 34 (3-4): 337-368.
Morgan, M.G. and D.W. Keith 1995. ``Subjective judgments by climate 
    experts'', Environmental Science and Technology 29: 468A-476A
National Research Council. 1991. Policy Implications of Greenhouse 
    Warming. National Academy of Sciences; Washington, DC.
Nordhaus, W.D. 1992. ``An Optimal Transition Path for Controlling 
    Greenhouse Gases'', Science 258: 1315-1319.
Nordhaus, W.D. Jan-Feb 1994. ``Expert opinion on climate change'', 
    American Scientist 45-51.
Root, T. L. and S. H. Schneider. 1995. ``Ecology and climate: research 
    strategies and implications'', Science 269: 331-341.
Rotmans J. and van Asselt, M. 1996. ``Integrated assessment: a growing 
    child on its way to maturity--an editorial''. Climatic Change 34 
    (3-4): 327-336.
Santer, B.D., K.E. Taylor, T.M.L. Wigley, T.C. Johns, P.D. Jones, D.J. 
    Karoly, J.F.B. Mitchell, A.H. Oort, J.E. Penner, V. Ramaswamy, M.D. 
    Schwarzkopf, R.J. Stouffer, and S. Tett. 1996. ``A search for human 
    influences on the thermal structure of the atmosphere.'' Nature 
    382: 39-46.
Schneider, S.H. 1990. Global Warming: Are We Entering the Greenhouse 
    Century? Vintage Books, New York, NY. 343 pages.

[[Page 136]]

Schneider, S.H. 1997a. Laboratory Earth: The Planetary Gamble We Can't 
    Afford to Lose. Basic Books: New York.
Schneider, S.H. 1997b. ``Integrated assessment modelling of global 
    climate change: Transparent rational tool for policymaking or 
    opaque screen hiding value-laden assumptions?'' Environmental 
    Modelling and Assessment (submitted).
Schneider, S.H. and R. Londer. 1984. The Coevolution of Climate and 
    Life. Sierra Club Books, San Francisco, CA.
Schneider, S.H. and L.E. Mesirow. 1976. The Genesis Strategy: Climate 
    and Global Survival. Pleanum, New York, NY. 419 pages.
Seitz, F. 1996. ``A Major Deception on Global Warming''. Wall Street 
    Journal. New York. June 12.
Singer, S.F. 1996. ``Letter to the Editor''. Wall Street Journal. New 
    York. July 11.
Thompson, S. L. and S. H. Schneider, 1982. ``CO2 and 
    Climate: The importance of realistic geography in estimating the 
    transient response'', Science 217: 1031-1033.
Titus, J. and V. Narayanan, 1996. ``The Risk of Sea Level Rise: A 
    Delphic Monte Carlo Analysis in which Twenty Researchers Specify 
    Subjective Probability Distributions for Model Coefficients within 
    their Respective Areas of Expertise''. Climatic Change 33 (2):151-
    212.
Wigley, T.M.L., R. Richels, and J.A. Edmonds. 1996. ``Economic and 
    environmental choices in the stabilizations of atmospheric 
    CO2 concentrations,'' Nature 379: 240-243.

[[Page 137]]

    
    


[[Page 138]]



[[Page 139]]



[[Page 140]]



[[Page 141]]



[[Page 142]]



[[Page 143]]



[[Page 144]]



[[Page 145]]



[[Page 146]]



[[Page 147]]



[[Page 148]]



[[Page 149]]



[[Page 150]]

  Responses by Dr. Stephen H. Schneider to Additional Questions from 
                             Senator Baucus
    Question 1. During the hearing, Dr. Barron stated that our 
strategies to address increasing concentrations of greenhouse gases 
should be adaptive in nature. In your opinion, what would be the most 
important adaptation strategies to pursue?
    Response. I agree with Dr. Barron that adaptive strategies are the 
most sensible. The reason I feel that they are sensible, as I also 
pointed out in written and oral testimoneys, is that it is very likely 
that further information on both climatic effects and impacts is likely 
to change our perceptions of the damages that climate could cause to 
environment and society, as well as the costs of mitigating those 
damages as new technologies are invented and implemented. Therefore, 
whatever policy instruments we adopt should have the maximum 
flexibility to be able to take advantage of, what I called in my 
written testimony, ``rolling re-assessment.'' That is, every five or so 
years some groups (like the IPCC) will produce the assessments, and the 
state of knowledge so assessed might indicate more serious (or less 
serious) concern over climate change than previous assessments. 
Therefore, policy instruments that are most flexible will allow the 
highest degree of adaptive management. In my personal view, although I 
recognize that political realities (currently in the United States at 
least) stand in its way, a carbon tax is probably the most flexible 
instrument (see the Appendix to my written testimony, which contains 
the commentary, now accepted, for Nature magazine by Professor Larry 
Goulder and myself defending the flexibility and economic efficiency 
aspects of a carbon tax as opposed to other carbon policy instruments). 
But regardless of whether a carbon tax, cap and trade arrangements, R&D 
subsidies or other instruments are the ultimate policies of choice, 
minimizing ``hardwiring'' would seem to me the best strategy.
    There are other areas where I think adaptive measures should also 
be considered. I have long advocated ``anticipatory adaptation'' as one 
of the responses to the possibility of negative effects of climatic 
changes. For example, a new water project could well increase the 
height of a dam, the width of a channel, or the amount of free 
coastline before expensive infrastructure would be allowed to be built, 
all in anticipation of the not unlikely possibility of increased 
extremes of drought and flood or sea levels. Building extra margins of 
safety into currently planned or future infrastructure is usually very 
inexpensive relative to the cost of retrofit. Thus, such anticipatory 
adaptation can substantially reduce the overall lifetime cost of the 
project, particularly if currently foreseeable but not certain impacts 
like sea level rise or extreme floods were to occur. Likewise, it is 
well-known that building more efficient houses and cars at the outset 
is much less costly than trying to retrofit them once they have been 
built.
    Another way in which anticipatory adaptation can take place is to 
make investments in agricultural research. For example, we know that if 
there is an increase in the probability of droughts and floods, as it 
is appearing to be increasingly likely, then agronomic research in 
which crop varieties or farming techniques that are more resilient to 
large climatic variations would provide a measure of security against 
those variations as they unfold. And even if they did not unfold, such 
resilience would help us deal with the ordinary climate variability, 
which already causes substantial year-to-year variations in 
agricultural productivity, even in technologically advanced countries 
like the United States.
    Finally, a form of adaptive strategy is simply the development of 
alternative energy technologies. That is, should the world decide in 
the next decade or so that it really does wish to avert the potential 
for ``dangerous interference'' in the climate system as the FCCC words 
it, it would be much more expensive to replace these conventional 
energy systems if there were no previous enhanced research and 
development efforts to experiment with nonconventional alternatives in 
advance of their urgent need. Therefore, investment in alternative 
energy systems to conventional fossil energy provides a measure of 
anticipatory adaptation that would make future adjustments much less 
expensive than if we simply pretend that business is usual is the 
safest and best path, and luck turns against us as new studies prove 
climate change to be in the mid-to-upper range of currently projected 
damages.

    Question 2. You stated in your testimony that it was difficult for 
plants and animals to adapt to a temperature increase of 5 deg.C over 
the 10,000 year period following the last Ice Age and that many species 
would likely go extinct with a kind of rapid temperature increase 
projected for the next century. Assuming, for the purpose of this 
question, that the Earth experiences a temperature increase of greater 
than 1.5 deg.C over the coming 100 years, what is the likelihood that 
species will successfully adapt? If, in your opinion, this represents a 
threat to preserving biological diversity, to your knowledge has there 
ever been a period in the paleoclimate record where climate change has 
resulted in significant loss of species?

[[Page 151]]

    Response. Let me answer the last part of Senator Baucus's question 
first. There are a number of periods in paleoclimatic records where 
rapid climate change resulted in dramatic loss of species. The obvious 
example is the famous ``Cretaceous/Tertiary boundary'', in which 
temperature changes on the order of 10 degrees per year likely 
accompanied an asteroid collision with the earth. Half the existing 
species in the world disappeared, including dinosaurs. Fortunately, no 
one envisions such a catastrophic rate of change! However, climate 
change is not the only factor by which humans disturb nature. It has 
long been argued by ecologists that the fragmentation of habitats, 
forcing wild species into smaller and smaller refuges with fewer 
resources and higher competition than they would normally experience, 
is a threat to preserving biodiversity. Indeed this ``conventional 
ecological wisdom'' has led such luminaries as E.O. Wilson at Harvard 
to predict a mini-extinction crisis, which, viewed from the perspective 
of hundreds of years, might look in some future geological record 
almost as if an asteroid had hit the earth today.
    But, if we combine the fragmentation of habitats, the introduction 
of thousands of chemicals for which most creatures have no evolutionary 
experience and which are often toxic, the transport across natural 
biogeographic barriers of so-called ``exotic species,'' and combine 
these stresses on natural systems with climate change at rates of 
degrees per century (as opposed to degrees per thousand years that are 
more typical in the past 10,000 years), then I am confident that it 
would be very difficult for many species to survive such a combination 
of human pressures without an unnaturally large number of extinctions. 
Whether such extinctions would be counted ``only'' in the several 
percent range or the tens of percent range, as many ecologists predict, 
is of course impossible to know now. But, it would seem to me almost 
certain that a dramatic increase of unnatural extinction rates would 
occur from this combination of fragmented habitats and rapidly changing 
climate. Even if we were to substantially expand our network of 
reserves and to interconnect them to allow migration corridors, actions 
that would certainly reduce somewhat our damages to nature, I still 
doubt we could prevent substantial loss of biodiversity. However, 
careful conservation practice, maintaining conservation areas, 
ecosystem restoration, maintenance of adequate wetlands, and cost-
effective priorities for conservation investments, probably could go a 
long ways toward offsetting a significant fraction of the damages that 
we would likely otherwise inflict on nature.
    Finally, without requiring an asteroid collision and its 
unbelievably rapid, large climate change, we do know that extinctions 
occurred at the end of the last ice-age, in which the ``charismatic 
metafauna'' such as mammoths and saber-toothed tigers disappeared. This 
is a time in which there were many ``no analog'' habitats, brought 
about by nature's typical sustained rates of climate change: on the 
order of degrees per millennium. I am virtually certain that degrees 
per century of climate change sustained over a century or more and 
combined with fragmented habitats would, as stated earlier, 
substantially increase the extinction rates of species all around the 
world.

    Question 3. Dr. Lindzen referred in his testimony to a natural 
mechanism that would be employed by the Earth to counteract the 
predicted climatic changes due to the effect of increased water vapor 
in the atmosphere. Are you aware of any historic reference or specific 
research that would support a theory of the existence of such a 
mechanism?
    Response. Dr. Lindzen referred in his testimony to natural 
mechanisms that could counteract the rate of climate change, as he has 
done many times in the past and in different contexts. A number of 
years ago, he asserted, without proof, that increasing surface 
temperatures would decrease the amount of moisture in the upper 
troposphere (between about 5 and 10 miles up). However, a number of 
observational studies show that when the North Pacific region warmed, 
the moisture content of the upper troposphere actually increased, as 
the computer models suggest, not as Dr. Lindzen speculated. He later 
``recanted'' his position (at least temporarily) when pressed by then 
Senator Gore at a Senate hearing.
    Dr. Lindzen frequently points to physical processes that are known 
to occur on small-scales, and asserts that since they are not 
explicitly treated in computer models, that the models necessarily are 
inaccurate, and, furthermore, he implies this inaccuracy is only in one 
direction--an overestimate of climate sensitivity. He has never 
demonstrated that the neglect of such small-scale processes makes any 
difference at the scale at which these models operate (hundreds of 
kilometers across). A scientist must demonstrate how small-scale 
processes matter to events at large scales, and then demonstrate that 
the poor treatment of such processes will change the climate 
sensitivity in a given direction. Neither Dr. Lindzen nor anyone else 
has demonstrated that poor treatment of each of these small scale 
processes necessarily matters at large scales, let alone in what 
direction a better representation of them

[[Page 152]]

would alter our predictions. Quite simply, these are theoretical 
speculations and Dr. Lindzen has asked the world to wait until these 
complex, technical issues are thoroughly resolved before paying 
attention to the current state-of-the-art--imperfect as it is--in 
modeling.
    To me, what is essential is the validation of existing tools, not 
their theoretical completeness (see my written testimony on this). 
Validation studies produce mixed results, of course, but, generally 
support the basic predictions of the magnitude of change in the climate 
models, not a tenth of that magnitude that Dr. Lindzen repeatedly 
asserts is the most likely outcome.
    Furthermore, in his written testimony, Dr. Lindzen said that 
satellites suggested that the computer models underestimated the amount 
of water vapor in the upper troposphere sufficiently to cause an error 
of about 20 watts per square meter in the models' natural greenhouse 
effect calculations. He compared this 20 to the 4 watts per square 
meter that a doubling of CO2 would add in terms of trapped 
infrared heat and implied we somehow can't detect a consequence from 
about 4 watts per square meter heat trapping when the absolute error in 
the models is 20 watts? Dr. Lindzen knows, as we have personally 
debated this issue before, that this is a misleading comparison. Since 
any error a model may make in the absolute amount of energy that it 
calculates the natural atmosphere traps is also an error that would 
take place both in the model's control experiment, and in the 
experiment in which carbon dioxide were increased. In other words, the 
error would subtract out from these two experiments, leaving no 
difference at all unless the processes involved are what we call 
``nonlinear.'' Indeed, processes are nonlinear in the climate system, 
but Dr. Lindzen has never shown that any such nonlinearity would reduce 
the sensitivity of the climate, as it could increase in sensitivity. 
The scientific community is well aware of these issues, tries to test 
them as best as possible, and would never confuse relative and absolute 
accuracy. By way of analogy, if I normally weighed 180 pounds, got on 
my scale and it said 190 pounds, I would be angry at the absolute error 
in my scale, but would get used to it over time. If a month later, 
after overindulging in too many desserts, I step on the scale and it 
read 193, I would be remiss to say that because the 3-pound relative 
increase is less than the absolute error of 10 pounds in the scale, 
that therefore the 3-pound increase can't be taken seriously. 
Obviously, had the scale been properly calibrated to 180, it still 
would have come out at 183, or perhaps 182 or 184 if the scale were 
slightly ``nonlinear.'' But by and large, the absolute error would make 
very little difference in the sensitivity of the scale to measuring 
change. That is the fallacy in Dr. Lindzen's comparison of the 4 watts 
per square meter CO2 doubling heating effect with the 20 
watt per square meter absolute error in the baseline calibration of the 
models he claims exists. I apologize for the technical complexity of 
this answer, but I feel that it is important to focus on that statement 
so as to emphasize the very little credibility that it deserves.

    Question 4. Dr. Lindzen stated in his testimony that the one 
specific feature that led to the IPCC conclusion of a discernible human 
influence on global climate, . . . ``disappears when additional data is 
considered.'' Are you aware of specific ``additional data'' that was 
not considered or erroneously applied that would cause the IPCC to 
reach a different conclusion? Are you aware of a specific research 
result or model that supports Dr. Lindzen's claim? If so, did you know 
whether the IPCC considered it? Are you aware of other factors that the 
IPCC relied upon to conclude that human activities were impacting 
global climate.
    Response. This is a very complicated issue, which I will try to 
answer as briefly as possible, but still will take several paragraphs. 
In short, IPCC in 1995 had not considered the additional data that Dr. 
Lindzen refers to, because it was not available to the analysis team at 
the time the analysis was performed. However, the very same authors who 
performed the analysis have not only considered such data recently, but 
they have incorporated it into subsequent analyses and their 
conclusions remain the same, in fact, they are strengthened. I strongly 
urge that you contact Dr. Ben Santer from the Lawrence Livermore 
National Laboratory, who will be able to explain this further. There is 
a debate in Nature magazine (12 December 1996 issue) in which you can 
find further technical details. In short, the argument is simply this. 
The first analysis that the IPCC debated was based on a calculation at 
Lawrence Livermore National Lab, in which carbon dioxide increases and 
aerosol increases from pre-industrial values to present were used and 
compared to carbon dioxide increases alone. The agreement between the 
models and observations was much better when the aerosols were 
included, which is what one might expect since aerosols also are part 
of the human impact on climate in the real world. However, the real 
world did not experience a fixed increase in either carbon dioxide or

[[Page 153]]

aerosols, but rather these ``radiative forcings'' changed with time--
what we call transient experiments (see my written testimony).
    The first studies which Dr. Santer and his colleagues performed 
involved equilibrium experiments. It turns out, and government 
officials should be proud of this, that environmental controls on air 
pollution that generates sulphate particles (because of their potential 
hazards to human health) caused a reduction in the emissions of such 
sulphates from the mid-seventies through the 1990's in North America 
and Europe. Therefore, a better way to perform the climate experiment 
would not be to put in a fixed amount of sulphate, as was done in the 
initial Santer et al. experiments, but to allow Northern Hemispheric 
sulphate to increase rapidly from post-World War II to the mid-1970's, 
then allow it to reduce due to air pollution controls, and then start 
to increase again in the 1990's because of Chinese emissions. Since the 
IPCC 1995 report, additional transient experiments with such time-
varying sulphate forcing patterns have been performed, and that Dr. 
Santer and colleagues (as reported briefly in the previously cited 
Nature debate) have shown that when this more correct sulphate forcing 
is applied to climate models, it gives a particular shape of response, 
which is similar to the shape that is observed when the ``additional 
data,'' to which Dr. Lindzen refers, is included. So the reason Dr. 
Lindzen asserts that the additional data invalidates the original 
conclusion is because Dr. Lindzen is applying the additional data to 
the equilibrium experiment--and the agreement becomes worse. But when 
this new data is applied to the transient experiment, the agreement 
between model and observations becomes even better. Since the transient 
experiment is the better representation of reality, the ``additional 
data,'' in my opinion, would improve one's confidence that a 
``discernible human influence'' on climate has occurred.
    Finally, let me say that it is absolutely incorrect to assert (as 
Dr. Lindzen does in his written testimony) that the IPCC lead authors, 
and I was one of them, used the ``discernible'' phrase because of this 
one additional ``specific feature'' that Dr. Santer and 11 other 
colleagues presented. Indeed, there were many lines of evidence, of 
which this ``specific feature'' was one, and if any one of them 
collapsed, it would not eliminate the preponderance associated with the 
others. These other factors include (1) a well validated theory of heat 
trapping, (2) a well established century-long 1/2 deg.C warming trend 
of the earth, (3) geographic patterns of climate change with 
CO2 and aerosols which begin to match observed patterns, (4) 
mountain glacier retreats, (5) rising sea level, (6) ability of the 
models to reproduce the different seasonal cycles of surface 
temperature in the Northern and Southern Hemispheres, and (7) the 
capacities of models to reproduce cooling of the lower atmosphere 
following volcanic eruptions in roughly the same amount as was 
observed. The ``discernible'' statement was clearly not based on one 
line of evidence.

    Question 5. Do you believe there is sufficient evidence of a 
problem with human-induced climate change for us to keep pursuing some 
kind of policy to limit CO2 emissions? If not, should we 
stop funding research that would tend to prove or disprove the theories 
that human activities are impacting global climate? If there is 
sufficient evidence, what more, if anything, should we be doing?
    Response. With due respect to Senator Baucus, asking the question 
about ``sufficient evidence'' to ``keep pursuing some kind of policy to 
limit CO2 emissions'' is clearly asking me for a value 
judgment. However, since I have been asked for my values many times, 
and they are well documented on the record through many congressional 
testimoneys and four published popular books (most recent being 
Laboratory Earth: A Planetary Gamble We Can't Afford to Lose, Basic 
Books, 1997), I will not hesitate to restate that opinion here.
    Indeed, as I said in my oral testimony on July 10, I have believed 
that there has been ``sufficient evidence'' for the past 20 years to 
limit CO2 emissions, not because I was certain of the 
precise nature, timing, and distribution of consequent damages, but 
simply because I am a risk-averse person who doesn't believe in taking 
irreversible chances--especially with the life-support systems of the 
planet, particularly when alternative energy systems already exist, and 
modest research development programs, along with incentive programs 
that could be spurred through more realistic energy pricing, could very 
well reduce substantially our impacts on the atmosphere. This, to me, 
is fundamental planetary insurance against the first decimal place odds 
chance of substantial damages, particularly in areas such as 
biodiversity loss.
    With regard to whether we should stop funding research that would 
``prove or disprove the theories,'' I have two reasons to disagree. The 
first is plain self-interest: as a scientific researcher interested in 
understanding how nature works, it would be hard for me not to advocate 
pursuing further knowledge for its own sake. With that self-interest 
aside, the second reason may prove more compelling to some in

[[Page 154]]

the Congress. That is, we need to understand how the system works, and 
how it changes, and how we might or might not be damaging it not only 
to help us decide how much carbon emissions to mitigate--the adaptive 
management issue referred to in question 1--but simply to help us learn 
how to adapt more effectively to whatever change might occur. Suppose 
we chose as a matter of policy to take the risk that climate change 
will not be serious and allow the earth to ``perform the experiment'' 
for us. Let us also suppose, that some damages unfold (both not 
unlikely assumptions, I'm afraid). In that case, the amount of damages 
that would eventually occur would depend upon on our capacity to 
forecast accurately what further changes would take place. For example, 
it is much easier for farmers to adapt to changes that are known in 
advance, for water supply planners or health officials to make 
contingency planning to deal with known changes than random or 
unforecasted changes. Likewise, wildlife managers could deal with 
artificial wetlands or migration corridors or other more cost-effective 
planning activities if they knew precisely what changes would unfold 
than if changes simply occurred unanticipated. Therefore, even if we 
choose to do nothing now to abate carbon--believing that any amount of 
uncertainty is sufficient grounds to do nothing (which I think is 
inconsistent with most personal and business investment practices)--we 
still would need the kinds of scientific information that the research 
community can provide in order to make adaptations more efficient and 
ultimate damages to incur lower costs.
    Since I argue that more research is important, you ask ``what 
more'' should we be doing. First, I think we need to integrate work in 
physical, biological, and social areas. I think that most areas of 
physical climate research are already in relatively good shape, and the 
most important thing in this area to watch is some continuity in 
funding, so that research groups aren't always spending so much time 
fighting for new grants. The amount of effort scientists put into grant 
writing these days because of unreliable funding often starts to equal 
the amount of effort they put into their own research. So, continuity 
and stability would strike me as more important than any particular 
increase in overall effort in physical science or climatology. With 
regard to biological research, I think there needs to be more 
coordination so that interdisciplinary activities across biological and 
physical research groups could continue to expand. The rewards systems 
in science don't often provide incentives to interdisciplinary 
researchers, and I think that universities and government labs could 
use some encouragement from Congress and funding agencies to support 
such applied, but fundamentally interesting, interdisciplinary work. 
Finally, I think we have put too little relative effort into asking the 
question, ``So what if the climate changes?'' I think more coordinated 
efforts to perform ``integrated assessment'' of the human activities 
which threaten to create climate change, which affect how we could 
adapt should such changes occur, and which evaluates the distribution 
of damages need a boost. Even more than for physical scientists, 
funding is spotty and unreliable, and impact assessment researchers 
spend a large fraction of their time in defensive posture pursuing 
grants rather than basic work. Furthermore, academic institutions are 
less likely to employ such people as they are not always valued as 
highly as ``basic researchers.''
    Finally, I think the economics community has taken major strides 
toward studying the potential costs of carbon abatement as well as the 
benefits of such abatement. Although all that work has accelerated, it 
is still at a relatively early stage of development, and not only does 
more of such work need to be done, but it needs to be better 
coordinated with those who study climate damages and the community that 
produces climate systems research. In a nutshell, it would be nice if 
we had, as the now defunct National Climate Program Office was supposed 
to do when it was first mandated by Congress in 1978, some central 
tracking office to make sure that wasted overlaps do not occur, and 
that serious research gaps do not also occur. Some office needs to help 
provide some continuity of funding for observations and modeling so 
that the research community can spend most of its time working, rather 
than frantically pursuing the next grant dollar for survival.

    Question 6. In your professional opinion, what is the probability 
that there will be a doubling of CO2 concentrations since 
pre-industrial times by the year 2100? A tripling? What are the impacts 
of a doubling? What are the impacts of a tripling?
    Response. The probability that there will be a doubling of 
CO2 concentrations since pre-industrial times by the year 
2100 is very high. If we include the combined effects of carbon 
dioxide, methane, and fluorocarbons, I think the probability is very 
close to one. It will be exceedingly difficult to turn off the 
population growth, economic growth and fossil fuel growth engines of 
this planet before the equivalent carbon dioxide concentration (i.e., 
CO2 plus methane, fluorocarbons, etc.) reaches the heat 
trapping equivalent of 550 parts per million CO2--probably 
before the middle

[[Page 155]]

of the next century. However, if we begin to invest in alternative 
technologies, and turn lose the impressive capacity of our industries 
to invent and deploy more efficient systems, I think there is no 
justification to go beyond that equivalent doubling of CO2. 
Indeed, we could hold heat trapping from CO2 well below a 
doubling if we were to aggressively pursue all ``no-regrets'' energy-
efficiency options now, as well as perform the needed research to 
enhance efficiency and lower the costs of less carbon-intense 
alternative energy systems. I also believe we would have to engage in 
``planetary bargains'' with countries like China and India, especially 
if the differential cost of their building more efficient, less 
polluting power plants were borne by richer countries. In this way, the 
Chinese would not lock in inefficient, high CO2-producing 
coal burning power plants now whose operating lifetime could be near 
five decades. Since I do not believe it is likely that such an 
international effort will get very far in the near future, I give a 
fairly high probability to the equivalent doubling of CO2. I 
believe also that the equivalent tripling of CO2 by 2100 is 
quite likely if the world pays no attention to the alternative pathways 
for energy development, and the continuation of international non-
cooperation on energy and protection of global commons is maintained. I 
am hopeful that will not be the case, although I am fearful this may 
only happen if environmental disasters motivate attention--something I 
recall Senator Baucus said in his oral remarks during the hearing and 
that I unhappily, but professionally, agree with.
    With regard to the impacts of doubling of CO2, I think 
that there is a 5 or 10 percent chance that that doubling could be 
relatively modest in its effect on climate (on the order of 1 deg.C or 
less temperature rise), and I think that there is probably a 10 percent 
chance that it could be potentially catastrophic (something like 4-
6 deg.C or more). I think it is most likely that 2-3 deg.C will occur 
as a result of that doubling, but that alone occurring over a century, 
would, as I said in answer to question 2, likely cause serious damages 
to nature in the form of biodiversity loss and dramatically altered 
habitats, as well as increases in the frequency of hydrological 
extremes, such as droughts, floods, and sea level rises, and other 
disruptions to our normal activities that depend on climate. I feel the 
impacts of a tripling would be substantially worse than those of the 
doubling, for a tripling could well cause climate changes of 5 deg.C or 
more, and in such instances major surprises, such as a flip-flop in 
North Atlantic ocean currents, large releases of stored carbon 
compounds in soils and bogs, and other currently ``imaginable 
surprises'' would be much more likely to occur. I think that virtually 
any currently imaginable definition of ``dangerous climate change'' 
would insist on holding the future amount of carbon dioxide for 
doubling or less, and indeed a cogent case could be made for holding 
the increase to no more than 450 parts per million, although I 
recognize that to do that would require significant policy actions 
right away.
                                 ______
                                 
  Responses by Dr. Stephen H. Schneider to Additional Questions from 
                             Senator Boxer
    Question 1. We hear about natural climatic cycles. For example, we 
know from geologic evidence that the earth has naturally gone through 
cooling and warming cycles, usually on a scale of 10's of thousands of 
years.
    Question 1a. Is it possible to identify cycles of a shorter scale?
    Response. Yes, there are shorter scale cycles, but the very large 
ones occur on tens of thousands of years (like ice ages and 
interglacial cycles, whose peak-to-peak temperature differences are in 
the order of 5 deg.C--9 deg.F). Smaller scale cycles usually involve 
changes that are 1 deg.C or less. Remember, we are talking about the 
``best guess'' for human-induced climate changes in the next century of 
several degrees, larger than the short scale effects. For example, 
during the early part of the current millennium, exploration of 
Greenland in a so-called ``medieval climatic optimum'' took place, in 
which temperatures in the North Atlantic region were perhaps one to two 
degrees warmer than now. However, on a globally averaged basis, it is 
unlikely surface temperatures were even 1 deg.C warmer. A few centuries 
ago, Europe and parts of North America were particularly affected by a 
so-called ``little Ice-Age,'' between about 1500 and 1800. Again, 
temperature decreases in northern latitudes were on the order of 
1 deg.C colder relative to today, and globally probably 1/2 deg.C or 
less. Thus, the magnitude of unnatural change that is typically 
projected as likely in the next century swamps these short-term cycles, 
which is why scientists frequently discuss the tens of thousands of 
years scale cycles for points of comparison, noting how rapid the 
typically projected human-induced climate change is likely to be 
relative to the large changes between ice ages interglacials.

    Question 1b. Would we be able to detect variations attributable to 
human activities in this natural cycle?

[[Page 156]]

    Response. This is an excellent and very difficult question, and one 
of the most controversial ones in climate science. One thing that needs 
to be stated first is that the words ``detect'' and ``attribute'' are 
quite separate in the minds of scientists. For example, to detect a 
climate change all we need to show is that it is relatively unusual 
given the natural cycles that occur. A 1/2 deg.C warming trend of the 
twentieth century is relatively unusual. I have estimated from looking 
at paleoclimatic indicators that it is perhaps a 10 percent chance that 
the twentieth century trend was entirely due to natural causes. 
Furthermore, recent evidence from Dr. Tom Karl at NOAA in Asheville, 
shows that since 1910 the U.S. has experienced a 10 percent increase in 
precipitation, and that more than half of that increase in 
precipitation occurred in the upper decile of precipitation intensity--
i.e. most of the increase occurred in ``gully washers'' rather than 
gentle rains. The statistical significance of this finding is very 
high--that is, there is little doubt that this is the detection of a 
real climate change. The attribution problem is whether this is just 
``double snake eyes'' from a perverse nature, or have we begun to 
``load the climate dice''? The latter is much more difficult to 
establish, and requires statistical testing, mathematical models, 
multiple kinds of evidence and is precisely the kinds of activities 
that the scientific community has been vigorously pursuing over the 
past 10 years. The most recent IPCC report, in which roughly 100 lead 
authors spent days debating this one point, led to the cautious, but 
nonetheless strong assertion, that ``the balance of evidence suggests 
that there is a discernible human impact on climate.'' I think this 
cautious statement goes about as far as the bulk of the community would 
allow, namely, a strong confidence that we are at least partly in the 
act, but that given the large degree of natural variability, until 
another decade or two elapses, in which case predicted effects should 
become even larger and therefore the probability of perverse nature 
even smaller, there still would be debate over this topic.

    Question 2. We know that CO2 has the potential for 
affecting the climatic balance of our atmosphere. Would it not make 
sense to limit the amount of CO2 we put into the atmosphere 
until we more fully understand the effects CO2 has on our 
climate?
    Response. This question, of course, calls for a value judgment 
about whether one fears more performing unplanned experiments on what I 
like to call ``Laboratory Earth'' or whether one fears more what the 
economic or social consequences would be from those actions which tend 
to reduce the pollutants. This is a balance of values question, and in 
my value system, which is risk averse, I don't like to take potentially 
irreversible chances with the life support systems of the earth. Nor do 
I like to risk committing future generations to have to adapt to 
potentially large changes that they had no participation in creating. 
In my value system, when we pursue activities that benefit us with the 
potential for irreversibility and the potential for causing harm to 
persons other than ourselves, these conditions lead me to limiting the 
amount of CO2, simply as planetary insurance that ethical 
people would undertake until they were more sure of the relative harm 
or benefits that our unplanned experiment could create.

    Question 3. In your testimony, you mentioned the incentive that a 
carbon tax would have upon emerging ``clean'' industries. What kind of 
industries do you think would emerge?
    Response. I feel that a carbon tax would have several positive 
benefits, as explained in the Appendix to my written testimony (the 
Commentary now accepted by Nature magazine by Professor Larry Goulder 
and myself). First of all, a fee for dumping carbon in the atmosphere 
sends the right signal to a market-based economy, that the atmosphere 
is not a valueless commodity, and cannot be used as a ``free sewer.'' 
In other words, how can a market system be efficient, if not all costs 
are part of the price. The price of energy is not simply extraction, 
transport, storage and profit, but also damages that each system 
differentially inflicts on people's lungs, sea level, nature, and so 
forth. Those systems which damage more should be charged more, 
otherwise a market system cannot work--these unpriced side effects are 
what economists call externalities. Internalizing these externalities, 
in my opinion, is most simply accomplished by a carbon tax, which, as I 
said in answer to Senator Baucus's question, also is a highly flexible 
policy instrument that can be cranked up or down as new knowledge tells 
us that the perceived problem is more or less serious than currently 
believed. Furthermore, a carbon tax not only causes billions of 
individuals to be more conscious of the energy components of the 
activity--that is, the energy component that produces carbon dioxide--
but serves as a major stimulus to alternative energy systems and to 
energy efficiency. It is already a fact that when the OPEC countries 
dramatically and precipitously increased the price of energy in the 
early seventies, this caused significant economic harm because of the 
precipitousness of the price shock. However, it is also a fact that 
after a temporary adjustment, structured changes to the economy and the 
inventive genius of

[[Page 157]]

our technologists caused a significant drop in the amount of energy it 
took to produce a unit of GDP in the developed countries of the world. 
In other words, we invented more efficient technologies and alternative 
ways to run our economy (e.g., information in computers rather than 
logs on tracks) on less energy. These effects have indelibly improved 
our economy and part of the economic boom we now enjoy is because of 
the structured changes and extra efficiency that was induced by that 
temporary oil price rise. Only after the prices decreased in the 1980's 
did we lose the great rate of progress that we were making in improving 
energy intensity. In other words, despite the political resistance to 
higher prices of energy, such price incentives have been demonstrated 
to stimulate improved technology which actually helps the economy over 
the long term. The key lesson is not to have any price rises which are 
both unexpected and precipitous.
    In addition to improving energy efficiency, alternative energy 
systems would be encouraged by raising prices of conventional energy. 
Investors in solar, wind, fuel cells, more efficient natural gas, and 
perhaps even safer and cheaper nuclear energy would all feel more 
investment opportunity if they knew that there were to be a sustained 
increase in conventional energy prices that would give them a larger 
potential market share. The more investors are willing to pump into 
research and development activities in these alternative energy 
systems, the more rapid progress would be made which will bring down 
the ultimate price of those alternative energy systems. This is not 
simply a way of reducing carbon more cheaply, but may very well in the 
long term help our economy materially in the following way. We know 
that oil is becoming increasingly scarce, and that after the next 
decade or so world oil production will no longer increase each year, 
despite further exploration activities, but will begin to decline, as 
has been long predicted. Oil prices will then increase. The question 
is, What will replace them? Isn't it better to replace them with 
cleaner alternative energy systems than coal or oil shales, and how can 
these cleaner systems compete with the dirty systems, unless the clean 
ones have had adequate research and development opportunities. 
Therefore, carbon taxes, or R&D subsidies, or other mechanisms that 
provide incentives for research seem to me essential regardless of the 
climate problem, as anticipation for dealing with the inevitable 
increase in fossil energy prices over the long run, which will require 
the development and deployment of substitutes, which, if we have 
foresight and pursue more vigorously now, will not only reduce 
greenhouse gases slightly today, but also will give us the opportunity 
for dramatic greenhouse gas reductions (relative to ``business as 
usual'') should new science prove that to be necessary. Development of 
alternative economic and energy systems provides a measure of 
protection against the inevitable increase in energy prices that will 
accompany the scarcity in fossil fuels as the oil era winds itself down 
in the first few decades of the 21st century.

    Question 4. What are the three most important things that need to 
be done to address global climate change?
    Response. As I have said in my oral and written testimoneys, I 
believe the first most important thing to do is to send a message that 
the atmosphere is not a ``free sewer.'' That is, some charge for the 
use of the global commons needs to be part of the price of doing 
business, so that the true costs to both the economy and ecology can be 
better incorporated into the price of commodities. The second thing is 
to improve the resilience of our systems to whatever changes take 
place--natural or human induced. In other words, developing more 
resilient agriculture, water supplies, biological reserves, and so 
forth, is an insurance policy not only against potential human-induced 
climate changes, but also against natural variability that nature often 
thrusts on us with or without climate change. Finally, I think one of 
the important things to do to deal with climate change is one of the 
important things to do for living in a secure 21st century-world: 
putting the question of sustainable development at the top of the 
world's agenda, not near the bottom. One poignant metaphor reminds us 
that all in the ship are at risk when one end is sinking. Clearly, 
developing countries have a right to be concerned that worries about 
global commons like the atmosphere might just be another excuse of the 
developed countries to restrain the competition that these developing 
countries will provide as they industrialize. My view is that we should 
be partners in that development, helping to transfer efficient and less 
polluting technologies, even via concessionary terms, for which we get 
back in exchange better relations, future customers, and less of a 
legacy of pollution and degradation for us and our posterity. I 
personally believe there is much too much emphasis around the world on 
international competition and national competitiveness, and 
insufficient attention to cooperative win/win solutions in which 
countries like China can use high technology to jump over the Victorian 
industrial revolution in which the now rich countries used inefficient, 
polluting technologies to build their wealth. I recognize how large 
these questions are and that

[[Page 158]]

planetary foresight is called for, and hope that the public education 
needed to achieve political acceptability of such planetary bargaining 
strategies becomes a reality, before large climate change and loss of 
biodiversity, coastal flooding, and other kinds of tragedies finally 
catalyze public consciousness after much preventable damage has 
occurred.
                                 ______
                                 
   Prepared Statement of Dale W. Jorgenson, Professor of Economics, 
                           Harvard University
    Mr. Chairman, distinguished members of the Committee on Environment 
and Public Works: I am very grateful for the opportunity to participate 
in these Hearings on the scientific understanding of global climate 
change. My testimony will focus on the economics of climate change. As 
a point of departure I will use the ``Economists' Statement on Climate 
Change'' included in my written testimony. I was one of five co-authors 
of this statement, which was circulated in January of this year and has 
now been endorsed by 2,600 economists, including eight Nobel prize 
winners.
    The first paragraph concludes that global change involves 
significant environmental risks and preventive steps are justified. The 
second paragraph summarizes economic studies showing that there are 
policies for reducing greenhouse gas emissions with benefits that 
outweigh the costs. The third paragraph describes these policies in 
more detail and emphasizes the importance of relying on market-based 
mechanisms.
    The economics of climate change can usefully be divided into three 
parts. The first is determination of the overall objective of climate 
policy. The economists' approach to this problem is to choose a policy 
that produces the greatest margin of benefits over costs. Using 
economic jargon, I will refer to this as the ``optimal'' policy. Such a 
policy would stipulate a time path for future emissions of greenhouse 
gases that could be embodied in an international agreement.
    After an overall objective is chosen, the second step is to devise 
a means of implementing this goal. Emissions of greenhouse gases would 
have to be allocated among the signatories of an agreement. In 
addition, emissions by countries that are not signatories would have to 
be taken into account, since the global climate is affected by total 
emissions. Third, given an allocation of greenhouse gas emissions among 
countries, each country would have to implement its emissions goal by 
devising policies that would hold emissions within the prescribed 
quota. Furthermore, the international community would have to monitor 
emissions for all countries.
    Let me begin with an evaluation of our existing climate policy, the 
Climate Change Action Plan (CCAP) of 1993. This Plan consisted of 
voluntary actions projected to reduce emissions to 1990 levels by the 
year 2000. The goal was stipulated in the United Nations Framework 
Convention on Climate Change ratified by the United States in October 
1993.
    The impact of CCAP is summarized in the final chart, which compares 
a projection of U.S. emissions of greenhouse gases under the original 
CCAP ``baseline,'' projecting emissions without the Plan. The CCAP 
actions were projected to reduce emissions to 1990 levels by the year 
2000. The third line on the chart gives actual U.S. emissions through 
1996. These are above the CCAP baseline and far above emissions levels 
required for stabilization. Clearly, we need to consider alternatives 
to our existing climate policy.
    The starting point for a discussion of climate policy is the 
damages associated with a change in the climate. This is based on 
combining a physical description of the climate with an economic 
description of the world economy. This type of analysis is called 
``integrated assessment'' and an assessment of this type has been 
carried out by William Nordhaus of Yale University in his 1994 book. 
The loss associated with climate change is 1.34 percent of world 
product in 2050.
    How large are the damages associated with climate change? They are 
equivalent to the loss of about 1 year of world economic growth. 
Obviously, this is sizable, but not overwhelming. In the view of the 
signatories of the Economists' Statement on Climate change, this is 
sufficient to justify preventive steps to reduce greenhouse gas 
emissions.
    Next, suppose we choose reductions in emissions that will produce 
the maximum difference between costs and benefits. How large are the 
benefits of this policy? Nordhaus has calculated the benefits for the 
world as a whole to be equivalent to $271 billion dollars. This is only 
0.04 percent of future consumption! While damages associated with 
climate change are substantial, steps to mitigate these damages will 
produce only very modest effects.

[[Page 159]]

    Let me emphasize at this point that the policy I have described 
conforms to the Economists' Statement on Climate Change. Preventive 
steps are justified. Policies like the one I have described would 
reduce greenhouse gas emissions and could employ market-based 
mechanisms to do so. A policy appropriate for international 
implementation would be the system of internationally tradeable permits 
described in the U.S. Climate Change Proposal of January 17.
    For domestic implementation of the optimal climate change policy an 
appropriate market mechanism would be to impose taxes on greenhouse gas 
emissions. These taxes would be relatively modest, amounting to an 
initial tax of $5.29 per ton of carbon and rising to $10.03 per ton by 
the year 2025. My paper with Peter Wilcoxen, ``The Economic Effects of 
a Carbon Tax,'' analyzes the effects of a tax on emissions of carbon 
dioxide, the most important greenhouse gas, in greater detail. Wilcoxen 
and I calculate the cost of achieving various goals, including the 
stabilization goal of the United Nations Convention. We also consider 
different methods for ``recycling'' the revenues from a carbon tax and 
find that the economic cost is highly dependent on the use of the 
revenue. Finally, we consider the use of alternative tax instruments, 
such as a ``Btu'' tax on energy and an ad valorem tax on energy.
    Our overall conclusions are, first, that a carbon tax is superior 
to other tax instruments. Second, by using the revenues to reduce the 
most burdensome taxes, namely taxes on income from capital, economic 
growth can be stimulated rather than retarded. Of course, reducing the 
tax burden on capital by substituting other forms of taxation would 
produce similar effects with no effect on emissions of greenhouse 
gases.
    To sum up: The economics of climate change is well understood. The 
optimal policy, described in more detail in my written testimony, 
involves a modest reduction in the growth of greenhouse gas emissions. 
This should provide the basis for any international agreement that 
would supersede the United Nations Framework Convention of 1994. 
However, this involves smaller reductions than our existing climate 
policy, the U.S. Climate Change Action Plan.
    The U.S. Climate Change Proposal from last January contains a 
useful contribution to international implementation by proposing a 
system of internationally tradeable permits for emissions. Domestic 
implementation requires a process for setting country-specific quotas 
for emissions. This might impose lower or higher reductions in 
emissions for the U.S., relative to other countries. After the U.S. 
quota has been determined, the final step would be to impose a tax on 
emissions like the carbon tax discussed in my paper with Wilcoxen.

[[Page 160]]





[[Page 161]]



[[Page 162]]



[[Page 163]]



[[Page 164]]



[[Page 165]]



[[Page 166]]



[[Page 167]]



[[Page 168]]



[[Page 169]]



[[Page 170]]



[[Page 171]]



[[Page 172]]



[[Page 173]]



[[Page 174]]



[[Page 175]]



[[Page 176]]



[[Page 177]]



[[Page 178]]



[[Page 179]]



[[Page 180]]



[[Page 181]]



[[Page 182]]



[[Page 183]]



[[Page 184]]



[[Page 185]]



[[Page 186]]



[[Page 187]]



[[Page 188]]



[[Page 189]]



[[Page 190]]



[[Page 191]]



[[Page 192]]



[[Page 193]]



[[Page 194]]



[[Page 195]]



[[Page 196]]



[[Page (197)]]





                         GLOBAL CLIMATE CHANGE

                              ----------                              


                        THURSDAY, JULY 17, 1997


                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.

                      INTERNATIONAL POLICY REVIEW

    The committee met, pursuant to recess, at 9:38 a.m. in room 
406, Senate Dirksen Building, Hon. John H. Chafee (chairman of 
the committee) presiding.
    Present: Senators Chafee, Inhofe, Baucus, Kempthorne, Reid, 
and Wyden.

OPENING STATEMENT OF HON. JOHN H. CHAFEE, U.S. SENATOR FROM THE 
                     STATE OF RHODE ISLAND

    Senator Chafee. This morning we have, as is not infrequent, 
some challenges as far as time goes. What I'd like to do this 
morning is have our opening statements, which I hope will be 
rather brief, and then we'll vote. The first vote is on now. I 
believe the leader has scheduled three votes.
    I noticed Secretary Wirth isn't here yet, but I certainly 
presume he'll be here when we finish our statements.
    A week ago today, the committee received testimony from a 
distinguished panel of witnesses on the science and economics 
of global climate change. This morning we hope to learn more 
about how the Administration has interpreted the current 
scientific and economic understanding of the climate change 
issue to form its domestic and international policies, how is 
this all influencing us.
    We will also receive views from two very knowledgeable 
representatives of the business community.
    What we did learn last week from our witnesses? I must say 
it didn't all come out like the blinding light that hit Paul on 
the road to Damascus, but information was there if we looked 
hard enough. Many left the hearing even more sure that there 
are too many uncertainties to commit the United States to 
additional or legally binding greenhouse gas emission 
reductions.
    Others may now be further convinced that serious climate 
change risks have been demonstrated sufficiently and that the 
time for meaningful, preventive action is now.
    Individuals possessing sound reason and good intent, of 
which this committee has 18, could plausibly arrive at either 
conclusion. That's a judgment call. Those of us in government 
and here on this committee have to advance with the best 
possible information.

[[Page 198]]

    What are the facts? First, energy from the sun warms the 
Earth. Second, greenhouse gases in the atmosphere trap heat 
from the Earth that would otherwise radiate out into space. 
Third, greenhouse gases make the Earth warmer than it otherwise 
would be.
    Fourth, water vapor is the most abundant, natural 
greenhouse gas. Fifth, greenhouse gases emitted by human 
activities are altering the pre-industrial composition of the 
atmosphere. Indeed, the concentration of carbon dioxide in the 
atmosphere has increased from about 280 parts per million 200 
years ago to about 360 ppm today.
    Importantly, the concentrations will not absolutely halt at 
360 ppm. We will observe a doubling of pre-industrial 
concentrations sometime in the early part of the next century 
unless we take action.
    Sixth, all nations are contributing to this buildup of 
greenhouse gases. No one Nation acting alone can effectively 
address this matter. Seventh, the United States is the largest 
greenhouse gas emitter in absolute and in per capita terms. 
China is the second largest greenhouse gas emitter in absolute, 
but on a per capita basis, emits one-tenth of U.S. emissions. 
Eighth, we have measured one degree of Fahrenheit temperature 
increase globally over the past 100 year.
    Finally, on the economic side, it is a fact that limiting 
carbon dioxide emissions will mean significant changes in 
energy use and energy sources.
    The question is, has science provided enough information on 
the relationship between these facts and actual changes in the 
climate to warrant further action? Obviously, the 
Administration has made its conclusion.
    The United States and 160 other nations are negotiating 
changes to the existing 1992 United Nations Framework 
Convention on Climate Change. These changes, if agreed to, 
could require specific, legally binding, greenhouse gas 
emission reductions commitments for the post-2000 period. These 
international negotiations are to culminate at the third 
conference of the parties in Kyoto in December of this year.
    Should we be signatories to a Kyoto agreement? What role 
should the developing countries play? What kind of emission 
reduction requirements are appropriate? What are the likely 
economic trade, competitiveness and job impacts? What are the 
likely environmental impacts of acting or not acting? How will 
such an international agreement be implemented domestically?
    Finally, is it possible to embark upon a ``low regrets,'' 
or ``no regrets'' strategy which would minimize economic damage 
or even improve our economic performance while responsibly 
reducing the threat of climate change? Can we do some things 
that are cost-effective, regardless of whether we believe in 
reducing the treat of climate change, but indeed, will reduce 
the threat of climate change? For instance, we talked the other 
day about a certain type of bulb in our lights.
    These are other topics will be our focus today.
    Senator Baucus.

[[Page 199]]

  OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE 
                        STATE OF MONTANA

    Senator Baucus. Thank you very much, Mr. Chairman.
    I have just a few brief remarks and observations from last 
week.
    No. 1, the scientists last week presented what I thought 
was quite solid evidence and a thoughtful argument that future 
changes in our climate caused by human activity is a 
potentially serious, if not absolutely certain, outcome.
    To me, that means the potential consequences are too 
serious to ignore and if we begin to make modest steps now to 
curtail greenhouse gas emissions, we may start making progress 
toward that goal without encountering serious economic 
disruptions.
    As with many issues around here, our task is to find the 
right balance between maximizing the benefits of a policy and 
minimizing any adverse consequences from it. As we were told 
last week, the sooner we start, the better this country will be 
able to achieve that result.
    My second point is that if we are to succeed in limiting 
worldwide emissions and CO2 and other greenhouse 
gases, we must have greater participation by at least the major 
developing countries. After all, this is called global climate 
change. If the major global players are not part of the 
solution, the prospects for success will be slim.
    Perhaps this is an area in which we need to broaden our 
thinking. I've spent a good deal of time looking at China's 
role in the world, particularly from the trade standpoint. The 
United States has a lot of issues to deal with China on, some 
issues on which we have fundamental disagreements, but there 
are many others with China on which we share mutual interest. 
Climate surely is one of them.
    China has more people potentially at risk from rising sea 
levels and violent weather than any other nation. It also has a 
desperate need to increase its domestic energy supplies. If 
there is no change, China will be contributing a full one-third 
of the additional greenhouse gas emissions in the world over 
the next 20 years, one-third.
    Looking at the broad array of issues on the United States-
China table, we should be able to find ways to gain their 
support on this issue. As I've said many times, our 
disagreements with China should not stop us from engaging with 
them on issues where we can both make some progress.
    Finally, Mr. Chairman, whatever our ultimate policy on 
climate change will be, it needs the support of the American 
people. I believe there is a compelling case to be made and 
it's why I welcome the President's decision to become more 
personally involved.
    The toughest issues for democracies to handle are those in 
which the threat to society builds gradually but inexorably 
over time. We deal well with immediate crises and I hope it 
will not take such an event to spur action on this one.
    Senator Chafee. Thank you, Senator.
    Senator Inhofe.

 OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM 
                     THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you, Mr. Chairman.

[[Page 200]]

    I do have a more lengthy statement that I will submit for 
the record, but I want to mention a couple of things that do 
concern me.
    The Clean Air Subcommittee has already held one hearing on 
climate change. One of the things that concerns me is I think 
the disingenuous way we've gotten information and treatment 
from the Administration. I have a list of contradictory 
statements that have been made. I'll only mention one of them 
and then submit the rest of them in my opening statement.
    In June 1996, Mr. Palmeritz, who is an Assistant Secretary 
over at the State Department, made the statement in response to 
the question ``Are we going to agree to a legally binding 
instrument in Geneva?,'' ``Are we going to agree to a legally 
binding instrument in Geneva? No way.'' One month later, 
Secretary Wirth, you announced that the United States supported 
a legally binding emissions target.
    This concerns me, the discrepancies that we are getting in 
statements from the various departments.
    I would like to just, in one sentence, outline five 
conclusions that I felt we came to in our first subcommittee 
hearing, Mr. Chairman, on this subject.
    No. 1, while there is a large body of scientific research, 
there is much controversy and disagreement and the scientific 
facts are being misrepresented by the Administration and the 
press.
    No. 2, we don't know how much human activity has influenced 
the climate. One scientist said less than 6 percent.
    No. 3, if you look at satellite data, we are not sure if 
there has been any global warming.
    No. 4, even if we eliminate all manmade emissions, it may 
not have a noticeable impact on the environment and the treaty 
may only eliminate emissions here in the United States and not 
the entire world.
    No. 5, when asked, all five witnesses--these are the 
scientific witnesses--they stated that we would not have the 
uncertainties understood by this December when the 
Administration plans on making a decision regarding the treaty.
    Thank you, Mr. Chairman. I'll be looking forward to asking 
some questions.
    [The prepared statement of Senator Inhofe follows:]
 Prepared Statement of Hon. Jim Inhofe, U.S. Senator from the State of 
                                Oklahoma
    Thank you Mr. Chairman, I am glad you called today's hearing, it is 
important to hear from the Administration on this issue. Under 
Secretary Wirth has testified in many Congressional hearings over the 
last few years, and unfortunately he raises more questions than he 
answers, but I hope today will be different.
    Last week at our science hearing on this issue, a number of points 
were made and I personally learned a great deal. I would like to 
summarize a few key observations from the hearing:
    (1) While there is a large body of scientific research there is 
much controversy and disagreement and the scientific facts are being 
misrepresented by the Administration and the press.
    (2) We don't know how much human activity has influenced the 
climate. One scientist said 6 percent.
    (3) If you look at satellite data, we are not sure if there has 
been any global warming.

[[Page 201]]

    (4) Even if we eliminate all manmade emissions, it may not have a 
noticeable impact on the environment, and the Treaty may only eliminate 
emissions here in the United States, not the entire world.
    (5) When asked, all five witnesses stated that we would not have 
the uncertainties understood by this December, when the Administration 
plans on making a decision regarding the Treaty.
    I have read over the hearing records in the various congressional 
committees over the last few years and I am very disturbed by the way 
the Administration makes promises to Congress and then immediately 
ignores them in international meetings. I would like to offer a few 
examples.
    In March 1995, in a House Commerce Hearing Congressmen Dingell and 
Schaefer raised concerns that new targets may not apply to all 
countries, on behalf of the Administration, Mr. Rafe Pomerance a Deputy 
Assistant Secretary at the State Department said ``Our goal, Mr. 
Chairman, is that all parties participate in this next round of 
negotiations. We want to see that all governments participate and help 
define the post-2000 regime.''
    One month later the Administration signed onto the ``Berlin 
Mandate'' to review the commitments made to reduce the greenhouse gases 
and adopt targets for further reductions. The conference differentiated 
between developed and developing nations. This was clearly at odds with 
Congressmen Dingell and Schaefer's concerns and the Administration's 
assurances.
    In June 1996, before a hearing, Mr. Pomerance stated, ``Are we 
going to agree to a legally binding instrument in Geneva? No way.'' One 
month later in Geneva, Under Secretary Wirth announced that the United 
States supported a legally binding emissions target.
    In September 1996 before the Commerce Committee, Assistant 
Secretary of State Eileen Claussen told Congressman Dingell that the 
United States would not be bound before we have completed the economic 
analysis and assessments. We learned this week that the Administrations 
efforts to analyze the economic effects has failed. The models they 
used did not work, and we will not understand the effect on our 
nation's economy before December.
    I have to conclude based on the Hearing records that the 
performance of this Administration is somewhere between ``misleading'' 
and downright ``untruthfulness''. I hope today's witnesses can change 
this record, but I will have to reserve judgment to see if today's 
promises will be fulfilled.
    Thank you Mr. Chairman.

    Senator Chafee. We have about 4 minutes left on this vote 
and my suggestion is rather than racing through your statement, 
that we go over and vote and then come back and we'll hear your 
statement, Senator Kempthorne, and then proceed with the 
witnesses.
    Senator Kempthorne. If you don't mind, may I race?
    Senator Chafee. We're certainly delighted to hear what 
you've got to say if you're conscious of 3\1/2\ minutes. The 
option is yours. I'm perfectly delighted to stay here. I was 
going to let you proceed in a more leisurely manner when the 
pearls you have to offer us will be easier observed in a calmer 
atmosphere.
    Senator Kempthorne. Mr. Chairman, I'd like to go ahead and 
do this, but if the others would like to go, I understand that, 
so I'll understand.
    Senator Chafee. I'll wait with you.

 OPENING STATEMENT OF HON. DIRK KEMPTHORNE, U.S. SENATOR FROM 
                       THE STATE OF IDAHO

    Senator Kempthorne. Mr. Chairman, I've always believed that 
fundamentally, we're all environmentalists. We all want a 
cleaner, healthier environment for our children and their 
children.
    I've always believed that the best way to achieve that 
cleaner and healthier environment is not necessarily through 
more Federal regulation and mandates. I believe there will be 
better results achieved faster using incentives, flexible 
programs and voluntary incentives.

[[Page 202]]

    As I understand it, the push for more aggressive, global 
climate change policy is being driven by evidence that suggests 
that the global temperature has increased by one degree, 
although it's unclear whether or not human-caused activities 
are solely responsive for that increase. Nor do we know whether 
it's significant.
    The assumption is that we should do something about it 
anyway, reduce or freeze greenhouse gas emissions to 1990 
levels. While I won't dispute that conclusion here today, in 
light of the uncertainty, I think it's important that we not 
jump to impose more regulations on U.S. businesses risking jobs 
in our economy when we really don't know if we are truly 
addressing the problem.
    We should also be concerned about what costs of any new 
policy will, in fact, be and who will bear them. Providing 
flexibility and greater opportunities for voluntary programs 
will go a long way to controlling unnecessary costs and 
increasing acceptance of any new policy.
    Just as importantly, we should not put our U.S. industries 
at a competitive disadvantage with their competitors in 
international markets. Climate change is truly a global issue 
and the solution must be a global one as well.
    If the United States is going to agree to mandatory 
reductions, our treaty partners, including developing 
countries, must also. That's only fair. Ultimately, the 
workability and cost of any new policy will be determined 
largely by the specific target levels and compliance schedules 
that the Administration negotiators decide to accept.
    I look forward to hearing from the witnesses as we discuss 
this critically important issue.
    Senator Chafee. We have to hasten over. Mr. Secretary, we 
will be back shortly. There are three votes, but they are 10-
minute votes, so we will be back shortly.
    There will be a brief recess.
    [Recess.]
    Senator Chafee. If we could have everyone's attention, we 
will start the hearing again.
    We apologize for the interruptions. I guess nobody 
understands the interruptions better than the distinguished 
Assistant Secretary of State, a former colleague who served in 
this body with distinction.
    We've completed all the statements and Mr. Secretary, go to 
it. We'd be interested to hear what you've got to say.
    Secretary Wirth. Thank you very much, Mr. Chairman.
    Mr. Chairman, if you have any desired order, we might ask 
Dr. Yellen to lead off, if that would be all right.
    Senator Chafee. That's fine. Go ahead, Dr. Yellen.

STATEMENT OF JANET YELLEN, CHAIR, COUNCIL OF ECONOMIC ADVISERS, 
  NATIONAL ECONOMIC COUNCIL, EXECUTIVE OFFICE OF THE PRESIDENT

    Ms. Yellen. Good afternoon, Mr. Chairman, members of the 
committee.
    I appreciate the opportunity to discuss with you today the 
economics of global climate change. In a speech to the United 
Nations in June, President Clinton emphasized that the risks 
posed by

[[Page 203]]

global climate change are real and that sensible, preventive 
steps are justified.
    This assessment accords with the views of more than 2,300 
economists, including 8 Noble laureates, who signed the 
statement supporting measures to reduce the threat of climate 
change.
    At this time, the Administration has not settled on a 
particular set of policies to reduce greenhouse gas emissions. 
Instead, the President indicated in his U.N. speech that he 
intends to engage in a discussion with all interested parties, 
Members of Congress and other elected officials, scientists, 
economists, business and labor leaders, about the problems 
posed by greenhouse gas accumulations and the costs and 
benefits of corrective action.
    This discussion is intended to inform the Administration's 
decisionmaking process which will culminate in a U.S. policy 
position in the international negotiations in Kyoto in December 
of this year.
    An important step in this, in any policy process, is 
determining the impact a policy will have on the American 
economy. President Clinton's top priority since his first days 
in office has been revitalizing the U.S. economy, creating jobs 
and investing in people and technology to enhance long-term 
growth, and we have made tremendous progress.
    Any policy the President ultimately endorses on climate 
change will be informed by his commitment to sustaining a 
healthy and robust economy. In my testimony today, I'd like to 
describe some of the principle lessons that emerged from the 
voluminous literature, much of it relatively recent, on the 
economic impacts of policies to address global climate change.
    Before I begin my discussion of the economic literature, 
however, I'd like first to emphasize the uncertainties that are 
associated with estimating both the costs and the benefits of 
reducing greenhouse gas emissions.
    Just to provide some perspective, as you all know, it is 
quite difficult to gauge exactly what impact, for example, the 
balanced budget agreement will have on the U.S. economy's 
growth rate, levels of employment, interest rates and 
consumption over a period as long as the next 5 years.
    With global climate change, it's orders of magnitude more 
difficult to gauge the effects of policies on the economy. 
We're concerned with not just the next 5 years and not just the 
American economy, but rather, with economic and physical 
processes that operate globally and over decades, if not 
centuries.
    Both the costs and the benefits of climate protection are 
very difficult to quantify or predict with any certainty. So, 
in short, if anybody tells you that he or she has the 
definitive answer as to the costs and benefits of particular 
climate change policies, I would suggest that you raise your 
collective eyebrows.
    Let me now turn to the economic literature and try to 
summarize what I think we know so far about this difficult 
topic.
    The economic literature includes estimates using many 
different models to evaluate numerous alternative emission 
reduction strategies. In fact, because there are so many 
different models, economists initially faced difficulties in 
comparing results.
    To solve this problem, thereby enabling meaningful 
comparisons, many economists have calibrated the various models 
by performing

[[Page 204]]

a standardized simulation. Specifically, they've assessed the 
consequences of stabilizing greenhouse gas emissions at 1990 
levels by 2010 or 2020.
    Within the Administration, a staff level working group, the 
Interagency Analytical Team, has attempted to estimate some of 
the economic implications of climate change policies.
    They took the emissions scenario that's most often used in 
the academic literature, that is stabilizing emissions at 1990 
levels by 2010 as the starting point for their own analysis. I 
emphasize that this scenario is not Administration policy. 
Instead, it was picked to make comparison with other models 
easier.
    This modeling effort produced some useful lessons, but as 
we found from peer reviewers' comments, it also suffered from 
some serious shortcomings. I think both the lessons and the 
shortcomings point to one clear conclusion which is that the 
effort to develop a model or small set of models that can give 
us a definitive answer concerning the economic impacts of a 
given climate change policy is futile, but we are left with a 
set of parameters and relationships that influence estimates of 
the impacts.
    I understand that a draft of the staff analysis was given 
to this committee earlier this week, along with reviewers' 
comments. I would be happy to answer any questions you may have 
about this modeling effort. Let me say just a bit about the 
lessons.
    The modeling efforts, both inside the Administration and 
outside, clearly indicate that economic analysis can do no more 
than estimate a range of potential impacts from particular 
policies and highlight how outcomes depend on underlying 
assumptions about how the economy works and the ways in which 
policy is implemented. I'd like to briefly summarize a few of 
the key lessons we've learned.
    First, the magnitude of the cost of reducing greenhouse gas 
emissions in the various models depends crucially on a number 
of key assumptions about how the economy works. Essentially, 
the lesson is that the greater the substitution possibilities 
and the faster the economy can adapt, the lower the costs.
    Second, costs depend critically on how emission reduction 
policies are implemented. It just boils down to this, if we do 
it dumb, it could cost a lot, but if we do it smart, it will 
cost much less and indeed, it could produce net benefits in the 
long run.
    The over 2,300 signatories of the economist statement 
argued that any global climate change policy should rely on 
market-based mechanisms. These mechanisms allow for flexibility 
in both the timing and the location of emissions reductions, 
thereby minimizing the cost to the U.S. economy.
    The economists concluded, ``There are policy options that 
would slow climate change without harming American living 
standards and these measures may, in fact, improve U.S. 
productivity in the longer run.''
    The third lesson that emerges from a study of the economics 
of climate protection is that developing, as well as developed, 
countries must be part of the process. While developed 
countries are responsible for most of the greenhouse gas 
currently in the atmosphere, developing countries are starting 
to catch up.

[[Page 205]]

    The timetable for inclusion of developing countries is also 
important. The sooner the developing countries face incentives 
to move away from carbon-intensive energy sources, the less 
likely it is they will become dependent on those types of fuels 
to spur their own economic growth. In short, global problems 
require global solutions.
    Let me wrap up by saying that policies to promote economic 
growth create jobs and improve the living standards and 
opportunities of all Americans have been and always will be the 
top priority of the President and the Administration.
    In his remarks to the Business Roundtable on Global Climate 
Change, the President said, ``Let's find a way to preserve the 
environment to meet our international responsibilities, to meet 
our responsibilities to our children, and grow the economy at 
the same time.''
    I believe that some of the lessons we've learned from the 
economics literature will help us achieve the President's goal.
    Thank you. I'd be happy to answer any questions you may 
have.
    Senator Chafee. Thank you very much.
    Now what I'd like to do is proceed with Secretary Wirth.
    Ms. Yellen. I do have a longer statement I'd like to submit 
for the record.
    Senator Chafee. That's fine. Do you have any urgency to 
leave?
    Ms. Yellen. No.
    Senator Chafee. Why don't you go ahead?
    Senator Reid. Mr. Chairman.
    Senator Chafee. Yes.
    Senator Reid. I ask unanimous consent that a copy of my 
statement be made a part of the record as if read.
    Senator Chafee. Fine.
    [The prepared statement of Senator Reid follows:]
 Prepared Statement of Hon. Harry Reid, U.S. Senator from the State of 
                                 Nevada
    Good Morning. I want to share a few thoughts on the science and 
economics of the global climate change debate. Although the committee 
has wisely chosen to hold two separate hearings on this subject this 
summer, one on science and economics, which was held last week and 
today's on the on-going international treaty negotiations, my comments 
cannot be so easily separated.
    There is a discernible human influence on global climate. Since the 
dawn of the industrial age, the concentration of carbon dioxide in the 
atmosphere has risen by 30 percent. Most experts now agree that the 
build-up of greenhouse gases in the atmosphere due to the combustion of 
fossil fuels and other human activities is happening. To many this is a 
troubling phenomenon. Although we are not sure what the exact adverse 
consequences of this build-up will be, mere common sense dictates that 
we, at a minimum, begin preparing to deal with it.
    The Senate approved the United Nations Framework Convention on 
Climate Change in 1993, which called for all signatory nations to adopt 
policies and programs to limit their greenhouse gas emissions on a 
voluntary basis. The United States had hoped to stabilize emissions in 
the year 2000 at 1990 levels. Unfortunately, we have fallen well short 
of that mark.
    The United States is, at the moment, the world's biggest consumer 
of fossil fuels and producer of greenhouse gas emissions. As such, it 
is important that we must show international leadership in terms of 
analysis, research, and, if necessary, in reducing these emissions.
    As part of the on-going international treaty negotiations, the 
Administration has moved towards supporting mandatory, legally binding 
limitations on greenhouse gases for the nations of the World. Within 
limits, I am supportive of these efforts.
    Unfortunately, I share the concern of many of my colleagues that 
the current negotiations do not seem to require a firm time table for 
reductions from the nations of the developing world.

[[Page 206]]

    The United States currently emits more greenhouse gases than 
developing nations, such as China and India. However, this will not be 
the case for much longer, especially if the United States begins to 
curb our emissions. While I am not eager to perpetuate the poverty in 
these nations by mandating that they participate equally and 
immediately in making reductions, I have economic and competitive 
concerns about requiring nothing from them.
    I cannot, in good faith, ask the citizens of Nevada and the rest of 
the Nation, who have worked very hard to develop and accommodate 
environmentally friendly transportation policies and clean industries, 
to now make more sacrifices without some guarantee that the developing 
nations will not make similar efforts soon.
    In a global economy, we are often forced to compete with other 
nations that have different labor laws and practices than our own, 
different rules of resource protection, and yes, often weaker 
environmental laws. Unfortunately, cheap labor, wasteful resource use, 
and weak environmental laws often add up to a mighty competitive retail 
price.
    On an issue of such wide-ranging economic impact and consequence, 
it is unfair to our citizens to let other nations do nothing while we 
make the necessary sacrifices.
    Again, I absolutely acknowledge that the United States must do its 
part to try to avert any adverse climate change. We are a part of the 
problem and we will be an important part of the solution.
    I would prefer that Senator Byrd's resolution recognize that the 
nations of the developing world will need some extra time, perhaps as 
much as 10 years, to put their binding reductions in place. I am 
hopeful that a compromise can be worked out to everyone's satisfaction.
    However, given a choice between sending U.S. negotiators to Kyoto 
offering unilateral economic disarmament on this subject, and sending 
them into final negotiations with a stance that demands world-wide 
equality of treatment now, must choose to protect the best interests of 
the United States.
    Thank you.

    Senator Reid. I'd also like to tell the chairman and 
especially my friend, Secretary Wirth, that I scheduled my time 
to be here from 10 a.m. to 11:15 a.m. and that time has gone 
and I will be unable to listen to his testimony. I apologize.
    Senator Chafee. I know you made the effort and 
unfortunately we had the intervention with those votes and 
that's just life in the Senate. We're glad you were able to 
come even though briefly.
    Mr. Secretary, why don't you proceed?

  STATEMENT OF TIMOTHY E. WIRTH, UNDER SECRETARY OF STATE FOR 
              GLOBAL AFFAIRS, DEPARTMENT OF STATE

    Secretary Wirth. Thank you very much, Mr. Chairman.
    Senator Baucus, Senator Reid, Senator Kempthorne, Senator 
Inhofe, we appreciate your being here. We also appreciate the 
great interest of this committee. I read with interest the 
transcript of the science panel and discussion that you had. 
Questions were raised earlier and we may have a chance to touch 
upon them today.
    My part of the discussion this morning is to focus on the 
ongoing negotiations toward the next steps under the United 
Nations Framework Convention on Climate Change. These 
negotiations began in August 1995 and are scheduled to end in 
December at the third conference of the parties in Kyoto when 
we hope to adopt a new protocol or other legal instrument.
    In his address last month to the United Nations General 
Assembly Special Session, President Clinton noted that, ``The 
science is clear and compelling'' and the President committed 
the United States to strong leadership on climate change.
    The President, as well, committed himself to engage the 
American people and the Congress in a dialog to explain the 
real and imminent threats from climate change, the economic 
costs and ben- 

[[Page 207]]

efits involved, and the opportunities that American technology 
an innovation can provide.
    The President also committed to ``bring to the Kyoto 
conference a strong American commitment to realistic and 
binding limits that will significantly reduce our emissions of 
greenhouse gases.''
    In recent weeks, interest in the negotiations has 
intensified, particularly in the Congress. The Administration 
welcomes this interest, Mr. Chairman, and wants to encourage 
the broadest possible dialog as we work toward a new agreement 
in Kyoto and urges the Senate and House leadership to establish 
observer groups with whom we can work even more closely in the 
weeks and months ahead.
    I would like today to focus on two concerns, first, how the 
actions negotiated under the Climate Convention correspond to a 
significant environmental objective and second, the need for 
developing nations to acknowledge more fully their role in 
meeting that objective.
    I won't repeat the science here this morning. That is 
familiar to all of you, particularly after your last hearing, 
but let me just briefly make one comment on effects. Virtually 
all the studies on the effects of climate disruption have 
focused on a predicted doubling of atmospheric concentrations 
of greenhouse gases; but as Senator Baucus pointed out in his 
opening statement, unless significant actions are taken early 
in the next century, it is very likely that atmospheric 
concentrations will, by the year 2100, nearly triple the pre-
industrial level and rise higher than at any point in the last 
50 million years.
    Changes to our climate system would also continue beyond 
the effects the current studies predict. The risks would 
increase dramatically as concentrations continue to rise. 
Moreover, there is no reason to believe that these additional 
effects would be linear. They would most likely take 
unpredictable and highly undesirable paths.
    Let me now move on to the division of responsibilities 
between the developed and the developing countries.
    As I noted earlier, we know that man-made emissions have 
increased the concentration by about 30 percent, from 280 ppm 
in pre-industrial times to around 366 ppm today. We know that 
the industrialized countries have put most of the carbon into 
the atmosphere and that CO2 lingers there for 100 to 
150 years. We know that the United States is the largest 
emitter of greenhouse gases; we have 4 percent of the world's 
population and contribute 22 percent of the carbon. We also 
know that given current trends, the developing world will pass 
the developed world as an emitter in about 30 years. At that 
point, the developing world will have about 70 percent of the 
world's population. China, with it's 1.2 billion people, will 
probably pass the United States toward the end of the first 
quarter of that century.
    So action by the industrialized nations alone will not put 
us on the road to safe concentrations of greenhouse gases. We 
need action by the developing countries as well.
    It's very clear from all our discussions and negotiations 
to date that if the developed countries, with our current 
economic capacity, technical capability and energy-intensive 
lifestyle, don't go first, setting the example and reducing 
emissions, then developing coun- 

[[Page 208]]

tries will not act either. We must lead the way and we must 
move soon.
    If not, a doubling of concentrations becomes certain and we 
put ourselves on the road to a tripling or even higher levels 
of concentrations, the consequences of which are uncertain but 
likely to be catastrophic.
    The United States has put forward a number of proposals 
which are outlined in my testimony and the attachments. Perhaps 
most controversial is Article 16, our proposal which calls for 
developing country parties to adopt by the year 2005, binding 
provisions so that all parties have quantitative greenhouse gas 
emission obligations and so that there is a mechanism or 
trigger for automatic application of those obligations based on 
agreed criteria.
    In urging this policy of what we call evolution, the United 
States is far out in front of almost all other countries and 
we're being criticized accordingly. For example, several 
developed countries believe that our proposal imposes unfair 
burdens on developing countries. Most countries in the 
developing world believe that evolution goes beyond the scope 
of the Climate Convention and the Berlin Mandate. We think we 
have the concept about right. No one should be exempt. We emit 
the most, so we have to act first, but others have to phase in 
over time.
    The overall negotiation on climate change is extremely 
complex, the most complex I've seen in 25 years of public life. 
The evolution aspect is perhaps the most important of all. We 
have put forward some proposals, some in Congress have as well. 
Now we have to hammer out a final proposal and negotiating 
position. We welcome your input, support and creativity as we 
work to solve this problem and I look forward to hearing your 
ideas, questions and comments today.
    The issue is not whether developing countries, especially 
the big and rapidly developing ones, take on quantified 
commitments to limit or reduce their emissions of greenhouse 
gases. Clearly, it will be impossible to abate the threat of 
climate change unless they do. The issue is when such 
commitment should begin and what criteria should be used to 
establish them and to whom they would apply.
    The Framework Convention, which President Bush signed and 
to which the Senate overwhelmingly gave its approval, 
established the principle that with respect to climate change, 
the world's nations have common but differentiated 
responsibilities and varying capabilities. Insisting the 
developing nations immediately accept binding emissions targets 
that industrialized nations are seeking to negotiate is neither 
realistic, nor consistent with the Convention approved by the 
Senate, but insisting that those developing nations now 
responsible for a growing share of global greenhouse gas 
emissions should have no further obligations to act until they 
cross some threshold of national income or emissions per 
capita, is equally unrealistic and inconsistent with the 
Convention's ultimate objective.
    The agreement reached in Kyoto will not solve the problem 
of global climate change. No matter how ambitious, it will 
represent only a second step along the much longer path toward 
achieving the Climate Convention's ultimate objective. As we 
prepare for Kyoto, we must also prepare for further steps 
beyond it. In particu- 

[[Page 209]]

lar, we must ensure that all nations responsible for a 
significant share of current global greenhouse gas emissions 
accept the need to limit or reduce their emissions and that 
they begin to move in that direction.
    What a Kyoto agreement can do is provide nations with the 
tools they will need to achieve a significant, binding 
greenhouse gas limitation and reduction commitment. These tools 
include greenhouse gas emission budgets over multiyear periods 
that will help smooth out annual fluctuations. They include 
full national flexibility in the choice of policies and 
measures to meet such binding emission budgets. They include 
emissions trading among nations with binding emission budgets, 
with the participation of the private sector in the trading 
regime which we believe will help significantly lower the cost 
of compliance. They include joint implementation for credit 
between nations with binding emissions budgets and those that 
do not yet have such budgets both to lower the cost of 
compliance and to promote economic development and 
environmental protection.
    Mr. Chairman, we have charted an ambitious course for the 
months ahead. The tremendous risk to our plant demand nothing 
less. With your continued support and the support of other 
Members of Congress, I am confident that we will obtain an 
outcome in Kyoto that will represent a significant step forward 
on the much longer path toward safeguarding the Earth's climate 
system for present and future generations.
    If I might, I'd like to have my statement included in full 
in the record and we look forward to answering any questions 
that the committee might have.
    Thank you, Mr. Chairman.
    Senator Chafee. Thank you very much.
    What we will do is have a round of questions. I would say 
each member will have 6 minutes and we will go around and come 
back so that everybody gets a chance.
    You say in your opening statement, President Clinton noted 
``The science is clear and compelling.'' I didn't get that 
feeling. Could you summarize the science that is clear and 
compelling?
    Secretary Wirth. As you know, this is probably the most 
peer-reviewed, carefully studied international issue that 
mankind has looked at. The international community established 
the Intergovernmental Panel on Climate Change in the 1980's. 
That made its first report when you and I were at the Rio 
Conference just before the 1992 Rio Summit. It's second report 
was completed in the fall of 1995 and was published in the 
spring of 1996.
    The consensus of that study--of almost every climate 
scientist in the world--was that man's impact on the climate 
can now be seen. That was Volume 1.
    Volume 2 pointed out what some of the impacts of this are 
going to be. As Senator Kempthorne pointed out, there's a lot 
of uncertainty as to exactly where, how much, how fast, and a 
great deal of work to be done, but Volume 2 began to tease out 
what some of the implications of this were.
    Volume 3 contained work by a great number of economists as 
well as people in the climate world as to what steps ought to 
be taken. It's a very impressive piece of work.

[[Page 210]]

    It was our judgment, in summary, looking at the science as 
it comes to us it was important and prudent for us to establish 
steps now to begin to take what many have called an insurance 
policy.
    There are still uncertainties, Senator Kempthorne, as to 
exactly where, how much, how fast, and that is well recognized, 
but the overall trend, in our opinion, is so compelling that we 
believe we have to begin now to take steps. As Senator Baucus 
pointed out, the earlier we take steps, the easier it's going 
to be to make these kinds of changes, the less disruption we'll 
have, the fewer costs we will incur. We have to begin to make 
those steps now, in the form of the insurance policy described 
in our proposals for Kyoto.
    Senator Chafee. The big stumbling block probably will be 
the developing countries and in your testimony, you indicated 
it's very, very important to get them aboard. I think it is 
important for us to recognize.
    I believe from your testimony, you say we've got 4 percent 
of the population and emit 22 percent of the CO2 and 
those are startling statistics and statistics that the 
developing countries know as well as we do.
    When you seek the participation of the developing 
countries, which means I would gather that they are going to 
accept some legally binding emission reduction targets, how are 
you going to do that in a timely manner?
    Secretary Wirth. As I pointed out in my testimony, we have 
a five-part approach for bringing the developing countries on 
board. In summary, let me say that Senator Byrd had a very 
appropriate metaphor for this, which I think is very helpful. 
That is, we're all in the same boat together. This is a problem 
that we all have to face and it's a very significant one. In 
that boat, we begin with a bigger oar than the developing 
countries but over a period of time, the size of their oar 
phases in so that when we get to say 2030, 2040, we're all 
pulling together oars the same size. That's not a bad metaphor 
to understand the process of phasing in.
    We have proposed a phase-in approach far beyond what almost 
anybody else in the world has done. The developing countries 
are required to advance their existing commitments on issues 
like energy efficiency, elimination of subsidies, privatization 
of energy, and the investment in renewable energy resources. 
There are a whole series of things that we want them to be 
pinned down to in advance.
    Second, we would like to create what is called an Annex B. 
As you know, Mr. Chairman, the Framework Convention has Annex I 
countries and non-Annex I countries. The Annex I countries are 
the developed countries and then there is everybody else. There 
are a number of countries who, over a relatively short period 
of time, are now graduating toward developed country status. We 
think as they graduate, for example, as they assume membership 
in the OECD, they also have to assume certain obligations, so 
we are proposing a second sort of interim category.
    Third, we're calling on developing country parties to adopt 
by 2005, binding provisions so that all parties have 
quantitative emission obligations.

[[Page 211]]

    Fourth, we have very important joint implementation 
processes which we think add real incentives to bring the 
developing countries on board. It's in their advantage to do 
so.
    Finally, we're carrying out other bilateral initiatives as 
part of our treaty obligations to promote energy efficiency, 
forest protection and various technical country assessments.
    This is the trickiest and most difficult issue in the whole 
negotiation as you pointed out in your resolution, Mr. 
Chairman. We appreciate your help and work on that and look 
forward to working with you and other members of the Senate.
    Senator Chafee. Many of us look back on the Montreal 
Protocol and the CFCs and what we did there, but when you look 
at that, it seems easy compared to this problem.
    As you recall, we had binding limitations in that by the 
year 2005, whatever it was, I can't remember the exact dates, 
the production of a certain type of CFC had to be completely 
banned. So we were able to achieve that, plus we had wonderful 
cooperation from American industry on it.
    I see my time is up. I'm going to give everybody else 8 
minutes and I'll take two more myself and then everybody will 
have eight.
    Dr. Yellen, in the beginning of your testimony, you said, 
``The Administration has not settled on a particular set of new 
policies to reduce greenhouse gas emissions.'' Kyoto is 20 
weeks away. That is not very far, so if you haven't settled on 
it, you'd better hurry.
    [Laughter.]
    Senator Chafee. What is your answer?
    Ms. Yellen. I should perhaps clarify and say there are some 
elements as the Under Secretary has mentioned of the United 
States approach that certainly are settled on. These have to do 
with the joint implementation, international emissions and 
other flexibility provisions that I think are very important.
    With respect to targets and timetables, that isn't settled 
and what that would entail in terms of domestic implementation.
    The President has indicated that he really thinks it is 
important before we settle on a policy to have a period in 
which he and the rest of the Administration become personally 
heavily engaged in hearing from broadly, Members of Congress, 
elected officials, business and labor leaders, and others that 
are interested, about their views on this topic. We would like 
to get that kind of input before trying to settle on the a 
policy.
    Senator Chafee. On page 10 of the testimony you submitted 
to us, you said, ``What a Kyoto agreement can do is provide 
nations with the tools they will need to achieve significant 
binding greenhouse gas limitation and reduction commitments.''
    Are you saying there will be binding greenhouse gas 
limitations? Is that what your thought is?
    Secretary Wirth. Yes. It's our belief that we have to go to 
a binding approach on this sort of thing.
    Just as a quick aside, I might say that Geneva was not a 
negotiation where we were making commitments; we were rather 
proposing what ought to be done and that might be the 
explanation.
    We believe that the non-binding aim that was built into the 
initial Framework Convention coming out of Rio has not been 
adequate to the task. We're going to miss it, everybody else is 
going

[[Page 212]]

to miss it except the United Kingdom which made a transition to 
natural gas, which was very painful and difficult for them to 
do and very laudable. They did that for a lot of other reasons, 
for the most part. Germany will make it because they adopted 
utilities in East Germany and shut them down which was 
difficult for them to do.
    Nobody else in the world is going to make the non-binding 
aim of Rio. We believe that we need a binding agreement that 
all nations really step up to, and really understand what 
they're committing themselves to, to make very significant 
progress.
    A binding agreement gets us beyond rhetorical flourishes 
into a kind of serious reality.
    Senator Chafee. I agree you've got to have a binding 
agreement if you're ever going to get the thing done.
    My times is up. Senator Baucus.
    Senator Baucus. Thank you very much, Mr. Chairman.
    Mr. Secretary, as you know, any treaty adopted by the 
Senate requires two-thirds of the members of the Senate to vote 
for a treaty. As you also know, Senator Byrd is sponsoring a 
resolution which basically states that no treaty should be 
adopted unless the developing countries are equally committed. 
He has two-thirds of the members of the Senate as co-sponsors 
of that resolution, and he's intending to push that resolution 
quite quickly I would expect before Kyoto.
    What is the Administration doing to turn that vote around? 
It seems to me that the Administration has quite a difficult 
job ahead of it because there is quite a feeling in the Senate 
that yes, the United States must do something about greenhouse 
gases. I think most of the Senators think that, although there 
are some who do not think that, but certainly those who feel 
the United States should not act, feel if we act that certainly 
all countries should, in an appropriate way, be a part of this 
solution. After all, we're all on this globe together.
    India and China together should I think be close to 40 
percent of greenhouse gas emissions.
    We all know the facts and the figures and we're all trying 
to find a solution here, but my question really is, what is the 
Administration's plan or what is the Administration going to do 
to persuade the Senators, by a two- thirds majority, that we 
ought to adopt a treaty?
    My advice to you is that we have to go farther than the 
United States does in persuading not only developing countries, 
but also the other developed countries that the developing 
countries have to step up a little more than they have thus 
far?
    Secretary Wirth. We recognize the size of the challenge 
that you lay out in your question. Let me just take pieces of 
it if I might.
    First of all, the engagement and leadership of Senator 
Byrd, we applaud. I have met with Senator Byrd. I don't know 
how many of you have had the opportunity to sit down and talk 
with him, I suppose all 70 who signed on.
    Senator Baucus. And some who have not signed have spoke 
with him.
    Secretary Wirth. And some who have not signed on.

[[Page 213]]

    Senator Byrd's resolution, in our opinion, is largely on 
the button and comes very close to the Chafee Resolution which 
we also very much applaud and support.
    The Byrd Resolution related to sharing of economics and 
engagement of that one element of it. We thoroughly agree with 
that. Second, we thoroughly agree with the engagement of a 
Senate observer group in the process. Third, we very much agree 
with the thrust of what he's saying related to developing 
country commitments.
    Exactly how those get defined is the thrust of our 
proposals for Kyoto which I outlined, the five-point position 
that we're taking.
    China and India together are enormous producers of 
greenhouse gases and are going to be at the same time a huge 
market over the next 30 years. It is estimated that China and 
India together will be building 1,500 megawatt plants in the 
next 30 years. That is the equivalent of 50 percent of the 
installed energy capacity in North America. That's a remarkable 
opportunity for us.
    Senator Baucus. That's why many have signed onto the Byrd 
Resolution.
    Secretary Wirth. We have to engage them both to get them to 
recognize the imperative of them dealing with the problem. 
China, as was pointed out in some of the earlier comments--I 
believe yours, Senator Inhofe--has got major problems of their 
own. They are starting to recognize those, they are starting to 
move in this right direction.
    We are negotiating as well with the Indians. We have to get 
them to understand that it's in their interest. Joint 
implementation, emission trading and other market mechanisms 
can be helpful to them as they move along the course of 
economic development.
    Senator Baucus. As I understand it, the 2005 commitment for 
developing countries--I don't want to put words in your mouth--
is essentially a proposed commitment by that date, talk. That 
is, it is not a commitment to by that date, commit to certain 
specific targets?
    Secretary Wirth. Under the 1992 Climate Treaty, there are 
certain existing commitments which the developing world is 
required to undertake. We believe those ought to be more 
broadly articulated, that those ought to be more carefully 
defined. These existing commitments can be very significant if 
they meet them. They are already required to do that.
    We think that specificity in their requirements ought to be 
part of the agreement that we reach. That's part of the phase-
in policy. It won't be the same targets and timetables that we 
have now, but it's moving them into that over a period of time.
    Senator Baucus. Can you describe the Annex B you talked 
about? What is that about?
    Secretary Wirth. The idea of an Annex B is that there are 
certain countries that are developing very rapidly which have 
assumed, for example, OECD status. They get that status, that 
privilege of membership, but coming with that are obligations. 
We believe there ought to be a sort of new interim category 
into which countries move with different responsibilities in 
the Climate Treaty.

[[Page 214]]

    Senator Baucus. Why not follow that step a little further 
and have not only Annex 1 but Annex B, C, D and E and all 
countries commit but at different rates?
    Secretary Wirth. That's generally the idea, that there will 
be different rates.
    Senator Baucus. But the point is they all commit to certain 
targets?
    Secretary Wirth. We would like to see that kind of 
commitment from all countries. We're dealing with 150-some 
signatories of the Climate Treaty, but we're really talking 
about maybe 35 countries that make major contributions. If we 
could get those 35 under the tent, as suggested by Senator 
Kempthorne's questions, we would have made an enormous 
difference.
    Senator Baucus. Am I correct in assuming that some other 
developed countries are not as interested as the United States?
    Secretary Wirth. That's true. We're far out front.
    Senator Baucus. Why is that? Why would the European Unions 
not be as interested, including developing countries as quickly 
as the United States?
    Secretary Wirth. I don't want to get into the politics of 
what may go on in Germany or wherever. I think they are a 
little skeptical of our engagement in that because we haven't 
put up numbers yet. I think some of that is their way of saying 
to us, ``why haven't you put up your targets and timetables 
yet, we're not going to agree with what you're saying until you 
come forward with your targets and timetables.''
    We'll do so later this fall and then I think it will be 
easier for us to bring them on board.
    There are also some suggestions that they don't want to get 
far out front in placing demands on the developing world, that 
maybe they can gain some economic advantage by having us out 
front as being the guy really pushing on the developing 
countries and they come back and say, we're the good guys.
    Senator Baucus. If you had to guess, what's the main 
reason?
    Secretary Wirth. The main reason is that we haven't yet put 
out our targets and timetables, so they're not going to pick up 
our proposals until we put out clear indications of what we 
believe we're going to do.
    Senator Baucus. So you think if we do put out our targets 
and timetables, then they too will then come in and suggest 
that developing countries step up more quickly?
    Secretary Wirth. Yes, I believe that's the case. We take 
the lead, we're the key area in all of this. We do a reasonable 
targets and timetables approach in Kyoto. We have that on the 
table mid to late October, that's part of that negotiation; 
then I think it's much, much more likely that we're going to 
get our proposals on economic flexibility that Dr. Yellen was 
outlining and it's much more likely then that they go along 
with us in pushing for developing country participation.
    We have then the opportunity and the Annex 1 countries or 
the developed countries to begin then to make a much clearer 
and coherent case to the developing countries to get on board. 
As the chairman pointed out, getting the developing countries 
on board is going to be the toughest part of this whole 
negotiation.

[[Page 215]]

    Senator Baucus. Thank you.
    Senator Chafee. Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    Secretary Wirth, these reductions on fossil fuels that 
would be required by an agreement, where would they come from? 
Let me put it this way, would the armed services be coming 
under this requirement, would they be exempt?
    Secretary Wirth. Our armed services are already making very 
significant steps toward their own economic efficiencies in the 
use of fuel, the recycling of materials and so on. We're way 
out in front of any other armed service in the world on that.
    Senator Inhofe. But I'm talking about are they going to be 
required, as I've seen some of the requirements that are going 
to be proposed, they would not be exempt in any way, would 
they?
    Secretary Wirth. I don't think Secretary Cohen would want 
them to be exempt.
    Senator Inhofe. I'm sure he wouldn't, but would you?
    Secretary Wirth. No.
    Senator Inhofe. So they would be included also. What about 
political subdivisions, State and local governments?
    Secretary Wirth. I think part of this process would be that 
State and local governments, like my city of Denver, the State 
of Colorado, would make very significant efforts to move toward 
natural gas vehicles and so on.
    I think there is a sense of shared responsibility. Of 
course they'd be involved.
    Senator Inhofe. I'm a former mayor, so I'm a little 
sensitive to this type of thing. Do you think this would be, in 
your mind, interpreted as an unfunded mandate?
    Secretary Wirth. An unfunded mandate?
    Ms. Yellen. A requirement to do something.
    Senator Inhofe. An unfunded mandate, yes.
    Secretary Wirth. I think most of the things we're proposing 
are going to be, as the economic studies suggest, steps that 
are going to end up like an insurance policy but most 
importantly the guts items are going to pay for themselves, at 
least for a long period of time.
    Senator Inhofe. So you don't see there could be any costs 
incurred by political subdivisions to comply?
    Secretary Wirth. Over a period of time, I would think the 
investments made in terms of energy conservation and efficiency 
during a first phase like this would absolutely pay for 
themselves.
    We then get into a situation as we're looking at steps 20, 
30 years down the line in which we're involved in very 
significant technological investments where we're really 
changing the nature of the way in which we fuel much of our 
economy.
    Senator Inhofe. But there will be costs incurred by State 
and local governments, you agree with that, don't you?
    Secretary Wirth. Sure.
    Ms. Yellen. I'd just add that I think what's being proposed 
here is a national cap on emissions and I think what you're 
talking about would be particular emissions limits placed on 
the armed services, on individual cities.

[[Page 216]]

    Senator Inhofe. Exactly. They're going to have to be a part 
of this. They're not exempt.
    Ms. Yellen. We really have not reached a conclusion as to 
how to go about implementing any overall national emissions 
target domestically. Certainly one kind of system that one 
could imagine, that one could think of----
    Senator Inhofe. You do not anticipate that the costs 
incurred by State and local governments would somehow be borne 
by the Federal Government, or do you?
    Ms. Yellen. I think that until we have discussed what kind 
of scheme would be used in order to try to meet targets and 
timetables, it's really impossible to discuss what the costs 
would be.
    Senator Inhofe. We've established there will be some 
costs--they might be high, they might be low--but there will be 
costs. My question would be, do you anticipate that the Federal 
Government will step in or should step in?
    Secretary Wirth. That would then be up to the implementing 
legislation and what the Congress, in its wisdom, decided to do 
based upon our consultations with the Congress. As Dr. Yellen 
has pointed out, we haven't gotten there yet, but it is fair to 
say that nobody is exempt, a developing country or whoever it 
may be.
    Senator Inhofe. Let me suggest that after you left this 
body, we did pass legislation on unfunded mandates in terms of 
political subdivisions. You may want to look into that.
    I want to move on here. In my opening statement, Mr. 
Palmeritz made a statement that ``Our goal, Mr. Chairman, is 
that all parties participate in the next round of 
negotiations.'' Let me find it here. ``Are we going to agree to 
the legally binding instrument in Geneva, to a legally binding 
instrument?'' and he said, ``No way.'' You were quoted a few 
days after that as contradicting that. Who is right?
    Secretary Wirth. Again, as I pointed out earlier, I'd have 
to look at the context of that, but Geneva was not a 
negotiating session in which we agreed to some thing and it's 
part of a negotiation. That is not what Geneva was.
    Geneva was a preparatory meeting and at Geneva, we laid out 
the U.S. proposal and included in the U.S. proposal were 
legally binding targets.
    Senator Inhofe. That answers the question. I want to get to 
the one I don't understand and I need to have it explained 
because in your opening statement, which I did not read but I 
was here during your opening statement.
    You made several comments. I think you said it's not 
realistic to assume that any product that comes out of here is 
going to impose the same thing on developing nations as 
developed nations. Is that correct?
    Secretary Wirth. That's true, yes.
    Senator Inhofe. And you said it several different ways. 
This also you said is maybe the most contentious part of this.
    Secretary Wirth. Most difficult, that's right.
    Senator Inhofe. Just about 5 minutes ago, this Senate Joint 
Resolution passed the Senate Foreign Relations Committee and I 
understand there are only two votes against it. To my 
understanding, they have somewhere between 66 and 70 co-
sponsors. You've addressed this.

[[Page 217]]

    As I read it, my interpretation is that if you don't treat 
them the same, we're not going to ratify them. Is that a 
different interpretation than you had?
    Secretary Wirth. That is a different interpretation than we 
have of that. Again, you would have to talk to Senator Byrd and 
Senator Hagel about their intent on this. As I pointed out, I 
thought the most useful metaphor in describing this was the 
boat and the oars. Senator Byrd said we're all in the same 
boat. We start with a bigger oar, over a period of time the 
size of their oar phases in.
    This is not dissimilar to what we've done in other 
environmental treaties. I might say Senator Chafee raised the 
Montreal Protocol. Under the Montreal Protocol, the developing 
countries were given a longer period of time in which to phase-
in and as the Senator pointed out, that has been an 
extraordinarily successful environmental treaty.
    Senator Inhofe. I appreciate that, Mr. Secretary, but I 
read this and I don't see that this is subject to 
interpretation or legislative intent. I have talked to both 
Senator Byrd and Senator Hagel. I'm going to read it. It states 
very clearly that we're not going to ratify a treaty, an 
agreement or a protocol which would--I'm directly reading from 
paragraph A--``mandate new commitments to limit or reduce 
greenhouse gas emissions for the Annex 1 parties unless the 
protocol or other agreement also mandates new specific 
scheduled commitments to limit or reduce greenhouse gas 
emissions for developing country parties within the same 
compliance period.'' What is ambiguous about that?
    Secretary Wirth. We agree with that, unless the protocol or 
other agreement also mandates specific scheduled commitments. 
We're agreeing with that. That is in our proposal. It does not 
say the same commitments.
    If one followed your interpretation, Senator, as I 
understand what you're suggesting, any new commitments under 
line 1, mandate new commitments, that would then go to the end 
of that sentence that those would be the same new commitments. 
Nowhere in the Byrd Resolution does it say the same new 
commitments for developing parties. That is not Senator Byrd's 
intent.
    Senator Byrd's intent is to start with a commitment which 
is lower for the developing countries and phase that in to what 
the developed countries do.
    Senator Inhofe. Respectfully, Mr. Secretary--and my time is 
up--I have to tell you I read this, it's in the record and it 
says the same. It doesn't use the word ``same;'' it says, you 
shall not expect anything from developed countries that you 
don't also get from developing countries.
    The reason I'm concerned about this is that you're going 
into negotiations knowing in advance that if you don't treat 
them both the same, you're not going to get ratification. You 
don't agree with that?
    Secretary Wirth. Senator, the word ``same'' in here applies 
to the compliance period, not to the requirements. The word 
``same'' is used as a way of defining compliance periods, not 
requirements. That's what the Byrd Resolution says, will be in 
the same compliance period but not the same requirements within 
that compliance period.

[[Page 218]]

    They will start with lower requirements in that same 
compliance period. Over a period of time, those lower 
requirements become greater and we all have the same size oar 
over a period of time.
    Senator Inhofe. Thank you, Mr. Secretary. I don't know how 
to word it any other way.
    Senator Chafee. Senator Kempthorne.
    Senator Kempthorne. Mr. Secretary, in your statement, you 
said industrial nations like the United States have to go first 
in reducing greenhouse gas emissions because the developing 
countries won't act on their own.
    You also stated that developing countries will emit more 
greenhouse gases than industrial nations within the next 30 
years.
    Under the Administration's approach, wouldn't industrial 
nations be required to reduce their emissions and limit 
economic activity while developing countries would be allowed 
to continue to increase their emissions?
    Secretary Wirth. Yes, that will be one of the results in 
this first period of time. We will be limiting our emissions. 
We hope that we will get to a point of stabilization at a 
particular time and that all developed countries will.
    And soon thereafter, when the developing countries begin to 
phase in their own requirements and steps, then we all end up 
with the same kinds of requirements.
    Senator Kempthorne. Are we, to follow your metaphor, going 
to be retarding or holding constant the size of our oar, while 
the other countries will be able to continue to grow their oar?
    Secretary Wirth. The oar metaphor relates to the actions 
that each of us takes. This gets a little stretched, Senator 
Kempthorne. The oar relates to the power that we put behind 
ultimately reaching the goal of stabilizing the concentrations 
of greenhouse gases.
    The goal in all of this is that all of us together, 
sometime in the 21st century, will stabilize the concentrations 
of greenhouse gases in the atmosphere. The developed countries 
have been the ones responsible for increasing the level of 
concentrations, for the most part, from the historic level of 
around 260 to above 360 today.
    We have to say we were responsible, we'll take the first 
step. We have the technology but you guys are coming along fast 
and you've got to phase in, not dissimilar from the very 
successful kind of phase-in approach that we did in the 
Montreal Protocol.
    Would these be legally binding on developing countries?
    Secretary Wirth. Yes. We believe they should be and that's 
the list of specific items that we have put out there in terms 
of the enhancement or articulation of their existing 
commitments.
    Senator Kempthorne. How would we enforce that?
    Secretary Wirth. In most international treaties, we have a 
whole section, and I'll be happy to put that in the record if I 
might, as to how one goes about reporting and meeting 
requirements and compliance. That's not in my testimony but 
I'll submit that to the record.
    We have proposed a whole package of approaches ranging from 
reporting to public disclosure of this to expert understanding 
and expert analysis of what goes on. For the most part, Senator 
Kempthorne, when you get to a legally binding treaty like this, 
if a country goes through the process of examining what it has 
to do

[[Page 219]]

and makes these commitments, then they're going to meet those 
commitments. Nations, for the most part, do what they say 
they're going to do.
    Senator Kempthorne. I wish we had more time because I'd 
really like to pursue that. At another date, we will.
    Secretary Wirth. Let's do that. I'd be happy to get 
together with you, Senator, at any time.
    Senator Kempthorne. Dr. Yellen, you stated the effort to 
model economic impacts based on alternative emission reduction 
strategies was abandoned, correct?
    Ms. Yellen. The search for a single model or a small set of 
models. In the case of the IAT report, three were used. The IAT 
analysis would produce forecasts that we could rely on or 
regard as definitive. That search was abandoned, but I don't 
mean to say that we don't expect to use a broad set of tools 
including those models, and other models that are better at 
understanding some other issues and many sorts of economic 
analysis in defending any proposal we would put forward.
    Senator Kempthorne. You also State in your testimony, in 
short, ``If anybody tells you that he or she has the definitive 
answer as to the costs and benefits of particular climate 
change policies, I would suggest your raise your collective 
eyebrows.''
    How are you going to agree to different reduction 
strategies if you can't estimate the impact of those strategies 
on the U.S. economy?
    Ms. Yellen. I believe I used the word definitive and to 
have a single forecast of, for example, the amount of jobs to 
be gained or lost in a particular industry in the year 2030. 
That is a search I think we've abandoned and shouldn't try to 
give you.
    Certainly we need to produce economic analysis of any 
proposal with respect to targets and timetables that the 
Administration would put forward and try to estimate even if 
it's only a range of potential impacts, what we think the 
impact would be on the American economy.
    We will, when there is a policy, certainly be prepared to 
do that.
    Senator Kempthorne. As we listen to this testimony, we take 
it in light of what was discussed at last week's hearing, the 
raised eyebrows, the abandonment of certain strategies, the 
data that doesn't quite give us any conclusion.
    You also stated, ``If we do it dumb, it could cost a lot. 
If we do it smart, it could result in net benefits.'' You seem 
to be telling us to trust the Administration to implement any 
new requirements reasonably. How can we depend on the 
Administration to do that when it seems that it cannot estimate 
the relative costs of alternative strategies to reduce 
greenhouse gases?
    Ms. Yellen. The Administration has been engaged, for some 
time now, in attempting to study and understand the potential 
impact on the economy of an emissions reduction strategy.
    While I used the term abandoned with respect to an attempt 
to produce definitive forecasts of impacts, I certainly do not 
mean to suggest that we have not learned a great deal from that 
exercise about what makes a policy sensible as opposed to 
costly and certainly reading a broader range of economic 
analysis by economists

[[Page 220]]

outside the Administration, putting it together with what we 
have done internally, points to some clear conclusions.
    One of the things I think the report that we've submitted 
to you does very well is to provide a general sense of what the 
gains are when one uses what I've described as flexible or 
smart strategies.
    One of the strengths of the U.S. proposal, I believe, is 
that it has emphasis on flexible, market-based, smart 
strategies that provide flexibility with respect to emission 
reductions when it comes to where they will take place and when 
they will take place.
    Within our own economy, coming back to Senator Inhofe's 
earlier question, I think the framework that you had in mind 
earlier was that you would imagine individual firms or State 
and local governments potentially having clear mandates as to 
how much emission reduction might be done.
    We've not settled on policies but flexible could mean, for 
example, tradeable permits where if one entity found it very 
difficult or costly to reduce emissions, they wouldn't have to 
do it, they could buy a permit to allow greater emissions.
    Senator Kempthorne. I appreciate that. I want to slide in 
one more question before that red light comes on.
    Mr. Secretary, the developing countries have a much greater 
population and are sure to pass, as you pointed out, the 
industrial nations in greenhouse gas emissions in the next 
quarter century. Given those facts, why is the Administration 
arguing in support of a per capita limit on greenhouse gas 
emissions rather than a proportionate share based on economic 
productivity? Aren't we really arguing against our own best 
interests?
    Secretary Wirth. We've not argued anywhere there should be 
a per capita limit. That would be a very, very unwise policy. 
If we say we're going to have a per capita limit, that would 
mean the United States would have the same per capita 
limitations as India whose population is growing perhaps even 
faster than their production of greenhouse forcing gases. That 
would certainly not be a prudent thing for us to do.
    Senator Kempthorne. I appreciate that.
    Secretary Wirth. If I might comment on one piece about this 
model. I'm not an economist. I view with some skepticism all of 
the modeling based upon a lot of experience on these kinds of 
issues.
    I remember when Senator Baucus and I were freshmen Members 
of Congress. The Arab oil boycott had first occurred and the 
economic modelers came in front of the Congress and told us 
that the cost of oil was going to be $110 a barrel and there 
would be huge stacks of what were called petrodollars in the 
Middle East and this was going to be a disaster for our 
economy. Well, none of those things proved to be the case. The 
modelers were wrong.
    When we did the Clean Air Act, you remember, Senator 
Chafee, the original model suggested that the reduction of a 
ton of sulfur would cost about $2,000. We figured out the right 
kind of a tradeable permit system in the United States and most 
recently, the cost of that has dropped to $100. The modelers 
were off by a factor of 20.
    They are useful tools to help you begin to think about this 
but, in summary, what I think we're saying is there is no 
single model

[[Page 221]]

that is going to give you every dot as to what is going to 
happen 10 years, 20 years or 30 years out.
    Senator Kempthorne. I raise my eyebrow.
    [Laughter.]
    Senator Chafee. We've been challenged by your statement to 
raise our collective eyebrows, Doctor. I'm not sure we do 
anything collectively around here.
    We will do 5 minutes in this round because we have another 
panel and I want to make a sure they get a chance.
    In the other areas we've worked on that are similar to 
this, namely you mentioned the Clean Air Act. At that time, you 
remember the whole acid rain problem was there and many of us 
took trips abroad and saw what the acid rain had done to the 
trees in the Black Forest of Germany or Switzerland.
    When we came to the CFCs, there was a real concern because 
there is a direct relationship between the destruction of the 
ozone layer and the increase in skin cancer. So we could sound 
the alarm, as it were. I find what is lacking here is the 
sounding of an alarm.
    In your statement, you state, ``Based on these warming 
trends, sea level is projected to raise an additional 1.5 feet 
by the year 2100,'' and 2100 is only 100 years from now. ``This 
would, without adoptive measures, flood 9,000 square miles of 
coastal areas in the United States, notably in Florida and 
Louisiana and put about 100 million people worldwide at risk 
each year from storm surges.'' That is an alarming statistic.
    I think the Administration, as I see it, is very, very 
cautious about going public with statements like that. I think 
your case is helped by pointing out the dangers that lie ahead 
if we do nothing.
    One of our scientists, Dr. Benjamin Santa, gave a very 
compelling statement, ``Although we will never have complete 
certainty about the exact size of the past, present or future 
human effect on climate, we do know beyond any reasonable 
doubt, that the burning of fossil fuels has modified the 
chemical composition of the atmosphere.
    ``The question is not whether but to what extent such 
changes in atmospheric composition have already influenced the 
climate of the past century and will continue to influence the 
climate of the 21st century.''
    I believe in that and my question to you is, isn't it 
possible for the President or those who have a bully pulpit to 
get out there and State what you have stated in your statement 
to us here?
    Secretary Wirth. I share your frustration about getting the 
story out and telling the story. The President has really 
picked up this cudgel. He began very aggressively with a 
terrific speech at the United Nations 2 weeks ago. I would ask 
that speech be placed in full in the record.
    He has two strong paragraphs in there for making the case. 
He has made it very clear that he's going to devote a great 
deal of attention this summer, identifying why this is as 
problem, pointing out to the American people that we have to 
move on this, culminating in a White House conference in late 
September-early October to bring together as much of this 
evidence as we can.
    The President was much taken, for example, by the World 
Wildlife Fund, which pointed out that in Glacier National Park, 
70 per- 

[[Page 222]]

cent of the glaciers have melted. The evidence on glaciers 
around the world, the man that was found in the Alps, why was 
that man 15,000 years old or whatever, suddenly discovered? The 
big glaciers had melted.
    The young woman who was sacrificed and put into an ice cave 
in the Andes a long time ago, suddenly found. Why was that? The 
glaciers are retreating.
    Look at south Florida and look at what insurance companies 
are starting to do there in terms of saying maybe we don't want 
to ensure here because the incidence of hurricanes may well be 
going up because there is greater warmth in the water, greater 
energy there, greater violence in these storms.
     These are the kinds of stories and anecdotes that have got 
to be put together so that people really understand what it's 
going to mean to them day in and day out. The President has 
dedicated himself to doing that.
    Senator Chafee. I know it's easy for us to sit here and say 
go to it, but I do have the feeling that the concerns haven't 
gotten out there. That was what made us move successfully in 
these past efforts I just mentioned, in which you were deeply 
involved at the time.
    I would encourage you and others who have a standing in 
these areas and we have responsibilities likewise. It isn't 
just all the Administration but I would urge the President to 
speak out on these subjects.
    I was not aware of this White House conference. That sounds 
like a good idea.
    Senator Baucus.
    Senator Baucus. Thank you very much. I've been around once.
    Senator Wyden. It's a pleasure to have Secretary Wirth and 
Dr. Yellen here. I just have a couple of questions for the two 
of you.
    I'm from I think the only State in the United States that 
has put in place carbon dioxide controls. We are convinced that 
it is possible to do this in a fashion that is good for the 
environment and also doesn't cause economic meltdown.
    I'd like to ask each of you a couple of questions. One, Mr. 
Wirth, if you could outline what you think are the most cost 
effective strategies for controlling emissions? My sense is 
this would give us a chance to compare some of the alternatives 
that are relevant here as Congress goes forward on this issue.
    Secretary Wirth. First of all, thank you, Mr. Wyden, for 
your kind opening comments and we appreciate not only your 
progressive State, but it's progressive representation.
    We do not have, as Dr. Yellen pointed out, a specific 
proposal at this point, so any comments that I might make are 
not in the context of a specific Administration proposal.
    Having said that, it's very clear there are very 
significant efficiencies over a relatively short period of time 
that can be had in our economy. We all worked on those together 
on the Commerce Committee in the House of Representatives. What 
was true then is true today.
    The Japanese, for example, are about twice as fuel 
efficient as we are, with an economy that is about close to 
being two-thirds of

[[Page 223]]

our size. Those are rough numbers. There are great significant 
efficiencies.
    Second, there are real opportunities for us to create very, 
very productive partnerships with large parts of American 
industry. You might have seen the piece this morning in the 
Washington Post by the chairman or president of Chrysler 
talking about the partnership for a new generation of vehicles. 
That's the kind of thing we think we can embark upon.
    There are real opportunities. We look at deregulation in 
the utility world. Think about the factor in the climate issue 
which can be very helpful in coming to the right kinds of 
economic decisions there. Getting the prices right is, of 
course, a very important one, to remove subsidies from key 
areas.
    These are some of the items that we can do over a 
relatively short period of time that can have a significant 
impact. The automobile example is a longer term one but again, 
the kind of promising steps that we might make.
    A final note, and I would ask Dr. Yellen to comment, this 
problem is not going to be solved, as you know, by these kinds 
of short-term measures. This is a long-term pull over 40, 50, 
or 60 years. The long-term solution is going to come from major 
technological improvements, changes and innovations. That is 
where the payoff is going to be.
    The sooner we start to get the framework right for 
developing those long-term technological solutions, the better 
chance we have of meeting our obligations to our children, 
grandchildren and great grandchildren.
    Senator Wyden. Is it your sense that energy efficiency, 
we've seen appraisals that would be in the vicinity of $2 a ton 
plus tree planting and forest management strategies where 
modest costs per ton would be sensible kinds of approaches that 
we ought to look to first.
    Secretary Wirth. We've already embarked upon a number of 
joint implementation projects with some 17 or 20 of those 
around the world today. We'd be happy to send you a list of 
those. Many of those do relate to forestry practices and very 
progressive forestry practices.
    The sequestration of carbon is a very, very important part 
of anything that we might want to do. Again, here is a good 
example of where the opportunities for us to develop 
partnerships with the agricultural community, with the forest 
product community, are very significant. There's a lot of 
carbon stored out there in sound agricultural practices.
    Senator Wyden. I appreciate your saying that because there 
is no question in our minds that looking at sensible forest 
management strategies is the winner all around. You're going to 
get more and higher value. Wood products are going to get 
better habit for species, water quality and as you said, it's a 
cost-effective way to sequester carbon.
    Given that, can the Administration make a special push to 
ensure that forest management and reforestation programs are a 
significant component of a global climate treaty?
    Secretary Wirth. We have made that point over and over 
again and I would commit that to you here, that the commitment 
and en- 

[[Page 224]]

gagement of the forest product industry, agriculture overall, 
is very important.
    I've met with our former colleague, Hinson Moore, who 
understands this and is a very, very effective spokesperson for 
his industry. We've met and will continue to do so on this very 
important issue.
    Senator Wyden. Let me turn to your colleague for a moment.
    Dr. Yellen, I'm interested in your thoughts about how a 
region's economy absorbs the impact of some of these kinds of 
changes as it relates to carbon dioxide emissions and in 
particular, what we found in Oregon is that if one does nothing 
else, nothing else other than look at a market-based kind of 
system for dealing with these issues, and making a number of 
the key ones prospective, such as the changes in the power 
plant area, that alone constitutes a significant effort to deal 
with this issue in a way that can be absorbed from an economic 
standpoint. Do you agree?
    Ms. Yellen. I would agree with your assessment. I think 
that there are a variety of market-based approaches that we 
could potentially use. Again, I want to emphasize that we 
haven't developed policies in this area but we've had 
experience in the United States. It's been very positive with 
emissions trading of permits in the case of sulfur dioxide and 
water trading.
    We've had some experience in California and other places 
and I think market-based systems really have the power to work 
to greatly reduce the costs. They provide flexibility over time 
with banking and borrowing of permits and across places. You 
give incentives to firms or individuals who see an opportunity 
there to make money when they can really reduce emissions very 
effectively, very cheaply. They have now an incentive to do 
more than they would otherwise be required to do because they 
can profit from it and reduce the cost to others that would 
find it costly.
    Senator Wyden. I came in late.
    Senator Chafee. You did come in late and the red light is 
on. What we'd like to do is go to Senator Baucus.
    We have another panel, I want to remind members of that and 
we want to give them a fair shot, plus we want to have an 
opportunity to ask questions. So I would like to move along 
here.
    Senator Baucus. We'll get back to you, Senator Wyden, if 
you wish some more on this.
    Senator Baucus. Secretary Wirth, one of the questions here 
obviously is how we implement controls. You talked about 
market-based mechanisms.
    The first question I have, the degree with which we think 
the emissions trading system which has worked under the Clean 
Air Act, in sulfur in particular, was transferable to 
greenhouse gases on a global level.
    Ms. Yellen. My sense is, although we've not concluded a 
study of that, an emissions trading system could be developed 
that would work for carbon dioxide emissions if we wanted to go 
in that direction.
    That is why there are proposals here for international 
trading.
    Senator Baucus. Why is it that the Europeans are resistant 
to that idea? I asked Secretary Wirth that question. I 
understand the

[[Page 225]]

Europeans are resistant to the kinds of emissions trading 
proposals for carbon dioxide that we have adopted for sulfur 
dioxide.
    Secretary Wirth. The Europeans have their own emissions 
trading system in their proposal. I think disingenuous is too 
tough a word but they are saying to us we don't want to have 
emissions trading but the whole proposal made by the EU is 
premised upon a bubble that would include all European 
countries.
    It would allow Portugal, for example, to increase their 
numbers by 40 percent, while Germany decreases by 15 percent. 
If that's not emissions trading, I don't know what is. So 
they're saying you guys can't do it internationally, but we can 
do it within the EU. We're saying, wait a minute.
    Senator Baucus. Practically, they do because they practice 
emissions trading but they will probably agree in a more 
comprehensive way.
    Secretary Wirth. I think they will when we get there.
    Senator Baucus. My next question is, you mentioned Mr. 
Easton's piece in the Washington Post. His main point is to 
wait until there is better technology on how to deal with all 
of this.
    Are we expending enough effort in this country, not only in 
cars but in coal-fired technologies, to be more fuel efficient? 
Could we do a better job there?
    Secretary Wirth. Fuel efficiencies of our energy 
technologies are greater than any place in the world. Our new 
technologies, you talk to someone like the Enron people about 
what we can do and what we're promoting around the world and 
the dramatic efficiencies from where we are with our best 
technologies and elsewhere. You're familiar with all of these 
Senator Baucus.
    The automotive industry has told us that they would expect 
to get very, very significant efficiencies, like 88 miles per 
gallon.
    Senator Baucus. This is a ``chicken before the egg'' 
question because I think we find efficiencies when we have to 
very often. For example, the oil shock enabled us to find new 
efficiencies.
    This committee years ago asked the automotive industry to 
develop the catalytic converter. First of all, they said they 
couldn't do it. Then they did it and they found out in doing 
so, they were much more efficient. They developed a much more 
efficient engine and fuel exhaust system.
    Again, sometimes this world is run by deadlines and when 
you have deadlines sometimes you're more likely to do something 
than when you're not.
    I wish you well. This is a daunting task, but it's a 
necessary one.
    Thank you.
    Secretary Wirth. I might say we believe that the framework 
that we've laid out over a period of time provides exactly the 
kinds of incentives and direction that is needed to do just the 
sort of pressure and push for the next steps that have to be 
taken.
    Senator Baucus. Your key problem right now is getting 
developing countries to commit to specific numbers by certain 
dates.
    Senator Chafee. Senator Wyden.
    Senator Wyden. Just one question. To continue this point on 
the economic impact for a second, Dr. Yellen. I think we've 
seen in the State of Oregon, for example, how you can go about 
making some emissions limits in a cost-effective kind of way.

[[Page 226]]

    My sense is that to do nothing is going to have 
extraordinarily bad economic consequences. I gather Secretary 
Wirth talked about this as something of an insurance policy.
    We recently had a conference in the Pacific Northwest where 
a group of independent scientists predicted climate change 
could bring a whole host of problems to the region's water 
resources, forests, agriculture, energy, water shortages, 
diseases forests, flooding, a variety of these.
    Has there been any ballpark estimate given to calculate the 
economic consequences of doing nothing? I know we have spent a 
great deal of time thrashing around with these estimates on 
what happens if you do this and this, particularly from some 
who are not advocating action at all.
    It would seem to me we also ought to try to get a ballpark 
set of costs for what happens if you do nothing.
    Ms. Yellen. Quantifying the cost of doing nothing with 
respect to environmental damage, public health and other issues 
is extremely difficult, very uncertain. Most modelers don't 
even include the benefits side of addressing climate change in 
their model. Indeed, in the report we sent to you, you'll see 
no modeling of the benefit side.
    There is some work in the economics literature and I could 
try to get back to you and give you some of the results from 
that literature, that have tried in a very rough way to 
estimate the benefits from exactly what you're talking about 
and they are significant. I'd be happy to send you some further 
details.
    Senator Wyden. The kind of example that would concern me is 
if you mess up your water supply, for example, what we know in 
the Pacific Northwest is that's going to make it hard to 
attract high tech companies because one of the things they have 
said again and again is that they need access to clean, pure 
water.
    It would seem to me that economic models that would address 
doing nothing and what happens if your water gets fouled and 
what happens when it has economic consequences for high 
technology companies is important.
    Your calculus now is that this would have major economic 
consequences but modeling is difficult?
    Ms. Yellen. It's hard to put a price tag on the 
consequences, but certainly this is why we're talking about it 
because obviously there are benefits from acting and there 
would be costs from failing to act.
    Senator Chafee. All right. Mr. Secretary, looking at the 
greenhouse gas emission curves, how long do you estimate we can 
afford environmentally to wait around before getting this 
participation by not only the developing countries but the 
developed countries as well?
    Secretary Wirth. It depends on what assumptions you make 
about what a harmful concentration of greenhouse gases may be. 
Most of the environmental modeling has been done on a doubling 
of parts per million of carbon in the atmosphere. We're 30 
percent of our way there; we're probably going to get there 
sometime in the second quarter and before 2040-2050, we're 
going to get to doubling. That's where the sea level rise and 
most of those predictions come.

[[Page 227]]

    If we don't start to act now to break into that curve, 
there is no way in the world that we can stop it doubling. We 
have to start, as Senator Baucus pointed out, now. There are 
some very sophisticated modeling curves about greenhouse gas 
emissions and I would like to submit those for the record 
because they do show where the curve and the breakpoints are.
    If we start now, how likely is it that we can stop it 
doubling. If we wait for 20 years, it's almost impossible that 
we can stop it doubling and we'll move rapidly to tripling. 
When you start to get between doubling and tripling, most 
scientists would agree that the impacts become even more severe 
and we're probably, as I pointed out, no longer into linear 
impacts but we're going to see some major surprises along the 
way.
    Senator Chafee. That is a good presentation and I hope you 
are able to sound that alarm publicly to a great extent.
    Secretary Wirth. We appreciate your help in doing so, 
Senator, and look forward to working with you.
    Senator Chafee. Thank you very much.
    Secretary Wirth. Thank you.
    Senator Chafee. We appreciate both you and Dr. Yellen.
    Now, Mr. Kevin Kay, executive director, International 
Climate Change Partnership and Mr. William O'Keefe. Will they 
both quickly come to the table and we'll get started because we 
want the opportunity to hear what you have to say.
    What we'll do with each of you is if each of you could give 
your statements in say 7 minutes, then we will have a chance to 
ask some questions. Your statements obviously will go into the 
record.
    Go to it, Mr. Fay.

   STATEMENT OF KEVIN FAY, EXECUTIVE DIRECTOR, INTERNATIONAL 
                   CLIMATE CHANGE PARTNERSHIP

    Mr. Fay. Thank you, Mr. Chairman, members of the committee.
    My name is Kevin Fay. I'm the executive director of the 
International Climate Change Partnership, a coalition of U.S. 
industry representatives and associations as well as 
international associations interested in the policy development 
process with respect to global climate change. We appreciate 
the opportunity to be here today.
    ICCP was organized in 1991 to provide a forum to address 
the issue of global climate change and to be a constructive 
participant in the policy debate. We continue to recognize the 
climate change issue as an important matter with which 
government should be concerned. However, it is a very long-term 
issue and extraordinarily complex in both its underlying 
science and its entanglement with the very foundations of the 
global economic structure.
    We have recently communicated our views on the key issues 
in the Kyoto negotiations to the Administration. I'm attaching 
this correspondence to my testimony and ask that it be included 
in the record.
    Senator Chafee. Yes, it will be.
    Mr. Fay. We have also communicated to the President on the 
issue of the Administration's now incomplete economic analysis, 
expressing our frustration at their lack of communication on 
the matters of greatest concern to the private sector, namely 
the potential

[[Page 228]]

economic impacts of a climate change agreement and the current 
thinking of future implementation scenarios.
    In light of the Administration's demurral on the economic 
analysis, our frustration only grows. In our view, the 
Administration made progress in its own deliberations and 
offered a thoughtful policy framework at the second meeting of 
the parties in 1996 and we have heard about that here today.
    This policy outline includes a comprehensive approach, 
identification of a long-term objective, identification of 
developing country roles under the treaty, implementation of 
flexibility through emissions trading, banking and joint 
implementation, and avoidance of a laundry list of so-called 
policies and measures.
    The U.S. framework also included a call for a binding 
commitment which the Administration has subsequently defined as 
an emissions budget period of undetermined length to achieve 
reductions of an undetermined size.
    While most of the attention has been focused on this part 
of the discussion, we continue to believe that it is not the 
only key to a successful treaty agreement in Kyoto or after 
Kyoto.
    You will note in both of the letters we attached, we urged 
the President and the State Department to reiterate to our 
negotiating partners that the U.S. policy framework enunciated 
last July is the only framework that can provide a climate 
change agreement that is both environmentally beneficial and 
economically feasible.
    Our primary concern has been that the result of the 
negotiations would focus on only one or two of the key issues, 
some of which we have outlined in our letter, and that the rest 
would be left until later.
    To date, frankly, we have been disappointed in the progress 
on most of these fronts and we are pessimistic on the ability 
to achieve them between now and Kyoto. ICCP is not and never 
has been interested in an agreement at the Kyoto meeting just 
for the sake of reaching an agreement. This view will not 
change.
    With respect to the economic issues, which I referred to 
earlier and the impacts of a climate change agreement on the 
U.S. economy, jobs and the environment, we remain very 
concerned. It is difficult to address this issue in any 
effective way given the lack of dialog on these topics and the 
lack of information being provided by the Administration.
    We know that the economic analysis that has been performed 
by the Administration and others tells us several important 
things--that there are costs involved in reducing greenhouse 
gas emissions; that the costs are likely to be reduced if 
flexibility provisions are incorporated; that you cannot 
achieve any reasonable goals either environmentally or 
economically without developing country participation; and the 
costs are less if you avoid premature capital retirement or 
turnover and provide industry the opportunity to manage their 
way into the technological innovation that will be necessary to 
accomplish whatever long-term goal is established by the 
parties to the Convention.
    We need to know now, however, what analytical process might 
be pursued in light of the Administration's current view of the 
difficulty of completing what it has promised for more than a 
year. In order for there to be an effective treaty, we believe 
that the par- 

[[Page 229]]

ties must first get the treaty structure right. We have a long 
way to go before that will happen.
    In closing, I believe it is useful to look at previous 
examples for guidance that may provide a better perspective 
than the intense pre-Kyoto focus.
    More than 12 years ago, negotiators were struggling to 
complete the Vienna Convention for protection of the ozone 
layer after more than 5 years of negotiation. These 
negotiations had taken on a bitter tone as parties, including 
the United States and the European Union tried to----
    Senator Chafee. When you say these negotiations, you mean 
the ozone layer, the Vienna ones?
    Mr. Fay. Yes. The United States and European Union tried to 
push for adoption of their own preferred policy approach to 
dealing with those depleting compounds. Instead, the parties 
agreed to that convention without the regulatory protocol and 
also agreed to establish a series of workshops and information-
gathering devices to better understand each others' views.
    When negotiations resumed, approximately 2 years later, the 
parties were much better informed and a treaty structure was 
adopted that has since proven very durable. The Montreal 
Protocol which was signed in 1987 has proven much more 
effective than most of us thought possible at the time.
    We raise this as an example not because we believe the 
issues are identical. They are not and climate change is 
certainly far more complex. We raise it because as we reach 
this fevered pitch prior to Kyoto, we want to stress that an 
effective framework is what counts, not an expedient framework.
    The climate treaty needs to be durable for the next 100 
years. Our companies have determined that the current State of 
scientific understanding requires a prudent, long-term approach 
to address this issue. This view is equally applicable to the 
climate negotiations themselves.
    We appreciate the opportunity to be here today.
    Senator Chafee. Thank you very much, Mr. Fay.
    Now, Mr. O'Keefe, chairman, Global Climate Coalition here 
in Washington.

    STATEMENT OF WILLIAM O'KEEFE, CHAIRMAN, GLOBAL CLIMATE 
                           COALITION

    Mr. O'Keefe. Thank you, Mr. Chairman.
    Mr. Chairman, members of the committee, I am William 
O'Keefe, chairman of the Global Climate Coalition. Our members 
form the backbone of the U.S. economy and encompass companies 
from manufacturing, agriculture, transportation, energy 
utilities and mining.
    The GCC commends this committee for holding these hearings 
to discuss the scientific and economic realities of climate 
change and the implications of the Administration's negotiating 
strategy in a rational, logical, and open forum.
    Recent Senate hearings have put a much needed spotlight on 
the compelling scientific uncertainties that should permeate 
every climate change policy discussion. A May 16 article in the 
respected journal, Science, demonstrated convincingly that 
based on our current State of knowledge, we do not face an 
imminent crisis and so

[[Page 230]]

do not need to undertake precipitous actions that could badly 
damage our economy.
    As scientific knowledge about climate change has improved, 
estimates of future temperature and sea level increases have 
moderated. In 1990, the Intergovernmental Panel on Climate 
Change estimated that the average global temperature would rise 
4 degrees Celsius by 2100. In 1995, the IPCC reduced that 
estimate by 50 percent. More recent British and United States 
estimates reported in Science place it lower than that.
    It is ironic that as estimates of the impacts have 
moderated, the Administration's policy has shifted from support 
of voluntary programs to legally binding commitments. Although 
the Administration has not specified for the Senate the 
critical details of what it might propose, Administration 
officials have alluded to cutting carbon dioxide emissions back 
to 1990 levels around 2010 and holding them there.
    Such a goal would require more than a 25 percent reduction 
in projected fossil fuel use. They have not told you, but I 
will, there is simply no economically viable technology that 
can replace that amount of energy that quickly. By implication, 
the Administration may be planning to commit the United States 
to a severe form of energy rationing. Nor will we escape 
through allusions to an unproven and unworkable international 
trading scheme to counterbalance the damage of self-imposed 
energy rationing.
    Other nations have already rejected such schemes. My 
written statement cites the estimated loss in income, jobs, and 
U.S. competitiveness that are likely to result from what the 
Administration has in mind.
    MIT economics professor, Richard Schmallensee has stated 
the matter graphically, ``The economic impacts would feel like 
the energy price hikes of the 1970's with a massive hangover.'' 
All of the sacrifice could be tolerated if significant benefits 
would be secured, but the plain fact is that the Berlin 
mandate, which is guiding the current round of negotiations, 
exempts developing countries such as China, India, Mexico, and 
Brazil, even though they will account for most of the future 
growth in carbon dioxide emissions in the next century.
    Any defensible emissions goal requires participation of all 
nations. The 2,600 economists who signed a petition on climate 
change and the 65 Senators who have co-sponsored Senate 
Resolution 98, and virtually all others who have analyzed this 
issue emphasize that all countries must participate in any 
program that is to be beneficial. That program should be guided 
by the limits of knowledge, anticipate that surprises will 
occur and recognize the need to adapt as new knowledge is 
created.
    Climate policy is simply not a dichotomy of action versus 
no action. We agree that action is justified but reject the 
course being pursued in international negotiations. It is an 
unjustified rush to judgment.
    The major difference between the GCC and our understanding 
of the Clinton administration is over approach, not need. We 
believe that a wise policy on climate change is akin to driving 
in a thick fog. The prudent course of action is to proceed at a 
speed consistent with how well the car's headlights illuminate 
the road ahead.

[[Page 231]]

    The Administration approach appears akin to driving full 
speed on the Autobahn on a clear day with no reason for 
caution. That approach is flawed and risks a fatal crash.
    By setting a pace that is consistent with the State of 
knowledge and economic realities, actions can be taken to 
achieve any justifiable, long-term goal at one-fifth the cost 
of the approach being embraced by international negotiators.
    We should also invest in information to reduce the 
uncertainties and to better understand the implications of 
alternative courses of action.
    Finally, we should take steps that will produce benefits 
under any set of circumstances. The GCC has developed several 
of these no or low regret actions and have shared them with the 
Administration. They are based on these points: No. 1, 
encourage the economic turnover of the capital stock; No. 2, 
focus investment and research to narrow the range of scientific 
uncertainties; No. 3, invest in the development of new 
technologies; No. 4, expedite diffusion of new technologies in 
developing countries; No. 5, facilitate the investment of U.S. 
private capital in countries with high emission levels; and 
finally, No. 6, continue promoting voluntary programs for 
reducing U.S. emissions.
    As we make progress in reducing climate change 
uncertainties, we can anticipate that additional prudent steps 
will be revealed. By proceeding at a pace that scientific 
understanding allows, we can greatly reduce the cost of dealing 
with potential climate change.
    It is a fact of life that precipitous actions driven by 
current technology and today's knowledge will be vastly more 
expensive and therefore, less effective than a balanced 
approach that does not undermine our remarkable record of 
economic growth and job creation.
    Mr. Chairman, that concludes my statement.
    Senator Chafee. Thank you very much, Mr. O'Keefe.
    I'm not sure what you meant in the second of your points 
there at the end, let me start at the beginning. ``The business 
community has shared these steps with the Administration which 
are based on these points: encourage an economic turnover of 
the capital stock.'' I'm just not sure what that means.
    Mr. O'Keefe. The existing inventory of plant and equipment 
represents long-lived investments. You should look for 
impediments to turning those over at the end of their economic 
life. Depreciation schedules, some provisions in Superfund law, 
some provisions of the Clean Air Act, new source performance 
standards and prevention of significant deterioration, all 
encourage keeping plants in operation longer than would 
otherwise be justified.
    As they are replaced, those that replace them will be more 
energy efficient. And, anything that will advance, on an 
economic basis, greater energy efficiency will lead to lower 
emissions.
    Senator Chafee. Mr. Fay, it seems to me what you're saying 
is that the position of your membership is that it accepts the 
science of climate change. You see a problem there and I guess 
it was Mr. O'Keefe that talked about the approach that you're 
concerned with. Was that in your testimony?
    Mr. Fay. That's correct, yes, sir.

[[Page 232]]

    Senator Chafee. But Mr. Fay, as I understand it, you accept 
that the best scientific information suggests that the human 
component of climate change isn't small and that human 
activities already are producing climate change signals that we 
ought to pay attention to. Am I correct in that?
    Mr. Fay. We would agree that the science requires us to pay 
attention to it, yes.
    Senator Chafee. What would you do about that? You heard the 
Secretary's testimony a while ago about what will happen in the 
middle of the next century, the first part or the middle of the 
next century, and what do you say to that?
    Mr. Fay. We've heard a lot of discussion. You need to cut 
up the science probably into three different regions of 
certainty. One is that our greenhouse gases are building up as 
a result of human activity, yes. There is the scientific 
consensus concerning temperature.
    Senator Chafee. What's your answer to the first? Did you 
say yes, are they building up as a result of human activities?
    Mr. Fay. Right, but in terms of the temperature range, we 
still think the temperature range and the sea level rise 
projections, there's a wide band there. We agree that the 
scientific consensus appears to have arrived at that range.
    Much beyond that in terms of those other effects you get, 
whether it's disease spread or agricultural impacts, we think 
there is an awful lot of uncertainty associated with those, but 
recognizing that the buildup of the gases themselves, if you 
realize those effects, would take a long time to retreat from 
them, it requires you to take a longer term view toward working 
on that issue.
    So we've acknowledged that it's appropriate to begin 
developing a means to work on this issue.
    Senator Chafee. Mr. Fay, you mentioned the Montreal 
Protocol and as you recall, all the signatories had to agree to 
a phaseout of the use of the ozone-depleting substances. You 
cited that as something that worked well. What do you think 
about following that procedure here?
    Mr. Fay. Well, I think that in those negotiations, the 
developing countries accepted the need for them to be 
participants. I'm afraid I haven't seen that kind of 
recognition from the developing countries in the current 
negotiations. There is a continuing insistence on their part 
with regard to climate change that they have no commitments, 
despite the fact that the Administration continues to argue 
they do have existing commitments which we welcome to be 
elaborated under the existing treaty.
    We're very concerned. I think Mr. O'Keefe mentioned the 
fact that there is virtually unanimous agreement that you can't 
achieve any reasonable climate change goals if you don't have 
developing countries participating. You have to find a way to 
get them on board. I haven't seen where we've achieved the 
recognition by those countries, however, that they are willing 
to do that.
    Senator Chafee. To get them on board, Secretary Wirth 
stressed we have to go first.
    Mr. Fay. I think we already are going first, Senator. We're 
already implementing the programs voluntarily. It is our 
technology that is likely to lead us toward solutions on this 
issue.

[[Page 233]]

    What we have asked for is because of the fact a great 
majority of the investment made by developed countries and 
developed country industries is going into developing 
countries, that you have to reach some decision as to what 
their role is going to be in the treaty process, what their 
commitments are going to be before we get into any kind of 
binding period for our own countries and our own companies. 
That's a minimum of what would be acceptable.
    As I said, we're still a long ways away from that 
recognition by the developing countries that while 80 percent 
of the emissions may have been associated with our economies 
over the last 100 years, 80 percent of the emissions over the 
next 100 years are going to come from their economies.
    Senator Chafee. Yes, but we've got a situation as we 
pointed out before where we have I believe the statistic is 4 
percent of the world's population and we emit 22 percent of the 
carbon dioxide.
    If I were in China or India and somebody from the west came 
to me and said, you've got to reduce your CO2 
emissions, I'd say, look, you ought to go first, you keep 
wrecking the place, not us.
    Mr. O'Keefe. Mr. Chairman, could I comment on that?
    Senator Chafee. Yes.
    Mr. O'Keefe. It is true that we account for 22 percent of 
the world's CO2 emissions, but we also account for 
at least that much and probably more in terms of the generation 
of global wealth. CO2 and other greenhouse gases are 
not typical pollutant. They are natural elements in nature and 
increases of CO2 are the result of economic 
activity. So when we produce a good and export it to another 
country, the emission is attributed to us, while a benefit 
accrues to the importing country.
    I think it's much more complex than suggested by a simple 
statistic.
    It may sound good to say that we spoiled the nest or we 
account for the bulk of the emissions, but we also account for 
much of the wealth, the food production, the goods and services 
those countries are using and that ought to be taken into 
account as well.
    Senator Chafee. That's a tough one to explain to somebody 
in India, isn't it?
    Mr. O'Keefe. I don't think anyone is saying that they have 
to have our technology tomorrow. We ought to do everything we 
can to aid the growth in their economies because it's the 
wealthier countries that have the technology that adapt and 
protect against unforeseen events. So the faster they can grow 
up the economic curve, the more efficient they will be in using 
energy. But, they have to participate or else we're not going 
to make any progress.
    Mr. Fay. We have suggested, Senator, as a way of dealing 
with this through the entry into force requirements for the 
treaty that while perhaps our efforts may be more aggressive up 
front, may take place prior to theirs, that you certainly have 
to have a significant percentage of world greenhouse gas 
emissions, and that would include India and China, and that you 
have to have as parties to the treaty, a majority of developed 
countries, a majority of developing countries, that you try to 
negotiate a treaty that perhaps as there was in the Protocol, 
there was a delay in the implementation of the requirements for 
those countries, but we had them as parties.

[[Page 234]]

    What we're not seeing is an indication that they are 
willing to become parties in that sense. So it's a question of 
how we assist them in growing smart, not how we stop them from 
growing, how we get them to adopt the most efficient 
technologies just as we need to be adopting the most efficient 
technologies here.
    Senator Chafee. As I understood the first part of your 
testimony, Mr. Fay, you were lamenting the fact that there 
didn't seem to be a dialog with the Administration with your 
organization and perhaps Mr. O'Keefe's organization. Am I 
correct in concluding that?
    Mr. Fay. We have lots of talks, but it has been pretty 
barren in terms of specifics, aside from the general framework 
that they put out where they continue to emphasize the need to 
do this in a rational, economic way.
    We've asked them to define their specific objectives; we've 
asked them to embrace the framework they put out there a year 
ago; and we've asked them to come to us and say what is their 
expectation of our industry sectors over the next two decades, 
what is it you want us to do better? We have not had those 
kinds of conversations. They've not defined a specific 
objective. They've defined a general framework which we're 
supportive of.
    Now we want them to say that's the framework they have to 
have in the negotiations. We want them to tell them what their 
expectations are of our industries. Until we can get that, it's 
going to be difficult for us to sign onto some blank check 
Kyoto agreement where we don't know what they are expecting of 
us or what their implementation regime may be when they bring 
that agreement back to the United States.
    These are reasonable questions for us to ask. We also think 
it's reasonable information for them to have. It was 
information we had as we were working through the Montreal 
Protocol negotiations. We had a better description of 
implementation schemes and those impacts.
    Senator Chafee. It certainly seems to me that we should 
expect in any agreement we entered into that the developing 
nations are going to be a part of it. I can understand that 
perfectly well and I think that's a reasonable point you're 
making.
    Mr. O'Keefe, in your testimony you talked about actions 
being considered by negotiators that would require us to 
suppress energy use by at least 25 percent in a little over a 
decade. Where do you get that figure from? Where is that? Is 
that being seriously considered by our negotiators, requiring a 
response like that?
    Mr. O'Keefe. Dr. Yellen used as the period 2010 to return 
to the 1990 levels. In the State Department's report on the 
voluntary programs, they talk about a 25 or 26 percent 
reduction. All the independent economic analyses that have been 
done on the subject assume that the most benign thing that's 
being considered, that might be agreed to, is returning to the 
1990 levels by 2010.
    The best estimate is that we would have to suppress, reduce 
energy consumption of fossil fuels by at least 25 percent below 
the level being estimated today by the Energy Information 
Administration.
    Senator Chafee. From where we'd otherwise be?
    Mr. O'Keefe. Yes.

[[Page 235]]

    Senator Chafee. Even though that might be more than the 
1990 level?
    Mr. O'Keefe. Oh, it will be. We don't have the technology 
to make that kind of reduction in that short a time period--13 
years. I think that Mr. Fay has made the same point.
    We need a process that is predictable, that is realistic. 
The Administration analysis is based on a trading program and 
some new technology. The technology hasn't been identified and 
other countries have rejected the trading scheme and many 
economists believe that it's not feasible. Quite simply, other 
nations will not agree to it.
    Certainly, if it was going to be in place, it's going to 
take a long time to get an agreement. So it might be better in 
Kyoto to try and agree on a framework that all nations would 
embrace and then, at a future conference, decide what the 
target is and the time period for achieving it.
    Senator Chafee. As I understand what both of you are 
saying, both of you recognize that there is a problem there and 
it's what to do about it where the contention comes. Is that a 
fair statement?
    Mr. O'Keefe. I think that there is a risk. I think there is 
legitimate scientific dispute over the problem and the hearing 
you had last week demonstrated that. The last page in Chapter 8 
of the IPCC report, around page 439, makes it clear that there 
is not a scientific consensus that we have a problem. But 
that's not an excuse for inaction.
    There is a potential risk and there is uncertainty and the 
uncertainty goes both ways. Given the uncertainty and the 
potential risk if we guess wrong, there is certainly a need for 
prudent action, but the people who have also studied this say 
we do have time to do it right. We do not face an imminent 
catastrophe that justifies the kind of crash program to reduce 
energy use that's being considered by the negotiators.
    Senator Chafee. The problem we have with that is, and we 
encounter this all the time. I'm on the Finance Committee and 
we're dealing there with Medicare and we have come up with a 
proposal that eligibility age for Medicare be increased to 67 
to correspond with the eligibility age for social security.
    There is great objection to that from many saying no, no, 
no and we're doing it because there is a real problem out there 
with the future of Medicare. So those like myself who are 
proponents for doing something say there's always an excuse to 
wait and delay things and it's always attractive to postpone 
it. It seems to me there is a similar situation here.
    I hardly think we've rushed into this, but your feeling is, 
I think you just said, let's wait and do it right. Who knows 
what right is?
    Mr. O'Keefe. Let me be clear. I'm not saying we should do 
nothing. There are hundreds of companies that are participating 
in the voluntary programs. The petroleum industry, which I also 
represent, is spending over $10 billion a year on achieving 
environmental objectives. There is a lot of progress being 
made. It's not whether we act; it's the rate at which we force 
actions to be taken and the consequences of those.
    By taking the time to do it right, and by that I mean the 
time to turn over the capital stock, get new plants and 
equipment in op- 

[[Page 236]]

eration; and incentives to accelerate our improvement of energy 
efficiency. We've reduced the energy component per dollar of 
GDP over the past two decades by 30 percent. Incentives to 
continue that. And to take our technology and get it in the 
hands of other nations all take time.
    Senator Chafee. What are the incentives now? You must be 
doing it. Your companies aren't doing it because they're 
worrying about global warming; they must be doing it because 
being more fuel efficient saves them money. Hopefully that is 
an incentive.
    Mr. O'Keefe. Well, they learn with new knowledge. We find 
there are better ways to do it and people take into account 
potential changes in law and regulation and knowledge. I can't 
tell you what component of the decision may take into account 
climate change, but certainly the possibility is taken into 
decisions when you're making capital investments that will last 
20 or 30 years.
    Mr. Fay. I think that our companies do also take into 
account the environmental issues as well, Senator. Our problem 
is not so much that we've rushed into this that all of a sudden 
we have these negotiations; our biggest problem I think is that 
we're 5 months from the supposed deadline and we have some 
fairly basic issues that this Administration either hasn't 
talked to us about or hasn't made their own decisions on.
    They've come in now after promising for a year this 
economic analysis and they've come back and said, it's hard. 
Well, we know it's hard. We have to make hard decisions every 
day in the private sector.
    We need to know what basis are they going to use then to 
make their decisions. We think it's still possible to achieve a 
treaty in December, but it's getting harder and harder as the 
time grows shorter. We don't think a 2-day White House 
conference is going to help all of a sudden produce the magic 
answers of what we're going to do on climate change.
    Mr. O'Keefe. It also doesn't help the Senate that has to 
participate in the advice and consent process.
    Senator Chafee. Thank you both very much for coming. Your 
testimony was very helpful and we appreciate you being here.
    That concludes the hearing.
    [Whereupon, at 12:55 p.m., the committee was adjourned, to 
reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
     Statement of Janet Yellen, Chair, Council of Economic Advisers
    Thank you, Mr. Chairman and members of the committee. I appreciate 
the opportunity to discuss with you today the economics of global 
climate change.
                              introduction
    In his speech to the United Nations Special Session on Environment 
and Development in June, President Clinton emphasized that the risks 
posed by global climate change are real and that sensible preventive 
steps are justified. This assessment accords with the views of the more 
than 2,300 economists, including 8 Nobel laureates, who signed a 
statement supporting measures to reduce the threat of climate change. 
The economists endorsed the conclusions from last year's report by the 
Intergovernmental Panel on Climate Change (IPCC), which said that 
governments should take steps to reduce the threat of damage from 
global warming, and went on to argue that market-based policies can 
slow climate change without harming the American economy.

[[Page 237]]

    At this time the Administration has not settled on a particular set 
of new policies to reduce greenhouse gas emissions. Instead, the 
President indicated in his U.N. speech that he intends to engage in a 
discussion with all interested parties about the problems posed by 
greenhouse gas accumulations and the costs and benefits of corrective 
action. To this end, the President will hold a White House conference 
on climate change later this year, and members of his Cabinet and other 
senior Administration officials will meet with Members of Congress, 
scientific and economic experts, environmentalists, local government 
officials, and business and labor leaders on a regular basis over the 
next several months to discuss issues related to climate change. This 
process is intended to inform the Administration's decisionmaking 
process, which will culminate in a U.S. policy position in the 
international negotiations in Kyoto in December of this year.
    An important step in this--and any--policy process is determining 
the impact it will have on the American economy. President Clinton's 
top priority, since his first days in office, has been revitalizing the 
U.S. economy, creating jobs and investing in people and technology to 
enhance long-term growth. And, we have made tremendous progress. The 
President is not going to jeopardize that progress. Any policy he 
ultimately endorses on climate change will be informed by his 
commitment to sustaining a healthy and robust economy.
    In my testimony today, I would like to describe some of the 
principal lessons that emerge from the voluminous literature, much of 
it relatively recent, on the economic impacts of policies to address 
global climate change.
                        underlying uncertainties
    Before I begin my discussion of the economic literature, I would 
like first to acknowledge the uncertainties associated with estimating 
both the costs and benefits of reducing greenhouse gas emissions. To 
provide some perspective: as you all know, it is difficult to gauge 
exactly what impact the balanced budget agreement will have on the U.S. 
economy's growth rate, levels of employment, interest rates and 
consumption over the next 5 years. But with global climate change, it 
is orders of magnitude more difficult to gauge the effects on the 
economy: we are concerned with not just the next 5 years and not just 
the American economy, but, rather, we are dealing with economic and 
physical processes that operate globally and over decades, if not 
centuries.
    Although a great many scientists believe that global climate change 
is already underway, the more serious potential damages associated with 
increasing concentrations of greenhouse gases are not predicted to 
occur for decades. This means that the benefits of climate protection 
are very difficult to quantify. And, while the potential costs of 
reducing greenhouse gas emissions may be more immediate, they too, as I 
will discuss below, are difficult to predict with any certainty. Many 
unanswered questions exist about the biophysical systems, potential 
thresholds, and economic impacts. In short, if anybody tells you that 
he or she has the definitive answer as to the costs and benefits of 
particular climate change policies, I would suggest that you raise your 
collective eyebrows.
                  lessons from the economic literature
    Let me now turn to the economic literature and try to summarize 
what I think we know so far about this difficult topic. Most economists 
have not addressed the benefits of climate protection, but rather have 
focused on the costs associated with alternative paths for reducing 
greenhouse gas emissions. The economic literature includes estimates 
using many different models to evaluate numerous alternative emission 
reduction strategies. In fact, because there are so many different 
models, economists initially faced difficulties in comparing results: 
they could not sort out the extent to which differences in results 
stemmed from differences in models and assumptions versus differences 
in baseline emission paths and policies. To solve this problem, thereby 
enabling meaningful comparisons, many economists have calibrated the 
various models by performing a standardized simulation. Specifically, 
they have assessed the consequences of stabilizing greenhouse gas 
emissions at 1990 levels by 2010 or 2020.
    Within the Administration, a staff level working group--the 
Interagency Analysis Team (IAT)--has attempted to estimate some of the 
economic implications of climate change policies. They took the 
emissions scenario most often used in academic literature--that is, 
stabilizing emissions at 1990 levels by 2010--as the starting point for 
their own analysis. I would emphasize that this scenario is not 
Administration policy; instead, it was picked to make comparisons with 
other models easier. The staff group employed 3 different models--the 
DRI model, the Second Generation Model (SGM) and Markal-Macro model, 
all commonly available in the public sphere.

[[Page 238]]

In running these models, the staff adopted a common baseline and, to 
the--maximum extent possible, similar economic assumptions. This 
modeling effort produced some useful lessons, but as we found from the 
peer reviewers' comments, it also suffered from some serious 
shortcomings. Both the lessons and the shortcomings point to one clear 
conclusion: the effort to develop a model or set of models that can 
give us a definitive answer as to the economic impacts of a given 
climate change policy is futile. Rather, we are left with a set of 
parameters and relationships that influence estimates of the impacts. 
In my view, it is more productive to employ a broad set of economic 
tools to analyze policy options than to seek to develop a single 
definitive model.
    I understand that a draft of the staff analysis was given to the 
committee earlier this week, along with the reviewers' comments. I 
would be happy to answer any questions you may have about this modeling 
effort.
The Lessons
    Modeling efforts both inside and outside the Administration clearly 
indicate that economic analysis can do no more than estimate a range of 
potential impacts from particular policies and highlight how outcomes 
depend on underlying assumptions about how the economy works and the 
ways in which policy is implemented. However, the economics literature 
on climate change does point to several important lessons:
How the economy works
    First, the magnitude of the costs of reducing greenhouse gas 
emissions in the various models depends crucially on a number of key 
assumptions about how the economy works. For instance:
     If firms in the economy can shift from high-carbon to low-
carbon energy sources quickly, the costs of climate protection will be 
lower.
     If the economy has significant opportunities, even now, to 
employ energy-saving technology at low costs, the costs of climate 
protection will be lower.
     If technological change occurs at a rapid rate, or is 
highly responsive to increases in the price of carbon emissions, the 
costs of climate protection will be reduced.
     If the Federal Reserve pursues a monetary policy oriented 
toward keeping the economy at full employment, transitional output 
costs will be lower.
    In short, the greater the substitution possibilities and the faster 
the economy can adapt, the lower the costs.
How the plan is implemented
    Second, costs depend critically on how emission reduction policies 
are implemented. It boils down to this: if we do it dumb, it could cost 
a lot, but if we do it smart, it will cost much less and indeed could 
produce net benefits in the long run. The over 2,300 signatories of the 
economists' statement argued that any global climate change policy 
should be rely on market-based mechanisms. Such mechanisms allow for 
flexibility in both the timing and location of emission reductions, 
thereby minimizing the costs to the U.S. economy. The economists 
concluded that ``there are policy options that would slow climate 
change without harming American living standards, and these measures 
may in fact improve U.S. productivity in the longer run.''
     The speed at which emissions reductions are required can 
have large effects on the estimated costs. It is important to allow 
sufficient lead-time for orderly investment in new equipment and 
technology. Alternatively, if emission reduction requirements are too 
far off in the future, the incentives to adopt energy efficient 
technologies are weakened because people may not view the policy as 
credible.
     A ``cap and trade'' system in which emission permits are 
issued and then traded among firms can substantially reduce the cost of 
meeting an emissions target by creating incentives for emissions to be 
reduced by those firms and in those activities where costs are lowest.
     International emission permit trading substantially lowers 
costs by applying the same cost-minimizing principle globally.
     So-called ``banking'' and ``borrowing'' of permits 
increases flexibility and lowers costs by allowing firms to change the 
timing of their emission reductions.
     Joint implementation, whereby U.S. firms would receive 
credit for undertaking emission reductions in countries with low 
abatement costs, would also lower the domestic burden.
    An additional aspect of implementation that profoundly affects the 
costs of reducing emissions concerns ``revenue recycling.'' In many 
model simulations, emissions are reduced by using various market 
mechanisms. For many of these scenarios, the Federal Government 
realizes an increase in revenues. Economic growth can receive

[[Page 239]]

a long-term boost if these revenues are used to reduce distortionary 
taxes that diminish the incentives to invest, save or work, or if the 
revenues are channeled into deficit reduction, thereby lowering 
interest rates and boosting investment. In fact, in some models and 
scenarios, emissions reduction generates a net economic benefit when 
the revenues are recycled in a growth-promoting fashion.
Which countries participate
    The third lesson that emerges from a study of the economics of 
climate protection is that developing, as well as developed, countries 
must be part of the process. While developed countries are responsible 
for most of the greenhouse gas currently in the atmosphere, developing 
countries are starting to catch up. By 2040, the largest fraction of 
emissions is estimated to come from developing countries. Thus, any 
comprehensive plan to deal with this global problem must include a 
mechanism to bring developing countries into the process.
    The timetable for the inclusion of developing countries is also 
important. The sooner that developing countries face incentives to move 
away from carbon intensive energy sources, the less likely it is that 
they will become dependent on those types of fuels to spur their 
economic growth. In short, global problems require global solutions. We 
must find the technologies and solutions to lead the way.
                               conclusion
    Let me conclude. Policies to promote economic growth, create jobs, 
and improve the living standards and opportunities of all Americans 
have been and always will remain the top priority of the President and 
his Administration. In his remarks to the Business Roundtable on global 
climate change, the President said ``[l]et's find a way to preserve the 
environment, to meet our international responsibilities, to meet our 
responsibilities to our children, and grow the economy at the same 
time.''
    Some of the key economic lessons we have learned that will help us 
achieve the President's goal include:
     Inherent uncertainty dictates that models should be 
expected to generate only a range of economic impacts, not definitive 
answers.
     Key assumptions about how the economy works directly 
influence the estimated costs of climate protection.
     Implementation of any policy needs to be market-based and 
flexible over time and space to achieve the lowest cost reductions.
     All nations, both developed and developing, need to 
participate.
    Thank you I would be happy to answer any questions you may have.
                                 ______
                                 
 Responses by Janet Yellen to Additional Questions from Senator Chafee
    Question 1. Dr. Yellen, you indicate at the beginning of your 
testimony that the Administration, ``has not settled on a particular 
set of new policies to reduce greenhouse gas emissions.'' We are now 20 
weeks away from Kyoto. When will it? Is there still time for informed 
public review and debate on the options?
    Answer. The President, Members of the Cabinet and Senior White 
House officials have been meeting with a wide range of parties 
interested in the issue of global climate change. We have been 
consulting with representatives from business and labor, environmental 
groups, scientists, economists and others about the best, most cost-
effective way to reduce greenhouse gas emissions. On October 6, the 
White House will hold a conference to discuss the scientific evidence, 
the economic impact and the international implications of global 
climate change. These discussions are intended to inform the 
Administration's decisionmaking process, which will culminate in a U.S. 
policy position for the international negotiations in Kyoto in December 
of this year.
    With the lessons we have learned so far, the Administration has 
established a broad framework within which this policy position will be 
developed. For example, we support the use of flexible approaches, such 
as international emissions trading. We support the requirement that 
non-Annex I countries, as they become wealthier, abide by binding 
emissions goals that are formulated in international treaty 
negotiations. And, for domestic implementation, we support the use of 
flexible, market based approaches.

    Question 2. You also say in your prepared remarks that, ``the 
effort to develop a model or set of models that can give us a definite 
answer to the economic impacts of a given climate change policy is 
futile.'' How are we to respond? What reliable tools do we have to 
determine what, if any, agreement is best for the United States?
    Answer. No one model, or even a small set of models, can give a 
definite estimate of the effects of a policy on the economy 20 or 30 
years into the future. The existence

[[Page 240]]

of modeling difficulties does not mean, however, that we can abandon 
rigorous economic analysis. Rather, we must employ a broad set of 
economic tools, and incorporate insights from the existing body of 
research on climate change policies, as we analyze the policy options. 
Some of these may have strengths on issues where the models used in the 
Interagency Analytical Team (IAT) analysis were weak.
    Drawing on this broad array of analytic tools allows an intelligent 
evaluation of policy alternatives. I am confident that the analytic 
tools and perspectives available to the Administration can provide us 
with sufficient information to generate ranges of estimated economic 
effects so that the Administration can make informed policy decisions.

     Question 3. Is the Administration considering some form of new 
energy tax to administer a new treaty, domestically?
    Answer. At this time, the Administration has not settled on a 
particular set of policies. The Administration is considering an array 
of market-based approaches to implement climate policy.

    Question 4. What advantages or disadvantages (economically or 
environmentally) might a trading system have over energy taxes?
    Answer. Tradeable emissions permits would provide greater certainty 
than energy taxes of attaining a specified emissions cap. By specifying 
a number of permits and allowing firms to trade these permits, the 
country can ensure that it is meeting an agreed upon carbon emissions 
goal. A tax, on the other hand, would provide greater certainty than a 
cap-and-trade approach of limiting costs, since the increase in unit 
costs would be determined by the tax. Taxes and permits may also differ 
in their administrative and transactions costs and ease of enforcement, 
particularly depending on how a permit trading system is implemented.

    Question 5. In order to use flexibility instruments like the 
proposed joint implementation and emissions trading, do we need to have 
a cap on nations' emissions?
    To what extent can these instruments reduce the cost of 
implementation of greenhouse gas emissions reductions for the United 
States and others? Is there reliable data available?
    Answer. For international emissions trading, all countries 
participating in the trading scheme will need to have their emissions 
capped. For joint implementation, all countries can participate, 
regardless of whether their emissions are capped. However, it will be 
necessary to set standards for approving joint implementation projects 
sufficient to ensure that the credit received by U.S. companies 
actually results in incremental abatement activities abroad.
    International permit trading allows emission reductions to occur in 
areas where the costs of those reductions are lowest. If some of the 
emissions reductions necessary to achieve the U.S. goal can be 
undertaken in other countries at lower costs, then U.S. emissions 
control costs will fall, by some estimates as much as two-thirds. While 
every country is better off when it can voluntarily buy or sell permits 
according to its respective emissions reduction costs, the ultimate 
permit price and traded quantities depend heavily on the degree of 
participation by developing countries and economic growth in Russia and 
Eastern Europe.

    Question 6. Some have argued that innovation toward less 
greenhouse-intensive technologies will occur in the absence of any 
market signal. Do you agree? Why or why not? If a market signal is 
needed, how should it be provided?
    Answer. Some shift toward a less energy-intensive economy occurs in 
the absence of deliberate government influences on price, some believe 
because of the changing composition of the U.S. economy toward less 
energy-intensive sectors. Many studies suggest that energy use relative 
to GDP falls each year, regardless of the price signal, by 0.5 to 1.25 
percent. To the extent that energy use is associated with climate 
change effects, and in turn causes damages not reflected in market 
prices, the business-as-usual decline in energy use relative to GDP is 
unlikely to be sufficient. Additional incentives to innovation, such as 
price signals or support for R&D may be needed.

    Question 7. Many are concerned that caps on industrialized nations' 
emissions, without similar caps on developing nations' emissions, will 
simply promote the flight of jobs, capital, and polluting activity to 
developing nations. Is this a valid concern? How should it be 
addressed? Would joint implementation help?
    Answer. Certainly the participation of developing countries is key 
to the long term success and cost-effectiveness of a global reduction 
in greenhouse gas emissions. In the next century, developing countries 
will likely reach and surpass currently developed countries in their 
share of global emissions. Any emissions reductions that Annex I 
countries achieve can be undone by others who do not so carefully 
address

[[Page 241]]

the problem. In addition, the important opportunities for low cost 
reductions created by developing countries' participation could reduce 
the overall cost of achieving a given environmental goal by more than a 
half by some estimates.
    Some observers of the climate change issue have suggested that 
capping only developed countries' emission will result in ``leakage'': 
the escape of jobs, capital, and polluting activity to developing 
countries. Even if caps are not initially placed on developing 
countries' emissions, the economic evidence does not support the 
argument that sensible climate policies will adversely affect overall 
U.S. economic competitiveness.
    First, non-tradeable sectors account for a substantial share of 
carbon emissions. Transportation and residential and commercial 
buildings account for approximately two-thirds of U.S. carbon 
emissions. For these sectors, the ``competitiveness'' argument does not 
appear applicable. Second, energy costs comprise only a small 
percentage of total manufacturing costs. According to the 1995 Annual 
Census of Manufactures, energy costs for manufacturing industries 
averaged just 2.2 percent of total costs. Given the small share of 
energy in total costs, differential shifts in existing energy prices 
are unlikely to have substantial effects on location decisions and 
trade flows. Third, our experience in this country with environmental 
regulation has been that it does not cause significant leakage. Firms 
that decide to relocate to other countries do so because of 
international differences in input costs and exchange rate changes that 
all swamp the costs of complying with environmental regulations.
                                 ______
                                 
  Responses by Janet Yellen to Additional Questions from Senator Boxer
    Question 1. In the Administration's economic analysis, it is stated 
that, ``There is no evidence of a wholesale `capital flight' from the 
United States resulting from an emissions reduction policy.'' Can you 
please expand on this?
    Answer. Certainly the participation of developing countries is key 
to the long term success and cost-effectiveness of a global reduction 
in greenhouse gas emissions. In the next century, developing countries 
will likely reach and surpass currently developed countries in their 
share of global emissions. Any emissions reductions that Annex I 
countries achieve can be undone by others who do not so carefully 
address the problem. In addition, the important opportunities for low 
cost reductions created by developing countries' participation could 
reduce the overall cost of achieving a given environmental goal by more 
than a half by some estimates.
    Some observers of the climate change issue have suggested that 
capping only developed countries' emission will result in ``leakage'': 
the escape of jobs, capital, and polluting activity to developing 
countries. Even if caps are not initially placed on developing 
countries' emissions, the economic evidence does not support the 
argument that climate policy will adversely affect overall U.S. 
economic competitiveness.
    First, non-tradeable sectors account for a substantial share of 
carbon emissions. Transportation and residential and commercial 
buildings account for approximately two- thirds of U.S. carbon 
emissions. For these sectors, the ``competitiveness'' argument does not 
appear applicable. Second, energy costs comprise only a small 
percentage of total manufacturing costs. According to the 1995 Annual 
Census of Manufactures, energy costs for manufacturing industries 
averaged just 2.2 percent of total costs. Given the small share of 
energy in total costs, differential shifts in existing energy prices 
are unlikely to have substantial effects on location decisions and 
trade flows. Third, our experience in this country with environmental 
regulation has been that it does not cause significant leakage. Firms 
that decide to relocate to other countries do so because of 
international differences in input costs and exchange rate changes that 
all swamp the costs of complying with environmental regulations.

    Question 2. The United States has far lower energy costs than 
Europe and Japan. How would our costs of emission reductions compare 
with theirs? How would this affect our ability to compete?
    Answer. The costs of reducing emissions in the United States, and 
in Europe and Japan, depend on how all of these countries implement 
their policies. If the United States employs a market-based approach, 
the costs will not be that high relative to Europe and Japan. 
Regardless of the implementation approaches used in these countries, 
the costs of emissions reductions are not likely to affect U.S. 
competitiveness. As noted above, energy costs comprise a small share of 
total manufacturing costs (2.2 percent). Further, two-thirds of carbon 
emissions occur in non-tradeable sectors. The evidence on energy price 
differentials across countries suggests that they are not sufficient to 
spur firm relocation to other countries.

[[Page 242]]

    Several analyses indicate that Western Europe will bear higher 
costs for reducing carbon emissions than will the United States. 
Western Europe already has high energy taxes relative to the United 
States, and has already ``backed out'' of fossil fuel use to varying 
degrees. This implies that a lot of the less expensive measures for 
reducing carbon reductions have already occurred in Europe, so that the 
United States has relatively more opportunities to inexpensively cut 
carbon emissions. For example, 20 percent of all energy in France, and 
a majority of its electricity production, is from nuclear power, while 
only 7 percent is from coal. Since nuclear is not carbon-based, France 
cannot further reduce carbon emissions from that energy source, and can 
achieve relatively limited emissions reductions from its low use of 
coal. In contrast, in the United States nuclear power comprises only 9 
percent of total energy production, while coal comprises 23 percent.

    Question 3. Dr. Yellen, we have heard horror stories of all the 
catastrophic economic effects that embarking on a policy of reducing 
greenhouse gas emissions would cause. Did the administration's analysis 
consider the positive effects on health, environment, AND the economy 
that reducing greenhouse gases would produce?
    Answer. The IAT report did not assess the human health and 
environmental benefits of reducing greenhouse gas emissions. In 
addition, the IAT did not study the risks of effects of climate change 
on economic activity. However, the report did assess the impacts of 
climate policy on the economy. The IAT analysis confirms other economic 
research (for example, the recent report by the World Resources 
Institute) that smart climate policy could produce some benefits for 
the economy. For example, the IAT analysis found that auctioning off 
tradeable permits and using the proceeds of the auction to reduce other 
taxes that distort work and savings decisions could produce economic 
benefits that offset the costs of meeting a climate change goal.

    Question 4. We heard last week that the longer we wait to implement 
our reductions, the more costly it will be in practically all sectors--
health, environment, and jobs. This reminds me of the commercial where 
the grizzled mechanic says, ``You can pay me now, or you can pay me 
later.'' What did your analysis find in terms of the costs of delaying 
action?
    Answer. We believe it is important to take early, credible action 
toward a long term strategy to control greenhouse gas emissions. More 
gradual efforts to reduce our carbon emissions can significantly lower 
the economic costs relative to very aggressive reductions efforts while 
still achieving the same carbon dioxide concentration goal. For 
example, some international proposals to reduce carbon emissions would 
have Annex I countries cutting emissions to 20 percent below 1990 
levels by 2005. Such a target and timetable would have very substantial 
economic costs because it does not provide enough time for the capital 
stock to turn over. It is very expensive to prematurely scrap the 
existing capital stock while much of it is in the prime of its life. 
Further, such a goal would require the economy to employ existing low-
carbon and carbon-free technologies while longer-term reductions would 
provide more lead time to develop and implement superior technologies. 
Given that it is the stock of carbon dioxide, not the annual emissions 
of carbon dioxide, that drive global warming, flexibility in the timing 
of emissions reductions can lower costs while not undermining our 
commitment to achieving a given ultimate concentration.

    Question 5. California has been a leader in development of new 
energy technologies. Based upon your analysis, what industries are 
likely to grow over the next 20-30 years?
    Answer. It is very difficult to forecast the nature of the economy, 
especially specific industries, 20 or 30 years into the future. If the 
country embarked on a policy of reducing carbon emissions, obviously 
the firms and industries that can creatively and cost-effectively 
reduce their emissions will benefit relative to their competitors. It 
is reasonable to envision that the products and services of industries 
that develop energy efficient technologies and industries that develop 
low-carbon based energy (such as renewable energy sources including 
wind, solar, and biomass) would be in greater demand during a period of 
reduction in greenhouse gas emissions.
                                 ______
                                 
    Responses by Janet Yellen to Additional Questions from Senator 
                               Lieberman
    Question 1. Congressman Dingell suggested on 6/19/97 that the 
Administration's analysis is ``too late to inform the process, and 
likely will be used to justify what the Administration has already 
decided to do.'' Please comment on his concerns.
    Answer. The Administration's analysis on the issue of climate 
policy has not occurred in a vacuum. In fact, climate change has been 
one of the more active areas of research in economics this decade. The 
economic literature on climate change,

[[Page 243]]

complemented by the IAT report, has already done quite a lot to inform 
the policy development process. Based on the economic research, we have 
identified some of the important characteristics of the climate policy 
we will develop: international emissions trading, developing country 
participation, emissions budgets, and market-based, flexible domestic 
implementation. My interpretation of the role of economics differs--I 
believe economics has informed the process, and I am confident that it 
will continue to play an important role in our country's deliberations 
over a climate policy position.

    Question 2. If the economic impacts of climate policies cannot be 
determined precisely, how will the economic analysis be used to develop 
the Administration's specific positions on a target and a timetable? 
Can the relative costs of different policies be evaluated with 
confidence by the Interagency Team?
    Answer. No one model, or even a small set of models, can give a 
definite estimate of the effects of a policy on the economy 20 or 30 
years into the future. The existence of modeling difficulties does not 
mean that we can abandon rigorous economic analysis. Rather, we must 
employ a broad set of economic tools and incorporate insights from the 
existing body of research on climate change policies, as we analyze the 
policy options. Some of these may have strengths on issues where the 
models used in the Interagency Analytical Team (IAT) analysis were 
weak.
    Drawing on this broad array of analytic tools allows an intelligent 
evaluation of policy alternatives. I am confident that the analytic 
tools and perspectives available to the Administration can provide us 
with sufficient information to generate ranges of estimated economic 
effects so that the Administration can make informed policy decisions.
                                 ______
                                 
Statement of the Timothy E. Wirth, Under Secretary of State for Global 
                                Affairs
    Chairman Chafee and members of the committee, I am pleased to be 
with you today to discuss the ongoing negotiations toward next steps 
under the United Nations Framework Convention on Climate Change. These 
negotiations began in August 1995 and are scheduled to end in December, 
at the Third Conference of the Parties in Kyoto, Japan, with the 
adoption of a new protocol or other legal instrument.
    In his address last month to the United Nations General Assembly 
Special Session, President Clinton noted that ``[t]he science is clear 
and compelling'' and committed the United States to strong leadership 
on climate change. The President committed himself to engage the 
American people and the Congress in a dialog to explain the real and 
imminent threats from climate change, the economic costs and benefits 
involved, and the opportunities that American technology and innovation 
can provide. The President also committed to ``bring to the Kyoto 
conference a strong American commitment to realistic and binding limits 
that will significantly reduce our emissions of greenhouse gases.''
    In recent weeks, interest in the negotiations has intensified, 
particularly in the Congress. The Administration welcomes this 
interest, wants to encourage the broadest possible dialog as we work 
toward a new agreement in Kyoto, and urges the Senate and House 
leadership to establish observer groups with whom we can work even more 
closely in the weeks and months ahead.
    I would like today to focus on two concerns--first, how the actions 
we are negotiating under the Climate Convention correspond to a 
specific environmental objective; and second, the need for developing 
nations to acknowledge more fully their role in meeting that objective.
    I would like to begin with the science, because scientists were the 
ones who drew our attention to climate change in the first place, and 
because we continue to base our policies on the best evidence and the 
most rigorous scientific analysis available. While I know many of you 
are aware of the basic facts, I think it may be useful to reiterate a 
few of the most crucial points that the scientific community has 
established.
    The ``greenhouse effect'' is caused by gases such as carbon 
dioxide, methane and nitrous oxide, which accumulate in the atmosphere 
and trap solar radiation, thus making the planet warmer than it 
otherwise would be. The natural levels or concentrations of these 
greenhouse gases in the atmosphere keep temperatures within a range 
that can support life. Without the background level of greenhouse gases 
in our atmosphere, the earth's temperature would be about 33 degrees 
Celsius cooler.
    Human beings increase the concentrations of greenhouse gases in the 
atmosphere primarily by the burning of fossil fuels--coal, oil and 
natural gas--and through a number of other industrial processes. 
Changing land use patterns, particularly de- 

[[Page 244]]

forestation and soil erosion, also play a role, by reducing the 
capacity of the natural environment to absorb carbon from the 
atmosphere. Since the industrial revolution in the 18th century, the 
concentration in the atmosphere of carbon dioxide has risen 30 percent; 
during the same period, methane concentrations have doubled, and 
nitrous oxide concentrations have risen by about 15 percent.
    Since pre-industrial times, the Earth has warmed about one degree 
Fahrenheit. Scientists believe that the observed increase is unlikely 
to be entirely natural in origin. In its most recent scientific 
assessment, the Intergovernmental Panel on Climate Change (IPCC) 
concluded that the balance of evidence suggests ``a discernible human 
influence on the climate system.''
    Projections of future climate change, based on complex climate 
models and on our best understanding of the physics of the climate 
system, suggest a rise of another 2 to 6.5 degrees Fahrenheit by 2100, 
with an average increase greater than any seen in the last 10,000 
years. This warming will not be uniform--it is likely to be greater at 
higher latitudes and at the poles.
    Based on these warming trends, sea level is projected to rise an 
additional 1.5 feet by 2100 due to thermal expansion of the oceans and 
to the melting of glaciers and ice sheets. This would, without adoptive 
measures, flood 9,000 square miles of coastal areas here in the United 
States, notably in Florida and Louisiana, and put about 100 million 
people worldwide at risk each year from storm surges.
    In other words, the path we are on is cause for significant 
concern. Climate change is likely to have wide-ranging and mostly 
adverse effects on human health. Both natural and managed ecosystems 
are at risk. The viability and location of forest and agricultural 
zones will change significantly.
    Moreover, virtually all the studies on the effects of climate 
disruption have focused on predicted doubling of atmospheric 
concentrations of greenhouse gases. But unless significant actions are 
taken early in the next century, it is very likely that atmospheric 
concentrations will, by the year 2100, nearly triple the pre-industrial 
level and rise higher than any point in the last 50 million years. 
Changes to our climate system would also continue beyond the effects 
that the current studies predict; the risks would increase dramatically 
as concentrations continue to rise. Moreover, there is no reason to 
believe that these additional effects would be linear; they would most 
likely take unpredictable and highly undesirable paths.
    Let me now move on to the division of responsibilities between 
developed and developing countries.
    As I noted earlier, we know that man-made emissions have increased 
the concentration by about 30 percent, from 280 parts per million in 
pre-industrial times to around 366 ppm today. We know that the 
industrialized countries have put most of the carbon into the 
atmosphere, and that CO2 lingers there for 100 to 150 years. 
We know that the United States is the largest emitter of greenhouse 
gases; we have 4 percent of the world's population and contribute 22 
percent of the carbon. We also know that, given current trends, the 
developing world will pass the developed world as an emitter in about 
30 years. (At that point, the developing world will have about 70 
percent of the world's population.) China, with its 1.2 billion people, 
will probably pass the United States toward the end of the first 
quarter of that century.
    So action by industrialized nations alone will not put us on the 
road to safe concentrations of greenhouse gases; we need action by the 
developing countries as well. But it is very clear from all our 
discussions and negotiations to date that if the developed countries, 
with our current economic capacity, technical capability, and energy 
intensive life-style, don't go first--setting the example and reducing 
emissions--then developing countries will not act either. We must lead 
the way. And we must move soon. If not, a doubling of concentrations 
becomes certain, and we put ourselves on the road to a tripling or even 
higher levels of concentrations--the consequences of which are 
uncertain but likely to be catastrophic.
    In 1992, the world community adopted the United Nations Framework 
Convention on Climate Change in an effort to begin coming to grips with 
this environmental threat. Under the Convention, developing nations 
agreed to take a variety of actions to mitigate climate and to 
facilitate adaptation to it's consequences. Industrialized nations 
agreed to take the same actions, but in addition, they agreed to take 
steps aimed at returning their emissions of greenhouse gases to 1990 
levels by the year 2000.
    In 1995, the Parties to the Climate Convention decided the existing 
treaty commitments were not adequate to address the threat. 
Accordingly, they agreed to begin a process to negotiate next steps. 
Since the ``aim'' set for industrialized nations expires in the year 
2000, they began to consider the goals that should guide their efforts 
in the decade or two after the year 2000. Industrialized nations agreed 
to establish quantified targets to limit and reduce their greenhouse 
gas emissions over yet-to-be-determined time periods--such as 2005, 
2010 or 2020. At that time, devel- 

[[Page 245]]

oping nations, many of whom had only begun to implement their existing 
commitments under the Convention, argued strenuously that the 
negotiating process should not result in new commitments for them. They 
agreed, however, to continue to advance the implementation of their 
existing commitments.
    The U.S. proposals in the current negotiations attempt to move the 
process. The U.S. proposal acknowledges that the list of ``developed 
country Parties'' established by the Convention's Annex I in 1992 no 
longer reflects current realities. A number of developing countries 
have joined the ranks of the developed world, through membership in the 
OECD and in other ways, and more are poised to do so. Our proposal to 
establish an ``Annex B'' would enable such countries, on a voluntary 
basis, to move beyond their current non-Annex I status, and take on 
binding greenhouse gas emissions obligations, reflecting their rapidly 
changing economic status, and enabling them to engage in emissions 
trading with industrialized nations.
    Similarly, Article 16 of the U.S. proposal calls on developing 
country Parties to adopt, by 2005, binding provisions so that all 
Parties have quantitative greenhouse gas emissions obligations and so 
that there is a mechanism or ``trigger'' for automatic application of 
those obligations, based on agreed criteria.
    In urging this policy of ``evolution,'' the United States is far 
out in front of almost all other countries, and we are being criticized 
accordingly. For example, several developed countries believe that our 
proposal imposes unfair burdens on developing countries. Most countries 
in the developing world believe that ``evolution'' goes beyond the 
scope of the Climate Convention and the Berlin Mandate. We think we 
have the concept about right: no one should be exempt; we emit the 
most, so we have to act first; but others have to phase in over time.
    The overall negotiation on climate change is extremely complex--the 
most complex I have seen in 25 years of public life (including 12 years 
on this challenging committee!)--and the ``evolution'' aspect is 
perhaps the most important of all. We have put forward some proposals; 
some in Congress have as well. Now we have to hammer out a final 
proposal and negotiating position. We welcome your input, support and 
creativity as we work to solve this problem, and I look forward to 
hearing your ideas, questions and comments today.
    The issue is not whether developing countries, especially the big 
and rapidly developing ones, take on quantified commitments to limit or 
reduce their emissions of greenhouse gases clearly, it will be 
impossible to abate the threat of climate change unless they do. The 
issue is when such commitments should begin, and what criteria should 
be used to establish them, and to whom they would apply.
    There are significant disparities in national income between those 
in industrialized nations and those in developing nations. There are 
enormous differences in per capita levels of greenhouse gas emissions. 
Some developing countries argue that these gaps must narrow before they 
will accept quantified emissions limitation or reduction commitments.
    While this argument is understandable, it misses two key points. 
First, the environmental threat posed by global climate change cannot 
be averted if nations wait to act until levels of national income or 
per capita emissions converge at some theoretical point in the future. 
Second, industrialized nations simply will not make significant efforts 
to reduce their greenhouse gas emissions if their efforts will be 
undermined by an unlimited increase in emissions from the developing 
world.
    The Framework Convention, which President Bush signed and to which 
the Senate overwhelmingly gave its advice and consent, established the 
principle that, with respect to climate change, the world's nations 
have common but differentiated responsibilities and varying 
capabilities. Insisting that developing nations immediately accept 
binding emissions targets that industrialized nations are seeking to 
negotiate for themselves is neither realistic nor consistent with the 
Convention approved by the Senate. But insisting that those developing 
nations now responsible for a growing share of global greenhouse gas 
emissions should have no further obligations to act until they have 
crossed some threshold of national income or emissions on a per capita 
basis is equally unrealistic and inconsistent with the Convention's 
ultimate objective.
    The agreement reached in Kyoto will not solve the problem of global 
climate change. No matter how ambitious, it will represent only a 
second step along the much longer path toward achieving the Climate 
Convention's ultimate objective. As we prepare for Kyoto, we must also 
prepare for further steps beyond it. In particular, we must ensure that 
all nations responsible for a significant share of current global 
greenhouse gas emissions accept the need to limit or reduce their 
emissions, and that they begin to move in that direction.
    What a Kyoto agreement can do is provide nations with the tools 
they will need to achieve to achieve significant, binding greenhouse 
gas limitation and reduction commitments. These tools include 
greenhouse gas emissions budgets over multiyear

[[Page 246]]

budget periods that will help smooth out annual fluctuations. They 
include full national flexibility in the choice of policies and 
measures to meet such binding emissions budgets. They include emissions 
trading among nations with binding emissions budgets, with the 
participation of the private sector in the trading regime, to help 
lower the costs of compliance. And they include joint implementation 
for credit between nations with binding emissions budgets and those 
that do not yet have such budgets both to lower the costs of compliance 
and to promote economic development and environmental protection.
    Mr. Chairman, we have indeed charted an ambitious course for the 
months ahead. The tremendous risks to our planet demand nothing less. 
With your continued support and the support of other Members of 
Congress, I am confident that we will obtain an outcome in Kyoto that 
will represent a significant step forward on the much longer path 
toward safeguarding the Earth's climate system for present and future 
generations. Thank you, Mr. Chairman.
                                 ______
                                 
 Statement of Kevin J. Fay, Executive Director, International Climate 
                           Change Partnership
    Good Morning, Mr. Chairman and members of the committee. My name is 
Kevin Fay; and I serve as the Executive Director of the International 
Climate Change Partnership (ICCP), a coalition of U.S. industry 
representatives and associations, as well as international 
associations, interested in the policy development process with respect 
to global climate change. We appreciate the opportunity to appear 
before the committee today on the subject of a global climate change 
convention.
    ICCP was organized in 1991 to provide a forum to address the issue 
of global climate change and to be a constructive participant in the 
policy debate. Five months before the Third Conference of Parties 
meeting in Kyoto, the issue has certainly raised the interest of many 
of us in the private sector and the Congress.
    ICCP continues to recognize the climate change issue as an 
important matter with which governments should be concerned. However, 
it is a very long-term issue and extraordinarily complex in both its 
underlying science and its entanglement with the very foundations of 
the global economic structure.
    We have recently communicated our views on the key issues in the 
Kyoto negotiations to the Administration. I am attaching this 
correspondence to my testimony and ask that it be included in the 
record. We have also communicated to the President on the issue of the 
Administration's as yet unreleased economic analysis, expressing our 
frustration at their lack of communication on the matters of greatest 
concern to the private sector--namely the potential economic impacts of 
a climate change agreement and the current thinking of future 
implementation scenarios. This letter is also attached.
    Our views have been based on the premise that the only agreement 
that is acceptable is one that is comprehensive and can work with 
flexibility, maintain national sovereignty, ensure participation by all 
countries, maintain a competitive level playing field, and is guided by 
effective science and includes a long-term objective that will guide 
future policymakers and future negotiators.
    You will note that in both letters, we urge the President and the 
State Department to reiterate to our negotiating partners that the U.S. 
policy framework enunciated last July is the only framework that can 
provide a climate change agreement that is both environmentally 
beneficial and economically feasible.
    Since prior to the first meeting of the parties in Berlin, we have 
consistently argued that the time is not yet right for a climate change 
agreement. Unfortunately, the parties established an artificial 
deadline under the Berlin mandate to reach an agreement by the third 
meeting of the parties, now scheduled to be held in December of this 
year.
    In our view the Administration made progress in its own 
deliberations and offered a thoughtful policy framework at the second 
meeting of the parties in 1996 which we have heard about here today. 
This policy outline includes a comprehensive approach; identification 
of a long-term objective; identification of a developing country role 
under the treaty; implementation flexibility through emissions trading, 
banking, and joint implementation; and avoidance of a laundry list of 
so-called ``policies & measures.''
    The U.S. framework also included a call for a binding commitment, 
which the Administration has subsequently defined as an emissions 
budget period of undetermined length to achieve reductions of an 
undetermined size. While most of the attention has been focused on this 
part of the discussions, we continue to believe that it is not the only 
key to a successful treaty agreement in Kyoto or beyond Kyoto.

[[Page 247]]

    We should point out at this time, however, that we have been 
provided with no analysis to justify any particular target or timetable 
that might be advocated.
    Our primary concern has been that the result of the negotiations 
would focus on only one or two of the key issues, some of which we have 
outlined in our letter, and that the rest would be left until later. 
This would be unacceptable to us. This worst result would be for the 
Administration to agree to some target and not achieve the entire 
policy framework it has advocated.
    An agreement on a target and timetable in Kyoto, and nothing else, 
would be unacceptable to the ICCP. An agreement in Kyoto on a target 
and timetable, including a developing country schedule, but with none 
of the flexibility or other provisions as articulated last year by the 
Administration, would be just as unacceptable.
    To date, we have been disappointed in the progress on most of these 
fronts and we are pessimistic on the ability to achieve them between 
now and Kyoto absent strong signals by the White House to reinvigorate 
the negotiations. ICCP is not and never has been interested in an 
agreement at the Kyoto meeting just for the sake of reaching an 
agreement. This view will not change.
    With respect to the economic issues and the impacts of a climate 
change agreement on the U.S. economy, jobs, and the environment we 
remain very concerned. It is difficult to address this issue in any 
effective way given the lack of dialog on these topics and the lack of 
information being provided by the Administration. We know that the 
economic analysis that has been performed tells us several important 
things:
     that there are costs involved in reducing greenhouse gas 
emissions;
     the costs are likely to be reduced if flexibility 
provisions are incorporated;
     that you cannot achieve any reasonable goals either 
environmentally or economically without developing country 
participation; and
     the costs are less if you avoid premature capital 
retirement or turnover, and provide industry the opportunity to manage 
their way into the technological innovation that will be necessary to 
accomplish whatever long-term goal is established by the parties to the 
convention.
    It is difficult to know how the costs compare to the benefits 
because we have yet to see any analysis that includes the benefits of 
mitigating climate change or facilitating adaptation strategies.
    In order for there to be an effective treaty, we believe that the 
parties must first get the treaty structure correct. We have a long way 
to go before that will happen.
    In closing, I believe it is useful to look at previous examples for 
guidance that may provide a better perspective than the intense pre-
Kyoto focus. More than 12 years ago, negotiators were struggling to 
complete the Vienna Convention for Protection of the Ozone layer after 
more than 5 years of negotiation.
    These negotiations had taken on a bitter tone as parties, including 
the United States and European Union, tried to push for adoption of 
their own preferred policy approach to dealing with ozone depleting 
compounds. Instead the parties agreed to the convention and to 
establish a series of workshops and information gathering devises to 
better understand each other's views.
    When negotiations resumed, the parties were much better informed, 
and a treaty structure was adopted that has since been proven very 
durable. The Montreal Protocol, signed in 1987, has proved much more 
effective than most of us thought possible at the time.
    We raise this example not because we believe the issues are 
identical. They are not and climate change is far more complex. We 
raise it because as we reach a fevered pitch prior to Kyoto, we want to 
stress that an effective framework is what counts, not an expedient 
framework.
    A climate treaty needs to be durable for the next 100 years. Our 
companies have determined that the current State of scientific 
understanding requires a prudent long-term approach to address this 
issue. This view is equally applicable to the negotiations themselves.
    We appreciate the opportunity to appear before you today, and we 
look forward to answering your questions.
                                 ______
                                 
                  International Climate Change Partnership,
                                                      June 6, 1997.
Hon. Timothy Wirth,
Under Secretary of State for Global Affairs,
Department of State, Washington, DC.
    Dear Mr. Wirth: You have requested our views on specific issues 
under consideration as part of the negotiations on implementation of 
the Berlin Mandate for a pos- 

[[Page 248]]

sible protocol or other legal instrument to the Framework Convention on 
Climate Change. We are pleased to provide these comments on specific 
issues of concern to the members of the International Climate Change 
Partnership (ICCP) with respect to the treaty negotiations. We are also 
writing, however, to express our concern with the current lack of focus 
to the negotiations or linkage of these issues with the important 
relationship between the international treaty and domestic 
implementation schemes.
    ICCP continues to recognize the climate change issue as an 
important matter with which governments should be concerned. However, 
it is a very long-term issue and extraordinarily complex in both its 
underlying science and its inextricable entanglement with the very 
foundations of the global economic structure. We are concerned that 
this complexity is exposing an overly ambitious timeframe for current 
negotiations and that the cohesive activity necessary to ensure a 
viable foundation for future action under this important treaty simply 
has not come to be. It is equally disturbing that there has been little 
public discussion of the economic impacts of the range of climate 
change mitigation by any of the parties, including the United States.
    ICCP commended the U.S. position enunciated in its statement in 
July of last year as a reasonable framework, and was particularly 
supportive of its efforts to force into the negotiations greater focus 
on the long-term character of the issue and its economic implications. 
However, we have made clear that our support is for the entire 
framework, and not for individual components. Some have misconstrued 
this position as support for early targets and timetables. It would be 
incorrect to read our position as such. While ICCP members have 
recognized the possibility that negotiators would agree on a mid-term 
emissions target, we could not specifically support such a target given 
the current lack of understanding of the implications of such a target 
or how it would be implemented.
    In our view, the issue of a binding target is not the most critical 
element of the negotiation. We view it more important to provide 
definition to the treaty structure through a long-term objective and a 
mechanism to ensure that all parties, developed and developing, have 
clearly defined roles before we enter into a binding commitment period. 
It is also important that the parties are able to achieve these goals 
with flexibility through emissions trading, banking, and true joint 
implementation. We appreciate that the United States has recognized 
this need for flexibility.
    It is of great concern to us that little progress appears to have 
been made on many of these issues concerning flexibility and the role 
of developing countries. While the United States has elaborated its 
views on these positions in subsequent statements and its protocol 
draft, we have detected little movement by the other parties on these 
issues. Since we are not privy to your bi-lateral discussions or the 
behind the scenes meetings, it is difficult for us to determine the 
current status of these topics.
    It is not acceptable to us for the negotiations to conclude in 
December with an agreement on a binding commitment toward a mid-term 
target with all details on other key provisions to be negotiated later.
    As you recall, we have consistently expressed our view that 1997 is 
too soon for a credible technical assessment process which would 
support an agreement by the parties on these issues. The apparent lack 
of progress to date, the dearth of information available to us 
regarding how these issues may be resolved, and the failure to 
thoroughly discuss the economic implications for an agreement, have 
only served to confirm this view.
    We have pledged to work responsibly with the United States and 
other parties on the development of an effective framework to address 
the climate change issue consistent with the need for all nations to 
sustain economic growth. We remain committed to this principle. It is 
not clear, however, that these issues can be resolved satisfactorily by 
the Kyoto meeting. ICCP will, of course, reserve any judgment on the 
results of Kyoto for the implementation process.
    We urge the United States to remain focused on and committed to 
delivering concrete results on all the points outlined in the statement 
delivered last July and elaborated on in its subsequent submittals. 
Further, we believe that the United States should indicate its 
commitment to its proposed climate change policy structure at the 
upcoming meetings of the G-7 and the United Nations General Assembly 
Special Session on the Environment.
    Concurrently, we believe the economic impacts of a possible 
agreement should be communicated with industry and other policymakers 
so we can have an effective dialog. Failure to discuss some of these 
issues in advance will make it extremely difficult to build support for 
ratification and implementation of the international agreement.

[[Page 249]]

    We look forward to working with you and appreciate the opportunity 
to discuss the specific views on the attached position paper in the 
very near future.
            Sincerely,
                                              Kevin J. Fay,
                                                Executive Director.
                                 ______
                                 
                  International Climate Change Partnership,
                                                      June 6, 1997.
President William Clinton,
The White House, Washington, DC.
    Dear Mr. President: On behalf of the International Climate Change 
Partnership, I am writing to express our concern for the status of the 
economic analysis for purposes of the international negotiations on 
climate change and the apparent lack of progress in making the economic 
issues an integral part of these negotiations. The ICCP is a coalition 
of companies and industries around the world committed to responsible 
participation in the climate change policy process.
    ICCP continues to recognize the climate change issue as an 
important issue with which governments should be concerned. However, it 
is a very long-term issue and extraordinarily complex in both its 
underlying science and in its entanglement with the very foundations of 
the global economic structure. ICCP commended the U.S. position 
enunciated in its statement in July of last year as a reasonable 
framework, and was particularly supportive of its efforts to give the 
negotiations greater focus on the long-term character of the issue and 
its economic implications.
    It is disturbing to us that, for nearly 1 year, there has been 
little public discussion of the economic impacts of the range of 
proposed climate change mitigation strategies by any of the parties, 
including the United States.
    The Administration had promised the results of its economic 
analysis to the Congress, its negotiating partners, the private sector 
and the non-governmental organizations. While we applaud the 
recognition of the need to peer review this work, the slow pace at 
which this activity is occurring raises concerns that it is either not 
being seriously pursued, or that the results are not being shared. 
Neither of these reasons, if true, bodes well for constructive private 
sector support of the Administration's efforts or for any result 
produced from the Third Conference of Parties meeting to be held later 
this year in Kyoto.
    This matter is further complicated by the recent resignation of 
Under Secretary of Commerce Ehrlich, who was coordinating the 
analytical effort. His departure suggests a possible further loss of 
momentum on this important effort at a critical time.
    Those who may be able to provide constructive input into the 
analysis and assessment being pursued by the Administration wonder what 
must be done to understand how specific industry sectors are being 
examined and what steps are being contemplated in order to pursue your 
climate protection goals. At a minimum, the Administration should be 
able to immediately publish the policy assumptions being used for 
individual sectors.
    In addition, aside from frequent references to implementation of 
flexible, market-based approaches, there has been little discussion of 
what may be suggested as implementation steps for a Kyoto agreement. 
Failure to discuss some of these issues in advance will likely make it 
difficult to build support for ratification of the international 
agreement and for development of implementing legislation.
    We respectfully urge you the Administration to provide an outline 
of the economic information and policy considerations, as well as a 
meaningful timeframe for the release of this information.
    Finally, we understand that you are preparing to attend the 
meetings of the G-7 and the United Nations General Assembly Special 
Session on the Environment. We urge you to reiterate the United States' 
support for these key economic issues as critical elements of any 
future agreement on climate change. It is only with these key policy 
provisions that we will have a climate change agreement that is both 
environmentally beneficial and economically feasible.
            Sincerely,
                                              Kevin J. Fay,
                                                         Executive.

[[Page 250]]

  International Climate Change Partnership Views on Key Issues in the 
      Climate Change Protocol Negotiations (In Alphabetical Order)
                        developing country role
    The United States has outlined a specific proposal for dealing with 
the developing country role as part of the Kyoto agreement, including 
definition of obligations under Article 4.1 of the Framework 
Convention, establishment of an Annex B of countries which would 
voluntarily adopt emissions budgets, and a date certain by which all 
parties would have emissions budgets.
    As stated by Bert Bolin, Chairman of the Intergovernmental Panel on 
Climate Change (IPCC) at the March 1997 meeting of the Subsidiary Body 
on Science and Technological Advice (SBSTA) in Bonn, ``[I]t is obvious 
from this graph that no reasonable future reductions by Annex I 
countries would stabilize global emissions.'' Therefore, it is 
imperative that developing countries be part of this agreement. 
Furthermore, as stated in the Administration's recent economic work, a 
significant percentage of infrastructure and industry investment by 
developed countries is occurring in developing countries. Finally, 
because of the strong linkages' between population growth and 
greenhouse gas emissions, it is important that we recognize that seven 
of the current non-Annex I countries represent two-thirds of the 
world's population.
    The Administration has been forthright in its insistence that the 
developing country role be defined. ICCP recognizes the potential 
limits of the current Berlin Mandate with respect to new commitments 
for non-Annex I Parties. It is clear, however, that the Berlin Mandate 
contemplates definition and elaboration of Article 4.1 commitments for 
all Parties, including the developing countries.
    Additionally, it is imperative that additional developing country 
participation, including emission budgets, must be defined prior to the 
start of the first binding budget period for the current Annex I 
parties. It is only through such definition that governments and the 
private sector can ensure that investment flows are not distorted.
                            entry into force
    ICCP has noted that six countries, including India and China, 
currently account for 55 percent of greenhouse gas emissions. In order 
for the treaty to enter into force, it is imperative that a significant 
percentage of greenhouse gas emissions be represented by ratifying 
countries. In addition, a significant percentage of Annex I countries 
and developing countries should ratify the treaty before it enters into 
force.
    We also believe that it is inappropriate for a regional economic 
organization to be allowed to represent both itself and the voting 
rights of its individual members. The EU has argued that it should be 
allowed to bubble its emissions and is proposing to allocate emissions 
internally. It is unfair that the EU be granted this concession to 
bubble its emissions when it declines to support similar flexibility 
for other Parties. Therefore, the EU should have to decide to either 
bubble and count as one vote, or to not bubble and to be counted 
individually.
                 greenhouse gas comprehensive approach
    The protocol negotiations should continue to focus on a 
comprehensive approach at the international level. Recent proposals 
from the European Union suggested a protocol on only three gases--
carbon dioxide, methane, and nitrous oxide--with the notation that 
fluorocarbon compounds should be covered by policies and measures and 
added to the basket in the year 2000. ICCP strongly opposes the EU 
approach. The gases that can be measured should be covered 
simultaneously in a comprehensive manner. The key to a comprehensive 
approach is for Parties to focus on achieving the most efficient 
emission reductions possible; and therefore, it is unproductive to 
segregate gases from coverage until a later date or to treat gases 
differently in an international agreement.
                          long-term objective
    ICCP has urged the negotiators to provide for a long-term focus or 
objective. We believe such an objective provides clarity to 
negotiators, as well as to those charged with implementation of 
commitments. It is our understanding that the United States has 
performed some analysis of this issue, and that such analysis could be 
useful to the negotiators currently. Furthermore, we applaud the 
article in the U.S. protocol proposals which contemplates a long-term 
objective.

[[Page 251]]

    This objective will be an important guide to future decisionmaking, 
including private sector investment planning. We note that several 
participants, including the EU, and certain environmental organizations 
have suggested certain objectives characterized as atmospheric 
concentrations of greenhouse gases, and that the IPCC documents present 
their analysis according to atmospheric loading of greenhouse gases 
measured in parts per million (ppm) of CO2 equivalent.
    ICCP has not advocated a greenhouse gas concentration as the 
appropriate measure for the long term objective. A long-term objective 
could be defined as a combination of adaptation, impacts, and 
concentration measures.
    Recent analysis of the economics of climate change controls have 
indicated that the long-term objective is not as relevant as the path 
charted for the emission reduction. In our view, it is impossible to 
develop a meaningful path without knowing the point of departure and 
the intended goal.
    We recognize that the current State of science does not provide a 
precise ``correct'' answer. Science does provide a basis for making an 
informed political judgment on the objective, and scientific assessment 
through the IPCC and elsewhere is critical to future reassessment of 
any potential long-term objective.
                         policies and measures
    It is imperative that each Nation maintains maximum national 
flexibility with respect to implementation of its climate commitments. 
It is neither appropriate nor productive for the negotiators to 
determine the manner in which each country should achieve its 
commitments. ICCP is opposed to any listing of specific annexes of 
policies and measures in any manner, i.e., mandatory, regional 
coordination, voluntary, or exemplary.
                  target/budget/accountability period
    There have been several proposals for specific point targets and/or 
budget periods as part of the protocol proposals that are currently 
before the Parties. ICCP has not endorsed the notion of a binding 
``target.'' We do, however, recognize that all of the government 
proposals to be considered in Kyoto do contemplate such a step as a 
starting point.
    The lesson from the non-binding commitment of the 1992 FCCC 
agreement is that, despite the best of intentions, a specific point 
target is very difficult to administer due to fluctuations in economic 
conditions, weather conditions, etc. Therefore, we believe it is 
imperative that the long-term objectives be utilized to examine a 
reasonable path that minimizes short-term economic disruption and 
stimulates the longer-term technological innovation necessary to 
significantly reduce worldwide greenhouse gas emissions.
    The United States has indicated a preference for an emissions 
budget period and a binding commitment to achieve that budget. In our 
view, the practical timetable for ratification and implementation of a 
Kyoto climate agreement, including subsequent definition of a 
developing country role, suggests that meaningful program 
implementation steps could not be up and running with confidence any 
time soon after a Kyoto agreement. There has been a great deal of focus 
on the beginning of such a so-called budget period.
    In our view, the beginning of the budget period is not as important 
as the end of the budget period, i.e., the point at which the principle 
of ``binding commitment'' actually has the potential to impose penalty 
or sanction. In light of the uncertainties stated above, ratification, 
implementation, developing country role, and some level of experience 
with the implementation process, we believe that it would be 
inappropriate to end the first binding budget period before the year 
2020. This timeframe will allow industry to develop its programs, and 
gain confidence in their performance.
    ICCP also believes this timeframe is consistent with its previous 
position that policies at the outset of this effort must take into 
account a reasonable period for capital stock turnover. This will 
provide a period for industry to ``ramp up'' its climate change 
responses.
    If the budget period is to be adopted, we believe that it should be 
long enough to encompass weather and economic cycles, but not so long 
as to present an impossible horizon to provide both industry and 
policymakers with some certainty. Therefore, it appears that a 10-year 
budget period is better than a 3- or 5-year period.
                         technology assessment
    Although not specifically included as part of the current protocol 
proposals, ICCP continues to believe that the FCCC must be grounded in 
sound scientific and tech- 

[[Page 252]]

nological assessment processes. This function, as currently served 
primarily through the Intergovernmental Panel on Climate Change (IPCC), 
is inadequate.
    The IPCC is currently considering restructuring proposals including 
the adoption of working group outlines that incorporate an effective 
role for private sector expert participation. We encourage support for 
these proposals.
    Finally, it is also important that we de-politicize the IPCC 
process to the maximum extent possible. Its credibility can be 
sustained only if it is truly seen to be the work of scientific and 
technical experts, and not subject to the whims of the diplomatic and 
political process or other special interests.
             trading, banking and joint implementation (ji)
    Most available economic analysis continues to indicate that 
flexibility through emissions trading, banking of emission credits, and 
joint implementation policies can help to maximize greenhouse gas 
emission reductions most cost-effectively. ICCP is fully supportive of 
such mechanisms as part of any agreement in Kyoto and beyond.
    We believe it to be imperative that such principles be included in 
the first agreement and not be left to some future negotiations. We 
also believe it is important that these provision not be relegated to 
some pilot project with final decisions to be made at some future date.
    Finally, it appears that flexibility is a positive inducement to 
ensure maximum compliance. It also would allow us to avoid the use of 
trade restrictions or trade sanctions as an enforcement mechanism in 
the treaty.

[[Page 253]]





[[Page 254]]



[[Page 255]]

  Statement of William F. O'Keefe, Chairman, Global Climate Coalition
    Mr. Chairman and members of the committee, as chairman of the 
Global Climate Coalition (GCC), I appreciate the opportunity to testify 
before you on global climate negotiations. The GCC is the leading 
representative of business and industry on this issue with members that 
encompass manufacturing; agriculture; small and large businesses; air, 
rail and barge transportation companies; domestic and international 
vehicle manufacturers; oil, coal, natural gas and other natural 
resource companies; municipal, co-op, investor-owned and independent 
electric utilities; cement; iron and steel; forest and paper; and 
numerous producers of chemicals, plastics and other industrial and 
consumer products.
    On behalf of this broad membership--the backbone of the U.S. 
economy--I would like to take this opportunity to set the record 
straight on five points that are key to the current public debate on 
climate change. First, the science is not ``clear and compelling'' as 
President Clinton claimed July 3 in his speech to the United Nations 
General Assembly, Special Session on Environment and Development. 
Instead, scientific uncertainties abound; enhanced global warming is 
still a hypothesis. Second, statements on scientific uncertainties by 
members of the GCC are consistent with those expressed in the May 16 
issue of the respected journal Science [attached]. Advocates of 
precipitous curbs on greenhouse gas emissions are the ones who are 
unjustifiably representing climate science in promoting a rush to 
judgment. Third, curbs on greenhouse gas emissions--which mean 
suppressing energy use--will not be cheap and relatively painless as 
some advocates encourage Americans to believe. Instead, curbs would be 
brutally expensive in terms of lost income, lost jobs and lost U.S. 
competitiveness on world markets. Fourth, business does not oppose 
action as evidenced by its widespread participation in the 
Administration's voluntary Climate Action programs. We support action 
that recognizes the state of knowledge, the extent of uncertainty, and 
balances the need for preserving robust economic growth with the 
requirement for a cleaner environment. Fifth, the climate issue does 
not represent a crisis requiring precipitous and dramatic actions to 
prevent an imminent ecological catastrophe.
  precipitous action on climate change serves an anti-industry agenda
    Claims of imminent catastrophe are designed to create a crisis 
atmosphere helpful in promoting other agendas. This strategy is 
routinely used to advance ill-advised policies--the saccharin scare in 
1977, predictions in the 1970's of famine and the exhaustion of natural 
resources, the predicted cancer epidemic in the 1980's, and the Alar, 
EDB and electromagnetic scares to name only a few.\1\
---------------------------------------------------------------------------
    \1\ For a more complete listing of scares, see: Adam J. Lieberman, 
Facts Versus Fears: A Review of the 20 Greatest Unfounded Health Scares 
of Recent Times, prepared for the American Council on Science and 
Health, May 1997.
---------------------------------------------------------------------------
    When these scares proved to be unfounded, the quest continued to 
find the ultimate environmental problem that will require wholesale, 
radical change in American lifestyles.\2\ The late Professor Aaron 
Wildavsky wrote that ``warming (and warming alone) . . . is capable of 
realizing the environmentalist's dream of an egalitarian society based 
on rejection of economic growth in favor of a smaller population's 
eating lower on the food chain, consuming a lot less, and sharing a 
much lower level of resources more equally.''\3\ MIT Professor Richard 
Lindzen has added that ``the great threat of warming fits in with a 
great variety of preexisting agendas--some legitimate, some less so: 
energy efficiency, reduced dependence on Middle Eastern oil, 
dissatisfaction with industrial society (neopastoralism), international 
competition, governmental desires for enhanced revenues (carbon taxes), 
and bureaucratic desires for enhanced power.''\4\
---------------------------------------------------------------------------
    \2\ For instance, the president of the World Resources Institute 
wrote: ``Climate change isn't just any environmental issue. It's bigger 
. . . it's tied to almost every facet of contemporary economic life. 
How we travel, manufacture and ship goods, build buildings, farm, and 
spend our leisure time all influences the tempo of climate change.'' 
[emphasis in original] See: Gus Speth, forward to The Greenhouse Trap 
(World Resources Institute, 1990).
    \3\ Aaron Wildavsky, ``Global Warming as a Means Of Achieving an 
Egalitarian Society: An Introduction,'' introduction to Robert C. 
Balling, Jr., The Heated Debate (1992), xv.
    \4\ Richard S. Lindzen, ``Global Warming: The Origin and Nature of 
the Alleged Scientific Consensus,'' Regulation, Vol. 15, No 2, (Spring 
1992).
---------------------------------------------------------------------------
    And so it is that climate change underpins the claims:
     That the automobile is a greater threat than any enemy we 
will ever face.
     That suburbia should be phased out.\5\
---------------------------------------------------------------------------
    \5\ Worldwatch Institute, Beyond the Petroleum Age: Designing a 
Solar Economy (December 1990), 48.

---------------------------------------------------------------------------

[[Page 256]]

     That human numbers must be drastically reduced.\6\
---------------------------------------------------------------------------
    \6\ Bill McKibben, The End of Nature (1989), 191-192.
---------------------------------------------------------------------------
    Obviously, evidence that climate change may not be an imminent 
catastrophe undermines such visions of America in the 21st Century. 
Indeed, unwavering allegiance to such agendas may explain why advocates 
of precipitous action deny with vehemence the logical implications of 
obvious scientific uncertainties.
    True concern for the economic and environmental well-being of 
people in this and other countries would surely lead negotiators to 
balance their policy prescriptions with the state of scientific 
evidence. After all, carbon dioxide (CO2) is not a pollutant 
but a natural element necessary for survival, with man-made emissions 
directly related to prosperity and economic progress. Curbing those 
emissions unnecessarily would mean fewer jobs and less income--and 
therefore less money for other health and environmental protection 
measures. A less prosperous United States means a nation less able to 
promote technological development which is essential to environmental 
progress and to our continued ability to adapt in a changing world.
                       the science is not settled
    The hearings of this committee a week ago--and those of the Senate 
Subcommittee on International Economic Policy, Export and Trade 
Promotion chaired by Senator Hagel in June--have put a much-needed 
public spotlight on the compelling scientific uncertainties that should 
permeate every climate change discussion and negotiation. Climate 
scientists and modelers simply do not know enough about possible human 
impacts on the global climate system to justify taking near-term 
actions being considered by international negotiators that would 
require us to suppress energy use by at least 25 percent in little over 
a decade.
    That opinion is shared by scientists who participated in the 
Intergovernmental Panel on Climate Change (IPCC) and wrote the 1995 
Second Assessment Report, along with many other members of the 
scientific community. That report does state that ``the balance of 
evidence suggests a discernible human influence on global climate'' and 
the Administration repeatedly quotes that sentiment--out of context--in 
its statements that the ``science is settled.'' The May 16 issue of the 
journal Science pointed out that Dr. Benjamin Santer, a lead IPCC 
author, warned against such over-simplification when he stated that, 
``It's unfortunate that many people read the media hype before they 
read the [IPCC] chapter [on greenhouse warming] . . . We say quite 
clearly that few scientists would say that the attribution issue was a 
done deal.'' That same Science article also notes that ``[s]ome 
scientists assert that developments since the IPCC completed its report 
have, if anything, magnified the uncertainties,'' and quotes a noted 
scientist as saying, ``There really isn't a persuasive case being 
made'' for detection of greenhouse warming. At the article's end, the 
author refers to a climatologist and IPCC contributor who concluded 
that ``while researchers are firming up the science, policy-makers 
could inaugurate `some cautious things' to moderate any warming.''
    Unquestionably, the concentration of CO2 in the 
atmosphere has increased. It has gone from about 280 parts per million 
two centuries ago to about 360 parts per million today. It is generally 
agreed that this increase is due to human activity, especially 
combustion of fossil fuels. CO2 like several other gases in 
the atmosphere, especially water vapor, traps heat. Without this 
greenhouse effect, the average global temperature would be about zero 
degrees and life as we know it would not be possible. In theory, if 
CO2 is increasing, more heat might get trapped and the 
temperature might rise.
    But theory is not fact until subjected to the acid test of 
scientific rigor to confirm or reject it. To date, no confirming 
evidence has withstood tough scrutiny--as the May 16 Science article 
explains. While it is a fact that there has been some warming over the 
past century, it is within the range of normal variability. 
Furthermore, most of it occurred before 1940, which was before any 
significant increase in CO2 emissions. In particular, over 
the past 20 years, when high-quality satellite measurements of 
temperature began, no warming has been observed; and, in fact, there 
has been a slight downward trend.
    Moreover, Dr. Bert Bolin, the chairman of the IPCC, has repeatedly 
said science has not established a link between human greenhouse gas 
emissions and particular severe weather events. Yet, Vice President 
Gore and other Administration officials made such an overstatement when 
they associated the flooding in North Dakota earlier this year with 
global warming. President Clinton made a similar overstatement when he 
said on June 30 in New York City that greenhouse gases have ``led to 
the most disruptive weather patterns anybody can remember over the last 
4 or 5 years.'' Members of the GCC and of the business community are 
only being accu- 

[[Page 257]]

rate when they point out that such claims go beyond what can be 
supported by climate science.
         exempting the developing countries guarantees failure
    Dr. Bolin has also cautioned against expecting global temperature 
benefits from emission reductions by developed countries alone. Yet, 
the Berlin Mandate agreed to by international negotiators in 1995 
exempts developing countries from any new commitments to curb 
emissions. Dr. Bolin, during his February 25, 1997 presentation in Bonn 
to international negotiators, said that the proposals applicable only 
to the industrialized nations ``would not be detectable on projected 
temperature increases.''
    The 2,000 economists who signed a petition on climate change--and 
the 65 U.S. Senators who have signed Senate Resolution 98--emphasize 
that all countries must participate in any program to address 
``global'' emissions. China, India and other developing countries will 
account for most of the future growth in carbon dioxide 
(CO2) emissions in the next century but will be exempt from 
any meaningful treaty obligations. This will create powerful incentives 
to attract manufacturing investments and the jobs they create from the 
industrialized countries--and also create powerful economic and 
political constituencies for never curbing emissions. As Representative 
John Dingell asked rhetorically in his testimony of June 19 before the 
Senate Subcommittee on International Economic Policy, Export and Trade 
Promotion: ``Does anyone seriously believe China, or any other country 
for that matter, will act on altruistic motives?'' Without the active 
involvement of developing countries, the growth in global 
CO2 emissions will not be reduced in any meaningful way.
                    the economic costs would be high
    The Administration suggests that curbing energy use will impose 
little economic sacrifice. Everett M. Ehrlich, former undersecretary of 
commerce for economic affairs, wrote in The Washington Post of June 15, 
1997 that ``the economic literature suggests that we could roll back 
our CO2 emissions to their 1990 levels by 2010 for the 
equivalent of a 25 cent gas tax. It's not free, but it's not the end of 
the world.'' Few consumers would share this benign view of such a hike 
in their energy bills. Some authors of the IPCC report even suggest 
that curbing greenhouse gas emissions could be free--the environmental 
equivalent of a free lunch--or even be economically beneficial!\7\
---------------------------------------------------------------------------
    \7\ These authors wrote: ``Despite significant differences in 
views, there is agreement that energy efficiency gains of perhaps 10 to 
30% over baseline trends over the next two or three decades can be 
realized at negative or zero net cost (negative net cost means an 
economic benefit).'' See: International Panel on ``Climate Change, 
Climate Change 1995: Economic and Social Dimensions of Climate 
Change.'' Contribution of Working Group III to the Second Assessment 
Report of the Intergovernmental Panel on Climate Change (1996), 16.
---------------------------------------------------------------------------
    In fact, however, every credible, independent economic analysis 
confirms what common sense suggests: a substantial curb on the use of a 
key economic resource will impose substantial costs. From an 
Administration draft analysis circulated last May, one could reasonably 
conclude that U.S. negotiators want to cut CO2 emissions 
back to 1990 levels by sometime around 2010, and hold them there. This 
would require more than a 25 percent reduction in projected fossil fuel 
use. The Administration is placing its blind faith in unidentified 
technological breakthroughs and an unproven--and probably unworkable--
trading scheme to counterbalance the economic damage of self-imposed 
energy rationing.
    However, economic studies more realistic about the probable 
contributions of existing and new technologies paint a more sobering 
picture. Studies by Charles River Associates, DRI, and the U.S. Energy 
Information Administration indicate that energy taxes of $125 to $200 
per metric ton of carbon would be needed to return emissions to 1990 
levels by 2010 ($200 per ton is equivalent to an increase in the excise 
tax on gasoline of about 60 cents a gallon). The annual impact of a tax 
this size includes the following losses:
     $100 billion to $275 billion in gross domestic product 
(GDP).
     $200,000 to $500,000 U.S. jobs.
     $65 billion to $100 billion in fixed business investment.
     $50 billion to $110 billion in consumer purchases.
   the clinton administration has been slow to release its economic 
                                analysis
    DOE released on July 11, 1997 a study contracted with Argonne 
National Laboratory early in 1996 to investigate ``the potential 
effects (which may be either beneficial or adverse) on energy-intensive 
industries in the United States of alternative

[[Page 258]]

scenarios for changes in world patterns of industrial energy prices 
that might result from new climate commitments.'' Six industries were 
selected and the study results show that the impact on each industry 
would range from ``significantly adverse'' to ``devastating'' and 
produce little, if any, environmental benefit.\8\
---------------------------------------------------------------------------
    \8\ The six industries studied were: aluminum; chemicals and allied 
products; petroleum refining; cement; paper and allied products; and 
steel.
---------------------------------------------------------------------------
    The U.S. Department of Energy (DOE) has attempted to put these 
results in a favorable light by claiming that the study examines energy 
price scenarios based on other countries' proposals ``of large 
hypothetical energy price increases'' rather than the 
``Administration's basic approach.'' However, the Administration has 
not explained how its own goals for curbing emissions could possibly 
avoid either high energy prices or highly restrictive regulatory curbs 
on energy use. At the very least, the DOE's claim that the Argonne 
study results apply only to the climate change proposals of other 
countries is an open admission that this study lacks a direct analysis 
of the Administration's own proposals. Hence, DOE's claim that the 
study ``confirms the wisdom of the Administration's basic approach to 
climate change'' is without foundation.
    The delay in releasing this study and the release two days ago by 
the Administration of its long-promised analysis and assessment of its 
own post-2000 climate change proposals raises questions about its 
negotiating objectives.
    In March 1995, as the Berlin Mandate began to take shape, President 
Clinton characterized U.S. objectives this way in a letter to 
Representative John Dingell:

          ``We have said this process must include thoughtful analysis 
        and reflect the fact that global problems require global 
        solutions. Furthermore, I assure you the U.S. delegation will 
        not accept any outcome or agree to any process that adversely 
        affects the United States and its industrial competitiveness.''

    DOE and the Environmental Protection Agency (EPA) jointly held a 
workshop in Springfield, Virginia to unveil the Administration's 
initial analysis. At a June 19, 1996 hearing before the House Commerce 
Committee, the DOE's Acting Assistant Secretary for Policy--Marc 
Chupka--testified that the ``U.S. strongly believes that analysis and 
assessment is central to the development of further commitments by 
Annex I Parties and to the furtherance of existing commitments of other 
parties to the Framework Convention on Climate Change.'' When it was 
announced last summer that Dr. Everett Ehrlich would assume the role of 
directing and coordinating this analytic effort, he assured everyone 
that the results would be available this past January. Over the next 
several months, Under Secretary of State Tim Wirth repeatedly stated 
that the Administration's analysis would be released soon. This did not 
occur and yet negotiations proceeded.
    This state of affairs led Representative Dingell in his Senate 
testimony of June 19, 1997 to ask:

          ``Why are we [proceeding with negotiations] before we have 
        the most basic information about how climate change policies 
        will affect our economy? In short, has the Administration 
        bothered to do its homework? We were supposed to have the 
        vaunted analysis and assessment of the impact of climate change 
        policies on the U.S. economy by the end of last year. It has 
        not been completed yet, despite repeated promises to Congress 
        and industry that it would be available before important policy 
        decisions are made. But the State Department formally proposed 
        a cap-and-trade negotiating position in January. In short, the 
        analysis is self-evidently too late to inform the process, and 
        likely will be used to justify what the Administration has 
        already decided to do. Just as clearly, public participation 
        and comment on the analysis and assessment is irrelevant.''

    Representative Dingell's remarks were insightful. Only two days ago 
did the Administration release a draft copy of its baseline economic 
analysis. While the GCC has not had time to examine this document 
thoroughly--and we would ask the committee for the opportunity to 
submit comments later--it is clear that the Administration still has 
not provided its assessment of specific policies now under 
consideration. It also has not explained how those policies would be 
implemented domestically and internationally nor has it quantified the 
impact of these policies on the U.S. economy, labor, industry and 
trade.
    This slow and partial release of the Administration's analysis and 
assessment has meant that the United States Senate has so far been 
unable to fulfill its Constitutional responsibility of ``Advice and 
Consent.'' Senate Resolution 98, introduced by Senators Byrd and 
Hagel--and now co-sponsored by 65 Senators reflects growing frustration 
with the Administration's failure to consult and alarm over the con- 

[[Page 259]]

sequences for the U.S. economy that will result from the current 
negotiating strategy.
                  the gcc supports appropriate action
    In spite of major scientific uncertainties, inadequacies in climate 
models and the doubt that any enhanced warming will soon occur, it 
would be imprudent to presume ``no problem.'' Global warming could have 
serious consequences should nations make wrong choices in either 
direction.
    Therefore, a proper framing of the problem recognizes uncertainty--
as pointed out by the petition signed by 2,600 economists. The 
Administration frames climate change as devoid of significant 
uncertainty--an approach that is clearly flawed.
    The basic structure for decision-making under conditions of 
significant uncertainty is relatively simple even though the global 
climate issue itself is complex. The first decision rule is to be slow 
rather than quick to commit to a single course of action. This is 
especially important when the costs of immediate action are known to be 
high--perhaps equal to our Nation's current total annual environmental 
expenditures--but the many scientific uncertainties prevent any 
reliable estimate of the environmental benefits (if any) from that 
action. In the case of global warming, we have time to address these 
uncertainties. Nothing we do in the next 20 years will have any 
appreciable impact on the world's average temperature in 2050 or 2100.
    This fact is absolutely crucial, because costs are exceedingly 
sensitive to timing. Many capital investments, including those in the 
energy and automobile industries, are long term. If change can be 
deferred until current equipment reaches the end of its useful life, 
and until more efficient devices are on-line, costs can be 
substantially less. Over the past 22 years, new technologies have 
enabled us to reduce energy intensity per dollar of gross domestic 
product by about 32 percent. This progress should continue. Analysis by 
the Electric Power Research Institute and the Stanford Energy Modeling 
Forum concludes that an orderly, long-term strategy for achieving a 
scientifically justified CO2 objective would cost only one-
fifth as much as a program that requires near-term cuts.\9\
---------------------------------------------------------------------------
    \9\ EPRI Journal, Nov./Dec. 1995.
---------------------------------------------------------------------------
    This leads to the second decision-making rule: invest in 
information to reduce the uncertainties and to better understand the 
implications of alternative courses of action. Indeed, the money 
already spent on improving climate models has increased our 
understanding of the climate system enormously with no indications yet 
that we have reached the point of diminishing returns in improving 
scientific knowledge and climate models.
    Furthermore, as climate models have improved they have--so far--
suggested that much of the 1+F increase in average global temperature 
over the past 130 years is due to natural variability and that any 
future warming is likely to be much less than earlier models have 
predicted. For instance, when the British Meteorological Office 
recently improved its modeling of the effects of clouds and 
precipitation, the model's response to a doubling of CO2 
emissions was a decline in warming from 5.2 Celsius degrees to 1.9 
degrees. The first results from the new climate model at the National 
Center for Atmospheric Research (NCAR) in Boulder, Colorado suggest--
according to the May 16 article in Science--that ``future greenhouse 
warming may be milder than some other models have suggested--and could 
take decades to reveal itself.''
    With improved information indicating that the problem may be less--
rather than more--severe than originally thought, it seems only 
sensible to continue improving scientific knowledge before committing 
to expensive policies predicated on earlier estimates, as the 
Administration appears determined to do. Although assessments of 
potential future impacts have moderated over the past few years, the 
Administration's policy has shifted from support of voluntary programs 
to legally-binding commitments.
    The third rule for decision-making under uncertainty is called ``no 
or low regrets.'' Look for actions that will produce benefits under any 
set of circumstances. The GCC has developed a list of emission-reducing 
actions that would be worthwhile even if the threat of global warming 
turns out to be another wildly exaggerated environmental scare.
    The business community has shared these steps with the 
Administration which are based on these points:
     Encourage an economic turnover of the capital stock.
     Focus investment in research to narrow the range of 
scientific uncertainties.
     Invest in the development of new technologies.

[[Page 260]]

     Expedite diffusion of new technologies in developing 
countries.
     Facilitate the investment of U.S. private capital in 
countries with high emissions levels.
     Continue promoting voluntary programs for reducing U.S. 
emissions.
    These points establish that GCC members support an action-oriented 
policy on climate change.
    The fourth decision rule is to consider alternatives. Only two 
decades ago, global cooling was the dominant concern. It is also 
possible that some warming will occur but not be harmful--or that 
developing adaptations to warming will greatly mitigate any harm. Sound 
policies must allow for these possibilities, and not be based on a 
single point estimate.
                         summary and conclusion
    Many uncertainties about the climate system, and the current and 
future impact of human activities on it, have been well documented. 
Business has played a constructive role by drawing attention to these 
uncertainties and the serious ramifications they pose for the 
Administration's negotiating strategy.
    Business agrees that action should be taken but rejects an 
unjustified rush to judgment. The major difference between the business 
community and the Clinton Administration is over approach, not the need 
for action. We support what can be called ``Lewis and Clark'' planning, 
after the famous explorers who successfully managed enormous 
uncertainty by gathering new information, taking a limited number of 
steps, reassessing and then repeating the process. In 1803, Lewis and 
Clark could not plan a detailed water route to the Pacific--President 
Jefferson's main goal. No one knew that the Rocky Mountains were in the 
way. Lewis and Clark were successful because they respected the limits 
of knowledge, anticipated surprises and recognized the need to adapt.
    The Clinton Administration supports an approach that discounts 
uncertainty. Minimal uncertainty allows detailed planning comparable to 
an extended itinerary what can be called ``Cooke's Tour planning'' 
after the famous travel agency. The conditions for this type of policy 
planning do not exist, and a Kyoto agreement that presumes they do will 
be playing ``Russian Roulette'' with our economy.

[[Page 261]]





[[Page 262]]



[[Page 263]]



[[Page 264]]



[[Page 265]]



[[Page 266]]



[[Page 267]]

 Responses By William F. O'Keefe to Additional Questions from Senator 
                                 Chafee
    Question 1. Mr. O'Keefe, you say in your testimony that you support 
``appropriate action.'' You want to encourage economic turnover of 
capital stock, spur the development of new technologies, and expedite 
their diffusion in developing countries. You also want to ``facilitate 
the investment of U.S. private capital in countries with high emissions 
levels.''
    I assume by that last point you mean that you are interested in 
spurring investment that reduces these high emissions, is that right? 
(If yes,) now why would you be interested in reducing these emissions?
    Answer. As I responded at the hearing when asked if there is a 
climate change ``problem'', the GCC recognizes that there is a risk 
that deserves to be addressed. Until the uncertainty surrounding this 
issue is reduced by expanding our State of knowledge, we simply do not 
know whether there is a genuine and serious ``problem.'' We do know 
that there is a very real risk that precipitous action will cause 
society's scarce resources to be wasted and our economic well being 
damaged. The risk of human-induced climate change warrants current 
efforts to ensure that we undertake emissions policies which are 
generally termed ``no'' or ``low'' regrets. Such a policy, which 
calibrates our national response to the still uncertain and evolving 
understanding of human impacts on the climate system, is what I meant 
when I urged ``appropriate action'' to reduce emissions. Such actions 
include promoting research leading to more energy-efficient 
technologies and their subsequent export to developing countries. The 
expanded use of current and future energy-efficient technologies in 
developing countries will contribute to their productivity improvements 
and economic strength and is therefore a desirable goal in itself. It 
also would limit GHG emissions growth in those countries and therefore 
diminish the risk associated with higher CO2 concentration 
levels.
    I would like to stress, however, that today there is an entirely 
legitimate scientific debate regarding the extent, if any, of human-
induced climate change and of what the impacts of change might be--
past, present, and future. Most regrettably, as the scientific 
community publicly acknowledges the uncertainty, and as warming 
predictions for the next century moderate substantially, the 
Administration has declared the debate to be over and attacked the 
patriotism and integrity of those who raise legitimate questions about 
their apocalyptic visions.
    As your first hearing on July 11 amply demonstrated the utter lack 
of scientific consensus regarding human-induced climate change, I will 
not address that fact further. However, I would like to draw the 
committee's attention to the efforts by the Clinton Administration to 
stifle the important and legitimate debate about inferences that can be 
drawn from the current State of scientific knowledge and about policies 
that are consistent with those inferences. On June 25, Vice-President 
Gore spoke at Vanderbilt University on the topic of ``global warming'' 
and stated:

          ``There is a small group that likes to spread dissension and 
        skepticism, just like the big tobacco companies spent huge 
        amounts of money telling tobacco smokers smoking is not bad for 
        you. . . . That's ridiculous and unethical.'' The Tennesseean 
        (June 26, 1997).

    On July 21, Interior Secretary Bruce Babbitt appeared on the Diane 
Rehm Show, and stated:

          ``[I]t's an unhappy fact that the oil companies and the coal 
        companies in the United States have joined in a conspiracy to 
        hire pseudo scientists to deny the facts, and then begin 
        raising political arguments that are essentially fraudulent, 
        that we can't do this without damaging the economy . . . [T]he 
        energy companies need to be called to account because what 
        they're doing is un-American in the most basic sense.''

    This type of extreme statement makes it more difficult for the 
American people to gain a better understanding of the issue and for the 
Senate to gain the type of information necessary for it to discharge 
its constitutional responsibility. Very plainly, efforts to suppress 
the free exchange of information, evidence, and opinion undermine 
efforts to formulate a responsible national policy on climate change. 
The passage of Senate Resolution 98 by a vote of 95-0 will hopefully 
dissuade the Administration from continuing to pursue its ``rush to 
judgment, cutoff debate'' strategy. It is now clear that an open policy 
dialog--which necessarily includes an honest evaluation of the science 
of climate change--will occur and the Senate will independently 
distinguish the science from the pseudo-science.


[[Page 268]]


    Question 2. Since you support ``appropriate action,'' I assume that 
you would prefer smart action to dumb action. By ``smart action'' I 
mean action that reduces emissions at lower cost than action that is 
costly.
    Well, the acid rain trading program under the 1990 Clean Air Act 
has proven itself to be a smart kind of action, since it is reducing 
emissions fast and cheaply, spurring innovation, and dramatically 
lowering the costs of technologies.
    I am told that a recent M.I.T. study has demonstrated this. It 
sounds to me like you are making an argument in favor of the ``cap-and-
trade'' approach, with joint implementation or trading with developing 
countries as a key component. That would address, in a smart way, all 
of the concerns for ``appropriate action'' that you have raised. Your 
thoughts?
    Answer. Your assumption that my use of the term ``appropriate 
action'' implies ``smart action [as opposed] to dumb action'' is 
correct. Let me clarify, however, that determining ``appropriate 
action'' is a two-step, sequential process:
    (1) identify and substantiate the problem you are trying to solve 
and what result or target is necessary to solve it; and
    (2) how to achieve that result or target most cost-effectively.
    The Administration has emphasized being ``smart'' solely with 
respect to the second step above, without being ``smart'' on the 
essential first step.\1\ Unfortunately, being ``dumb'' with respect to 
the essential first step renders the entire two-step process ``dumb''. 
Thus, joint implementation and emissions trading are options to be 
considered in the second step above. The GCC has long supported the 
concept of joint implementation, but questions the practicability and 
enforceability of an international ``cap and trade'' system for 
curtailing global greenhouse gas emissions. While ``cap and trade'' may 
seem like an attractive concept, a ``cap'' means rationing, which is a 
failed concept. However, the use of ``smart'', market-based tools to 
achieve a result that is not, in fact, yet warranted by the evidence, 
is not ``smart''. It is instead merely a ``smart'' way to address a 
dumb conclusion.
---------------------------------------------------------------------------
    \1\ Testimony of Dr. Janet Yellen before the Committee on 
Environment and Public Works, July 17, 1997, p. 6: ``[C]osts depend 
critically on how emission reduction policies are implemented. It boils 
down to this: if we do it dumb it could cost a lot, but if we do it 
smart it will cost much less . . .'' (emphasis added). The GCC is still 
curious as to what the ``it'' is, as well as the justification for 
``it.'' [Step One Above].
---------------------------------------------------------------------------
    Your reference to the acid rain trading program of the Clean Air 
Act of 1990 is a useful one because it highlights the advantages of 
market mechanisms, the importance of serendipity, and the significant 
differences between the SO2 trading program and an 
international tradable permits program for greenhouse gas emissions. 
First, the acid rain trading program did allow companies flexibility in 
meeting a performance goal, and that allowed cost savings compared to 
what would have occurred with a one-size-fits-all command and control 
program. Second, while the current market value of an SO2 
emission permit is below levels projected while the program was being 
devised, to a large extent this is the result of serendipity. For 
example, energy prices are lower than projected and deregulation in the 
transportation sector has allowed much greater use of low-sulfur coal. 
Third, there are immense differences between the United States 
SO2 trading program and a program required for international 
tradable permits in greenhouse gases. The SO2 program 
involved one gas, in one industry, in one country and the application 
of readily available technology. An international tradable permit 
program for greenhouse gases would involve multiple gases, multiple 
nations, plus every industry and every citizen in every country. 
Furthermore, short of suppressing energy use there is no practical 
technology for significantly reducing or sequestering CO2 
emissions. Obviously, an international tradable permits system would 
require a tremendous, unprecedented global monitoring and transactional 
infrastructure to ensure its integrity and enforceability. Whether 
political systems based upon national sovereignty could accommodate 
such an infrastructure is a serious question. Many, such as Dr. Richard 
Cooper (Harvard University) and Dr. Thomas Schelling (University of 
Maryland) have carefully considered these issues and concluded that 
``cap and trade'' as well as joint implementation programs are simply 
not practical in any real sense. Cap and trade programs require 
allocation of the cap, and there is no generally accepted basis for 
such allocation. And to be cost-effective, both programs require major 
commitments by developing nations--commitments that are clearly not 
forthcoming. For these reasons, it is facile to suggest an easy 
parallel between the SO2 trading permits program in the 
United States and a global emissions trading scheme for GHGs.

    Question 3. You state in your testimony that, curbs on greenhouse 
gas emissions, ``would be brutally expensive in terms of lost income, 
lost jobs and lost U.S. competitiveness on world markets.'' Curbs of 
any kind?

[[Page 269]]

    Answer. The GCC's consistent promotion of ``no'' or ``low'' regrets 
measures to constrain the growth in greenhouse gas emissions obviously 
implies that there are opportunities to reduce emissions that would be 
benign economically and perhaps even beneficial. Many such 
opportunities have been embraced by industry to support voluntary 
efforts to achieve the ``aim'' of returning 2000 greenhouse gas 
emissions to 1990 levels. The U.S. Climate Action Report, released in 
May, reveals that over 5,000 private sector organizations participate 
in voluntary Federal climate mitigation programs, which are projected 
to reduce emissions by an estimated 75 million metric tons by the year 
2000; consumer and business savings are projected at $10 billion by 
2000 and $50 billion by 2010. Importantly, the Report documents that 94 
percent of the U.S. primary aluminum production capacity has joined the 
Voluntary Aluminum Industrial Partnership; electric utilities 
representing 69 percent of 1990 electric generation and utility carbon 
emissions have signed the Climate Wise agreements; 2,300 companies now 
participate in the Green Lights program; and the Gas Research Institute 
has pledged $4 million of its annual budget to projects that reduce 
methane emissions. Widespread voluntary efforts such as these are an 
efficient, cost-effective way of speeding the adoption of economically 
viable energy efficient technologies. Such programs should help 
strengthen the already strong trend of increased U.S. energy 
efficiency.\2\ In fact, the Energy Information Administration's 1997 
reference case projection indicates annual decreases of 1 percent in 
energy consumption per dollar of GDP through 2015.
---------------------------------------------------------------------------
    \2\ Between 1973 and 1986, energy consumption per dollar of GDP 
declined 2.6 percent per year. Between 1986 and 1996, energy 
consumption per dollar of GDP declined 0.4 percent per year.
---------------------------------------------------------------------------
    However, your quotation from my full Statement regarding ``brutally 
expensive'' curbs on greenhouse gas emissions appears as point 3 in the 
introductory summary. My detailed discussion of such costs relates to 
the Administration's intimation of agreeing to a legally binding U.S. 
commitment to stabilize emissions at 1990 levels in the next 12 years, 
by 2010.\3\ In that regard all credible, independent economic analyses 
of the costs of dramatically curbing near term emissions--to 1990 
levels by 2010--indicate the same result: brutal expense to our economy 
and people. Studies by Charles River Associates, DRI/McGraw Hill, the 
U.S. Energy Information Administration and economists at our most 
prestigious universities indicate that energy taxes of $125 to $200 per 
metric ton of carbon would be needed to suppress demand sufficiently to 
return emissions to 1990 levels by 2010 ($200 per ton is equivalent to 
an increase in the excise tax on gasoline of about 60 cents per 
gallon). A conservative estimate of the annual impact of a tax this 
size includes the following losses:
---------------------------------------------------------------------------
    \3\ Dr. Everett M. Ehrlich, who recently resigned his position as 
Undersecretary of Commerce for Economic Affairs, wrote in the 
Washington Post on June 15:

      L  ``. . . the economic literature suggests that we could roll 
back our CO2 emissions to their 1990 levels by 2010 for the 
equivalent of a 25 cent gas tax. It's not free, but it's not the end of 
the world.''

    In addition, on July 15 the Administration released its May 30 
draft interagency study on the economic impacts of stabilizing 
CO2 emissions by 2010 at 1990 levels.
---------------------------------------------------------------------------
     $100 billion to $275 billion in GDP.
     200,000 to 500,000 U.S. jobs.
     $65 billion to $100 billion in fixed business investment.
     $50 billion to $110 billion in consumer purchases.
    On July 11, the Administration finally released a study by the 
Department of Energy (contracted through the Argonne National 
Laboratory). The study focused on ``the potential effects on energy-
intensive industries in the United States of alternative scenarios for 
changes in world patterns of industrial energy prices that might result 
from new climate commitments.'' The study results described the impacts 
on six industries (steel, cement, aluminum, paper, chemicals, and 
petroleum refining) as ``significantly adverse'' to ``devastating,'' 
producing little, if any, environmental benefit.
    In her testimony before the committee, Dr. Janet Yellen, Chair, 
Council of Economic Advisers, reported that the Administration's 
economic modeling efforts to predict the impacts of climate change 
policy were ``futile.'' She stated that the Administration was left 
only with ``a set of parameters and relationships that influence 
estimates of the impacts.'' It is, however, noteworthy that the May 30 
Draft Report of the Interagency Analytical Team revealed that ``[t]he 
starting point scenario [assuming stabilized emissions at 1990 levels 
by 2010] would raise the implicit price of carbon in the economy by 
about $100 per ton of carbon.'' The Report then described that ``[a] 
permit price of $100 per ton is the equivalent of a price increase of 
26 cents per gallon of refined petroleum product, $1.49 per thousand 
cubic feet of natural

[[Page 270]]

gas, $52.52 per ton of coal, and 2 cents per kilowatt hour of 
electricity produced.'' Draft Report, Page 8.
    This important effort, before it was abandoned by the 
Administration, was tending to confirm the severely negative economic 
costs of a policy to drastically curtail emissions in the near term. In 
fact, Dr. Yellen emphasized in her testimony that ``[t]he speed at 
which emissions reductions are required can have large effects on the 
estimated costs. It is important to allow sufficient lead-time for 
orderly investment in new equipment and technology.'' This conclusion 
supports arguments made by the GCC in its July 1995 paper by David 
Montgomery, Charles River Associates, ``Toward an Economically Rational 
Response to the Berlin Mandate.'' Others, such as Wigley, Richels and 
Edmonds in their January 18, 1996 article in Nature come to similar 
conclusions, namely that ``[u]nanticipated changes will be costly. Time 
is therefore needed to reoptimize the capital stock.'' The GCC agrees 
and re-emphasizes that a 12-year period to return emissions to 1990 
levels--requiring an approximate 25 percent reduction in projected 
fossil fuel use--would be brutally expensive. Even using Dr. Yellen's 
``remaining tools,'' we are unaware of any ``parameters'' or 
``relationships''--or existing technology for that matter--which avoids 
that result.

    Question 4. Do you base your impacts assertions on the recent 
economic modeling done by the Charles River and Associates group? (If 
yes,) please talk some about the underlying assumptions in the Charles 
River Associate model, because a model as you know only suggests 
potential impacts. Does that particular model, for example, assume that 
the economy suffers persistent transitional inefficiencies (from 
actions to reduce emissions)?
    Does it assume that there will be any energy source substitution? 
Does it assume inclusion of joint implementation or emissions trading, 
or any other flexibility instruments? Does it assume any benefits from 
averting climate change or other pollution damages? Is it reasonable to 
assume any of these at some level?
    Answer. My statements regarding the economic impacts of policies to 
drastically limit greenhouse gas emissions and U.S. energy use are 
based on a broad spectrum of economic modeling efforts. In addition to 
work done by Charles River Associates, work by other groups such as 
MIT, the Energy Modeling Forum, DRI, and ABARE (Australian Bureau of 
Agricultural and Resource Economics) are also relevant and provide 
useful insights into the large impacts that should be expected from the 
targets and timetables proposed in the Berlin Mandate negotiations.
    The question states that, ``a model as you know only suggests 
potential impacts.'' This applies to models that project climate and 
the impacts of a change in climate, as well as to economic models that 
focus more on the impacts of climate policy. There is an apparent 
inconsistency in the Administration's confidence in modeling: why are 
economic models deemed ``futile'' in terms of projecting impacts in the 
next 20 years, while climate models predicting changes in the next 100 
years are unquestioned? Thus, results of climate and climate impact 
models that are used to promote climate policies of the type being 
negotiated concern suggested potential impacts that might occur 100 or 
more years into the future. While some economic models cover a similar 
time horizon, most of the policy impact analysis done by the groups 
mentioned above focus on the next 20 or so years and evaluate the 
relatively near-term economic impact of proposed climate policies. It 
is very hard to deny that climate and impact models 100 years out are, 
by orders of magnitude, more unreliable than the economic models 10 or 
20 years out. This is particularly true when you realize that the 
climate and impact models, for 100 years out, require inputs from 
economic models to even start their analysis. Assumptions regarding 
population, economic activity, technology, and lifestyles are all 
required before estimates of greenhouse gas emissions are generated for 
the next 100 years. Without that information, the climate models either 
have no emissions baseline to work with or are randomly picking 
scenarios that may have no relevance to the real world.
    Regarding the CRA model, it assumes that market mechanisms would be 
used to create incentives for reducing energy use, thereby reducing 
carbon emissions, below baseline projected levels. These market 
mechanisms can be viewed either as carbon taxes or auctioned tradable 
permits, which are viewed by economists as being the least-cost way of 
reducing carbon emissions. Therefore, the model does not assume that 
the economy suffers persistent transitional inefficiencies specifically 
from actions to reduce emissions.
    Transitional inefficiencies are more likely to be induced by the 
use of various command and control policies. In fact, since the model 
is of the type referred to as general equilibrium models, it arguably 
omits some transitional costs to the economy of moving to a lower-
carbon trajectory, and therefore its impact estimates may be on the low 
side.

[[Page 271]]

    The CRA model does allow for substitution among different fossil 
fuels, as well as to non-carbon fuels. This substitution occurs 
depending on the relative prices of the fuels, including carbon taxes 
or tradable permit market values that raise the cost of carbon 
generating fuels. The CRA model, following the general structure of the 
Framework Convention on Climate Change as well as the Berlin Mandate 
language, assumes that each OECD country individually meets a proposed 
emission target.
    The model is designed to help identify the economic costs of 
alternative emission reduction targets and timetables and does not 
attempt to address any possible benefits of lower carbon emission 
trajectories. While all policies should at least be evaluated with 
respect to likely costs and benefits, one difficulty with the climate 
change issue is that there are large near-term economic costs to 
reducing emissions substantially over the next two decades while it is 
unlikely that there would be any measurable benefits from reduced 
carbon emissions during that same timeframe, especially if developing 
countries are excluded from emission reduction requirements.
    Returning to ``transitional inefficiencies,'' there is a recent 
tendency to mischar- acterize how economic models address the issue--
are consumers efficient in their energy use and how efficient are they 
in changing their energy use. The recent World Resources Institute 
study, The Costs of Climate Protection: A Guide for the Perplexed is a 
prime example. For example, one of the six criteria the WRI study used 
to characterize model results was ``inefficient economic responses.'' 
More specifically, it asked: ``Is the model of the CGE type, which 
assumes that the economy adjusts efficiently in the long-run, or it is 
a macro model that assumes that the economy suffers persistent 
transitional inefficiencies?'' This is a clear mischar- acterization of 
the difference between model types, especially when the CGE results are 
labeled ``optimistic'' and the macromodel results are labeled 
``pessimistic.'' In reality the two types of models address different 
questions: the former asks what are the economic consequences of 
different equilibrium conditions (one with large carbon taxes and one 
without), and the latter asks what sort of costs arise during a policy-
induced transition from one equilibrium to another. The difference 
between the models is sort of like moving from Washington, DC. to 
either Seattle or San Diego. The CGE model asks what life is like after 
you moved, while the macromodel focuses more on how you get to either 
location. It's like a vacation--getting there is at least half the fun, 
but if you cannot afford the travel portion, you do not take the trip.
    Question 5. You talk about actions being considered by negotiators 
that would require us to ``suppress energy use by at least 25 percent 
in little over a decade.'' What actions or proposals, now being 
seriously considered by international negotiators, would ``require'' 
this sort of response?
    Answer. With less than 4 months before the Kyoto Conference of the 
Parties, United States negotiators still have not revealed to Congress 
or the American people the specific targets and timetables they intend 
to endorse. Apparently, the U.S. position will not be settled until 
late in the Fall. However, U.S. Government officials have consistently 
discussed and analyzed a commitment to return to 1990 emissions levels 
by 2010.\4\ This past Spring, the European Union (EU) proposed a 15 
percent reduction in 1990 emissions by 2010.
---------------------------------------------------------------------------
    \4\ See footnote 3 regarding statements by Dr. Ehrlich and the May 
30 Draft Interagency Study.
---------------------------------------------------------------------------
    Comparing such goals with official U.S. Government projections of 
emissions clearly indicates that very large emissions reductions by the 
United States would be required. For example, Table A9 of the Energy 
Information Administration's International Energy Outlook 1997 reports 
that U.S. carbon emissions for 1990 were 1.34 billion metric tons. The 
reference case projection for 2010 is 1.72 billion metric tons. Thus, 
to limit emissions to 1990 levels by 2010 would require a 22 percent 
reduction in emissions from the baseline. To limit emissions to 15 
percent below the 1990 level by 2010 would require a 34 percent 
reduction in emissions from the baseline. As a practical matter, it is 
difficult to comprehend how emissions could be reduced by \1/3\ off the 
baseline in little over a decade. Only very large carbon taxes, very 
high tradable permit prices, and/or an exceptionally long list of 
highly onerous command and control programs could suppress energy use 
sufficiently to achieve such emission reductions within that timeframe.
    Question 6. If a treaty were signed that called for . . . let's 
say, a return to 1990 emissions levels by the year 2015: is the only 
way to get to that goal (that your group would support) a requirement 
that all countries, regardless of poverty level or current emissions 
contribution, take identical action at the same time? That is, should 
Togo, for example, be required to take the same actions as the United 
States and other OECD nations, and China, at the same time?

[[Page 272]]

    Answer. Any impact GHGs have on climate is independent of whether 
they come from developed or developing countries, and developing 
countries' emissions are projected to grow rapidly in the next century, 
outstripping those of the developed world by 2015, according to the 
Energy Information Administration. The purposes of the ongoing 
negotiations to amend the Framework Convention on Climate Change 
(``FCCC'') are ostensibly to limit emissions, thereby limiting the 
potential of climate change. The Berlin Mandate of 1995, which exempts 
the developing world from assuming any treaty obligations, guarantees 
that total global GHG emissions will increase in the next century. As 
of now, therefore, the Berlin Mandate guarantees failure in addressing 
the objective of the FCCC. In addition, the flight of capital, jobs, 
and economic strength from participating developed countries to the 
exempted developing world would be an inevitable consequence of the 
Berlin Mandate.
    In light of those realities, the relative burden of nations in 
addressing a global environmental risk is a daunting challenge that was 
recognized in the Berlin Mandate. Economic equity must be an essential 
part of any treaty negotiation, in spite of the difficulty in pursuing 
it. Many Senators supporting the unanimous passage of Senate Resolution 
98 expressed the view that the Berlin Mandate, to which the 
Administration agreed in 1995, was a ``fundamental error.'' President 
Clinton himself stated on August 4: ``I believe the [Kyoto] agreement 
has to be a global one. I think all nations, developed and developing, 
should be a part of this.'' On this point, the GCC agrees with the 
President and the 95 U.S. Senators who supported Senate Resolution 98.

    Question 7. You State that unnecessarily curbing carbon emissions 
will mean fewer jobs and less income. Does this prediction include all 
the new jobs that will be created by the shift to new technologies and 
industries?
    Answer. Absent any identification of the ``new technologies'' that 
will enable, at the least, a 22 percent reduction in our use of fossil 
fuels within 12 years, it would be highly speculative to assume related 
``new industries'' and ``jobs.'' If technology does not emerge to 
accommodate an international commitment to reduce our use of fossil 
fuels by at least 22 percent, then painful policies to ration that use 
would be necessary. Prudent policymaking should prompt the question: 
What is the risk that a technology will not emerge which will enable a 
22 percent reduction in our fossil fuel use in 12 years? Economist 
Robert Samuelson wrote in the July 9 Washington Post:
          ``Without a breakthrough in alternative energy--nuclear, 
        solar, something--no one knows how to lower emissions 
        adequately without ultimately crushing the world economy.''

[[Page 273]]



[[Page 274]]



[[Page 275]]



[[Page 276]]