[Senate Hearing 107-153]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 107-153

 S. 1008--THE CLIMATE CHANGE STRATEGY AND TECHNOLOGY INNOVATION ACT OF 
                                  2001

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

                                HEARING

                               before the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                                   on

                                S. 1008

  TO AMEND THE ENERGY POLICY ACT OF 1992 TO DEVELOP THE UNITED STATES 
  CLIMATE CHANGE RESPONSE STRATEGY WITH THE GOAL OF STABILIZATION OF 
 GREENHOUSE GAS CONCENTRATIONS IN THE ATMOSPHERE AT A LEVEL THAT WOULD 
 PREVENT DANGEROUS ANTHROPOGENIC INTERFERENCE WITH THE CLIMATE SYSTEM, 
 WHILE MINIMIZING ADVERSE SHORT-TERM AND LONG-TERM ECONOMIC AND SOCIAL 
 IMPACTS, ALIGNING THE STRATEGY WITH UNITED STATES ENERGY POLICY, AND 
    PROMOTING A SOUND NATIONAL ENVIRONMENTAL POLICY, TO ESTABLISH A 
  RESEARCH AND DEVELOPMENT PROGRAM THAT FOCUSES ON BOLD TECHNOLOGICAL 
    BREAKTHROUGHS THAT MAKE SIGNIFICANT PROGRESS TOWARD THE GOAL OF 
   STABILIZATION OF GREENHOUSES GAS CONCENTRATIONS, TO ESTABLISH THE 
NATIONAL OFFICE OF CLIMATE CHANGE RESPONSE WITHIN THE EXECUTIVE OFFICE 
                OF THE PRESIDENT, AND FOR OTHER PURPOSES

                               __________

                             JULY 18, 2001

                               __________

      Printed for the use of the Committee on Governmental Affairs


                                _______

                  U.S. GOVERNMENT PRINTING OFFICE
75-474                     WASHINGTON : 2002

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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois          SUSAN M. COLLINS, Maine
ROBERT G. TORRICELLI, New Jersey     GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia                 PETE V. DOMENICI, New Mexico
THOMAS R. CARPER, Delaware           THAD COCHRAN, Mississippi
JEAN CARNAHAN, Missouri              ROBERT F. BENNETT, Utah
MARK DAYTON, Minnesota               JIM BUNNING, Kentucky
           Joyce A. Rechtschaffen, Staff Director and Counsel
                       Holly A. Idelson, Counsel
      Timothy H. Profeta, Legislative Counsel to Senator Lieberman
         Hannah S. Sistare, Minority Staff Director and Counsel
                  Paul R. Noe, Minority Senior Counsel
                     Darla D. Cassell, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Thompson.............................................     2
    Senator Stevens..............................................     7
    Senator Voinovich............................................    21
    Senator Collins..............................................    24
    Senator Bennett..............................................    26

                               WITNESSES
                        Wednesday, July 18, 2001

Hon. Robert C. Byrd, a U.S. Senator from the State of West 
  Virginia.......................................................     4
James E. Hansen, Ph.D., Head, NASA Goddard Institute for Space 
  Studies........................................................     9
Thomas R. Karl, Director, National Climatic Data Center, National 
  Environmental Satellite Data and Information Services, National 
  Oceanic and Atmospheric Administration.........................    11
Eileen Claussen, President, Pew Center on Global Climate Change..    30
James A. Edmonds, Ph.D., Senior Staff Scientist, Pacific 
  Northwest National Laboratory, Battelle Memorial Institute.....    32
Dale E. Heydlauff, Senior Vice President-Environmental Affairs, 
  American Electric Power Company................................    34
Jonathan Lash, President, World Resources Institute..............    36
Margo Thorning, Ph.D., Senior Vice President and Chief Economist, 
  American Council for Capital Formation.........................    38

                     Alphabetical List of Witnesses

Byrd, Hon. Robert C.:
    Testimony....................................................     4
Claussen, Eileen:
    Testimony....................................................    30
    Prepared statement with an attachment........................    75
Edmonds, James A.:
    Testimony....................................................    32
    Prepared statement...........................................    79
Hansen, James E.:
    Testimony....................................................     9
    Prepared statement with attachments..........................    51
Heydlauff, Dale E.:
    Testimony....................................................    34
    Prepared statement with an attachment........................    84
Karl, Thomas R.:
    Testimony....................................................    11
    Prepared statement with attachments..........................    68
Lash, Jonathan:
    Testimony....................................................    36
    Prepared statement...........................................    91
Thorning, Margo:
    Testimony....................................................    38
    Prepared statement...........................................    98

                                Appendix

Statement entitled ``The Future Course of the International 
  Climate Change Negotiations,'' printed in the Congressional 
  Record on May 4, 2001, submitted by Senator Byrd...............   112
Statement entitled ``Climate Change Strategy and Technology 
  Innovation Act of 2001,'' printed in the Congressional Record 
  on June 8, 2001, submitted by Senator Byrd.....................   114
Article from The Wall Street Journal, June 11, 2001, entitled 
  ``Scientists' Report Doesn't Support the Kyoto Treaty,'' by 
  Richard S. Lindzen.............................................   118
Prepared testimony of Richard S. Lindzen before the Senate 
  Environment and Public Works Committee on May 2, 2001..........   120
Prepared statement of John P. Holdren, Professor, Kennedy School 
  of Government and the Department of Earth and Planetary 
  Sciences, Harvard University...................................   125
Prepared statement of David G. Hawkins, Director, NRDC Climate 
  Center, Natural Resources Defense Council......................   134
Copy of S. 1008..................................................   144

 
 S. 1008--THE CLIMATE CHANGE STRATEGY AND TECHNOLOGY INNOVATION ACT OF 
                                  2001

                              ----------                              


                        WEDNESDAY, JULY 18, 2001

                                       U.S. Senate,
                         Committee on Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:30 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Joseph 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, Thompson, Stevens, Voinovich, 
Collins, and Bennett.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. The hearing will come to order. I 
welcome our witnesses and our guests this morning. I would like 
to thank them for joining us to present testimony regarding the 
Climate Change Strategy and Technology Innovation Act of 2001, 
which has been introduced by our colleagues, Senators Byrd and 
Stevens. In the long term, I think there is no greater 
environmental challenge facing the United States and the world 
than global climate change. It is also a most complicated 
international matter, to devise an appropriate response.
    Two recent scientific reports, one by the United Nations 
and the second by the National Academy of Sciences, confirmed 
some of the worst fears about climate change. These reports 
conclude that the Earth is warming; that the warming is caused 
by human activities; and that, unless we reverse this trend, we 
will face dire consequences, including rising sea levels, 
widespread drought, the spread of diseases associated with 
warmer weather, and an increase in extreme weather events.
    Most everyone agrees that there is a problem and on the 
need for a strong response, except frankly some here in the 
United States. One need only look to Genoa and Bonn, where 
thousands of protesters are gathering to demonstrate against 
President Bush's decision to walk away from the Kyoto Protocol, 
to appreciate the depth of conviction associated with this 
problem of global warming and the extent to which the United 
States has now separated itself from most of the rest of the 
world on this subject.
    Personally, I feel that we need an international agreement 
with binding targets and timetables for reducing greenhouse gas 
emissions. I say that because in the aftermath of the Rio 
Treaty, which the Senate ratified on October 15, 1992, which 
set out a series of targets and timetables that were meant to 
be voluntarily complied with, but were not, that the answer, I 
believe, is that we need binding targets and timetables.
    I know that some of my colleagues feel otherwise, but the 
truth is that we are not here today to debate those questions, 
although I would guess that we will hear some of the differing 
points of view on them. That is because our two colleagues, 
Senators Byrd and Stevens, have, I think, put together a 
legislative proposal that creates common ground that all of us 
can occupy and from which we can move forward together. 
Achieving a bipartisan consensus on this legislation can, I 
believe, be an historic turning point in the United States' 
response to global climate change.
    The legislation Senators Byrd and Stevens propose will 
create a focused, comprehensive effort within the Executive 
Branch that will provide the leadership and creative work that 
the problem of global warming requires. The bill will establish 
a new National Office of Climate Change Response in the White 
House, comparable in some ways to the current Office of 
National Drug Control Policy, to develop a peer-reviewed 
strategy to stabilize the levels of greenhouse gases in our 
atmosphere, in order to prevent dangerous disruption of the 
climate system.
    That is a goal that we have all agreed to in the 
aforementioned Rio Treaty on climate change, which again the 
Senate ratified in October 1992. This bill will also create the 
infrastructure needed to develop the innovative technologies 
that will be necessary to address global warming and it will 
authorize funding for those efforts. With this bill, research 
and development activities on greenhouse gas mitigation would 
have a home centered in the Department of Energy from which 
they could be aggressively pursued, and in crafting a climate 
change strategy, the office within the White House would be 
instructed by this proposal to consider four key elements: 
Emissions mitigation; technology development; adaptation needs; 
and further scientific research.
    As Senator Byrd has said, this bill is meant to complement, 
not replace, other greenhouse gas mitigation measures by 
creating a process by which we receive expert evaluation of the 
challenge we face and fund research work to meet it. This 
legislation, I think, will become the tree from which other 
climate change measures will branch. In the end, I believe our 
shared responsibility is clear. We have got to take action and 
take it soon to deal with this problem that will affect our 
children and grandchildren and theirs, more than it will 
directly affect us.
    I would close by saying that in their long and 
distinguished careers in the Senate, Senators Robert C. Byrd 
and Ted Stevens have not only made history, they have shown 
they understand history and the responsibility for leadership 
that history places on those of us who are privileged to serve 
here. In this bipartisan breakthrough proposal on global 
climate change, they have once again shown the rest of us a way 
to move forward together. For that, I thank them.
    Senator Thompson.

             OPENING STATEMENT OF SENATOR THOMPSON

    Senator Thompson. Thank you, Mr. Chairman, for holding this 
hearing on legislation pending before the Committee on the 
important issue of climate change. The risk from human-induced 
climate change is a risk that we should responsibly try to 
manage. When contrasted against the Kyoto protocol, S. 1008 
offers a potential for a reasonable way forward, I believe. S. 
1008 would require the development of a national climate change 
strategy and authorize new funding for the development of 
breakthrough energies technology needed to reduce the risk of 
climate change.\1\
---------------------------------------------------------------------------
    \1\ Copy of S. 1008 appears in the Appendix on page 144.
---------------------------------------------------------------------------
    We are going to need these technologies if we want to meet 
the objective of the U.N. Framework Convention on Climate 
Change, which the United States has ratified. The objective was 
the long-term stabilization of atmospheric greenhouse gas 
concentrations in the future, and to meet this, we are going to 
have to develop fundamentally new ways of producing and using 
energy that give us the energy we need without the emissions 
that we do not want.
    But reducing CO2 emissions is not as simple as 
putting a scrubber on a smokestack. We are going to need new 
technologies, and we must seek a global solution, one that 
involves all nations of the world and not just the developed 
ones. These are some of the reasons why I applaud the 
President's rejection of the Kyoto Protocol. I also support the 
President's effort to define the new way forward, both 
domestically and internationally.
    The flawed Kyoto Protocol would place unfair, expensive 
limits on the United States. It could have rationed the amount 
of energy the United States could have used, even though energy 
is key to American prosperity. It could have caused 
significantly higher energy costs. It could have significantly 
reduced the rate of economic growth, affecting millions of 
jobs, eliminating the surplus and threatening American global 
competitiveness. Some of our biggest economic rivals would be 
exempt from the emission limits.
    It appears that a new approach to managing the risk of 
climate change is needed, and the President is providing it. 
The President's plan will focus on managing the risk of climate 
change using American technology, ingenuity and innovation. It 
will involve quantifying and understanding the risk of climate 
change through improved climate observations and models. It 
will involve developing the tools we will need to reduce the 
future risk of climate change, advanced energy technologies. 
Such useful concepts are reflected in S. 1008. I also 
understand that several of my colleagues, including Senators 
Murkowski, Craig and Hagel, may soon introduce legislation that 
could make positive additions to S. 1008. There is a great deal 
of controversy surrounding the politics and science of global 
climate change. While I am concerned about spending such large 
sums of money in creating new bureaucracies, there may be broad 
support for the notion that we will need significant investment 
in R&D to be prepared to address the challenge of climate 
change.
    There is significant disagreement on other policy options, 
like mandatory caps on emissions, and as the National Academy 
recently pointed out, there are still significant uncertainties 
in our scientific understanding of climate change. But perhaps 
we can start by reducing the gaps in our scientific 
understanding to quantify the risk we face, and we can develop 
the energy technology tools we are going to need if we want to 
act dramatically to reduce the risk of future climate change.
    I look forward to hearing from our distinguished witnesses.
    Chairman Lieberman. Thanks very much, Senator Thompson. We 
have been following a procedure here where we have opening 
statements just from the Chair and the Ranking Member, so I am 
going to ask Senator Byrd to testify now. But then obviously, 
because Senator Stevens is a co-sponsor, I will ask him, if he 
wishes, after you conclude, to speak.
    Senator Byrd, we are honored to have you here and look 
forward to your testimony.

TESTIMONY OF HON. ROBERT C. BYRD, A U.S. SENATOR FROM THE STATE 
                        OF WEST VIRGINIA

    Senator Byrd. Thank you, Mr. Chairman, Senator Thompson, 
Senator Stevens, Senator Voinovich, Senator Collins, other 
Members of the Committee. I thank you very much for inviting me 
to speak on behalf of S. 1008, the Climate Change Strategy and 
Technology Innovation Act of 2001. I thank you for holding this 
hearing on legislation that Senator Stevens and I have 
introduced and which we believe incorporates the interests of a 
wide range of members on both sides of the aisle.
    I have spoken twice in recent months on the Senate floor 
about the issue of global climate change. My desire to discuss 
this important issue derives not only from my sense of personal 
concern, but also from my optimistic belief that we can meet 
the climate change challenge if we are willing to make a 
commitment to do so. It is my position that all nations, 
industrialized and developing countries alike, must begin to 
honestly address the multifaceted and very complex global 
climate change problem.
    At the same time, I believe that our Nation is particularly 
well-positioned with the talent, the wisdom, the drive, in 
leading efforts to address the problem that is before us. It is 
for these reasons that my friend, Senator Stevens, and I 
introduced the legislation that is under consideration before 
this Committee today. The Byrd-Stevens climate change action 
plan recognizes the awesome problem posed by climate change. It 
puts into place a comprehensive framework, as well as a 
research and development effort to guide U.S. efforts far into 
the future.
    This legislation authorizes a major new infusion of funding 
for the research and development efforts to help create and 
deploy the next generation of innovative technologies that will 
be needed to address the climate change challenge in the coming 
decades. S. 1008 establishes a regime of responsibility and 
accountability in the Federal sector for the development of a 
national climate change response strategy.
    That strategy, Mr. Chairman, calls for a new framework to 
deal with a comprehensive climate change approach. To implement 
this strategy, this legislation provides for the creation of an 
administrative structure within the Federal Government, 
including an office in the White House to coordinate and 
implement this strategy. S. 1008 also creates a new office in 
the Department of Energy that will work on long-term research 
and development of a type that is not currently pursued in more 
conventional research and development programs today.
    The bill creates an independent review board that will 
report to Congress to ensure that these goals are achieved. 
Under S. 1008, we can begin to take action on climate change 
through a comprehensive and aggressive approach. It is a 
bipartisan initiative that is intended to supplement, rather 
than replace, other complementary proposals to deal with 
climate change. This bill is technology-neutral and does not 
carve out special benefits for any one energy resource or 
technology.
    We must put a portfolio of options on the table if we are 
to have any hope of solving this dilemma. This legislation 
provides for the broad framework necessary to address the 
climate change challenge. It reaffirms the goal of stabilizing 
atmospheric greenhouse gas concentration. It leaves the 
technology decisions to energy experts and the marketplace, and 
it recognizes the vital need to support public-private 
partnerships in developing these technologies.
    Senators we have an opportunity before us that we should 
not let slip away. It is not just an opportunity. It is also a 
very heavy responsibility. As this Senate begins to address our 
Nation's many energy and environmental concerns, climate change 
legislation must be part of that equation, and the Byrd-Stevens 
climate change action plan can help to chart that course. 
Addressing global climate change takes clear-headed and strong 
leadership. It requires extraordinary leadership.
    While our current menu of climate change policies and 
programs is an important first step, this approach only pays 
lip service to the awesome challenge that we face. We must go 
further than just making small incremental improvements in our 
existing research and development programs. It is a huge 
challenge. I hope that this Congress and this administration 
are willing to step up to the plate. Rarely has mankind been 
confronted with such an undertaking, the need to improve the 
energy systems that power our economy
    This is the greatest Nation in the world when the issue is 
one of applying our talents to push beyond the next step, and 
instead to visualize, conceptualize and then to achieve major 
leaps forward. We have put a man on the Moon and brought him 
back to Earth. We have helped to eradicate insidious diseases 
that have ravaged the peoples of the Earth. Our Nation is a 
world leader in medical and telecommunications technologies. We 
should also be a leader when it comes to revolutionizing our 
energy technologies. Such a commitment would be important for 
our economy, our energy security, and the global environment 
overall.
    But I must ask how long are we going to wait to develop 
these technologies? This is a huge opportunity for our Nation, 
but our efforts will only be rewarded if we can make a 
concerted commitment and dedicate ourselves to the task ahead, 
and that will not be easy. Make no mistake about it, global 
climate change is a reality. There are some who may have 
misinterpreted my stance on this issue, based on S. Res. 98 of 
July 1997, which I co-authored with Senator Hagel. That 
resolution, which was approved by a 95-0 vote, said that the 
Senate should not give its consent to any future binding 
international climate change treaty which failed to include two 
important provisions.
    That resolution simply stated that developing nations, 
especially those largest emitters, must also be included in any 
treaty and that such a treaty must not result in serious harm 
to the U.S. economy. In other words, we needed to proceed with 
our eyes open and we asked the administration--the then-
administration--to provide to the Congress the estimates of 
cost of the treaty, cost to the various industries in this 
country, the automobile industry, the mining industry and so 
on. Those estimates have not yet been provided.
    I still believe that these two provisions are vitally 
important components of any future climate change treaty, but I 
do not believe that this resolution should be used as an excuse 
for the United States to abandon its shared responsibility to 
help find a solution to the global climate change dilemma. At 
the same time, we should not back away from efforts to bring 
other nations along. The United States will never be successful 
in addressing climate change alone.
    We are all in the same boat, and what comes around goes 
around. The pollution that begins with China and Indonesia and 
Mexico, Brazil, and other developing countries, comes around to 
the United States and to Great Britain and to the European 
countries. It is a global problem that requires a global 
solution. It is critical that nations such as those I have 
mentioned, China, India, Mexico, Brazil and other developing 
nations, adopt a cleaner, more substantial development path 
that promotes economic growth while also reducing their 
pollution and greenhouse gas emissions.
    In the Senate's fiscal year 2001 energy and water 
appropriations bill, I inserted language that created an 
interagency task force to promote the department of U.S. clean-
energy technologies abroad. Such an initiative is complementary 
to the efforts proposed in S. 1008. The clean-energy technology 
exports initiative is now underway and will help foreign 
nations to deploy a range of clean-energy technologies that 
have been developed in our laboratories.
    These technologies are hugely marketable. Many of them have 
resulted from our clean-coal technology, which I initiated in 
1985, with $750 million committed to the task. It has been an 
immensely successful program. The private sector has come 
forward with more than it was required. It was required to come 
forward with 50 percent of the cost. It has put two-thirds of 
the cost on the barrelhead and several technologies have gone 
forward and proved to be successful
    If nations like China continue to depend on coal and other 
fossil fuels to grow their economies into the future, it is 
incumbent upon the United States to accelerate the development, 
demonstration and deployment of clean coal and other clean-
energy technologies that will be critical to meeting all 
nations' energy needs, while also providing for a cleaner 
environment. I believe that S. 1008 maps a responsible and 
realistic course. That road may be bumpy and I am sure that 
there will be disagreements along the way, but it is a journey 
that we have to take. We owe it to future generations.
    S. 1008, if adopted and signed by the President, will 
commit the United States to a serious undertaking, but one that 
should no longer be ignored. If we are to have any hope of 
solving one of the world's and one of humanity's greatest 
challenges, we must begin now. Mr. Chairman, I again thank you 
for holding this hearing. I again thank my colleague, Senator 
Stevens, for his vision, his leadership, for his cooperation, 
for his joining in the promotion of this legislation. I look 
forward to working with you, Senator Lieberman, and with you, 
Senator Thompson, Senator Stevens and the other Members of this 
Committee on this important and timely legislation. It is not a 
moment too soon.
    I ask unanimous consent that my May 4, 2001 and June 8, 
2001 climate change statements printed in the Congressional 
Record be made a part of the record.\1\
---------------------------------------------------------------------------
    \1\ The statements submitted by Senator Byrd from the Congressional 
Record on May 4, 2001 and June 8, 2001 appear in the Appendix on pages 
112 and 114 respectively.
---------------------------------------------------------------------------
    Chairman Lieberman. Without objection.
    Senator Byrd. That completes my statement, Mr. Chairman.
    Chairman Lieberman. Thank you very much, Senator Byrd, for 
a very thoughtful, very important statement, and one that has, 
I think, the appropriate sense of urgency.
    Senator Stevens.

              OPENING STATEMENT OF SENATOR STEVENS

    Senator Stevens. Well, thank you very much, Mr. Chairman, 
and I, too, join Senator Byrd in thanking you for holding this 
hearing, and I commend my good friend from West Virginia for 
his leadership in trying to establish a major research effort 
to reduce carbon emissions and deal with the whole subject, the 
myriad of subjects that are included in global climate change 
strategy. I thank you very much, Senator Byrd, for allowing me 
to join you on this, because it is a matter of great importance 
to me and my State, as you know.
    I think, Mr. Chairman, Senator Thompson, Members of the 
Committee, in days gone by, Senator Byrd and I might have just 
added this to an appropriations bill.
    Chairman Lieberman. We still were hoping that eventually 
you might do that. [Laughter.]
    Senator Stevens. The difference is that we know this is 
such a complex subject, one that needs congressional approval 
before we forge into this area. We want to make sure that you 
are all behind us before we try to put the taxpayers' money 
where our mouths have been. We need funds for this. I view this 
as being next to major medical research in terms of issues that 
this country faces, and I want to tell you I am particularly 
interested because of the last hearing I chaired, Mr. Chairman, 
as Chairman of the Appropriations Committee, was a field 
hearing in Fairbanks on the impacts of global climate change on 
the Arctic environment.
    I would welcome and urge you to think about bringing the 
whole Committee up to see what global climate change means. 
There is no question that the change has taken place more 
rapidly in the Arctic than anywhere else on the globe. Many of 
the witnesses at our hearing noted that climate activity stems 
from a number of factors, including human activity. I do not 
think we can assess it totally to human activity.
    The degree to which any particular phenomenon or activity 
contributes to climate change is not yet well-understood. 
Regardless of the cause, there has been a dramatic warming 
trend in the Arctic areas, as I said. Let me tell you, pack 
ice, which is the ice that insulates our coastal villages from 
winter storms, has shrunk 3 percent per year since 1970. 
Increased storm activity has caused significant beach erosion, 
which now has required us to consider ways to displace entire 
communities along the coastline of Alaska.
    The sea ice is thinner than it was 30 years ago, and the 
sea ice is the platform on which most of the reproductive 
activity of marine mammals takes place. It is back from the 
shore now. This is permanent ice that is thinning. As a matter 
of fact, I was told it was three inches thinner this year than 
last year. The Northwest Passage has been opened now for 3 
years. I remember so well, as a young Senator, when I went on 
the MANHATTAN and tried to accompany many people and see if we 
could use the Northwest Passage to transport Alaska's oil to 
the East Coast, rather than build a pipeline; and it failed, as 
you know, because of the ice.
    We spent days riding that ice breaker tanker, grinding 
three, four, five miles a day of ice. That is gone now. It is 
not there. The Northwest Passage is just one of the 
indications. I would invite you to come up and see our northern 
forests. Our northern forests are now farther north and further 
west, as the permafrost is melting, and the permafrost melting 
means a great deal to us. Half of the coal in the United States 
is in that area, of the permafrost of Alaska. Whether we will 
ever be required to use it, I do not know, but under current 
law, we would have to replace the contour of the land if we 
took the coal out. Of course, that is an impossibility.
    Now, the powers-that-be, the Good Lord, is melting that 
permafrost and the contour may not be the same in future years 
as it is now. It might be easier to get to the coal. But this 
legislation provides us a balanced approach to climate change 
and will help us deal with the issue of greenhouse gases and do 
so without harming the economy of the United States, and to 
increase the capability of Third World countries to improve 
their economy. By making necessary research and development 
efforts now, I think we can inspire a generation of 
technologies that will enhance America's chance to be the 
leader in dealing with global climate change.
    It will increase research and development funding, so we 
can better understand this global climate change. We can plan 
to develop the capabilities that technology will lead us to, 
and I think we will be able to react to global climate change 
in a very positive way if we follow the Senator's lead, and I 
am glad to be his partner in this effort. This bill will 
require, in my judgment, that we double the technology 
investment for research and development related to global 
climate change, just as we doubled the investment in health 
research in the last 5 years. This will lead us into a new era 
of funding for research in this area.
    I think there should be no misunderstanding about it, 
because I have joined Senator Byrd in making a commitment that 
this money will be made available to the research community, so 
we can better understand these changes and take whatever 
actions we can to offset them. It will create a process for the 
United States to take seriously this issue and to address it 
promptly. I thank you for holding the hearing, and again I 
repeat my invitation to you to come up and see what is 
happening. I was told in Fairbanks that while the world as a 
whole may have increased in temperature by about one degree, 
the Arctic has increased in temperature by seven degrees, and 
we took our committee to Antarctica to see if the same 
situation was developing down there.
    They have increased ice pack down there. They have 
increased problems down there, but they are not as much 
involved in global climate change as we are in the Arctic. The 
Arctic is the place to understand global climate change and I 
am proud, Senator, that you allowed me to join you in this 
effort, and pledge that we will fight this battle together. We 
need this information. We need to develop this technology as 
rapidly as possible.
    Thank you very much.
    Senator Byrd. Thank you, Mr. Chairman.
    Chairman Lieberman. Senator Stevens, thank you very much 
for that very compelling testimony, and particularly for the 
memorable reports from Alaska and the Arctic. I accept your 
invitation. I think Senator Thompson and I ought to figure out 
a way to see if we can bring the Committee exactly to the 
places you described. In a way, it may be that Alaska and the 
Arctic are the early warning system or, to use an old and worn 
expression, the canary in the coal mine, in the case of climate 
change. I thank you.
    Senator Byrd, thank you very much for your time. I know you 
have a busy schedule and I appreciate very much your being here 
today.
    Senator Stevens. Please excuse me, too. I have another----
    Chairman Lieberman. Oh, you have a busy schedule, too. It 
is always great, not only to have your leadership on a critical 
problem like this, but to know when we have your leadership, 
the prospects of funding such a bill are quite high. 
[Laughter.]
    Thank you. We will call the second panel: Dr. James Hansen, 
Head of NASA Goddard Institute for Space Studies; and Thomas 
Karl, Director of the National Climatic Data Center. Dr. 
Hansen, why don't you proceed? We have a clock going. Your full 
statement, which we appreciate, will be printed in the record 
in full, and I ask you to try to stay pretty much as close to 
the 5 minutes as you can. Then it is the tradition of the 
Committee now to give each Senator 10 minutes. So if any of my 
colleagues want to make opening statements, that hopefully will 
give them the opportunity to do that, as well.
    Dr. Hansen.

  TESTIMONY OF JAMES E. HANSEN,\1\ Ph.D., HEAD, NASA GODDARD 
                  INSTITUTE FOR SPACE STUDIES

    Mr. Hansen. Thank you, Senator Lieberman. I will talk about 
options for influencing future climate. The most popular 
prediction for future climate change is based on the business-
as-usual scenario, in which the annual increments of the 
forcing agents that drive climate change grow larger and larger 
every year. This scenario leads to a prediction of dramatic 
climate change, several degrees by the end of the century.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Hansen with attachments appears 
in the Appendix on page 51.
---------------------------------------------------------------------------
    It is a useful warning of what could happen if we let the 
growth of climate-forcing agents run wild. For the sake of 
contrast, my colleagues and I have defined an alternative 
scenario for climate change in the 21st Century. In this 
scenario, the growth rate of the forcing agents that drive 
climate change decelerates, such that global warming in the 
next 50 years is less than one degree and the stage is set for 
stabilizing atmospheric composition later in the century. How 
can we achieve this? What are the climate forcing agents?
    My chart,\1\ which is over here, but is also in your 
handout, shows the estimated climate forcing agents that exist 
today. Red is used for forces that cause warming, blue for 
cooling. Carbon dioxide, the bar on the left, causes the 
largest forcing, 1.4 watts-per-meter-squared. But the forcing 
by other greenhouse gases, the next four bars, adds up to at 
least as much as carbon dioxide. Methane causes a forcing half 
as large as carbon dioxide. Tropospheric ozone is also 
important; and then there are several aerosols, which are fine 
particles in the air. Black carbon is soot from diesel engines 
and coal burning. It causes warming. Organic aerosols and 
sulfates from fossil fuels cause cooling. Aerosols also affect 
the properties of clouds (that is the large blue bar here) and 
cause a cooling, but the magnitude of it is very uncertain. The 
net forcing by all of these is positive, consistent with 
observed global warming.
---------------------------------------------------------------------------
    \1\ The chart referred to appears in the Appendix on page 62.
---------------------------------------------------------------------------
    The question is: How will these forcings change in the 
future? The added climate forcing in the next 50 years will be 
only one watt and greenhouse warming less than one degree 
provided, (1) we halt the growth of the non-CO2 
forcings, and, (2) fossil fuel use and CO2 emissions 
continue, but at about the same rate as today. The resulting 
forcing of one watt would cause some climate change, but less 
than one degree in 50 years.
    So, first, can we stop the growth of the non-CO2 
forcing? Not only can we, but it only makes sense. Black carbon 
is the product of incomplete combustion. You can see it in the 
exhaust of diesel trucks. The microscopic soot particles are 
like tiny sponges. They soak up toxic organics and other 
aerosols. They are so tiny that, when breathed in, they 
penetrate human tissue deeply. Some of the smallest enter the 
bloodstream. They cause respiratory and cardiac problems, 
asthma, acute bronchitis, with tens of thousands of deaths per 
year in the United States, also in Europe, where the health 
cost of particulate air pollution have been estimated at 1.6 
percent of the gross domestic products.
    In the developing world, the costs are staggering. In 
India, approximately 270,000 children under the age of five die 
per year from acute respiratory infections caused by this air 
pollution. The pollution arises in household burning of field 
residue, cow dung, coal, for cooking and heating. There is now 
a brown cloud of air pollution mushrooming from India. 
Tropospheric ozone is another pollutant whose growth could be 
stopped, as could that of methane. We have only one atmosphere 
and it is a global atmosphere. We need to reduce the pollution 
that we put into it for other reasons, human health, 
agricultural productivity, and in the process we can prevent 
the non-CO2 climate forcing from increasing.
    In the United States, for example, we can reduce diesel and 
other soot admissions. We might also work with developing 
countries to help reduce their pollution. One possible long-
term solution would be electrification, a clean source of 
energy.
    Now, the other part of the climate problem is 
CO2. It is the hardest part of the problem, but is 
not as intractable as it is often made out to be.
    In 1998, global CO2 emissions declined slightly. 
In 1999, they declined again, and, in 2000, another small 
decline. This is just the trend needed to achieve the 
alternative scenario with only moderate climate change. In the 
near-term, my opinion is that this trend can be maintained via 
concerted efforts toward increased energy efficiency, 
conservation and increased use of renewable energy sources. On 
the long-term, we probably need a significant increasing 
contribution from an energy source that produces little or no 
CO2.
    In my written testimony, I note some possibilities, which 
include zero-emission coal; nuclear power; the combination of 
solar energy, hydrogen and fuel cells. Each possibility has 
pros and cons, and R&D is needed. It will be up to the public, 
through their representatives, to make the choices.
    Finally, the relevance of all this to your hearing is that 
there is more than one way to control climate change. The 
forcing agents that cause climate change are complex and, in 
some cases, poorly understood. These forcing agents have other 
effects on people and the rest of the biosphere that should be 
considered. We need to take a broad view of this issue. We will 
need a strategy, and that strategy will need to be adjusted as 
we learn more and see the effect of the actions that we take. 
This is a long-term issue.
    Thank you.
    Chairman Lieberman. Thanks, Dr. Hansen. Mr. Karl.

  TESTIMONY OF THOMAS R. KARL,\1\ DIRECTOR, NATIONAL CLIMATIC 
    DATA CENTER, NATIONAL ENVIRONMENTAL SATELLITE DATA AND 
    INFORMATION SERVICES, NATIONAL OCEANIC AND ATMOSPHERIC 
                         ADMINISTRATION

    Mr. Karl. Good morning, Mr. Chairman. Thank you for 
inviting me here today, and Members of the Committee. I have 
been invited to talk about the science of climate change. 
First, I want to emphasize two important fundamental issues. 
First off, there is a natural greenhouse effect. It is real. A 
small percentage of the atmosphere, about 2 percent, is 
composed of greenhouse gases. This includes water vapor, carbon 
dioxide, ozone, and methane. These effectively prevent part of 
the heat from the Earth escaping and lead to temperatures 
warmer than what would otherwise be the case.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Karl appears in the Appendix on 
page 68.
---------------------------------------------------------------------------
    In addition to the natural greenhouse effect, there is a 
change underway in the greenhouse radiation balance. Some 
greenhouse gases are increasing in the atmosphere because of 
human activities and increasingly trapping more heat. Direct 
atmospheric measurements over the past 40 or so years have 
documented a steady growth in atmospheric abundance of carbon 
dioxide. Measurements, using air bubbles trapped within 
accumulating layers of snow, show that atmospheric carbon 
dioxide has increased by more than 30 percent over the 
industrial era, compared to the relative constant abundance 
that it had over the previous 750 years.
    The predominant cause of the increase in carbon dioxide is 
the combustion of fossil fuels and burning of forests. Other 
heat-trapping gases are also increasing as a result of human 
activities. The increase in heat-trapping greenhouse gases due 
to human activities are projected to be amplified by feedback 
effects, such as changes in water vapor, snow cover, and sea 
ice. So as atmospheric concentrations of carbon dioxide and 
greenhouse gases increase, the resulting increase in surface 
temperature leads to less sea ice and snow, thereby reducing 
the amount of the Sun's energy reflected back into space, 
resulting in a higher temperature.
    As greenhouse gases increase, evaporation increases, which 
leads to more atmospheric water vapor. The additional water 
vapor acts as important feedback to increase temperature. Our 
present understanding is that these two feedbacks account for 
about 60 percent of the warming. The exact magnitude of the 
feedback effects and others, such as changes in clouds, remain 
a significant source of uncertainty related to our 
understanding of the impact of greenhouse gases.
    Increases in evaporation water vapor affect global climate 
in other ways besides increasing temperature, such as 
increasing rainfall and snowfall rates. The increase in 
greenhouse gas concentration implies a positive radiative 
forcing and has a tendency to warm the climate. Particles or 
aerosols in the atmosphere resulting from human activities can 
also affect climate. Aerosols vary considerably from region to 
region. Some aerosol types act, in a sense, opposite to the 
greenhouse gases and cause a negative forcing or cooling of 
climate, as Dr. Hansen's chart shows.
    There may also be other natural factors that exert an 
influence on climate: Changes in the sun's energy, and changes 
in volcanic eruptions. These effects, however, such as volcanic 
eruptions, are short-lived. The forcing estimates in the case 
of greenhouse gases are substantially greater than those for 
these other two forcing agents. What do the changes imply? 
First off, there is a growing set of observations that yields a 
collective picture of a warmer world. There is just simply no 
question the climate of the last 100 years is increasing the 
temperature. We have ample evidence: Widespread retreat of 
glaciers in non-polar regions; snow cover, and sea ice extent 
has decreased; thickness of sea ice has decreased; and duration 
of ice on lakes and rivers also all have decreased.
    It is also likely that the frequency of extreme events have 
increased as global temperatures have risen. This is particular 
evident in areas where precipitation has increased, primarily 
mid- and high-latitudes of the Northern Hemisphere. Other 
extremes have decreased, such as the frequency of extremely 
cold weather, and the frequency of frost during the period of 
instrumental record. There is a new and stronger evidence that 
most of the warming over the last 50 years is attributed to 
human activities. Scenarios of future human activities indicate 
continued changes in atmospheric composition throughout the 
21st Century.
    Based on these scenarios and the estimated uncertainties in 
climate models, resulting projections of global temperature 
increase by the year 2100 range from 2.3 to 10.1 degrees 
Fahrenheit. Such a projected rate of warming would be much 
larger than observed over the 20th Century and would very much 
likely be without precedent over the past 10,000 years. It is 
important to emphasize that greenhouse gas warming could be 
reversed only very slowly. The quasi-irreversibility arises 
because of the slow rate of removal from the atmosphere of 
greenhouse gases and because of the slow response of oceans to 
thermal changes.
    It is presently not possible to generally define a safe 
level of greenhouse gases. There are still large uncertainties 
related to the projected rate and magnitude of climate change. 
The determination of an acceptable concentration of greenhouse 
gases depends on narrowing this range, as well as the knowledge 
and risk of vulnerabilities to climate change. Analysis reveals 
that sectors and regions vary in their sensitivity to climate 
change, but generally those societies and systems least able to 
adapt and those regions with the largest changes are at 
greatest risk. This includes the poor nations and sectors of 
our society, natural ecosystems--those regions that are likely 
to see the largest changes, for example, in the Arctic.
    In terms of our understanding, there is still considerable 
uncertainty of how the natural variability of the climate 
system reacts to emissions of greenhouse gases and aerosols. 
Current estimates of the magnitude and impacts of future 
warming are subject to future adjustments either up or down. To 
address these uncertainties in several areas, we think it is 
important that we embark on understanding the complex climate 
system. Progress in this area will be limited by the weakest 
link in the chain. At the present time, there are several weak 
links that need to be addressed.
    First and foremost, a climate observing system is needed to 
monitor decade-to-century scale changes for basic variables 
needed to describe the climate system. Current observing 
systems yield large uncertainties in several key parameters, 
especially on regional and local scales. Although we have been 
able to link observed changes to human activities, it is not 
possible to quantitatively identify the specific contribution 
of each forcing factor, which is required for the most 
effective strategy to prevent large or rapid climate change. 
This will require better understanding in several areas: The 
feedbacks of the climate system; the future usage of fossil 
fuels; carbon sequestration on land and in the ocean; details 
of regional climate change; and natural climate variability.
    Finally, we found that no matter how good our understanding 
of future climate change might be, we ultimately must 
understand how this impacts natural and human systems. To 
achieve this understanding will require first an 
interdisciplinary research that couples physical, chemical, 
biological, and human systems, improved capability to integrate 
scientific knowledge, including its uncertainty, into effective 
decision support systems, a better understanding of the impact 
of multiple stresses on human and natural systems, especially 
at the regional and sectorial level.
    Thank you, and I look forward to working with you on these 
issues, and thank you again for inviting me to appear today.
    Chairman Lieberman. Thanks, Mr. Karl. Let me begin 
questioning. Although we asked you here to discuss the science 
of climate change, I think it would be interesting to ask if 
you have any response, having the expertise you do, to the 
Byrd-Stevens proposal that is the focus of our hearing today, 
and to the coordination of the response to climate change that 
it would enact. Do either of you have a response?
    Mr. Karl.
    Mr. Karl. One thing I would highlight is, as I indicated in 
my testimony, this is an extremely complex issue, one which 
encompasses many areas of science. It encompasses areas of 
social science, as well as the physical sciences. So, to move 
forward, it is very clear a coordinated effort is clearly 
needed, and I think that is one of the highlights of the Byrd-
Stevens bill.
    Chairman Lieberman. Thank you. Dr. Hansen.
    Mr. Hansen. I was delighted to hear the discussions by the 
several Senators. I agree with Mr. Karl. It is a very 
complicated issue and we need a broad approach to look at it.
    Chairman Lieberman. Do you think that the Byrd-Stevens 
proposal, as you understand it, meets that standard?
    Mr. Hansen. I do not think it is appropriate for me to take 
a position with regard to it, but certainly the discussions we 
heard today seem to be right on the mark.
    Chairman Lieberman. Understood. It is my impression that 
there is not really remaining dispute regarding whether climate 
change is occurring. In fact, I noticed last week that our 
colleague, Senator Hagel, who was one of the co-authors, 
obviously, of the Byrd-Hagel resolution, was quoted in USA 
Today as saying that, ``There is no question there is climate 
change. We are beyond that debate.'' Would you agree with 
Senator Hagel, Dr. Hansen?
    Mr. Hansen. Yes, I was one of the authors, as was Mr. Karl, 
of the recent National Academy of Science's report in which we 
reaffirmed the reality of global warming and that there is the 
possibility of disruptive climate change later this century. I 
think we also took pains to stress some caveats about what will 
happen. It depends very much on how these climate forcing 
agents develop, and it is certainly within our capability to 
influence that and to influence the amount of climate change 
that will occur.
    Chairman Lieberman. Mr. Karl.
    Mr. Karl. Yes, there is no question that the climate is 
changing in ways which we have now seen from the observational 
record and our past paleoclimate data. One of the important 
attributes of climate, though, is much broader than just 
changes in temperature, and as I indicated, there are some 
unsettling things we do not know about--for example, changes in 
some of the extreme precipitation events in all areas of the 
world.
    So I think it is really going to be key, as we continue to 
change atmospheric composition, to look at changes in all the 
elements of the climate system, particularly for potential 
surprises, accelerated changes. That is one of the areas I 
would like to emphasize. Although we are sure climate is 
changing in significant ways, we do not have all the answers 
today.
    Chairman Lieberman. In other words, there are questions 
about whether some of the extreme precipitation or extreme 
weather that people are experiencing is related to the climate 
change that we know is a reality.
    Mr. Karl. Part of the difficulty we have, if you look at 
our observing system, is that in the mid-latitudes and some of 
the higher latitudes, we have enough data to make what we think 
are reasonably confident statements. But if you look at the 
rest of the world, the observing systems really are not capable 
of delivering that kind of information which we so badly need.
    Chairman Lieberman. One area of focus of the Byrd-Stevens 
bill, S. 1008, which is, I thought, very interesting, was the 
need to help us--Americans--adapt to the already inevitable 
consequences of climate change, or at least that is the way I 
read one of their four goals. I wanted to ask you to what--
perhaps you have answered it already, but just to come at it in 
a different way--to what extent do you believe that some 
climate change is already inevitable? In other words, that 
there will be consequences already. And what measures would you 
recommend to help adapt to that change?
    Mr. Hansen. I think that we have evidence that some 
additional warming is on the way. There has been warming 
already of about half-a-degree Celsius or one degree Fahrenheit 
in the past century, and I think that there is about another 
half-a-degree Celsius, which is already in the pipeline, 
because of the greenhouse gases that we have added to the 
atmosphere and which the system has not yet responded to, due 
to the long time constant of the ocean. It takes a long time 
for the ocean to warm up in response to this forcing.
    If we can slow down the growth rate of these climate 
forcing agents, then I think the additional warming in the next 
50 years will be less than one degree. That is a magnitude 
which we could adjust to probably without a great deal of 
difficulty, although even now climate fluctuations are a major 
factor that we need to pay more attention to, making ourself 
less vulnerable to those fluctuations.
    Chairman Lieberman. How serious would the steps be that we 
have to take to control or contain climate change within the 
next 50 years, to the degree that you describe?
    Mr. Hansen. Well, there are two things that we need to do: 
One is, as I mentioned, stop the growth of these non-CO2 
forcings. I think there are very good reasons to do that 
anyhow, which to a large degree could pay for themselves. They 
are not going to happen automatically. We have to see that they 
happen. They are basically air pollution and they affect 
everybody--I gave numbers for people that die from it--but 
there are even more people who do not die, but suffer 
consequences of air pollution.
    The CO2 part: How do we keep the rate of 
emissions of CO2 from increasing? Again, that is 
debatable. There are people who feel that just from 
conservation, energy efficiency and renewable energy sources, 
we can keep the emissions similar to what they are today. Most 
energy experts, however, believe that we will need some clean 
energy sources such as--I gave you examples: Nuclear power, 
which has disadvantages; or capture the CO2 from 
coal--that is now technically possible, but it adds to the 
cost. So there are things that appear practical--but they will 
require a real effort to do them.
    Chairman Lieberman. Mr. Karl, how about your reaction to 
the extent to which climate change is already inevitable, 
perhaps also your evaluation of Dr. Hansen's alternative 
scenario?
    Mr. Karl. Yes, I would like to address that and emphasize 
as well, one of the great problems we face, as Dr. Hansen said, 
which I agree with, we already have in the pipeline some 
additional warming, something on the order of half-a-degree, 
and it is clear that greenhouse gas concentrations are likely 
to continue to increase. One of the real difficulties we have 
is trying to ensure that new systems that are expected to have 
a lifetime of many decades now begin to incorporate, not just 
the past climate, but projected changes in climate, to ensure 
that their design efficiency is as good as it could possibly 
be.
    Chairman Lieberman. How do you mean new systems?
    Mr. Karl. For example, we have noticed that the design 
standards for buildings are being exceeded in many parts of the 
country and engineers are using climatologies based on earlier 
records in the 20th Century. So in order to ensure that we have 
efficiency in our energy systems, we would really need to think 
about how we use the climate of the past and what we might 
expect into the future, and that is a very important area of 
adaptation, because quite frankly, at this time, people are a 
bit scrambling, trying to decide exactly what to do.
    Chairman Lieberman. Are we seeing elsewhere, in your 
experience, the rather dramatic examples that Senator Stevens 
gave us about what is happening in Alaska and the Arctic 
region, of the effects of climate change?
    Mr. Hansen. The Arctic region--it is not the entire Arctic. 
For example, Greenland has actually cooled in the last 50 
years. So there is a change in the long-wave patterns at the 
high latitudes, such that the region around Alaska and the 
center of Siberia warm substantially. Those are the regions 
where we have seen the largest warming. I do not think there is 
a comparable warming in other parts of the world. As we said, 
the average warming is about half-a-degree Celsius, but in 
those regions it has been significantly larger than that.
    Chairman Lieberman. Go ahead, Mr. Karl.
    Mr. Karl. I think it would be worth emphasizing that the 
expectations of warming are larger over land areas compared to 
the ocean areas, and large over places like North America and 
mid- and high-latitudes, significantly larger than the average 
temperatures that you hear being discussed in terms of 
projected change.
    Chairman Lieberman. Why is that?
    Mr. Karl. The oceans are a great reservoir of heat, and we 
have just conducted some research in our agency which showed 
that the ocean heat content has increased. So part of the 
warming being taken up into the oceans is being transported 
down to deep layers in the ocean.
    Chairman Lieberman. But why more of an impact in North 
America?
    Mr. Karl. North America is similar to other major, large 
continental areas. So you can make the same statement for 
Eurasia, as well.
    Chairman Lieberman. Thank you, both. Senator Thompson.
    Senator Thompson. Thank you very much, gentlemen. Thank you 
very much for being with us here today. It seems to me that one 
of the things that comes out of reading from your works and 
other experts' work is that there is a great deal of 
uncertainty and complexity involved in what we are dealing with 
here, from the work of the National Academy of Sciences and 
also the U.N. Intergovernmental Panel on Climate Change and 
others.
    Obviously, many are strong proponents of Kyoto, but in 
1999, more than 17,000 scientists signed a petition against it. 
It seems to me that there are questions with regard to the 
extent of the warming. There are also questions with regard to 
the causes of the warming. The question presented to us as 
policymakers is how much do we know at this point and what are 
the responsible policy options and choices in light of what we 
know and what we do not know.
    Getting to the question of the extent of the warming, I 
have read--or some scientists have pointed out or alleged--that 
the climate is always changing and always has. In the Middle 
Ages, we had another warming trend. Thirty years ago, some 
people were concerned about climate cooling. Is that 
technically accurate and, if so, what is the significance of 
that?
    Mr. Karl. I would be happy to address that, Senator. One of 
the major improvements that we have been able to achieve in the 
last 5 years is the use of paleoclimatic data or proxy data, 
and what this encompasses are measurements from tree rings, ice 
cores, corals in the ocean and historical records. These 
records have been painstakingly analyzed over the last 5 years 
by a number of different scientific groups to try and estimate 
what temperatures have done globally over the last 1,000 years 
or so. Unfortunately, the measurements are not complete enough 
to go back 1,000 years in the Southern Hemisphere, but for the 
Northern Hemisphere, we think they are.
    This analysis suggests that our concepts of things like the 
Little Ice Age, the medieval warming period, perhaps were 
rooted in the accounts that we read from Europe. If you look at 
the globe or the hemisphere as a whole, what you see is a 
remarkable consistency in temperatures across the Northern 
Hemisphere the last 1,000 years. So when you put on top of that 
the instrumental record of the 20th Century, you see that the 
warming that we see in the last 100 years is substantially 
greater than anything we have seen in the last 1,000 years.
    By no means do we have all the answers. We would like to be 
able to narrow uncertainties. I think the statements we are 
using now are saying things like, ``It's likely that,'' because 
we want to leave a little room for additional observations. But 
the best evidence suggests the warming today is very unusual.
    Senator Thompson. Can you determine that there have been 
periods of time in our history where there has been a cooling?
    Mr. Hansen. Certainly there have been. There was a cooling 
from the 1930's and 1940's until 1970, and that does relate to 
your comment about some scientists talking about mechanisms 
that would cause cooling. That actually is in my chart. The 
blue bars--the aerosols, most of the aerosols, tend to reflect 
sunlight and therefore cause a cooling, and it is a possibility 
that the cooling that we observed in that period was related to 
the aerosols.
    As we started to get our energy systems going, we were 
producing a lot of aerosols and CO2. Recently, in 
recent decades, we have tried to reduce some of those sulfate 
aerosols, which are pure white and cause a cooling effect. The 
reason to reduce them being that they cause acid rain and other 
undesirable things. So it is good to try to reduce those. In 
the process, though, we accelerate the tendency toward warming. 
So that is why it is important to also attack not only sulfate 
aerosols, but the black carbon aerosols, because those aerosols 
cause warming.
    Senator Thompson. May I ask this? Do we know enough about 
this particular subject and this history?
    Mr. Hansen. We do not know enough to----
    Senator Thompson. Extrapolate that the current trend is 
going to continue?
    Mr. Hansen. Right, because, you see, there are uncertainty 
bars on these, the black vertical bars. In fact, the aerosol 
changes are very uncertain. We do not have the measurements. It 
is clear we need to try to do some things, and we will need to 
adjust our strategy as we go along, as we learn more.
    Senator Thompson. If my suggestion is correct, it does not 
mean that we should not do anything about it. It does not mean 
that we should not try to deal with it, or err on the side of 
safety in the long-term. But it does seem to me, from all I can 
gather and my limited knowledge of this area, that there is 
still an awful lot we do not know. It would be very difficult, 
based on where the science is and where the history and the 
historical analysis has been, to extrapolate any trend with 
confidence. It is kind of like budgets and deficits and 
surpluses around here. Whatever is happening at the moment is 
what we predict is going to continue to happen. I hope 
scientists do not do the same thing, but it is a good thing to 
keep mind, I think, as we go forward.
    I also understand that some satellite measurements have 
been different than others in terms of the extent of the 
warming. Obviously, you have got regional considerations to 
take into effect. Some parts of the world are cooling, many are 
warming. In some cases, surface measurements have been 
different from satellite measurements--have they not?
    Mr. Karl. It is an interesting aspect of trying to 
understand some of the details of what we see.
    Senator Thompson. Do not try to make me understand it. We 
do not have time enough for me to understand all that. But I 
have a couple more questions, if you can give me a summary.
    Mr. Karl. It is clear that if you look at the middle of the 
atmosphere--I think you were referring to satellite 
measurements--if you go back to the late 1950's, where we have 
weather balloons, the middle atmosphere and the surface warming 
is very comparable. If you look at the last 20 years, a smaller 
period where satellites have been able to provide additional 
information, you do find significant differences that we do not 
entirely understand today.
    Senator Thompson. Alright, sir. Getting to the causes of 
warming, Dr. Hansen you especially have made the point that 
perhaps we are not emphasizing enough the non-CO2 
aspects. I notice this bill creates an Office of Carbon 
Management and so forth. Obviously, CO2 is 
significant, but actually I believe that has been rather 
stable. CO2 emissions have been rather stable over a 
period of time--haven't they--while the other particulates and 
so forth have gone up?
    Mr. Hansen. The CO2 emissions have been, in the 
last 20 years, increasing at about 1 percent a year. That 
compares with about 4 percent per year from the end of World 
War II until the oil price shock in the 1970's. So we changed 
the growth rate from 4 percent to 1 percent. But if we allowed 
even 1 percent per year growth to continue 50 years, we would 
be in trouble. So we really need to change that 1 percent to 
more like 0 percent, and that does require some effort and some 
technology.
    It is often assumed that CO2 is all the problem 
or almost all the problem. That is under the assumption that 
CO2 emissions continue to increase, so that every 
year we burn more fossils fuels than the year before, and that 
is not necessarily true. If we can decrease that growth rate 
down to 0 percent, then its contribution is not so 
overwhelming.
    Senator Thompson. Both of you worked on the National 
Academy of Sciences report that did an evaluation of the work 
of the IPCC, and it has been somewhat controversial. The 
summary that came out was used in the media, in many cases, to 
say that what you were doing was endorsing Kyoto or certainly 
at least endorsing the IPCC conclusions.
    One of your fellow panelists, Richard Lindzen has written 
in the Wall Street Journal about it, and says, ``The panel was 
finally asked to evaluate the work of the United Nations 
Intergovernmental Panel on Climate Change, focusing on the 
summary for policymakers, the only part ever read or quoted. 
The summary for policymakers, which is seen as endorsing Kyoto, 
is commonly presented as the consensus of thousands of the 
world's foremost climate scientists. Within the confines of 
professional courtesy, the NAS panel essentially concluded that 
the IPCC's summary for policymakers does not provide suitable 
guidance for the U.S. Government. The full IPCC report is an 
admirable description of research activities and climate 
science, but it is not specifically directed at policy. The 
summary for policymakers is, but it is also a very different 
document. It represents a consensus of government 
representatives, many of whom are also their nation's Kyoto 
representatives, rather than scientists. The resulting document 
has a strong tendency to disguise uncertainty and to conjure up 
some scary scenarios for which there is no evidence.'' \1\
---------------------------------------------------------------------------
    \1\ The article by Richard S. Lindzen referred to by Senator 
Thompson appears in the Appendix on page 118.
---------------------------------------------------------------------------
    Would you concur or disagree with his assessment of the 
work of the NAS in this instance?
    Mr. Hansen. I am disappointed that the media takes such a 
simple perspective. We reaffirmed that there is some global 
warming going on, and that there is a danger of large climate 
change later this century. But that does not lead to the 
conclusion that therefore the solution to this is Kyoto. We did 
not address the appropriate policy responses. We did take pains 
to stress some caveats that should be associated with the IPCC 
assessment. In particular, right at the very beginning, our 
second paragraph of the summary, we said that the projections 
of IPCC that get very large climate change are based on the 
premise of a business-as-usual scenario, which has larger and 
larger emissions.
    It is not obvious that will happen. In fact, in the last 20 
years, there has actually been some deceleration in the rate of 
growth of climate forcings. The peak rate of growth occurred in 
1980 and there has been a 25-percent reduction in that rate, 
due to the fact that we decided to phase out 
chlorofluorocarbons and the methane growth rate declined. So 
that is an example of the kind of strategy, that you can have 
other benefits from reducing some of these climate forcing 
agents. That is what we are trying to argue, that we need to 
look at the entire picture, not just CO2.
    Senator Thompson. I am over time, but if you want Mr. Karl 
to respond to that, it is fine with me.
    Chairman Lieberman. Mr. Karl.
    Mr. Karl. Commenting on Mr. Lindzen's comment, one of the 
things, I think, we tried to point out in the Academy report is 
any time you are necessarily taking a very large volume of 
work, like if you look at the IPCC full science report, and 
then you look at the technical summary and the summary for 
policymakers, it shrinks down. So it is very clear that you do 
not have the time to or the length of paper to explain all the 
uncertainties and all of the details of the changes.
    So I think it is only natural, when you look at a briefer 
summary, that you do not spend a lot of time reading all the 
uncertainties, and clearly they are there in the IPCC report, 
and often beauty is in the eye of the beholder, and people can 
take all of those reports and selectively pull out individual 
sentences and try and craft either a very uncertain future or a 
very certain future.
    Senator Thompson. Sometimes commentators or politicians 
using scientific research and analysis to justify their 
opinions is not a pretty sight; is it?
    Mr. Karl. It is not a pretty sight, but one thing I would 
say is in Shanghai, as we said in the Academy report, every 
change that was made to the report--because we went there with 
a draft--there were suggestions from the floor. They did not 
understand some comments that were made. They suggested 
alternative language. But for every change that was made, there 
was a scientist who was responsible for that section, who 
formed a group and eventually agreed to whatever change was put 
into the report on the summary for the policymakers.
    Senator Thompson. Thank you very much.
    Chairman Lieberman. Thanks, Senator Thompson. Senator 
Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman. The two of us 
are on two committees, this Committee and Environment and 
Public Works, and I am not sure sometimes which committee I am 
before. I noticed that there is a movement to move climate 
change into our Subcommittee in Environment and Public Works.
    Chairman Lieberman. That is correct.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. I thank you for calling this hearing 
today. I think that this legislation does a good job of calling 
more attention to the issue of climate change without jumping 
to some of the conclusions, regarding the science and other 
issues, which have plagued other approaches. I am pleased, in 
particular, that it recognizes the need for the continued use 
of coal. I was interested in Dr. Hansen's comments.
    Coal is now and will continue to be the most economical way 
of producing energy in this country for many years. We have a 
250-year supply of coal and we need to encourage clean-coal 
technologies. Unfortunately, Mr. Chairman, the previous 
administration was anti-coal and did everything it could to 
discourage its use, instead of promoting clean-coal technology 
and working with the utilities to improve their emissions to 
protect the environment and public health, and to provide low-
cost energy.
    I sincerely believe that until we pass a multi-emissions 
bill and deal with the issue of new source review, that we are 
not going to be able to utilize the technology available for 
coal so that we can have low-cost energy and move forward with 
improving our environment. The same applies to nuclear power. 
We cannot examine climate change and a national energy policy 
and ignore the fact that nuclear power is something that should 
be looked at, and again, until we deal with the political 
football of what we do with nuclear waste, we cannot move on 
with that option. But it is one that we need to move forward 
with.
    As you know, Mr. Chairman, we did have a hearing in the 
Public Works Committee which examined the state of the science 
in terms of climate change, and I was impressed with the fact 
that there are still many uncertainties regarding climate 
change and the state of consensus on the issue is, I think, 
greatly exaggerated by climate change proponents and most 
members of the press. I noticed that Senator Thompson mentioned 
Dr. Lindzen's testimony and I am going to ask if that testimony 
that he gave in the hearing can be inserted in the record for 
today.\1\
---------------------------------------------------------------------------
    \1\ The prepared testimony before the Senate Environment and Public 
Works Committee by Richard S. Lindzen on May 2, 2001 appears in the 
Appendix on page 120.
---------------------------------------------------------------------------
    Chairman Lieberman. Without objection
    Senator Voinovich. I am encouraged, although I think that 
President Bush handled this Kyoto Treaty issue--maybe from a 
public relations point of view, he could have handled it 
differently, because I know that Europeans are up in arms, and 
I ran into that when I was at the Organization for Security and 
Cooperation meeting in Europe and also at a NATO meeting. But I 
am encouraged that President Bush announced last week a broad 
policy initiative to further study climate change and the 
potential impacts, including an important joint venture with 
Japan to develop state-of-the-art climate modeling.
    The models that the U.N.'s IPCC has relied upon need 
additional research before we base a major policy initiative on 
them, such as what is called for by the European Union. We have 
to really improve the modeling substantially. I think this 
legislation is a positive step forward in the sense that it is 
bipartisan and tries to answer the many uncertainties involved 
with this issue.
    My concerns with the legislation are the costs, which are 
substantial, and whether or not creating a new bureaucracy in 
the Department of Energy and in the White House is going to 
enhance our ability to deal with this challenging problem or 
whether it is going to make it even more difficult. It 
authorizes some $4.8 billion, and I am interested in finding 
out how much is already appropriated to various agencies and 
departments for climate change and whether or not there is an 
overlap in terms of the funding.
    In addition, I would like to make sure that the new offices 
in the Department of Energy and the White House actually reduce 
bureaucratic burden instead of increasing it. I want to again 
underscore what Senator Thompson said, and that is the National 
Academy of Sciences, in their report, said, ``Because there is 
considerable uncertainty in current understanding of how the 
climate system varies naturally and reacts to emissions of 
greenhouse gases and aerosols, current estimates of the 
magnitude of future warming should be regarded as tentative and 
subject to future adjustments either upward or downward, and 
reducing the wide range of uncertainty inherent in current 
model predictions of global climate change will require major 
advances in understanding and modeling of both the factors that 
determine atmospheric concentration of greenhouse gases and 
aerosols and the so-called feedbacks that determine the 
sensitivity of the climate system and prescribed increase in 
greenhouse gases. There is also a pressing need for a global 
observing system designed for monitoring climate.''
    It is really important that Senator Byrd and Senator 
Stevens are trying to bring some more objective evaluation of 
where we are to this subject. Would you agree that we need a 
whole lot more work in this area?
    Mr. Hansen. Yes, absolutely. I have been arguing for some 
years that--some people would say that the error bars that we 
have on these forcings are actually underestimated--that we 
have to measure what things are actually changing. If we are 
going to project the future, we have to know what is happening 
now.
    Mr. Karl. There is absolutely no question, as I indicated 
in my oral statement, that we need fundamental observations for 
the long-term, not just a 2- or 3-year effort. We need to make 
sure that we put into place an observing system that can 
guarantee 50 years from now that we will know what actually 
happened to some of these very important variables that we have 
discussed here today.
    Senator Voinovich. This legislation funds clean-coal 
technology, and Dr. Hansen, you mentioned that. With your 
understanding of the science today, do you believe it is 
possible to address the concerns of the climate change 
proponents and continue to rely upon the burning of our current 
coal levels?
    Mr. Hansen. Coal has at least two--it has several 
emissions. Black carbon is one of them. I think that scrubbing 
the sulfate and the black carbon is something that can be done. 
I think that, as you have mentioned, the technology for that 
has been worked on. That will take care of part of the problem. 
In the long-run, if coal were to be a major contributor in the 
next 100 years to our energy needs, we may also need to 
actually capture the CO2. That is possible, and 
there are now experiments intended to prove that this can be 
done in an economic way and we can dispose of the 
CO2. There are experiments where this is being 
tested, the CO2 injected into the ocean, and the 
ocean can absorb it all. So I think that it is technically 
possible. We need to support that technology, but it will raise 
a practical issue because it will increase the cost. We need to 
make sure that it is not so costly that it would discourage 
some countries from actually using it.
    Senator Voinovich. Do you think that it could be 
compensated with more attention to carbon sinks?
    Mr. Hansen. Carbon sinks, if you mean in the biosphere of 
forests and soils, there is a limit as to how much you can put 
there. It can help, but by itself, that is not sufficient if 
we, in fact, continue to have fossil fuels as a major energy 
source.
    Senator Voinovich. And what do you think of nuclear power?
    Mr. Hansen. Again, these types of issues, of course, have 
to be decided by the people through the representatives, and as 
you know, there are pros and cons to each of these. Nuclear 
power, from our standpoint as climate scientists, we can say, 
``Well, it looks great from that standpoint.'' It produces 
essentially no CO2. So, if it were acceptable, then 
that is certainly a good candidate for an energy source.
    Senator Voinovich. I know that you seem to be reluctant to 
comment about the organizational structure, when you were asked 
a question earlier.
    Mr. Hansen. I do not think it is appropriate really, for me 
to do that.
    Senator Voinovich. May I ask you this? We have the 
Department of Energy, President Clinton had a task force with 
the Council on Environmental Quality in the White House, and 
there are many agencies right now that are dealing with this 
issue. From your observation, do you think that these 
activities are well coordinated?
    Mr. Hansen. I think there is a NAS report--Mr. Karl can put 
in his word here, too, but I think there is pretty widespread 
agreement that it is not as coordinated as it should be.
    Mr. Karl. As I mentioned earlier, this is an exceedingly 
complex issue, ranging from understanding the physical aspects 
of the climate system down to the impacts, and I must tell you 
one of the most frustrating experiences as a scientist is when 
you try and go interdisciplinary and try and link up the 
information from one specific scientific specialty to others, 
to really understand almost every problem we have, relate to 
multiple stresses. It really requires a lot of coordination. So 
the statement that it is not nearly as well-coordinated as it 
could be, I think goes without saying.
    Senator Voinovich. So you would both agree that, whether 
through this proposed legislation or some other vehicle, there 
is a need for better coordination between all of the agencies 
that are dealing with this problem?
    Mr. Karl. Yes.
    Senator Voinovich. Thank you.
    Chairman Lieberman. Thanks, Senator Voinovich. Senator 
Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. I want to begin by thanking you for 
holding this hearing. Climate change is a serious and growing 
problem. Global temperatures have increased by approximately 1 
degree over the last 100 years. According to the scientific 
community, much of this warming is likely due to human 
activities that have increased greenhouse gas concentrations in 
the atmosphere. This warming is expected to accelerate. The 
best predictions forecast an increase in global temperatures of 
anywhere from 2.5 to 10 degrees by the end of the next century.
    According to a report recently prepared by the National 
Academy of Sciences, such warming could well have serious 
adverse effects, including droughts, floods, sea level rise, 
and far-reaching changes to ecosystems. Senator Byrd and 
Senator Stevens deserve praise for their efforts to address the 
difficult issue of climate change by crafting legislation that 
would position the United States to address climate change in a 
comprehensive manner and with adequate resources.
    I am therefore very pleased to join the Senators as a co-
sponsor of their legislation. By more than doubling authorized 
funds for research and development to create new technologies 
to deal with climate change, this legislation would 
significantly advance the United States' efforts to address 
climate change, as well as better position the United States to 
become a leader in the energy technologies of the future. The 
Climate Change Strategy and Technology Innovation Act is an 
important step in creating an appropriate U.S. response to 
climate change.
    But, Mr. Chairman, I would suggest that it is not the only 
step that we should take. We also need to continue making 
improvements in energy efficiency, further develop our 
renewable energy resources, and take action to reduce 
emissions. In fact, the Chairman and I are co-sponsors of 
legislation that would attempt to bring about those changes. By 
taking these actions in combination with the groundbreaking 
legislation proposed by Senator Byrd and Senator Stevens, I 
believe that we can create an energy strategy that will save 
consumers money, make America less dependent on foreign energy 
sources, and protect society and the environment from the 
detrimental effects of climate change.
    Mr. Chairman, I am very fortunate to have on my staff a 
climatologist. I suspect that I may be the only Senator who is 
not a member of the Environment Committee that has a 
climatologist on my staff, and I have to tell you that he 
speaks very highly of the work done by the two scientists who 
are appearing before us today.
    Dr. Karl, my staff tells me that you have done 
groundbreaking work on the analysis of global temperature 
trends, and your work has made a significant contribution to 
our knowledge of global warming. Given your expertise on 
measuring temperature trends, could you discuss an issue that I 
understand has been hotly debated with climate change, on the 
differing results between ground-level and satellite 
measurements of temperature trends.
    I understand that ground-level measurements have often 
shown greater warming than satellite measurements. So the 
question that comes to my mind: Is there a problem with one set 
of measurements or are ground temperatures really warming 
faster than those in the lower atmosphere?
    Mr. Karl. That is a very good question, Senator, and I will 
try to briefly answer that. As I indicated earlier to Senator 
Thompson, that if we take a look at the temperatures in the 
middle part of the troposphere, they have been measured by 
satellites since 1979. If we go back farther in time, using 
weather balloons, we can get an estimate of the temperatures in 
the middle part of the troposphere back to 1960. If we see what 
is happening at the surface and compare that to the middle part 
of the troposphere, we find a reasonably consistent picture 
over that longer 40-year period. If we focus on the last 20 
years, we find a significant difference.
    Part of that difference, we think we understand in terms of 
the timing. It is a short record, remember, 20 years, the 
timing of El Nino events, the timing of volcanic eruptions--
Mount Pinutubo, for example, all have big effects in a short 
record. Also the way in which the Earth is sampled differently 
from ground-based measurements compared to balloons and from 
satellite data impacts the difference. So we can go some way 
toward explaining the difference in the last 20 years, but part 
of that difference still remains unexplained and it is one of 
the challenges of the scientific community to understand.
    Now, are there still problems with both surface and 
tropospheric temperature measurements? Certainly we try to put 
error bounds on the data, and we think even given the error 
bounds that we put on these two different sets of measurements, 
in the troposphere and at the surface, there still remains an 
unexplained physical difference that we do not quite have 
resolved yet today.
    Senator Collins. Thank you.
    Dr. Hansen, I have a question for you, also. In your 
written testimony, you speak extensively of the importance of 
combating air pollution as a means of addressing climate 
change. As you point out, this would have substantial 
collateral benefits. Your statistics on the impact of air 
pollution in Europe are really stunning: 40,000 deaths and 
500,000 asthma cases a year in France, Switzerland, and Austria 
alone. In your judgment, does the Kyoto Protocol adequately and 
efficiently address the global warming impacts of black carbon 
and other forms of air pollution?
    Mr. Hansen. No, it does not. It, in fact, does not include 
black carbon. It does not include tropospheric ozone. As you 
notice in my chart, if you add up our estimates of those two 
forcings, it is comparable to that of CO2, and I 
think it is important that they be included. Given the 
difficulty, the cost of the kind of agreements that you would 
need for the Kyoto Protocol, I just do not see us having two of 
these. So I think it makes much more sense to combine the air 
pollution issue and the CO2 issue, otherwise we are 
just not giving enough attention to this aspect of the problem.
    I do not know how many people are dying from global warming 
right now, but I do not think it is very many, and I do not 
think there are as many people being affected by that. So it is 
just inappropriate to neglect this air pollution aspect.
    Senator Collins. And that does appear to be a significant 
weakness of the Kyoto Protocol.
    Mr. Hansen. In my personal opinion, yes.
    Senator Collins. Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks very much, Senator Collins. I 
remember being at a seminar on global warming in which--this 
was one of those Aspen programs in which we had a bunch of 
scientists talking to a bunch of us members of Congress, and 
one member of the House, who happened to be a Republican, at 
the end said--it was Jim Greenwood who said, ``So let me get 
this straight,'' to the scientists, ``If you are right,'' and 
they were mostly very proactive about global warming, ``and we 
take appropriate remedial action, we will have saved the planet 
as we know it. And if you are hyperventilating a bit, all we 
will have done is to clean up the air and keep a lot of people 
healthier than they otherwise would be.'' So, not a bad trade-
off. Thank you.
    Senator Bennett, thanks for being here.

              OPENING STATEMENT OF SENATOR BENNETT

    Senator Bennett. Thank you very much, Mr. Chairman. If I 
may, I would respond to that with another set of trade-offs. 
There is no agreement in the scientific community about what is 
causing global warming. There are hypotheses that are 
vigorously argued one side or the other. There is, as nearly as 
I can tell, absolute agreement in the economic community that 
Kyoto would be a disaster, economically, to the United States, 
if it were to be put into place. My point is that the greatest 
enemy of the environment is poverty.
    Dr. Hansen has talked about India and the brown cloud that 
hangs over India. The reason India puts up with that is not 
that they like air pollution, but that they cannot afford in 
their economy the kind of scrubbers that we have. So if we go 
chasing down the cliff, and I consider it a cliff, of Kyoto, we 
run the risk of impoverishing the economy that drives the rest 
of the world, and thereby end up with people in underdeveloped 
countries causing greater global warming than otherwise. So I 
would have argued with your Republican friend if I had been 
present at that particular Aspen Institute.
    Dr. Hansen, I do not want to mousetrap you or blindside you 
in any way. I have here a report written by Patrick Michaels. 
Are you familiar with Mr. Michaels?
    Mr. Hansen. Yes, I am.
    Senator Bennett. Rather than debate it, I would ask you to 
supply for the record your rebuttal to Mr. Michaels' argument, 
so that those who do not know what we are talking about will 
understand this. I am quoting from this report, he says, ``NASA 
scientists--on June 23, 1988, NASA scientist James Hansen 
testified before the House that there was a strong cause-and-
effect relationship between observed temperatures and human 
emissions into the atmosphere,'' and then you presented a model 
based on that assumption where you predicted an increase of .45 
degrees centigrade from 1988 to 1997, and Mr. Michaels has a 
chart where he shows that prediction was wrong on the high side 
by a fairly significant amount.
    I would appreciate it if you would respond to that chart 
and give us your analysis. If you can do it quickly here----
    Mr. Hansen. Yes, I would like to quickly respond to that. 
It is a very curious charge, because, in fact, if you look at 
my 1988 testimony, what I showed was three scenarios for the 
future. One of them, scenario A, was business-as-usual, in 
which the emissions increase, every year you have more than 
before, and the other--scenarios B and C had more flat 
emissions. In fact, the real-world emissions have been between 
scenarios B and C. If you look at our climate model 
calculations for the forcings which have actually occurred, 
they are right on the money. So Mr. Michaels did a very 
interesting thing. He took our chart--by the way, in the Senate 
testimony I said----
    Senator Bennett. In the House testimony.
    Mr. Hansen. In my Senate testimony in 1988----
    Senator Bennett. Oh, OK.
    Mr. Hansen. I testified to both the House and Senate in 
1988 and showed exactly the same projections--but I said the 
most likely scenario is scenario B, not scenario A. But Mr. 
Michaels took this chart, erased scenarios B and C, and showed 
scenario A. So it is a very simple answer to this.
    Senator Bennett. I appreciate that, because I suggest or 
believe that the New York Times has taken scenario A and 
enshrined it in conventional wisdom forever and ever, as they 
tell us what scientists are saying. I appreciate your 
clarifying that, because what you are saying is that there is 
no absolute certain prediction upon which everybody can depend 
with respect to the future. There is a great deal of 
uncertainty.
    Mr. Hansen. That is exactly right. There is no reason that 
we need to follow scenario A, the business-as-usual.
    Senator Bennett. You are saying now that we did not follow 
the scenario----
    Mr. Hansen. We have not, no. I mentioned a little earlier 
that, in fact, the growth rate of emissions declined 25 percent 
in the last two decades because of chlorofluorocarbons being 
phased out and because of methane slowdowns. So we have already 
taken some very helpful steps for reducing the future climate 
change and we need to take some more in the next century.
    Senator Bennett. I would hope that if there is any 
representative of the New York Times here, that they would call 
your answer to the attention of their editorial writers, so 
that they could become a little less hysterical.
    Mr. Hansen. I actually tried to do that. I wrote an op-ed 
article a week ago, but they did not publish it.
    Senator Lieberman. We can sympathize with that. [Laughter.]
    Senator Bennett. You will not get opinions that are not 
fully orthodox ever reported in the New York Times, unless you 
can get Bill Sapphire to write the column about it.
    Chairman Lieberman. That explains why I like those 
editorials, they are fully Orthodox. [Laughter.]
    Senator Bennett. Very good. You have maybe answered this 
question, but I would like you to get into it a little bit 
more. We are talking about temperatures going up in the last 
100 years. In fact, they went up for 30 years. They went down, 
admittedly at a lower angle than they went up, for about 30 
years, and then they started up again for 30 years. So, instead 
of this being the chart for the last century, it is this, this, 
and this. [Indicating.]
    Can you tell us what caused that 30 years of temperature 
going down, roughly between 1945 and 1975?
    Mr. Hansen. We cannot do it with confidence. It could be 
unforced variability. The climate system is a chaotic system, 
which fluctuates from decade to decade, just like the weather 
fluctuates from day to day, because the atmosphere and ocean 
are fluids, which are chaotic and have an unforced variability. 
It could also have been forced. As you know, as we have talked 
some time today, there are both positive forcings and negative 
forcings, and the negative forcings probably--the aerosols have 
not been increasing so much recently. In fact, in the United 
States and Europe, they have been decreasing because of acid 
rain concerns. It could be that the aerosol increases caused 
that cooling trend, but we do not have the measurements to 
prove that.
    Senator Bennett. You are underscoring once again the 
uncertainty here.
    Mr. Hansen. Right.
    Senator Bennett. We do not really know what caused it to go 
up so rapidly in that first 30-year period or what caused it to 
come down in 30 years. We think we have got a better handle on 
what is causing it to go up now, but even there, we cannot be 
absolutely sure. Is that a fair statement?
    Mr. Hansen. That is exactly right.
    Senator Bennett. One final question. As I looked into this, 
I asked a layman's question and was a little stunned at the 
answer that I got. I hope you can help me understand it. I 
said, ``How much CO2 is there?'' We talk about 
CO2. How much CO2 is there and what 
percentage of it comes from human activity? I am told that 
roughly three--maybe generously 4 percent--of the total 
CO2 that the planet has released into the atmosphere 
every year comes from human activity, and that the rest of it 
is all generated by the planet itself.
    My question is, is there a difference out there in the 
atmosphere or troposphere or wherever it is you wander, between 
naturally-generated CO2 and human-generated 
CO2? Let me tell you why I want to know that. 
Because if indeed there is no difference--let's take the 4 
percent number, which is the largest number I have heard for 
human activity generating CO2, and take the 25 
percent figure, which the New York Times quotes as coming from 
the United States, that means the United States is producing 1 
percent of the total CO2 out there, and if we do 
Kyoto, we reduce that by less than \1/10\ of 1 percent. I 
wonder why savaging the American economy to reduce the total by 
less than \1/10\ of 1 percent is a good idea.
    Now, that is where the math is. Once again, is there a 
difference in the atmosphere between naturally-generated 
CO2 and human-generated CO2 that affects 
this whole equation?
    Mr. Hansen. There is not a difference which is relevant to 
their ability to cause warming. However, I do not understand 
where your 4 percent comes from, because there are various ways 
to do these numbers.
    Senator Bennett. It comes from the Department of Energy and 
cross-checked with the Congressional Research Service at the 
Library of Congress.
    Mr. Hansen. Let me tell you what I think the relevant 
numbers would be. Prior to the Industrial Revolution, the 
amount of CO2 in the atmosphere was about 280 parts-
per-million. It did change over time scales of tens of 
thousands of years with the Ice Ages and things, but the last 
several thousand years it was about 280 parts-per-million. It 
is now about 360--is that right, Mr. Karl? So it is about a 25- 
or 30-percent increase, and we are pretty darn sure that that 
is almost entirely due to human activity. So, based on those 
numbers, it is not a 4 percent increase. It is more like a 30 
percent increase, and the United States has contributed a 
fairly large fraction of that.
    Senator Bennett. Clearly, we need a resolution to this, 
because I have gone to every source I could find to say what 
percentage of the total CO2 currently being sent 
into the atmosphere comes from human activity, and the answers 
have been amazingly uniform.
    Mr. Hansen. The way you get that small number is to look at 
the fluxes. There are fluxes that go up and down, because the 
plants are growing and decomposing--there are fluxes up and 
down. But the point is, if you look at those total fluxes, yes, 
the human contribution may not look so large. But the net 
impact of that human contribution--it is always one sign. 
Humans are the cause almost certainly for almost all of this 
increase from 280 parts-per-million to 360 parts-per-million.
    So I think it is more appropriate to say that humans have 
contributed an increase to atmospheric CO2, which is 
about 30 percent of what is there now. There is really no 
scientific disagreement about this.
    Chairman Lieberman. You got your answer, Senator Bennett.
    Senator Bennett. I will go back to the Department of Energy 
and the Library of Congress now and see what comment they have.
    Chairman Lieberman. Thanks very much. You raise some 
important questions, including the ones about the economic 
consequences of Kyoto, which I believe that some of our 
witnesses on the second panel will testify to. If they do not, 
I am going to ask them about it. Thanks to both of you.
    Did you want to respond at all, Mr. Karl, to Senator 
Bennett's questioning?
    Mr. Karl. I might just want to make one statement, and that 
is absolute certainty is very rarely going to be found in these 
complex environmental issues. So when we say we are nearly 
certain, that is pretty high statement coming from scientists 
in an area that is fairly uncertain.
    Chairman Lieberman. Thanks very much to both of you. I 
would like to now call the final panel: Eileen Claussen, 
President of the Pew Center on Global Climate Change; Dr. James 
Edmonds, Senior Staff Scientist, Pacific Northwest National 
Laboratory, Battelle Memorial Institute; Dale E. Heydlauff, 
Senior Vice President, Environmental Affairs, of the American 
Electric Power Company; Jonathan Lash, President of the World 
Resources Institute; and Margo Thorning, who is Senior Vice 
President and Chief Economist of the American Council for 
Capital Formation.
    Thanks to all of you for coming this morning. We really 
look forward to your testimony about the Byrd-Stevens 
legislation and about the problem overall.
    Ms. Claussen, welcome back.

   TESTIMONY OF EILEEN CLAUSSEN,\1\ PRESIDENT, PEW CENTER ON 
                     GLOBAL CLIMATE CHANGE

    Ms. Claussen. Thank you very much, Mr. Chairman and Members 
of the Committee. Thank you for this opportunity to testify on 
S. 1008, the Byrd-Stevens Climate Change Strategy and 
Technology Innovation Act of 2001. My name is Eileen Claussen 
and I am the President of the Pew Center on Global Climate 
Change. The Pew Center on Global Climate Change is a nonprofit, 
nonpartisan and independent organization dedicated to providing 
credible information, straight answers and innovative solutions 
to the effort to address climate change. Thirty-six major 
companies in the Pew Center's Business Environmental Leadership 
Council, most included in the Fortune 500, work with the center 
in assessing the risks, challenges and solutions to climate 
change. There is a list of who they are up there on the chart.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Claussen appears in the Appendix 
on page 75.
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    Mr. Chairman, I believe that enacting the Byrd-Stevens bill 
will be an important first step in developing a serious 
domestic climate change program, a step that should be taken 
quickly. This bipartisan bill will integrate our energy policy 
with the long-term goal of stabilizing atmospheric greenhouse 
gas concentrations. It will respond to concerns often raised by 
other nations that the United States has no basis for domestic 
action. It will continue investigation into the uncertainties 
of the science and economics of climate change.
    Most important among the many provisions of the Byrd-
Stevens bill is the one that requires the development within 1 
year of a U.S. climate change response strategy with the 
objective of stabilizing greenhouse gas concentrations. To meet 
this goal, the strategy will rely on emission mitigation 
measures, technology innovation, climate adaptation research, 
and efforts to resolve the remaining scientific and economic 
uncertainties.
    At the Pew Center, we believe enough is known about the 
science and environmental impact of climate change for us to 
take action now. As we have learned from the Intergovernmental 
Panel on Climate Change, confirmed recently by the National 
Academy of Sciences, the scientific consensus is very strong 
that greenhouse gases are accumulating in Earth's atmosphere as 
a result of human activities, causing surface air temperatures 
and subsurface ocean temperatures to rise.
    As a consequence, there likely will be substantial impacts 
to human health, agriculture, ecosystems and coastlines. The 
high probability of these outcomes indicates the need for some 
action now. Even as we act, however, we need to refine our 
scientific understanding, particularly on the impacts of 
climate change. But the best scientific evidence tells us that 
we have already bought a changed climate, to which we and our 
children will need to adapt.
    Obviously, the more quickly we mitigate, the less we will 
have to adapt. But some amount of adaptation appears 
inevitable. The Byrd-Stevens bill creates a sound basis for 
giving priority to and investigating how we must adapt to 
climate change. We also applaud efforts to further analyze the 
uncertainties regarding the economic impacts of climate change. 
Work done by the Pew Center suggests that no existing model 
accurately predicts the economic effects of any given measure 
to mitigate climate change. We are hard at work to fill in many 
of the gaps of the models, but additional efforts would be most 
welcome.
    Second, the Byrd-Stevens bill will promote technology 
innovation. In May, Senator Byrd said from the Senate floor 
that to address global climate change, ``What is required is 
the equivalent of an Industrial Revolution.'' We think he was 
exactly right. To effectively address climate change, we need 
to lower carbon intensity, become more energy efficient, 
promote carbon sequestration, and find ways to limit emissions 
of non-CO2 gases. This will require fundamentally 
new technologies, as well as dramatic improvements in existing 
ones.
    New, less carbon-intensive ways of producing, distributing 
and using energy will be essential. The redesign of industrial 
processes, consumer products and agricultural technologies and 
practices will also be critical. These changes can be 
introduced over decades as we turn over our existing capital 
stocks and establish new infrastructure. But we must begin 
making investments, building institutions and implementing 
policies now.
    Third, under the Byrd-Stevens bill, the climate change 
response strategy will be required to incorporate mitigation 
approaches to reduce, avoid and sequester greenhouse gas 
emissions. This will force us to take a hard, needed look at 
our policy choices. We believe that it will be extraordinarily 
difficult, if not impossible, to muster the kind of sustained 
effort needed to reduce, avoid and sequester greenhouse gas 
emissions without the force of legally-binding commitments.
    There is little incentive for any company to undertake real 
action unless ultimately all do and are in some manner held 
accountable. Markets, of course, will be instrumental in 
mobilizing the necessary resources and know-how. Market-based 
strategies, such as emissions trading, will also help deliver 
emissions reductions at the lowest possible cost. But markets 
can move us in the right direction only if they are given the 
right signals. In the United States, those signals have been 
neither fully given, nor fully excepted.
    Three decades of experience fighting pollution in the 
United States have taught us a great deal about what works 
best. In general, the most cost-effective approaches allow 
emitters flexibility to decide how best to meet a given limit, 
provide early direction so targets can be anticipated and 
factored into major capital and investment decisions, and 
employ market mechanisms to achieve reductions where they cost 
least. To ease the transition from established ways of doing 
business, targets should be realistic and achievable. What is 
important is that they be strong enough to spur real action and 
to encourage investment and development of the technology and 
infrastructure needed to achieve the long-term objective.
    A good first step to get our house in order is to 
immediately require accurate measurement, tracking, reporting 
and disclosure of greenhouse gas emissions. In addition, the 
government could enter into voluntary enforceable agreements 
with companies or sectors willing to commit to significant 
reductions. While such efforts can help get the United States 
on track, the long-term emission reductions needed can be 
achieved only with a far more comprehensive and binding 
strategy.
    I should add that congressional debate over the mitigation 
measures should start now and not await completion of the 
strategy, especially since the debate will take some time, we 
believe, to resolve. As Senator Byrd said when he introduced 
his bill, this legislation is intended to supplement, rather 
than replace, other complementary proposals to deal with 
climate change in the near-term on both the national and 
international level.
    In closing, Mr. Chairman, the Byrd-Stevens Climate Change 
Strategy and Technology Innovation Act of 2001, if enacted 
quickly and implemented in a serious manner, will provide an 
excellent foundation for climate change policy in this country. 
Thank you for the opportunity to testify.
    Chairman Lieberman. Thank you, Ms. Claussen, for that 
excellent testimony.
    Dr. Edmonds, welcome. Thank you for being here.

     TESTIMONY OF JAMES A. EDMONDS,\1\ Ph.D., SENIOR STAFF 
  SCIENTIST, PACIFIC NORTHWEST NATIONAL LABORATORY, BATTELLE 
                       MEMORIAL INSTITUTE

    Mr. Edmonds. Thank you, Mr. Chairman and Members of the 
Committee, for the opportunity to testify here this morning on 
the Climate Change Strategy and Technology Innovation Act of 
2001. It is a privilege to be invited here and to have the 
opportunity to share a position on this panel with such 
distinguished colleagues as Dale Heydlauff, as well as, Eileen 
Claussen, Jonathan Lash, and Margo Thorning. My presence here 
today is possible because the U.S. Department of Energy, EPRI 
and numerous other organizations in both the public and private 
sectors have provided me and my research team at the Pacific 
Northwest National Laboratory long-term research support.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Edmonds appears in the Appendix 
on page 79.
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    That having been said, I come here today to speak as a 
researcher and the views I express are mine alone. The focus of 
my comments today are on the funding portion of the Climate 
Change Strategy and Technology Innovation Act of 2001, not on 
its organizational aspects.
    My observations draw upon the work that was conducted under 
the Global Energy Technology Strategy Program to Address 
Climate Change, an international, public-private sector 
collaboration advised by an eminent Steering Group. Analysis 
conducted at the Pacific Northwest National Laboratory, as well 
as in collaborating institutions around the world during Phase 
I, supports three general conclusions: (1) It's concentrations 
of greenhouse gases that matter. For CO2, cumulative 
emissions by all countries, over all time determine the 
concentration; (2) technology is the key to controlling the 
cost of stabilizing the concentration of greenhouse gases; and 
(3) managing the cost of stabilizing the concentration of 
greenhouse gases, at any level, requires a portfolio of energy 
R&D investments across a wide spectrum of technology classes.
    My first point is that: It's Concentrations Not Emissions. 
The United States is a party to the Framework Convention on 
Climate Change, which has as its objective the ``stabilization 
of greenhouse gas concentrations in the atmosphere at a level 
that would prevent dangerous anthropogenic interference with 
the climate system.'' This is not the same as stabilizing 
emissions. Because emissions of the greenhouse gas, 
CO2, accumulate in the atmosphere, its concentration 
will continue to rise indefinitely even if emissions are held 
to current levels or even at some reduced level.
    Stabilization of CO2 concentrations means that 
the global energy system, and not just the United States' 
energy system, must undergo a fundamental transition from one 
in which emissions continue to grow throughout this century 
into one in which global emissions eventually peak and then 
decline.
    Coupled with significant global population and economic 
growth, this transition represents a daunting task even if a 
concentration as high as 750 parts per million is eventually 
determined to meet the goal of the Framework Convention--though 
no consensus yet exists as to what concentration will prevent 
``dangerous'' interference with the climate system.
    My second point is that: Technology Controls Cost. 
Stabilizing the concentration of greenhouse gases in the 
atmosphere will require a credible commitment to limit 
cumulative global emissions of CO2. Such a limit is 
unlikely to be achieved without cost but that cost will in 
large measure be shaped by the character of the energy 
technology options available to limit cumulative global 
emissions of CO2.
    My third point is that: There Is No ``Silver Bullet.'' No 
single technology controls the cost of stabilizing CO2 
concentrations under all circumstances. The portfolio of energy 
technologies that is employed varies across the world's regions 
and over time. Regional difference in such factors as resource 
endowments, institutions, demographics and economics, 
inevitably lead to different technology mixes in different 
nations, while changes in technology options inevitably lead to 
different technology mixes over time.
    Technologies that are potentially important in stabilizing 
the concentration of CO2 include energy efficiency 
and renewable energy forms, non-carbon energy sources such as 
nuclear power and fusion, improved applications of fossil 
fuels, and technologies such as terrestrial carbon capture by 
plants and soils, carbon capture and geologic sequestration, 
fuel cells, and advanced energy storage systems, and commercial 
biomass and biotechnology. The latter holds the promise of 
revolutionary change for a wide range of energy technologies. 
Many of these technologies are undeveloped or play only a minor 
role in their present state of development.
    Mr. Chairman, thank you for this opportunity to testify. I 
will be happy to answer your and the Committee's questions.
    Chairman Lieberman. Thanks, Dr. Edmonds. Thanks very much.
    Mr. Heydlauff, welcome.

   TESTIMONY OF DALE E. HEYDLAUFF,\1\ SENIOR VICE PRESIDENT-
     ENVIRONMENTAL AFFAIRS, AMERICAN ELECTRIC POWER COMPANY

    Mr. Heydlauff. Thank you very much, Mr. Chairman. It is a 
privilege to be here, Senator Thompson, Senator Bennett. My 
name is Dale Heydlauff. I am the Senior Vice President for 
Environmental Affairs at American Electric Power Company. We 
are headquartered in Columbus, Ohio, and have the distinction 
of being the country's largest consumer of coal. As a matter of 
fact, I think we burn more coal than anybody in the Western 
Hemisphere. We are the third-largest consumer of natural gas. 
We are the largest producer of electricity in the Nation.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Heydlauff with an attachment 
appears in the Appendix on page 84.
---------------------------------------------------------------------------
    As a consequence of that, we recognized early on that the 
concerns about global climate changes were ones that we needed 
to take seriously. We have been heavily engaged in the debate 
since literally Dr. Hansen testified before the Senate in 1988. 
We have been following this debate very closely. We have been 
participants and observers in the international negotiations on 
this issue, and importantly, we have sought to find and 
identify ways that we can effectuate meaningful emission 
reductions, avoidance or sequestration through our activities 
and our operations, both domestically and around the world.
    It is in that context that I wanted to testify before you 
today, and with your permission, I will submit my written 
statement for the record and just summarize my oral remarks. 
The simple thing for me to do is just to say I concur 
completely with the statements of those who have preceded me on 
this panel. We are one of the founding members of the Pew 
Center on Climate Change Business Environmental Leadership 
Council and we are honored to be in that position. I rarely 
find myself in disagreement with the wisdom of our President, 
Mrs. Claussen. Dr. James Edmonds and I have known each other 
for a number of years now. The Global Energy Technology 
Strategy Program that he referenced in his testimony is 
research that we helped fund and have funded for years. Quite 
honestly, it has guided substantially what I want to say here 
today.
    Let me start and say if I could summarize my remarks in one 
line, it would be this: Accelerating climate friendly 
technology development through very dramatic increases in 
energy technology, research and development, both by the public 
and private sectors, and then deploying the fruits of that R&D 
on a global basis is by far and away, in my judgement, the most 
sensible, cost-effective and ultimately sustainable strategy 
for addressing the climate change issue.
    I do not think there is going to be any other way you are 
going to do it. If you believe that atmospheric concentrations 
of greenhouse gas emissions need to be stabilized in the 
future, it is only going to come about as a result of a 
technology strategy, one that can help be facilitated by the 
legislation that we are testifying to today. Let me talk a 
little bit about the challenge that befalls this country in 
doing that, and indeed the world, because this is truly a 
global commons problem.
    The first is, in real terms, energy technology R&D in this 
Nation in the past decade has fallen by 47 percent, both in the 
public and private sectors. The energy industry itself, I am 
somewhat embarrassed to report, today invests \1/2\ of 1 
percent of total national revenues on technology R&D. Compare 
that to the chemical, pharmaceutical, and telecommunications 
industries, which routinely spend about 10 percent of annual 
revenues on R&D, or the U.S. industrial average of 7 percent, 
and you can see the challenge we have confronting us.
    To compound the problem, however, what we are spending our 
dollars on today could be characterized as evolutionary 
improvements in existing technology, which certainly have some 
societal good, and particularly even some climate change 
benefits, because in many cases we are attempting to squeeze 
out more efficiency from existing technologies. But it simply 
is not going to be a successful strategy, because what we 
really need to do is develop those bold breakthrough 
technologies that the Byrd-Stevens legislation would help to 
facilitate.
    A couple of other points I wanted to mention, specifically 
with respect to the Byrd-Stevens legislation. One is I think 
they have done a commendable job in the construct of the 
national research program and agenda. First of all, you need 
leadership, and that leadership can only and should only be 
governed from the top of the Executive Branch in the White 
House. I commend them for the establishment of the White House 
office.
    Second, you do need a bureaucracy. I hesitate always to 
differ with the Senator from my home State, but in this case, I 
think you do need leadership, you need management of an effort 
of this magnitude. Third, quite honestly, as significant as the 
level of expenditures would be under this legislation, they 
will ultimately be inadequate, and I realize we are just 
talking about public sector investments with respect to the 
authorizations that we derive from this legislation, and 
hopefully the private sector would be willing to step up and 
come close to matching that level, because you are going to 
need investments of that magnitude ultimately to be successful.
    You look at the four paradigms of the Byrd-Stevens bill, 
and I think they have got it right. It would establish the 
solid foundation upon which to address the climate change issue 
for a very long time to come. So, with that, I would admonish 
the Committee to exercise the same degree of speed and 
forthrightness that you took to scheduling this hearing so soon 
after the legislation was introduced and proceed on to pass it 
out and send it over to the House.
    Thank you very much, Mr. Chairman.
    Chairman Lieberman. Thanks very much, Mr. Heydlauff. It 
strikes me that for somebody who may be either here in the 
room, and not very familiar with this dialogue that has been 
going on, or watching on television, that the favorable 
testimony and very proactive testimony that you have given, 
representing the company that is the largest consumer of coal, 
might be surprising, because some might think that you would be 
avoiding a solution. So I admire the fact, and it is typical of 
a whole group of companies in a similar position, that you are 
forward-leaning, are part of the solution, and I know from 
previous conversation you want the certainty that will come 
with a legislative leadership and solution. So I thank you very 
much for your testimony.
    Mr. Lash, welcome back. Good to see you again.

   TESTIMONY OF JONATHAN LASH,\1\ PRESIDENT, WORLD RESOURCES 
                           INSTITUTE

    Mr. Lash. Thank you, Mr. Chairman, Senator Thompson, and 
Senator Bennett. It is a pleasure to be here with you today. I 
was very struck by Senator Byrd's opening statement and by his 
co-sponsor Senator Stevens' comments at the beginning of this 
hearing. These comments are most important because they signify 
a recognition that climate change is a problem that needs to be 
systematically addressed and is a priority for our country.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Lash appears in the Appendix on 
page 91.
---------------------------------------------------------------------------
    I would actually like to address the legislation that is 
before us, rather than the science or the strategies that might 
emerge. Senator Byrd commented, as he did when he introduced 
the bill initially in the Senate, that this is a part of a 
broader effort on climate, not a substitute for action, and I 
want to address it in that context. It is essential that, at 
the same time, the Senate continue to deal with complementary 
proposals for addressing the problem of climate change 
including legislation that Members of this Committee have co-
sponsored. I will come back to why I think that this is so 
important. But S. 1008 is particularly important because it 
recognizes that climate change represents threat to the 
Nation's interests and that we need a national climate change 
strategy that is informed by a public dialogue which can help 
the country to understand what is at stake in the issue and 
what is at stake as we approach the solutions.
    The strategy should take as its goal, the stabilization of 
greenhouse gases in the atmosphere at safe levels. That 
recognition is an important step in our debate. This was the 
goal accepted by the United States almost a decade ago when 
then-President Bush signed and the U.S. Senate ratified the 
Framework Convention on Climate Change. Now the United States 
does not have a strategy on climate change, and as many 
commentators have noted, we are clearer about what we are 
against than what we are for.
    Second, S. 1008 recognizes that climate change 
considerations should be integrated into decision-making at 
every level of the government. I offer no view about the 
specific administrative arrangements proposed in the bill and 
the highly-detailed requirements, but I think that the effort 
to ensure that climate change considerations enter into energy 
policy and environmental policy decisions is essential, at all 
levels of the government.
    Third, S. 1008 recognizes that economic consequences of 
inaction on global warming may cost the global economy 
trillions of dollars. As Senator Bennett pointed out several 
times earlier, there is no free effort to respond to climate 
change and there is a great deal of discussion about the costs 
of any strategy for a response, but we need to recognize the 
costs of failure to respond as well.
    Fourth, S. 1008 recognizes that current research and 
development budgets are grossly inadequate to meet the 
challenge of climate change. As the bill's findings correctly 
state, stabilization of greenhouse gases in the atmosphere will 
require transformational change in the global energy system, as 
well as research and development that leads to bold 
technological breakthroughs. I agree very much with what Mr. 
Heydlauff said a moment ago about the importance of research 
that is not just at the margins, but, of research that helps us 
understand the significant kind of changes that we could make.
    Today we have technologies available that companies part of 
the Pew Center are using to reduce emissions. It is not 
impossible for us to respond to climate change this week, next 
week, or next month, to improve efficiency, and to adopt new 
sources. At the World Resources Institute, we work with a group 
of companies who will soon purchase several thousand megawatts 
of wind energy in an effort to reduce their reliance on carbon-
based fuels. But none of this is a substitute for large-scale 
research on major new technologies.
    Finally, S. 1008 recognizes that our national energy 
strategy cannot be shaped without paying close attention to the 
challenge of climate change. I want to go back to what I said 
at the start and emphasize again the need for early action. I 
think there are three reasons for slowly taking action now. 
First of all, if we begin to slowly take action, we will learn 
the answers to some of the questions that are troubling many 
Senators about the costs and technological and social 
difficulties of change. If we start slowly, we can add to our 
store of information about how to respond pragmatically.
    Second, a slow start gives us a chance to make a stable 
transition. Mr. Heydlauff's company, I believe, burns 80 
million tons of coal a year. Part of the national energy 
strategy will certainly be to encourage companies like AEP to 
build new plants for the generation of electricity. I do not 
know how AEP managers can effectively represent the interests 
of their shareholders if they do not know what policies 
government may impose in 5, 6, or 8 years that will add to the 
costs of burning coal. Without knowing what regulatory costs 
will be managed, they do not know how much to invest in 
efficiency, how much to invest in gas, how much to invest in 
pollution controls.
    Finally, I do not think it is to the benefit of the United 
States' competitiveness to fail to invest in more efficient 
technologies for producing energy. Whatever long-term strategy 
we ultimately develop to try to stabilize concentrations, what 
we do in the first 10 years will likely have to be the same. 
Whatever the path we ultimately are going to follow, it will 
still involve early efforts to reduce pollution and control 
CO2.
    Thank you very much, Mr. Chairman.
    Chairman Lieberman. Thank you very much, Mr. Lash, for that 
very interesting testimony.
    Ms. Thorning, thanks for being here. We look forward to 
hearing you now.

 TESTIMONY OF MARGO THORNING,\1\ Ph.D., SENIOR VICE PRESIDENT 
  AND CHIEF ECONOMIST, AMERICAN COUNCIL FOR CAPITAL FORMATION

    Ms. Thorning. Thank you very much. I appreciate the 
opportunity, Mr. Chairman, to appear before this Committee and 
to appear with such a distinguished panel of climate policy 
experts. I would like to request that my written testimony be 
included in the record.
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    \1\ The prepared statement of Ms. Thorning appears in the Appendix 
on page 98.
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    Chairman Lieberman. It will, without objection.
    Ms. Thorning. My written testimony includes a discussion of 
some of the issues you asked about, including the macroeconomic 
impact of the Kyoto Protocol and near-term emission limits, the 
impact on U.S. budget surpluses of actions that would slow 
economic growth, international trading systems, and a 
discussion of the fact that the European Union itself will not 
be able to meet its Kyoto targets, and a discussion of the 
science. Although I am not a scientist, I did want to raise the 
issue that, as we heard earlier, the science is not clearly 
understood. Much further work, much more study, needs to be 
done on that.
    Before launching into a little discussion of S. 1008, I 
would like to draw your attention to the story on the front 
page of the Washington Post this morning, Steven Pearlstein's 
story about the economic impact of global slowdown. The 
implication of the Pearlstein story is the United States is the 
engine of world economic growth. If we are unable to regenerate 
the strong growth that we have experienced in earlier years, it 
is going to be much harder for the developing economies and for 
Europe and for Japan to pull themselves out of their slump.
    Therefore, I think it is appropriate to weigh very 
carefully any major policy decisions, such as measures to, in 
the near-term, sharply reduce the growth or cap CO2 
emissions. The studies that we have looked at and that are 
described in my testimony suggest such policies would reduce 
U.S. levels of GDP by 2 to 4 percent a year, which would be a 
significant negative drag on the U.S. economy and on our 
trading partners. Also, there is a substantial body of research 
by scholars such as Robert Crandall at Brookings, McKibben and 
Wilcoxin, Yale professor Bill Nordhaus, that suggest that the 
cost of going ahead with sharp, near-term caps on emissions far 
exceed the benefits, even when you take account of the 
possibility of some changes to climate.
    So I think the evidence suggests we need to take a cautious 
attitude before deciding what is the best strategy to address 
the potential threat of climate change, and I do not think the 
scholars whose work I am mentioning suggest that nothing needs 
to be done. Clearly it does, but we need to move forward in the 
most efficient, cost-effective possible way, so as not unduly 
burden the U.S. economy and our trading partners.
    I would like to make a few comments about S. 1008. I think 
Senators Byrd and Stevens are to be commended for their 
recognition of the importance of technological innovation as 
the principal means of dealing with the possible threat, 
potential threat, of climate change. S. 1008 contains some 
helpful initiatives that could further the goals of maintaining 
strong economic growth and energy security, while reducing 
greenhouse gas emissions. The bill also appears to be 
supportive of some of the initiatives put forth by the Bush 
Administration, including advancing clean-coal technology.
    I was very pleased to hear the other comments about the 
importance of coal to the U.S. economy. It is clearly going to 
be a major energy source for the foreseeable future, and we do 
need to accelerate the development of clean-coal technology. 
However, I would like to suggest that S. 1008 falls short in 
some ways, in terms of promoting many of the policies I 
suggested in my testimony for encouraging technological 
innovation.
    For example, S. 1008 does not address the question of how 
to deploy new technology. We need to develop it, but how do we 
get it adopted? How do we get it into the system? One thing I 
would like to draw your attention to is the U.S. Tax Code, 
which taxes new investment much more harshly than most of our 
competitors, whether it is productive investment or whether it 
is pollution-control investment. As Table 1 of my testimony 
shows, the United States has very slow capital cost recovery. 
We rank near the bottom of a list of eight countries that 
Arthur Andersen surveyed. If we could improve depreciation or 
tax incentives for pulling through, it would help to pull 
through the kinds of equipment that would enable us to both 
grow and reduce CO2 emissions.
    So, taking a look at the tax code and, as the Bush 
Administration moves forward with tax reform, hopefully that 
would be part of hopefully better depreciation, particularly 
for energy-efficient or pollution-reduction--would be part of 
any tax code reform. Second, S. 1008 does not address nuclear 
power. That has clearly got to be a major component, at least 
over the next several decades, of U.S. energy supply; France 
manages to produce 80 percent of its electricity and the United 
States only 20 percent. So it suggests that we ought to be able 
to move forward to rely on a source of energy that is much less 
polluting.
    We also need more bilateral cooperation with developing 
countries to promote the use of existing and emerging 
technology. We need to expand incentives for landfill methane 
and biomass, the EIA Clean Technology Initiative report shows 
that those were the two most effective programs, and I do not 
believe S. 1008 addresses those. Finally, we need to avoid caps 
on CO2 emissions by U.S. industry and avoid setting 
targets at this time. We need further study of this issue. We 
need to move forward, but in a cost-effective, careful way.
    Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you very much. Thanks for your 
testimony. I appreciate the effort that all of you put into 
appearing before us.
    Ms. Claussen, let me start with you, and you talked about 
the critical need for a national strategy on climate change. 
You have extensive experience in government. Now you are in the 
private sector, working with some of America's largest 
corporations. Just give us your reaction to what you think the 
impact would be of a central White House office focused on 
climate change, and I want to ask the question implicitly, is 
it worth it? In other words, we do not want to continue to 
proliferate offices in the White House, but how do you see it 
here?
    Ms. Claussen. Senator, I was in government for about 25 
years, and I participated in interagency process in the Reagan 
Administration and the first Bush Administration. In the early 
part of the Clinton Administration, I actually ran an 
interagency process. I hope I learned from the first two 
administrations and applied some of it in the third, but the 
fact is, this is a monster of an issue and everyone has a 
legitimate reason to be involved across the government for a 
variety of different reasons. If you do not have a way to focus 
the effort and coordinate the effort, you just have everybody 
doing their own thing based on their own set of objectives and 
the culture of their own agency. You do not have a coherent 
policy. It is extremely hard to do, but I think you have to 
center it in the White House and you have to put some real 
effort into making it work.
    Chairman Lieberman. Thank you. Let me go now to the 
economic consequences and, in a sense, some of the questions 
that Senator Bennett raised about the costs of complying with 
Kyoto or the cost of responding to the climate change problem. 
I was interested that, I think, Dr. Edmonds and Mr. Lash, in 
your prepared testimony, talked about the economic consequences 
of inaction here. I wonder if you could both expand on that, 
and if there is any way in which we could begin to quantify the 
economic cost of inaction.
    Mr. Edmonds. Thank you, Mr. Chairman. The Global Energy 
Technology Strategy Program has shown that cost does matter and 
is an important element that must be taken into account in 
framing an effective response to climate change. The climate 
change issue is essentially an intergenerational problem. This 
makes the climate change problem far more difficult than local 
environmental problems involving short-lived gases and 
aerosols, with which we are more familiar.
    We largely live with the climate that we inherited from our 
predecessors, while we are in turn laying down the foundations 
of the climate that we will pass on to the next generation. 
But, we have very little margin to change our own climate. The 
actions that we take to mitigate emissions are therefore 
largely undertaken out of an altruistic motivation-care for our 
children and grandchildren. Under such circumstances the cost 
of emissions mitigation matters a great deal.
    This observation in turn leads us back to the importance of 
developing technologies and energy systems that can limit 
emissions in a cost-effective manner. And, that is the heart of 
S. 1008. Without cost-effective energy technologies and systems 
even the best-crafted tactics to limit cumulative global 
emissions of carbon to the atmosphere will ultimately prove to 
be either too expensive to implement, or will more likely lead 
to higher concentrations and greater climate change for future 
generations.
    On the other hand, if energy technologies and systems are 
developed and made available at reasonable cost, all tactics 
for controlling emissions begin to look much more attractive, 
as do lower cumulative global carbon emissions and long-term 
CO2 concentrations.
    I think the thrust of everything we have learned under this 
global energy technology strategy program is that cost does 
matter. It is a very important element. It has to be taken into 
account. The climate change issue is essentially an 
intergenerational problem, and we largely live with the climate 
that we inherited from our predecessors, and we lay down the 
concentrations of greenhouse gases in the atmosphere that are 
passed onto the next generation. So, in fact, most of our 
margin is not on our own climate. It is an altruistic 
enterprise, and under those circumstances, we do altruism. We 
save for our kids education and we do things for the future, 
but cost really does matter and it matters a lot.
    I think what comes out of this global energy technology 
strategy program is that addressing the climate change issue 
seriously requires that we deal with this as a century scale 
problem, not as a year by year problem, and that if the 
technology to address climate change is not available--that is 
the core of what S. 1008 is about--if it is not available, 
pretty much independent of the best crafted tactics to limit 
cumulative global emissions of carbon to the atmosphere are 
ultimately going to turn out to be too expensive, and we will 
either not do it or we will not do as much as we could.
    On the other hand, if the technology is developed and is 
made available, all the tactics begin to look much more 
attractive and it is a lot easier to do the job right. I think 
that is the important lesson, that if we have the technology, 
it is going to be a lot easier job and costs are going to be 
minimal.
    Chairman Lieberman. Mr. Lash.
    Mr. Lash. Two brief comments--first, looking at the costs 
of action, one gets very different answers depending on the 
assumptions used in the models that do the calculations and on 
the policies that one analyzes. If the models assume that the 
economy is very good at changing sources of fuel, that we would 
use more gas and less coal as a response, and that new 
technologies would develop, the cost is low. If the models do 
not assume that kind of flexibility in our economy, the cost is 
high. If the models account for benefits, the cost is low. If 
the models do not account for benefits, the cost is high. Most 
models do not account for benefits because to account for 
benefits is very difficult.
    For instance, Dr. Hansen was talking about the number of 
people who die from air pollution who might be saved if we 
reduce pollution. Certainly, it is very important what policies 
are used. If you have a rigid regulatory system that imposes 
huge and sudden cost on utilities or on the auto industry, 
reductions will cost a lot. If you have a market-based system 
that allows companies to choose how they are going to proceed 
over a number of years, reductions will cost less. It is 
important to make those distinctions as one is analyzing costs. 
The same is true for the benefits of action and the costs of 
inaction. Because we are uncertain about precisely what will 
happen 25 years from now if we do not take action--any 
assessment we make of those costs is going to involve the kinds 
of scenarios that Dr. Hansen was talking about, and guesses 
about impacts, both here and externally, and it makes counting 
them difficult. The assumptions going in determine the numbers 
coming out.
    Chairman Lieberman. Mr. Heydlauff, it might be interesting 
to ask you to comment on this from the perspective of one 
company, a big, significant company, America's largest 
generator of electricity, generating about 6 percent of the 
U.S. figure, comparable to the annual electric power 
consumption of Mexico and Australia. I am just reading from 
your testimony--6.1 million customers. So the question is, from 
your company's point of view, you are supporting action here, I 
assume, as an act of good citizenship, but also because there 
has been a calculation made within the company and you 
dispatched your responsibility to shareholders that this is the 
right way to go economically, as well. I wonder if you could 
talk about that a little bit.
    Mr. Heydlauff. I would be happy to do that. One thing I 
believe has come out of the research that we help fund, is that 
you cannot solve this problem without new technology. We 
believe as a company that it would be a shame if the country 
adds new generation, utilizing existing technologies, and does 
not take advantage of advanced, more efficient, less carbon 
intensive technologies to meet the energy needs of the Nation, 
and most importantly, then, if we also do not take that 
technology and deploy it around the globe. Let me give you a 
concrete example of where I think the challenge is greatest, 
and that is in the developing nations, which are going to 
utilize their indigenous energy resources to grow their 
economies. Case in point is China.
    China's total coal burned in 1996, I think, was 600 million 
or 700 million tons a year. They are projected to burn 2.1 
billion tons a year by 2015, the year at which they are also 
projected to have their greenhouse gas emissions equal those of 
the United States of America. A number of years ago, the 
Chinese came to us recognizing our expertise in coal-fired 
generation. They said we are going to build lots of new coal-
fired generation, approximately at the time they were talking 
about building 15,000 megawatts of new generation a year, and 
we would like to talk to you about building some of those 
plants for us. We told them that, initially, our real interest 
was in trying to take these innovative clean-coal technologies 
that are much more efficient and much cleaner and deploy them 
in China. The problem is there is a price premium for that, 
that neither we nor our shareholders were willing to eat, nor 
were the Chinese willing to pay. That is one of the reasons 
why, for a number of years, Senator Byrd has had legislation in 
saying we need to figure a way to subsidize that delta between 
conventional technology and innovative technologies.
    We built a power plant in China, relatively clean, but it 
was utilizing 1940's, 1950's technology because that is all 
they were willing to pay for. I felt real bad about it, 
honestly, until I understood what we were displacing, which was 
the direct use of coal to heat and cook in residential 
dwellings. We brought electricity to a community that never had 
it before, which is obviously far cleaner and more efficient 
than what they were doing. But it was not what we should have 
accomplished, which was that leapfrog in technology use 
internationally. I do not believe AEP will build another coal-
fired power plant like we have in operation today. I believe it 
will be much more efficient. I think coal has been the bedrock 
fuel for electric generation in this country for 100 years, and 
it will continue to be.
    We have got to find a way to burn it more efficiently, more 
cleanly--which the Byrd-Stevens legislation would accomplish. I 
applaud President Bush in his initiatives that he announced 
late last week, which is to advance research on carbon capture 
and then either utilizing the carbon dioxide for enhanced oil 
and gas recovery, or more appropriately probably because the 
volumes will be so significant, disposing of it in a safe and 
permanent manner in geologic formations; deep saline aquifers, 
abandoned oil and gas wells, coal mines, whatever. That is how 
you keep coal in the fuel mix, which I think is essential.
    Chairman Lieberman. I am going to yield to Senator Thompson 
and maybe he wants to take up this line of questioning. I take 
it from what you said in your earlier testimony that 
notwithstanding the need for transformational new technologies, 
energy technologies, you do not see the private sector here 
investing the necessary money in research and development, 
which is why we need the kind of focused, expanded effort that 
is part of this research and development effort through the 
Federal Government that is part of the Byrd-Stevens bill.
    Mr. Heydlauff. That is correct. Certainly, history would 
suggest that the levels of private sector investment in those 
revolutionary bold breakthrough technologies is pretty much 
nonexistent. There is very little of it going on today, and 
perhaps this legislation will motivate that.
    Chairman Lieberman. Thanks, thanks very much. Senator 
Thompson?
    Senator Thompson. I wonder why the R&D has been so low in 
this area, compared to other industries. It looks to me like 
you are being besieged at all sides. I know you and I share a 
commonality in that we both represent entities that are being 
sued by EPA right now. I am referring to TVA, saying that we 
are keeping the old plants on too long, and the modifications 
are not permitted under the Clean Air Act. So, in fact, it is a 
mini-Kyoto situation, it looks to me like. You have the factor 
of your need for a global approach to it, because the pollution 
in the area is destroying the Smoky Mountains National Park, by 
the way. You have automobile emissions and the coal emissions 
from the TVA plants, but a lot of it comes from your part of 
the country and it settles right down in that area.
    No company or entity wants to be disadvantaged. So you are 
going to have to have a global solution, more or less. The 
costs are said to be astronomical if we do it any differently. 
The rates will go up in the TVA area if we correct the problem 
and nobody knows really how much, but the damage being done is 
clearer there. It is more imminent. It is more polluted on the 
top of the Smoky Mountains most days than it is on the streets 
of New York City. So if we cannot have some kind of regional 
solution to that, I am wondering how we are going to take on 
the world.
    I get back to my point. I wonder why, with all this 
pressure and commentary, industry is not doing more. Clearly 
the government needs to step into this. That is what we do best 
up here. We mandate all these different things, all these 
different entities, and we come to what seem to be logical 
conclusions about what ought to be done about all of these 
problems. We pass some bills not knowing what we are doing, 
unintended consequences run rampant. This is what we do well up 
here, research and development, but industry, I think, has got 
to do more too.
    I would like to work with you some in the future and talk 
about some way we can approach this regional problem that is 
doing a lot of damage. Nobody wants to put anybody at a 
competitive disadvantage, but maybe if we do it together----
    Mr. Heydlauff. Just to respond very quickly, one of the 
other things that Congress can do and can do well is resolve 
conflicts in Federal policy. Nowhere is that more in evidence 
than in the issue that you raised about new source review. The 
Clinton Administration came to us early on and said they were 
going to meet the aim of the framework convention on climate 
change to reduce emissions levels by the year 2000, but they do 
not want to rely on new bureaucracies and new regulations. They 
want to tap the ingenuity of the American public, and in 
particular, American industry.
    The electric utility industry stepped up to the plate and 
put together a very robust program of response measures. We 
literally combed our company for opportunities to improve the 
efficiency with which we convert coal into electrons, and we 
took a number of measures at our power plants to do that. I 
would submit to you that everything we did that improved the 
efficiency with which we converted energy into electrons, 
simultaneously reduced those air emissions that you are 
concerned about in the Smoky Mountains. Yet, we are in the 
unhappy position today of having been sued for taking some of 
those actions. We are improving the efficiency of the plant, we 
are reducing emissions, yet the government is telling us that 
was a violation of new source review rules and, consequently 
and unfortunately, we have halted those measures until we have 
resolved this issue.
    I hope that--and I realize that is an issue not for this 
Committee. Senator Lieberman, it is for your other committee, 
and in that we can get that issue resolved too. View it in the 
context of a multi-pollutant control legislation that Senator 
Voinovich talked about, where we can bring a rational approach, 
a resolution to all of these issues; the air quality issues, 
Senator Thompson, that you are concerned about in Tennessee, 
and I know they are concerned about it in the Northeast, as 
well as, perhaps, starting down the path that we all hope to go 
down in terms of the response to global climate change 
concerns.
    Senator Thompson. Going to another question here that was 
mentioned, I think that several members of the panel, 
specifically Mr. Lash, mentioned the uncertainty of the 
economic estimates. I saw a June 12 USA Today article, I think 
you referenced it in your testimony, Ms. Thorning, that 
indicates the Clinton Administration has now acknowledged that 
its economic analysis was flawed. Back during Kyoto, they came 
up with some rather low numbers as to what it would cost--but, 
it seems it was based on China and India accepting binding 
emissions limits, which they have not, and Europe and other 
countries engaging in emissions trading as a solution, and 
apparently they are not making any progress on that. Former 
administration officials were quoted as saying, ``That the 
thing that made them really uneasy about our analysis was that 
if our assumptions do not come true, costs can come up much, 
much higher.''
    Ms. Thorning, you have done that, I know, in some of your 
work. It has been pointed out that it is very uncertain and it 
all depends on assumptions and so forth. I would like for you 
to address that and I would specifically like for you to 
address what we should do and how much is it going to cost? 
Kyoto is a good place to start. That is one so-called solution 
that is out there, and people can try to measure it. There are, 
obviously, other approaches that will presumably have lower 
price tags. As far as Kyoto is concerned, first discuss the 
validity of being able to analyze the economic aspects. Second, 
what does your work reveal in terms of the effect it would have 
on: The gross domestic product of this country; our growth, on 
gas and electricity prices; and on migration of industry out of 
this country?
    Ms. Thorning. Thank you, Senator Thompson. The focus of our 
work over the past 10 years at the ACCF--and we have spent a 
fair amount of time on the issue of climate change--has been 
looking at the costs of action, and what are appropriate 
policies to respond to this potential threat. A range of 
credible modelers, ranging from the Department of Energy to 
Wharton Econometric Forecasting Associates, Australian Bureau 
of Resource Economics, Charles Rivers Associates, Professor 
Alan Mann at Stanford, suggest that the cost range of complying 
with Kyoto would be 2 to 4 percent of U.S. GDP or $200 to $400 
billion a year. Of course, the cost varies depending on what 
the assumption is about global trading, particularly, as well 
as some other variables in the models.
    As you mentioned, the Clinton Administration's Council of 
Economic Advisers number was really off the chart, which they 
have now admitted was erroneous. So it seems to me very clear 
that the costs are high. The Department of Energy also 
estimated that electricity prices would have to rise perhaps as 
much as 80 percent, gasoline prices, 50 percent. So the cost to 
the American economy is very significant. Low-income wage 
earners would be particularly disproportionately impacted, 
because the cost of energy is a much larger share of their 
budget. U.S. industry would tend to migrate to countries that 
were not CO2 constrained. Alan Mann's work suggests 
that by 2020, we might lose 10 to 15 percent of our energy 
intensive sector. So there are very serious consequences to 
precipitously moving forward to limit--cap CO2 
emissions. It seems to me that given the uncertainty about the 
science, the focus of your hearing today, which is on the 
importance of technology and the development of alternative 
technologies for energy production, is very appropriate. We do 
need to focus on that.
    Senator Thompson. Without China and India and these other 
countries being a part of it, would the CO2 
emissions continue to rise anyway?
    Ms. Thorning. They will continue to rise. There are 
numerous projections that show that even if the United States 
and Europe shut down and sat in the dark--no electricity, no 
cars--the impact on global concentrations of CO2 
would be almost negligible.
    Senator Thompson. Do you have any basis for reaching an 
opinion as to whether or not the European Union could or would 
comply, even if we did?
    Ms. Thorning. As my testimony points out, there are five or 
six new studies that suggest that the European Union will be 15 
to 25 percent above its emissions targets by 2010 or 2012. So 
it is hypocritical, really, of the European Union to rail 
against the Bush Administration's policy of stepping back and 
taking another look at how to address climate change.
    Senator Thompson. It seems to me that the European Union's 
attitude toward Kyoto is somewhat like some of our Democratic 
friends'--on the House side--attitude is toward campaign 
finance reform, and that is it is a great idea, as long as it 
does not happen. [Laughter.]
    Ms. Thorning. One of the things that I think people need to 
realize about the European Union is the leaders there have 10 
years worth of capital built up, political capital. They have 
made the case that they need to comply with Kyoto and it is 
very difficult for them now to simply back away, I think, and 
we need to be sensitive to that situation and help--which I 
think the Bush Administration is trying to do--come up with 
alternative strategies that will enable them to feel that we 
and the rest of the world are going to move forward.
    Senator Thompson. Thank you, Mr. Chairman.
    Chairman Lieberman. Thanks, Senator Thompson. It strikes me 
you are one of a small, courageous band of Republicans that 
could have made that comment about Democrats and campaign 
finance reform. [Laughter.]
    Senator Bennett.
    Senator Bennett. Thank you, Mr. Chairman. I could not 
possibly have said what Senator Thompson said on that score. As 
I sit through the morning, I am beginning to see the emergence 
of consensus, and let me try it out and see if you agree, 
because obviously I do not want to put words in anybody's 
mouth. But it seems to me that technology is the answer to this 
problem. Arbitrary limits, such as came out of the Kyoto 
Protocol, are not, but technology that is developed to be more 
efficient almost always means cleaner, and there are economic 
benefits to being more efficient, and cleaner is a wonderful 
side effect that comes out, and indeed, as Mr. Lash points out, 
has some economic benefit in and of itself.
    I am referring to an editorial comment made by Robert 
Samuelson, and I liked his opening. He said, ``The education of 
George W. Bush on global warming as simply summarized: Honesty 
may not be the best policy.'' Greenhouse politics have long 
blended exaggeration and deception, and the Bush 
Administration, I think, has told the truth about Kyoto and now 
is being beaten up for it. But that is not the issue. The issue 
is what do we do, and the answer seems to be, coming out of 
today's hearing, that we develop the technology to deal with 
it, rather than putting on the artificial, politically-
dominated caps.
    Now, you are shaking your head, Ms. Claussen. You take the 
first shot at me here.
    Ms. Claussen. I agree with I think virtually everyone on 
this panel that you cannot solve this without technology. But I 
do not think that precludes the need for rational, sensible 
limits, which I think can also help you move the technology on 
the development side and also on the deployment side. This is 
not to say you need a mandatory system that will bankrupt the 
economy or that will move too soon, too much, but I think there 
is a real place for limits which, if done rationally over time 
and in a way that the market can sort out, have to be a part of 
the system.
    Senator Bennett. Let me give you an analogy then. You used 
two words, neither one of which can be challenged, but that 
create great mischief up here: Rational and sensible. I am not 
sure we are ever complying with both of those in legislation 
that we pass.
    Ms. Claussen. Well, I have great faith in the Senate.
    Senator Bennett. But in the automobile industry, CAFE 
standards have no doubt produced technological breakthroughs. I 
was at the Department of Transportation when the catalytic 
converter was introduced, and that was a technological 
breakthrough. But it was driven in part by CAFE standards. One 
of the interesting side effects of CAFE standards has been the 
creation of the automobile industry in Japan, because the 
Americans, for whatever reason, did not seem to be able to 
produce reliable small cars, and so more and more people 
started importing cars from Japan, where they had the 
technology to produce these kinds of cars. That is a separate 
debate.
    In the Samuelson column, he talks about how Europe has 
achieved what they have achieved with respect to emissions. He 
says there are only three countries in Europe that have reduced 
their emissions: Germany, Britain, and Luxembourg. I do not 
think we need to worry about Luxembourg. Britain, because of 
plentiful North Sea gas, they have shifted from coal. But in 
Germany, it is a one-time experience, as they have shut down 
the technologically-impaired plants of East Germany that came 
in with unification, and once that is done, they are not going 
to get another boost, unless there are technological 
breakthroughs that can say, when the time comes to retrofit a 
plant, we are going to retrofit it with one that is more 
efficient and cleaner. Along the lines, to stretch the analogy, 
of the CAFE standards, we are going to get rid of the Cadillac 
and buy a Toyota, and maybe we have to buy two Toyotas to carry 
everybody around, but maybe not, because you can really only 
get six people in a Cadillac, and if everybody breathes at the 
same time, you can get five in a Toyota.
    So I am just reacting here, but the reason I am doing this 
is because I find in the environmental community some segments 
that are anti-technology. They hate the idea of technology. 
Now, the best example of that, and this is obviously 
pathological, was the Unabomber, who did everything he could to 
attack technology as the source of all of our problems, when, 
in fact, technology is the solution to our problems, and the 
people who are heavy in the rhetoric, anti-technology, need to 
realize that we all need to get on board in the same thing if 
we are going to solve this kind of problem.
    Now let me give you an example, and maybe Mr. Heydlauff, 
you could comment on this. I talked to the electrical 
generators in Utah--obvious parochial interest. They tell me 
they are very bullish on wind. We have got a lot of wind in the 
West and they are very bullish on wind, and they have been able 
to design the windmills in such a way that they are not 
particularly dangerous to birds anymore. But there is one 
problem with wind, and that is that the wind stops, and you 
cannot stockpile energy the way you can stockpile Toyotas, and 
when the wind stops, you have got to have some alternative.
    The obvious alternative is hydro, where you have a body of 
water stored, and when the wind stops, you allow that water to 
go through the turbine and generate electricity until the wind 
starts again, and then, in those hours of the night when nobody 
is using the wind energy and you have excess capacity, you pump 
the water back up. To me, this is an obvious, wonderful 
solution to changing, and many in the environmental community 
say we are opposed to hydro in any way, shape or form.
    This is a technological solution that can help us, that is 
being attacked for ideological political reasons. Does anybody 
have a comment on technology? You have taken me on, and I 
accept your----
    Mr. Lash. Can we disavow the Unabomber first?
    Senator Bennett. Yes, let's all disavow the Unabomber.
    Chairman Lieberman. We environmentalists do not want Mr. 
Kaczynski to be our representative here.
    Mr. Heydlauff. Senator, one of the strengths of the U.S. 
economy, I think, is the fact that we power it with a wide 
diversity of energy sources. Coal is approximately 50 percent 
of the electricity base. We have got 21 percent, I think, 
roughly is the nuclear capacity. Natural gas is approximately 
15 percent; hydro is 10 percent; a little bit of oil and the 
balance is going to be these non-renewable resources you talked 
about, which is less than 2 percent. I think we need them all 
and I think we need to develop them all, and we need to develop 
them in a way that is both economically rational, but also 
protective of the environment, more so than we ever have in the 
past.
    We are a diversified energy company. I talked about the 
fact that we burn, I think as Jonathan said, nearly 80 million 
tons of coal a year, but that is only 66 percent of our 
generation mix; 24 percent is natural gas. We do have nuclear 
generation, hydro, and we are about to commission a 150 
megawatt wind plant, which we are very proud of. It is in 
Texas, and we think there is a lot of wind potential in Texas. 
You are absolutely right about the intermittent nature of wind 
generation, and it is going to be a problem that will keep a 
lot of these intermittent renewable energy resources, like 
solar and wind, at the periphery of the electricity supply 
business until such time as we have a dramatic breakthrough in 
energy storage technology, and that has been elusive, as you 
know.
    As a matter of fact, we would solve the urban smog problem 
in Senator Lieberman's State if we could just come up with an 
efficient energy storage system, so that people could drive 
around in the cars and electric vehicles that do not emit 
anything. But we are still going to have an urban smog problem 
for as far as we can see, because we have not found that, and 
the automobile manufacturers actually have cut back on a lot of 
that research and gone to hybrids instead. So that is a 
challenge, but it is growing and it will continue to grow and 
capture more of the energy market.
    Frankly, I think--and we have got experience with this--the 
renewable energy systems make a lot of sense in developing 
countries, either in those areas where they have no access to 
electricity or in areas where their electricity comes from 
diesel generation. We, for example, have put in solar 
generation, photovoltaic systems, in Bolivia, and in one case 
it was to provide electricity for the first time to a 
community, and in the other case it is displacing diesel 
generation. We are looking at that. We are looking at, 
actually, renewable hybrids similar to what you talked about, 
small-scale hydro systems, combined with solar and wind 
generation.
    So there are a lot of solutions, I think, to the energy 
challenges of the world, and certainly the country, that we 
need to continue to exploit. Your suggestions are correct and 
you are absolutely right, there are relatively entrenched 
opponents to virtually any form of electric generation. We 
certainly have it with coal. You see it with nuclear. You have 
it with hydro and we are well-aware of that. It is very 
difficult today to site and build a new hydro plant. As a 
matter of fact, I think we have pretty much developed all the 
economically feasible areas anyway. It is just hard to get them 
relicensed today.
    Senator Bennett. They are trying to tear them down in my 
State.
    Mr. Heydlauff. And they are trying to tear them down, I 
know, out West. Even the most efficient, clean natural gas 
generation, you are having a hard time siting and building in 
the Midwest, some States where you would not expect it, like in 
Indiana, where they have had enormous difficulty trying to site 
new natural gas power plants. We have the old NIMBY (not in my 
backyard) syndrome prevalent in ways that we have never had to 
deal with when we built the existing infrastructure. But that 
infrastructure needs to be replaced. It is getting old and we 
have got to replace it.
    So we have to come up with a rational energy strategy, and 
I guess that is for another committee as well.
    Senator Bennett. Thank you. Let the record show that I am 
the only member of the Senate who drives a Honda Insight, get 
55 miles to the gallon, and I bought it because I was in love 
with the technology.
    Senator Thompson. How do you get in it, is the question?
    Senator Bennett. I have had you in it, the two of us.
    Chairman Lieberman. I have actually seen you get in and out 
of it, and it is an impressive sight, and quite comfortable. 
[Laughter.]
    I would say to my friend from Utah--I thank him for his 
questions--I think he is right. There is a consensus here about 
the need for technology and bold new energy technologies to 
deal with the problem of climate change and air pollution and 
the rest. I think there is also an agreement, an important one, 
that, for various reasons, the private sector is not going to 
do it itself. So this is one where the government has, as 
Senator Thompson said, some credibility and needs to do it.
    But the second part of this, about the private sector, and 
this is where we separate for the moment, anyway, is that I 
think, as Ms. Claussen does, that we need caps, and the best 
reason is actually the example you gave, of the CAFE standards, 
of the fuel mileage standards, because what we do here does 
drive technology. In other words, if we create standards, the 
private sector will figure out ways often to meet them. As Ms. 
Claussen said, we have got to calibrate this as best we can, 
because we do not want to create economic havoc, certainly, in 
the short run.
    The other reason that I favor the binding targets and 
timetables is that we had this experience in the 1990's after 
the Rio framework, which set targets and timetables and made 
them voluntary, and nobody did much of anything around the 
country and the world, and the problem got worse. So I think 
that is what actually led to Kyoto. One may disagree with the 
specifics of the Kyoto Protocol. I was actually in Kyoto, and 
it was a remarkable experience, watching all those countries 
with differing points of few, differing domestic political 
constituencies and energy resources, trying to work something 
out.
    So it is far from perfect and it is always subject to 
alteration, but I think that is a point at which we differ. The 
good thing about the Byrd-Stevens is it does not require us to 
reach consensus on those questions. It creates these 
mechanisms, these offices in the Federal Government, that will 
stimulate and finance more research and development, that will 
force us to come back at this every year and see how we are 
doing and create a strategy that reaches toward stabilization.
    I come to the end of the hearing, thanking all the 
witnesses and my colleagues, feeling that though there are 
still disagreements about tactics here, that this bill really 
does provide us with some common ground to go forward, and in 
doing that, I do think it is a breakthrough.
    Senator Thompson, if you want to add anything----
    Senator Thompson. Well said, Mr. Chairman.
    Chairman Lieberman. Thank you, all. The hearing is 
adjourned.
    [Whereupon, the 12:26 p.m., the Committee was adjourned.]


                            A P P E N D I X

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