[Senate Hearing 107-994]
[From the U.S. Government Publishing Office]



                                                         S. Hrg.107-994

 
                  CLEAN AIR ACT: RISKS FROM GREENHOUSE
                             GAS EMISSIONS

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   ON

    THE ECONOMIC AND ENVIRONMENTAL RISKS ASSOCIATED WITH INCREASING 
                        GREENHOUSE GAS EMISSIONS

                               __________

                             MARCH 13, 2002

                               __________


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

                                 _____

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                          WASHINGTON : 2004
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      one hundred seventh congress
                             second session
                  JAMES M. JEFFORDS, Vermont, Chairman
MAX BAUCUS, Montana                  BOB SMITH, New Hampshire
HARRY REID, Nevada                   JOHN W. WARNER, Virginia
BOB GRAHAM, Florida                  JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut     CHRISTOPHER S. BOND, Missouri
BARBARA BOXER, California            GEORGE V. VOINOVICH, Ohio
RON WYDEN, Oregon                    MICHAEL D. CRAPO, Idaho
THOMAS R. CARPER, Delaware           LINCOLN CHAFEE, Rhode Island
HILLARY RODHAM CLINTON, New York     ARLEN SPECTER, Pennsylvania
JON S. CORZINE, New Jersey           BEN NIGHTHORSE CAMPBELL, Colorado

                 Ken Connolly, Majority Staff Director
                 Dave Conover, Minority Staff Director



                            C O N T E N T S

                              ----------                              
                                                                   Page

                             MARCH 13, 2002

                           OPENING STATEMENTS

Campbell, Hon. Ben Nighthorse, U.S. Senator from the State of 
  Colorado.......................................................    44
Chafee, Hon. Lincoln, U.S. Senator from the State of Rhode Island    29
Corzine, Hon. Jon S., U.S. Senator from the State of New Jersey..    32
Jeffords, Hon. James M., U.S. Senator from the State of Vermont..     1
Lieberman, Hon. Joseph, U.S. Senator from the State of 
  Connecticut....................................................    43
Smith, Hon. Bob, U.S. Senator from the State of New Hampshire....     6
Voinovich, Hon. George V., U.S. Senator from the State of Ohio...     4

                               WITNESSES

Baliunas, Sallie, astrophysicist, Harvard-Smithsonian Center for 
  Astrophysics, Cambridge, MA....................................    19
    Prepared statement...........................................   154
    Report, Climate Research, Vol. 18:259-275, 2001, Modeling 
      climatic effects of anthropogenic carbon dioxide emissions: 
      unknown uncertainties.....................................162-178
    Responses to additional questions from:
        Senator Campbell.........................................   183
        Senator Jeffords.........................................   179
        Senator Smith............................................   179
        Senator Voinovich........................................   181
Cogen, Jack D., president, Natsource, New York, NY...............    22
    Prepared statement...........................................   195
    Responses to additional questions from:
        Senator Smith............................................   196
        Senator Voinovich........................................   197
Legates, David R., director, Center for Climatic Research, 
  University of Delaware, Newark, DE.............................    15
    Prepared statement...........................................   101
    Report, A Layman's Guide to the General Circulation Models 
      Used in the National Assessment...........................106-125
    Responses to additional questions from:
        Senator Campbell.........................................   132
        Senator Jeffords.........................................   126
        Senator Smith............................................   126
        Senator Voinovich........................................   129
        Summary, Addendum #1, Theoretical and Applied 
          Climatology, 41, 11-21 (1990), by Springer-Verlag, Mean 
          Seasonal and Spatial Variability in Global Surface Air 
          Temperature...........................................134-145
Markham, Adam, executive director, Clean Air-Cool Planet, 
  Portsmouth, NH.................................................    17
    Prepared statement...........................................   146
    Responses to additional questions from:
        Senator Campbell.........................................   154
        Senator Jeffords.........................................   151
        Senator Smith............................................   152
        Senator Voinovich........................................   153
Pielke, Roger A., Jr., associate professor, Center for Science 
  and Technology Policy Research, University of Colorado/
  Cooperative Institute for Research in Environmental Sciences, 
  Boulder, CO....................................................    13
    Prepared statement...........................................    87
    Responses to additional questions from:
        Senator Campbell.........................................   100
        Senator Jeffords.........................................    94
        Senator Smith............................................    98
        Senator Voinovich........................................    99
Rowland, Sherwood F., Donald Bren research professor of chemistry 
  and earth science, University of California Irvine, Irvine, CA.    10
    Prepared statement...........................................    45
    Report, Climate Change Science, An Analysis of Some Key 
      Questions, National Academy Press.......................... 47-82
    Responses to additional questions from:
        Senator Jeffords.........................................    83
        Senator Smith............................................    84
        Senator Voinovich........................................    86
Whittaker, Martin, managing director, Innovest, Richmond Hill, 
  Ontario, Canada................................................    20
    Prepared statement...........................................   183
    Responses to additional questions from:
        Senator Jeffords.........................................   188
        Senator Smith............................................   191
        Senator Voinovich........................................   193

                          ADDITIONAL MATERIAL

Charts:
    Alaska's Temperature History.................................   207
    A Sun-Climate Link...........................................   161
    Forecast Amount of Averted Global Warming....................   157
    Global Temperature...........................................   159
    Global Tropospheric Temperature..............................   160
    Surface Temperature..........................................   158
Letter, East-West Center, Honolulu, HI...........................   208
Report, ``Swiss Re''............................................199-206


           CLEAN AIR ACT: RISKS FROM GREENHOUSE GAS EMISSIONS

                              ----------                              


                       WEDNESDAY, MARCH 13, 2002

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:34 a.m. in room 
406, Senate Dirksen Building, Hon. James M. Jeffords (chairman 
of the committee) presiding.
    Present: Senators Jeffords, Voinovich, Smith, Chafee, and 
Corzine.

OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Senator Jeffords. Good morning. The hearing will come to 
order.
    Today we will hear testimony on the economic and 
environmental risk of increasing greenhouse gas emissions. It 
is important to note that the hearing is not a debate about 
whether manmade emissions are causing warming. For the time 
being, that question has been settled by the National Academy 
of Sciences. An Academy report from June 2001 said,``Greenhouse 
gases are accumulating in Earth's atmosphere as a result of 
human activities, causing surface air temperatures and sub-
surface ocean temperatures to rise, and human-induced warming 
and associated sea level rises are expected to continue through 
the 21st century.''
    We are fortunate to have today a witness here who has 
worked on that report.
    What the committee will review is the magnitude of the 
possible injuries or losses that may be caused by this warming. 
I urge the witnesses to stay on that topic and help us assess 
the risk related to increasing greenhouse gas emissions.
    One year ago today, the President formally notified the 
world and the Senate of his decision to unilaterally abandon 
the Kyoto Protocol. At the same time, he also abandoned his 
campaign promise to reduce carbon dioxide emissions, or the 
fourth ``P'' from powerplants. That was a serious blow to a 
sensible, market-based approach to reducing carbon emissions. 
As a result, the country has no actual policy in place to 
achieve a real emissions reduction target, so emissions will 
continue unabated. This is happening despite our international 
commitment in the Rio Agreement to reduce U.S. emissions to 
1990 levels. Voluntary measures are no substitute and have 
failed to do more than slightly slow the rate of growth.
    This situation concerns me and it should concern all of my 
colleagues. Unconstrained emissions will increase atmospheric 
concentrations. These will lead to greater global warming and 
provoke even greater climate changes.
    Some of my concern is parochial. In Vermont, we rely on 
predictability of the seasons for our economic well-being and 
our quality of life. In the spring, maple syrup production is 
important. In the fall and summer, it is tourism. In the 
winter, it is skiing, snowboarding, and other outdoor 
recreation. It is safe to say that most Vermonters aren't 
interested in moving Hudson Bay to maintain their way of life.
    Elsewhere in the country, my colleagues should be concerned 
about the potential impacts of climate change on public health, 
infrastructure, agriculture, and wildlife.
    Sea-level rise should be of particular concern to my 
friends who represent coastal States, especially with growing 
areas. As Senator Stevens has noted, Alaska villages have 
already started to experience some of these effects. However, 
these gradual impacts may pale in comparison to what might 
happen with a sudden or abrupt change.
    In December 2001, the National Academy said, ``Greenhouse 
warming and other human alterations of the Earth's system may 
increase the possibility of large, abrupt, and unwelcome 
regional or global climactic changes.'' This should be a 
sobering statement that encourages action; instead, the debate 
often seems to be focused on the trees rather than the forest. 
But that information is not essential for Congress to act.
    The potential calamity that awaits us through inaction is 
too serious for Congress to ignore. We acted on lead in 
gasoline and on ozone-depleting substances, even though we did 
not have perfect information. We made the right choice.
    The science on climate change is sound enough to proceed 
with reductions now. Many carbon-intensive businesses have 
already begun to take action. They see a duty to their 
shareholders and to the public to start reducing these carbon 
risks.
    Major insurance companies are increasingly concerned about 
the uncertainty of a changing climate in their financial 
exposure. Several markets are developing for the trading of 
greenhouse gas reduction credits, even in the United States.
    It seems that there must be some level of economic or 
environmental risk associated with these emissions; otherwise, 
how could the credits have value, and why would anyone trade 
them? But they are being traded at $1 to $9 per ton.
    Congress is often slow to act on complex problems like 
climate, especially without vigorous leadership from the White 
House. In this situation, the private sector may have to lead 
us in the right direction.
    Unfortunately, in the meantime it seems to be business as 
usual on emissions. They will continue to grow, and we may 
reach atmospheric concentrations that haven't existed for 
hundreds of thousands of years. We need to know and be prepared 
for what that means for our committee, our plans, and our 
Nation.
    I look forward to the panel's testimony. It will help us 
discover and better understand the risks that are posed by 
continuing to increase greenhouse gas emissions.
    [The prepared statement of Senator Jeffords follows:]
  Statement of Hon. James M. Jeffords, U.S. Senator from the State of 
                                Vermont
    Today we'll hear testimony on the economic and environmental risks 
of increasing greenhouse gas emissions. It's important to note that 
this hearing is not a debate about whether manmade emissions are 
causing warming. For the time being, that question has been settled by 
the National Academy of Sciences.
    An Academy report from June 2001 said, ``Greenhouse gases are 
accumulating in Earth's atmosphere as a result of human activities, 
causing surface air temperatures and subsurface ocean temperatures to 
rise'' . . . and . . . ``Human-induced warming and associated sea level 
rises are expected to continue through the 21st century.'' We're 
fortunate to have a witness here today who worked on that report.
    What the committee will review is the magnitude of the possible 
injuries or losses that may be caused by this warming. I urge the 
witnesses to stay on that topic and help us assess the risks related to 
increasing greenhouse gas emissions.
    One year ago today, the President formally notified the world and 
the Senate of his decision to unilaterally abandon the Kyoto Protocol. 
At the same time, he also abandoned his campaign promise to reduce 
carbon dioxide emissions, or the fourth ``P,'' from power plants. That 
was a serious blow to a sensible, market-based approach to reducing 
carbon emissions.
    As a result, the country has no actual policy in place to achieve a 
real emissions reductions target. So, emissions will continue unabated.
    This is happening despite our international commitment in the Rio 
Agreement to reduce U.S. emissions to 1990 levels. Voluntary measures 
are no substitute and have failed to do more than slightly slow the 
rate of growth.
    This situation concerns me and it should concern all of my 
colleagues. Unconstrained emissions will increase atmospheric 
concentrations. These will lead to greater global warming and provoke 
even greater climate changes.
    Some of my concern is parochial. In Vermont, we rely on the 
predictability of the seasons for our economic well-being and our 
quality of life.
    In the spring, maple syrup production is important. In the fall and 
summer, it's tourism. In the winter, it's skiing, snowboarding and 
other outdoor recreation. It's safe to say that most Vermonters aren't 
interested in moving to Hudson Bay to maintain their way of life.
    Elsewhere in the country, my colleagues should be concerned about 
the potential impacts of climate change on public health, 
infrastructure, agriculture and wildlife. Sea-level rise should be of 
particular concern to my friends who represent coastal states, 
especially with growing areas.
    As Senator Stevens has noted, Alaskan villages have already started 
to experience some of these effects.
    However, these gradual impacts may pale in comparison to what might 
happen with a sudden or abrupt change. In December 2001, the National 
Academy said, ``greenhouse warming and other human alterations of the 
Earth system may increase the possibility of large, abrupt and 
unwelcome regional or global climatic events.''
    That should be a sobering statement that encourages action. 
Instead, the debate often seems to be focused on the trees rather than 
the forest.
    There are even some people who think we should stop our efforts to 
assess the possible impact of global warming on our economy or our 
environment. They want to wait for perfect information. That seems 
unwise and irresponsible.
    We must redouble our efforts to understand how global warming may 
affect us. We should continue working diligently to reduce the 
uncertainties of predictions.
    I am hopeful that the President will soon send up the detailed 
global change budget, as required by the Global Change Research Act of 
1990. That budget must keep the national assessment moving without 
delay or censorship.
    But, that information is not essential for Congress to begin 
acting. The potential calamity that awaits us through inaction is too 
serious for Congress to ignore.
    We acted on lead in gasoline and on ozone-depleting substances even 
though we did not have perfect information. We made the right choice. 
The science on climate change is sound enough to proceed with 
reductions now.
    Many carbon intensive businesses have already begun to take action. 
They see a duty to their shareholders and to the public to start 
reducing their carbon risks. Major insurance companies are increasingly 
concerned about the uncertainty of changing climate and their financial 
exposure. Several markets are developing for the trading of greenhouse 
gas reduction credits, even in the United States. It seems that there 
must be some level of economic or environmental risk associated with 
these emissions. Otherwise, how could the credits have value and why 
would anyone trade them? But, they are being traded at $1-$9 per ton.
    Congress is often slow to act on complex problems like climate, 
especially without vigorous leadership from the White House. In this 
situation, the private sector may have to lead us in the right 
direction.
    Unfortunately, in the meantime, it seems to be business as usual on 
emissions. They will continue to grow and we may reach atmospheric 
concentrations that haven't existed for hundreds of thousands of years.
    We need to know and be prepared for what that means for our 
communities, our plans, and our nation.
    I look forward to the panel's testimony. It will help us discover 
and better understand the risks that are posed by continuing to 
increase greenhouse gas emissions.

    Senator Jeffords. Our first witness is Dr. Rowland.
    Senator Voinovich, I note your arrival. If you have an 
opening statement, now is the time.

  OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR 
                     FROM THE STATE OF OHIO

    Senator Voinovich. Thank you, Mr. Chairman.
    I welcome the panel.
    I want to thank you for holding this hearing today on the 
economic and environmental risks associated with increasing 
greenhouse gas emissions. I think it is always important to try 
and understand the risks associated with the various policy 
decisions that we grapple with here in the Senate; however, Mr. 
Chairman, I want to make sure we don't rush past the underlying 
assumptions on the science of greenhouse gases and climate 
change and jump immediately to the worst case scenario effects. 
In courtroom terms, we are in danger here, I think, of passing 
a sentence before we have fully deliberated on the evidence.
    Over the last year, I have chaired one hearing on climate 
change. I have now attended, including today, three others. 
There is no question in my mind that there is a real difference 
of opinion between the scientific experts on climate change.
    It is amazing to me how certain groups have bought into the 
idea that everything is settled and they close their mind to 
conflicting evidence. I get letters from constituents and 
friends about climate change, and it appears that they just 
look at one set of information and have made a conclusion about 
it. Then what I do is, I send them the testimony that I've had 
at hearings and said, ``Here, read all of it, and then you tell 
me what you think after reading both sides of this.'' There is 
a difference of opinion.
    Greenhouse gas emissions and the climate change debate are 
real issues which deserve our attention and the attention of 
the best and brightest scientists in our country and the world. 
There are a number of issues which need to be addressed before 
we plan what to do about the worst case scenario, such as: what 
do the models tell us about past changes and climate patterns, 
and how well-suited are they to predict future changes? What do 
we know about the predicted range of climate temperatures due 
to manmade emissions over the next 50 to 100 years? If 
something needs to be done today, what are the available 
technology options and what would the cost be to society to 
implement those options? Finally, if we were to implement 
changes, what would the impact be?
    I am told that if we were to implement the Kyoto Treaty 
completely, we would only avert the expected temperature change 
of .06 C--that's .06 C, which is substantially less than 1 
F. That's a .01 C. To me that hardly seems significant, and 
maybe some of our witnesses will comment on that.
    I'd also like to say a brief word about the President's 
climate change initiative. I know today's hearing was planned 
for the anniversary of the President's announcement on Kyoto--
very good, Mr. Chairman. Instead of dwelling on Kyoto, which 
was a failed treaty and would never have passed the Senate and 
still would never pass the Senate, we should look at the 
President's initiative. To me, it seems to be a very reasonable 
approach and it is the only credible alternative proposed to 
date. By the way, it is one that's gaining support by many of 
our allies who would like to go forward and get something done 
on this issue and not have it be a long debate of the 
international community with nothing getting done. It provides 
the necessary funding for both the science and the 
technological research. It encourages companies to register 
their CO2 emissions. It sets a national goal to 
reduce our carbon intensity, which is the best way to protect 
our economy and begin to address the issue.
    Finally, in terms of the multi-emission strategy, as I've 
said repeatedly, I would support addressing CO2, Mr. 
Chairman, in a voluntary way which encourages new technologies 
and practices such as carbon sequestration or anything else 
that's out there that we can look at, but I will not support a 
mandatory CO2 reduction cap.
    I think it is important that we do not let the 
CO2 issue stand in the way of meaningful reductions 
of SO2, NOx, and mercury. There are many people out 
there that want something done about those three emissions, 
many of them who live in your part of the country. We can sit 
here and have a chowder society and debate. I'd like to get on 
with dealing with those three so that we can improve the 
environment and at the same time, create an environment where 
we have reasonable energy costs for the people of this country.
    Thank you.
    [The prepared statement of Senator Voinovich follows:]
Statement of Hon. George Voinovich, U.S. Senator from the State of Ohio
    Mr. Chairman, thank you for holding this hearing today on the 
economic and environmental risks associated with increasing greenhouse 
gas emissions. I think it is always important to try and understand the 
risks associated with the various policy decisions we grapple with here 
in the Senate.
    However, I want to make sure we don't rush past the underlying 
assumptions on the science of greenhouse gases and climate change and 
jump immediately to the worst-case scenario effects. In courtroom terms 
we are in danger here today of passing a sentence before we have fully 
deliberated the evidence.
    Over the last year I have chaired one Hearing on Climate Change and 
have now attended three others. There is no question in my mind that 
there is a real difference of opinion between the scientific experts on 
climate change. It is amazing to me how certain groups have bought into 
the idea that everything is settled and they close their mind to 
conflicting evidence.
    Greenhouse gas emissions and the climate change debate are real 
issues which deserve our attention and the attention of the best and 
brightest scientists in our country and the world. There are a number 
of issues which need to be addressed before we plan what to do about 
the worst-case scenarios such as:
     What do the models tell us about the past changes in 
climate patterns and how well suited are they to predict future 
changes?
     What do we know about the predicted range of climate 
temperatures due to man-made emissions over the next 50 to 100 years?
     If something needs to be done today, what are the 
available technology options and what would the cost be to society to 
implement them?
     Finally, if we were to implement changes, what would the 
impact be. I am told if we were to implement the Kyoto Treaty 
completely, we would only avert the expected temperature change by .06 
degrees Celsius over the next 50 years. That hardly seems significant.
    I would also like to say a brief word about the President's Climate 
Change Initiative. I know today's hearing was planned for the 
anniversary of the President's announcement on Kyoto. Instead of 
dwelling on Kyoto, which was a failed Treaty and would never have 
passed the Senate, we should look at his Initiative. To me it seems to 
be a very reasonable approach and it is the only credible alternative 
proposed to date.
     It provides the necessary funding for both the science and 
the technology research.
     It encourages companies to register their CO2 
emissions.
     It sets a national goal to reduce our carbon intensity, 
which is the best way to protect our economy and begin to address the 
issue.
    Finally, in terms of the Multi-Emissions Strategy I have said 
repeatedly that I would support addressing CO2 in a 
voluntary way which encourages new technologies and practices such as 
carbon sequestration. I will not support a mandatory CO2 
reduction cap. I think it is important that we do not let the 
CO2 issue stand in the way of meaningful reduction of 
SO2, NOx, and mercury.

    Senator Jeffords. Senator Smith.

  OPENING STATEMENT OF HON. BOB SMITH, U.S. SENATOR FROM THE 
                     STATE OF NEW HAMPSHIRE

    Senator Smith. Thank you very much, Mr. Chairman.
    Let me just pick up on the Senator from Ohio comments. I 
want to compliment him for working together with this Senator. 
We have a number of issues which easily could put our States 
against each other, but it has been a cooperative effort. I 
agree with your comments regarding the technology that's out 
there that is bringing dramatic reductions in NOx, 
SO2, and mercury. We have a partnership between a 
company in New Hampshire, Power Span, working with a company, 
working with a utility in Ohio. We're getting good results on 
that, and I think that's the kind of thing that brings us 
together to reach compromise and solutions, and I am very 
grateful for your cooperation on these issues.
    We are this morning talking about economic and 
environmental risks associated with climate change, and 
certainly want to welcome all the witnesses, but specifically, 
Adam Markham from Portsmouth, NH. It is good to see you here. 
Mr. Markham will be discussing a recent report coordinated by 
the University of New Hampshire that describes much of the 
potential environmental and economic impact of climate change 
in New England--impact on industries, which is where we make 
money, skiing and--we don't have any sugar maple subsidies. We 
have peanut subsidies and tobacco subsidies, but no sugar maple 
subsidies. I'm not advocating any, either.
    This study underscores concerns that I've shared with 
members of this committee about small, family-owned businesses 
that are at risk as a result of what we may or may not do.
    These are just a few of the risks that New Hampshire would 
face with a potential change in climate. There are many more 
aspects to the question of risks posed by climate change than 
we could even get into today. But when we talk about risk, I 
think it is worth looking to those whose entire business is 
based on putting a price on risk, translating environmental 
risk into economic terms, and obviously that is the insurance 
industry. Insurance companies are motivated to seek the 
clearest risk information available on the subject of anything, 
and certainly climate change, as well. This motivation is not 
clouded by politics or agendas, but focused squarely on the 
bottom line.
    I have had my share of disagreements with insurance 
companies on some of these issues, but accuracy in this kind of 
work is not a luxury. It's a necessity. If they don't estimate 
risks accurately, then somebody is going to go bankrupt--they 
will.
    I would like to reference a document that's found on the 
website of one of the largest reinsurance companies in the 
world. It's called ``Swiss Re.'' I would ask unanimous consent 
that this document be made a part of the record, Mr. Chairman.
    Senator Jeffords. Without objection.
    Senator Smith. The document has a very interesting title, 
``Climate Research Does Not Remove the Uncertainty: Coping with 
the Risks of Climate Change.'' The title I think sums up our 
hearing today. The primary point of the paper is that climate 
change is happening and it poses financial risks. We're still 
unclear on how much of the change is natural and how much of it 
is human induced.
    I have been to Woods Hole, MA. We've talked about these 
issues with a number of scientists. That's what I hear over and 
over again--is the change natural? How much of it is natural? 
How much of it is human induced? But there is change taking 
place. If you go back to the insurance industry and their 
customers, causes are of secondary importance in the face of 
weather-related losses.
    So as we examine the risk question--and that's why I bring 
the insurance analogy up here--as we consider the entirety of 
the climate change debate, we should focus more attention on 
economic risk posed by any climate change, natural or human 
induced.
    The study points out that our vulnerability to extreme 
weather conditions is increasing. This is because in a global 
economy, local weather can have international consequences. As 
an example, Swiss Re points to the flooding of the Far East 
Computer Chip Factory, causing supply bottlenecks through the 
entire technology sector. The paper points out that climate 
change is not needed for that example to occur.
    But evidence does show, though, that human interference in 
the climate system exacerbates the problem caused by natural 
climate change, so the difference between natural variation in 
the climate and natural variation coupled with human influences 
may be small. We don't know yet. The scientists will continue 
to try to answer that question.
    There are differences between forces that can cause either 
negligible damage or catastrophic loss. These are the 
intelligent thoughts of experienced businessmen and woman and 
people not driven by any political agenda. Their jobs are to 
accurately assess the economic risks posed by climate 
conditions, and they provide an excellent perspective for us to 
consider.
    Let me just share one quote from the paper. ``The climate 
problem cannot be ignored, nor will it be solved merely by 
calls for optimum climate protection. We need to find ways of 
implementing the necessary climate protection measures in a 
manner which is both socially and economically acceptable.'' 
That's reasonable counsel. Although I might doubt the authors 
ever intended it for this committee, I would urge that we 
listen to their advice.
    Given the potential risk, we have to begin to explore 
reasonable ways of mitigating the potential economic damage, 
regardless of the cause of climate change.
    I've strongly advocated a system based on incentives for 
innovative measures to reduce greenhouse gas. That's what 
Senator Voinovich was just talking about. We are working with 
the chairman on this. We have some differences. Hopefully they 
will be differences that we can bridge, but we do have 
differences. But I believe that capitalizing on innovation in 
the free market will meet whatever challenges are presented. We 
need to think out of the box.
    Maybe technology will move a lot quicker in this area than 
the regulation that we propose. Maybe we won't need to worry 
about Kyoto because the technology that we are producing will 
export to the Third World countries and as they develop, they 
won't be making the same mistakes that we made. Just maybe that 
might work. It doesn't seem to me to make a lot of sense to try 
to get people involved in a treaty who won't abide by the 
treaty or can't abide by the treaty and don't have the means to 
abide by a treaty.
    I don't think it is necessary to regulate through command 
and control carbon, for example, at powerplants to cut 
atmospheric levels of greenhouse gases. Let's get the 
technology working out there so people can make money and 
reduce carbon while we're doing it. We don't have to create 
economic damage as a means to avoid economic and environmental 
risk. There are other ways. We shouldn't be in the business of 
choosing winners and losers.
    Regardless of whatever the policy answer is, one thing is 
for certain: absent a bipartisan approach to the resolution of 
this issue, we will achieve nothing, nothing at all. I've 
learned that as the chairman of this committee the hard way, 
frankly. We had two major issues when I was chairman of the 
committee. One was the Everglades and one was brownfields, and 
they have been lollygagging around here in the Senate for 
years. I had some strong views on both and couldn't get them 
passed, and we were able to work together, come up with a 
bipartisan solution, and found myself voting against amendments 
that I supported in order to stick with that solution as we 
move forward, and both of those pieces of legislation are now 
law. It is tough to deal with this. It is frustrating when you 
have people who differ with you on issues but you know in your 
heart you're going to have to compromise before you can get it 
done.
    So, regardless of whatever the policy is, we will need to 
be bipartisan. We can't allow politics to trump reason and 
success. You know, good politics isn't always necessarily the 
right thing for the environment. I think we ought to let the 
chips fall where they may. But we do have a long tradition of 
bipartisanship in this committee, Mr. Chairman, as you well 
know, and I think it will continue. There's a tremendous 
diversity of opinion in this room on how to address these 
issues, but I'm confident that that diversity is both valuable 
and a challenge, and I look forward to meeting that challenge.
    Thank you, Mr. Chairman.
    Senator Jeffords. Thank you.
    [The prepared statement of Senator Smith follows:]

    Statement of Hon. Bob Smith, U.S. Senator from the State of New 
                               Hampshire
    Good morning. Today we are here to talk about the economic and 
environmental risks associated with climate change.
    I want to welcome all of our witnesses, and a special welcome to 
Adam Markham who has come down from New Hampshire. Mr. Markham will be 
discussing a recent report coordinated by the University of New 
Hampshire that describes much of the potential environmental and 
economic impact of climate change in New England--impact on industries 
such as skiing and sugar maple.
    This study underscores concerns I have shared with members of this 
committee. Small, family-owned businesses are at risk. These are just a 
few of risks that New Hampshire would face--associated with the 
potential change in climate.
    There are many more aspects to the question of risks posed by 
climate change than we could list today. When we talk about risk, I 
think it is worth looking to those whose entire business is based on 
putting a price on risk--translating environmental risk into economic 
terms--the insurance industry. Insurance companies are motivated to 
seek the clearest risk information available on subject of climate 
change.
    This motivation is not clouded by politics or agendas, but focused 
squarely on the bottom line where accuracy is not a luxury. It is a 
necessity. If they do not estimate risks accurately, they will soon go 
bankrupt.
    I would like reference a document that can be found on the web site 
of one of largest reinsurance companies in the world--Swiss Re. I would 
ask unanimous consent that this document be part of the record. The 
document bears the title ``Climate Research Does Not Remove the 
Uncertainty: Coping With The Risks of Climate Change.'' The title 
pretty well sums up our hearing topic today.
    The primary point of this paper is that climate change is happening 
and it poses financial risks. We still are unclear on how much of that 
change is natural and how much is human-induced. But for the insurance 
industry and their customers, CAUSES are of secondary importance in the 
face of weather-related losses.
    As we examine the risk question, and as we consider the entirety of 
the climate change debate, we should focus more attention on economic 
risk posed by any climate change--natural or human induced. The study 
points out that our ``vulnerability to extreme weather conditions is 
increasing.'' This is because in a global economy, local weather can 
have international consequences.
    An example Swiss Re points to is the flooding of a Far East 
computer chip factory, causing supply bottlenecks for the entire 
technology sector.
    The paper points out that climate change is not needed for that 
example to occur. But, evidence shows that human interference in the 
climate system exacerbates the problem already caused by natural 
climate change. The difference between natural variation in the 
climate, and natural variation coupled with human influences may be 
small. We don't know yet--the scientists will continue to try to answer 
that question.
    There are small differences between forces that can cause either 
negligible damage or catastrophic loss. These are the intelligent 
thoughts of experienced businessmen and women--people not driven by any 
political agenda. Their jobs are to ACCURATELY assess the economic 
risks posed by climate conditions--and they provide an excellent 
perspective for us to consider. I would like to share one last quote 
from the paper,

          ``The climate problem cannot be ignored, nor will it be 
        solved merely by calls for optimum climate protection. We need 
        to find ways of implementing the necessary climate protection 
        measures in a manner which is both socially and economically 
        acceptable.''

    I believe that is reasonable counsel and even though I doubt the 
authors ever intended it for this committee, I would urge that we heed 
their advice.
    Given the potential risks, we must begin to explore reasonable ways 
of mitigating the potential economic damages--regardless of the causes 
of the climate change. I have strongly advocated a system based on 
incentives for innovative measures to reduce greenhouse gases.
    I believe that capitalizing on innovation and the free market will 
meet whatever challenges are presented--we should think ``out of the 
box.''
    I don't believe that it is necessary to regulate--through command-
and-control--carbon at power plants to cut atmospheric levels of 
greenhouse gases. We don't have to create economic damage as means to 
avoid economic and environmental risks. There are other ways.
    And we shouldn't be in the business of choosing winners and losers.
    Regardless of whatever the policy answer is--one thing is for 
certain: absent a bipartisan approach, we will achieve nothing. We 
cannot allow politics to trump reason and success.
    Fortunately, this committee has a long tradition of bipartisanship. 
I can assure you this--if a partisan approach is followed on this 
committee with this, or any other issue, the only thing that will be 
achieved is failure--what a terrible legacy that would be. There is 
tremendous diversity of opinion in this room on how to address these 
issues. That diversity is both valuable and a challenge.
    But, this isn't the first time this committee has been faced with 
such a challenge. When people put political agendas aside and are 
willing to work toward a constructive solution, we ultimately find 
common ground. I have done my best to work on all environmental 
legislation applying the principles of cooperation, partnership, and 
bipartisanship.
    It is my hope, Mr. Chairman, that we will continue to work together 
and find a good solution.
    Thank you.

    Senator Jeffords. Our first witness is Dr. F. Sherwood 
Rowland, the Donald Bren Research professor of chemistry and 
earth system science, the University of California.
    Please proceed.

    STATEMENT OF F. SHERWOOD ROWLAND, DONALD BREN RESEARCH 
    PROFESSOR OF CHEMISTRY AND EARTH SCIENCE, UNIVERSITY OF 
                 CALIFORNIA IRVINE, IRVINE, CA

    Mr. Rowland. I'm pleased to be here to testify to your 
committee, Senator Jeffords.
    To Senator Voinovich, I will just say that I grew up in 
Ohio and my undergraduate education was at Ohio Wesleyan 
University.
    I am here really as a member of a committee that was 
appointed by the National Academy of Sciences and made a report 
to the White House last June. I am an atmospheric scientist, 
and I will tell you something about that report.
    A natural greenhouse effect has existed in Earth's 
atmosphere for thousands of years, warming the Earth's surface 
by a global average of 57 F. During the 20th century, the 
atmospheric concentrations of a number of greenhouse gases have 
increased, mostly because of the actions of mankind.
    Our current concern is not whether there is a greenhouse 
effect, because there is one, but rather how large will be the 
enhanced greenhouse effect from the additional accumulation in 
the atmosphere of these greenhouse gases.
    Daily, the Earth intercepts energy from the sun, much of it 
in the visible wavelengths corresponding to the spectrum of 
colors from red to violet and the rest in ultraviolet and 
nearby infrared wavelengths. An equal amount of energy must 
escape from the Earth daily to maintain a balance, but this 
energy emission is controlled by the much cooler average 
surface temperature of the Earth and occurs in wavelengths in 
what is called the ``far infrared.''
    If all of this terrestrially emitted infrared radiation 
were able to escape directly to space, then the required 
average temperature of the Earth would be 0 F. However, the 
greenhouse gases--carbon dioxide, CO2, methane, 
nitrous oxide, and others--selectively intercept some of this 
far infrared radiation, preventing its escape. A warmer Earth 
emits more infrared radiation and Earth with an average surface 
temperature of 57 F was able to make up the shortfall from 
greenhouse gas absorption. However, at first slowly during the 
19th century and then more rapidly during the 20th century, the 
atmospheric concentrations of these greenhouse gases increased, 
often because of the activities of mankind.
    Other greenhouse gases have also been added, such as the 
chlorofluorocarbons, or CFCs, and tropospheric ozone. With more 
of these gases present in the atmosphere, more infrared will be 
intercepted and a further temperature increase will be required 
to maintain the energy balance.
    Carbon dioxide is released by the combustion of fossil 
fuels--coal, oil, and natural gas--and its atmospheric 
concentration has increased from about 280 ppm as the 19th 
century began to 315 ppm in 1958 and 370 ppm now.
    Water is actually the most significant greenhouse gas in 
absorbing infrared radiation, but the amount of gaseous water 
is controlled by the temperature of the world's oceans and 
lakes.
    Methane has a natural source from swamps, but is also 
released during agricultural activities--for example, from rice 
paddies while flooded and from cows and other ruminant animals 
and by other processes--and has increased from about 0.7 ppm in 
the early 1800's to 1.5 ppm around 1978 and 1.77 ppm currently.
    Nitrous oxide concentrations grew from 0.27 to 0.31 ppm 
during the 20th century, formed by microbial action in soils 
and waters on nitrogen-containing compounds, including 
nitrogen-containing fertilizers.
    The chlorofluorocarbons or CFCs were not a natural part of 
the atmosphere but were first synthesized in 1928 and were then 
applied to a variety of uses--propellant gases for aerosol 
sprays, refrigerants in home refrigerators and automobile air 
conditioners, industrial solvents, manufacture of plastic 
foams, etc.
    The CFC concentrations started from zero concentration in 
the 1920's and rose rapidly during the latter part of the 20th 
century until the early 1990's. They are no longer increasing 
because of the Montreal Protocol, an international ban on their 
further manufacture.
    Tropospheric ozone is a globally important compound formed 
by photochemical reactions as a part of urban smog in hundreds 
of cities. Other potential influences on temperature changes 
for which the global average data are still very sparse include 
the concentrations of particulate matter, such as sulfate and 
black carbon aerosols.
    Measurements of surface temperatures only became 
sufficiently broad in geographical coverage about 1860 to 
permit global averaging, with improved coverage as the years 
passed. The globally averaged surface temperature increased 
about 1.1 F during the 20th century, with about half of this 
change occurring during the last 25 years. The year 1998 was 
the warmest year globally in the entire 140-year record, and 
the 1990's were the warmest decade.
    Fluctuations in solar activity have been directly observed 
since the invention of the telescope 400 years ago, but 
accurate, direct measurements of total solar energy output have 
only been possible with the advent of satellite measurements in 
the late 1970's. These satellite data exhibit a small but 
definite cyclic variation over the last two decades, 
paralleling the 11-year solar sun spot cycle, but with little 
long-term difference in solar energy output contemporary with 
the rising global temperatures of the past two decades.
    Predictions of future temperature responses require 
atmospheric model calculations which effectively simulate the 
past and then are extrapolated into the future with appropriate 
estimates of the future changes in atmospheric greenhouse gas 
concentrations. These models calculate the direct temperature 
increases that additional greenhouse gases will cause and the 
further feedbacks induced by these temperature changes. One of 
the most prominent of these feedbacks is the change in albedo, 
or surface reflectivity, in the polar north. When melting ice 
is replaced by open water, or melting snow replaced by bare 
ground, less solar radiation is reflected back to space and 
more remains at the surface, causing a further temperature 
increase.
    The models also assume that more water will remain in the 
atmosphere in response to the temperature increases, providing 
another positive feedback.
    There is an additional possible feedback from the changes 
in clouds--amount, composition, altitude. In present models, 
the cloud feedback is assumed to be small, but data for better 
evaluation are very difficult to obtain.
    Extrapolations for 50 or 100 years in the future 
necessarily include hypotheses about future societal 
developments, including population growth, economic activity, 
etc. The Intergovernmental Panel on Climate Change, or IPCC, 
developed a large set of scenarios about the possible course of 
these events over the next century, with resulting model 
calculations of globally averaged temperature increases for the 
year 2100 relative to 1990, ranging from 2.5 F to 10.4 F, or 
1.4 C to 5.8 C. These results were only a small part of the 
three IPCC reports issued during the year 2001 about climate 
change. Volume I of the IPCC reports treated the scientific 
bases; Volume II covered impacts, adaptation, and 
vulnerability; and Volume III, mitigation.
    The National Academy of Sciences, in response to a May 
2001, request from the White House and following discussions 
between the Administration and the Academy over some questions 
raised by the former, convened an 11-member scientific panel, 
which issued in June a 24-page report, ``Climate Change 
Science: An Analysis of Some Key Questions,'' from a select 
committee of atmospheric scientists. I quote the first few 
sentences of this report and have appended the entire represent 
to this testimony. Many of these words were repeated by Senator 
Jeffords.
    ``Greenhouse gases are accumulating in Earth's atmosphere 
as a result of human activities, causing surface air 
temperatures and sub-surface ocean temperatures to rise. 
Temperatures are, in fact, rising. The changes observed over 
the last several decades are likely mostly due to human 
activities, but we cannot rule out that some significant part 
of these changes is also a reflection of natural variability.''
    The increasing global temperatures will have many 
consequences, often adverse in the long run. Because many of 
the causes of this temperature increase have their origin in 
the activities of mankind, actions can and should now be taken 
which will slow this rate of increase. I should say the last 
words are mine and not the Academy report. I think that we need 
to start taking actions that will ameliorate the problems of 
the greenhouse gases.
    Thank you.
    Senator Jeffords. Thank you very much, Dr. Rowland.
    I think we will go through all of the witnesses first 
before questions.
    Our second witness is Roger A. Pielke, Jr., associate 
professor, Center for Science and Technology Policy Research at 
the University of Colorado/Cooperative Institute for Research 
in Environmental Sciences in Boulder.
    Go ahead.

STATEMENT OF ROGER A. PIELKE, JR., ASSOCIATE PROFESSOR, CENTER 
   FOR SCIENCE AND TECHNOLOGY POLICY RESEARCH, UNIVERSITY OF 
 COLORADO/COOPERATIVE INSTITUTE FOR RESEARCH IN ENVIRONMENTAL 
                     SCIENCES, BOULDER, CO

    Mr. Pielke. Thank you. I'd like to thank Chairman Jeffords 
and the committee for the opportunity to offer testimony this 
morning.
    My name is Roger Pielke, Jr., and I am from the University 
of Colorado. On page 7 of my testimony, you'll find more 
details on my background.
    In the time I have available, I would like to highlight the 
take-home points from my testimony. These are developed in 
greater detail in the written testimony and also in the peer-
reviewed scientific papers on which they are based.
    Before I proceed, I want to say that everything I'll 
present today is consistent with the NRC report that Dr. 
Rowland referred to and the IPCC, so it is starting with those 
scientific background documents as a starting point. There is 
no need--I agree with some of the statements made earlier--no 
need to question the level of science in those reports; 
however, as you will hear from me momentarily, it does lead to 
a range of different interpretations for policy.
    The take-home points:
    First, weather and climate have increasing impacts on 
economies and people around the world. Data is scattered, hard 
to come by, but the picture we are able to put together, 
largely based on economic data, is that the impacts are 
growing. I think the Swiss Re report you referred to and the 
insurance industry would back that up.
    The primary cause for that growth in impacts is the 
increasing vulnerability of human and environmental systems to 
climate variability and change, not changes in climate, per se. 
This is not to say that climate does not change or has not 
changed or will not continue to change. This is only to say 
that when we look at the sensitivity of impacts to the various 
factors that lead to impacts, it takes both a climate event and 
an exposed society or exposed environment to lead to impacts.
    This is shown dramatically on page 3, figure 3, of my 
testimony, where I show a picture of Miami Beach from 1926 and 
a picture of Miami Beach from near the present, near 2000. Not 
only does climate change, but society changes.
    Taking the assumptions of the IPCC figure 6 on page 4, we 
compare the relative sensitivities of economic losses to 
tropical cyclones to society factors versus climate factors and 
find societal factors under the assumptions of the IPCC range 
from the 22-to-1 to a 60-to-1 increased, larger sensitivity 
than the climate impacts.
    Again, not to discount the possibility of climate change, 
but to say to understand climate change we have to put it into 
the context of societal change.
    To address increasing vulnerability and the growing impacts 
that result would require a broader conception of climate 
policy than now dominates the debate. We could do a whole lot 
to energy policy and not do very much to address the growing 
risk of climate change, climate variability to economies, 
people, and the environment around the world.
    Therefore, we must begin to consider adaptation to climate 
to be as important as matters of energy policy when we talk 
about response options. Present discussion all but completely 
neglects adaptation to climate. Increased attention to 
adaptation would not mean that we should ignore energy policies 
or reduce the intensity which we want to improve energy 
policies, but instead it would be a recognition of the fact 
that changes in energy policy are insufficient to address the 
primary reasons underlying the trends and the societal impacts 
of weather and climate.
    Again, another point to emphasize is my testimony is 
focused on the societal and economic impacts today. It is not 
focused on the environmental or ecological impacts of climate.
    The Nation's investments in research, which I should say 
are considerable in the area of climate change, in my opinion 
could more efficiently focused on producing usable information 
for decisionmakers seeking to reduce vulnerabilities to 
climate.
    Specifically, the present research agenda is focused, in my 
view, improperly on prediction of the distant climate future. 
We can spend a lot of money on research and argue for a long 
time what the climate future will be 50 to 100 years from now. 
The real test of what the climate future will be is when we 
actually experience the climate of that time.
    Instead, I would suggest we are neglecting what are 
traditionally called ``no regrets adaptation and mitigation 
opportunities.'' Instead of arguing about global warming, yes 
or no, the degree of risk in the far-distant future, we might 
be better served by addressing things like the present drought 
that is developing in the Northeast, for which, again, energy 
policy will not do much to mitigate.
    In closing, I would like to leave you with the thought that 
climate change is much too important a topic to equate solely 
with energy policy. The last figure in my testimony, figure 7 
on page 6, illustrates schematically how we might think about 
energy policy and climate policy, which do, indeed, have 
important overlaps but are not the same topic.
    Thank you very much.
    Senator Jeffords. Thank you, Doctor.
    Our next witness is David Legates, a Ph.D. and C.C.M., 
director of the Center for Climatic Research, the University of 
Delaware, Newark, DE.
    Please proceed.

 STATEMENT OF DAVID R. LEGATES, DIRECTOR, CENTER FOR CLIMATIC 
          RESEARCH, UNIVERSITY OF DELAWARE, NEWARK, DE

    Mr. Legates. I would like to thank Senator Jeffords and the 
committee for inviting my commentary on this important topic. 
My basic background in research has been in precipitation, so 
you'll probably guess that I'm going to focus primarily on 
precipitation, and precipitation variability. With rain 
outside, it is probably a good topic to bring up today.
    In my written testimony, I discuss some of the problems 
associated with determining climate change from both climate 
models and observations. In my limited presentation here, I'm 
going to examine an issue, which I feel focuses on an important 
environmental risk that we face--human-induced changes in 
climatic extremes--droughts, floods, and storminess.
    Do climate models well represent the Earth's climate? Well, 
on three separate occasions, I have reviewed the ability of 
state-of-the-art climate models to simulate regional scale 
precipitation. The models poorly reproduce the observed 
precipitation, and that character of the models had not 
substantially changed over time. But, more importantly, climate 
models simply do not exhibit the observed variability. Both air 
temperature and precipitation exhibit little year-to-year 
fluctuation, which is quite unlike what we presently 
experience. This is crucial, because climatic extremes and not 
their mean values have the largest economic and environmental 
impacts.
    Simply put, climate models cannot address issues associated 
with changes in the frequency of extreme events because they 
fail to simulate storm scale systems or to exhibit the observed 
variability. Moreover, many extreme weather events are so 
uncommon that we simply cannot determine their statistical 
frequency from the observed record, let alone determine how 
that frequency has changed over time. Determining anthropogenic 
changes in extreme weather events, either from modeling or 
observational standpoints, therefore, is nearly impossible.
    Furthermore, it is unclear how much should be attributed to 
anthropogenic increases in atmospheric trace gases and how much 
will be simply a result of natural variability or measurement 
biases.
    So I ask: is there a cause for concern that anthropogenic 
warming will lead to more occurrences of floods, droughts, and 
storminess? I point to the latest Intergovernmental Panel on 
Climate Change, the IPCC, Summary for Policymakers, which 
states that, ``Global warming is likely to lead to greater 
extremes of drying and heavy rainfall and increase the risk of 
droughts and floods.''
    The mainstream media has frequently echoed this enhanced 
hydrologic cycle scenario; however, if one carefully reads the 
IPCC Technical Summary, you will find an admission that, 
``There is no compelling evidence to indicate that the 
characteristics of tropical and extra-tropical storms have 
changed. Recent analysis of changes in severe local weather do 
not provide compelling evidence to suggest long-term changes. 
In general, trends in severe weather events are notoriously 
difficult to detect because of their relatively rare occurrence 
and large spatial variability.''
    The IPCC further goes on to state that areas experiencing 
severe drought to severe wetness increased only to a small 
degree over the entire 20th century. Tom Karl and Richard 
Knight have concluded that as the climate has warmed, 
precipitation variability actually has decreased across much of 
the Northern hemisphere's mid-latitudes. Bruce Hayden, writing 
for the Water Sector of U.S. National Assessment, argues that 
little can or should be said about change in storminess in 
carbon-dioxide-enriched years.
    Sinclair and Watterson recently noted that increased levels 
of atmospheric trace gases generally leads to a marked decrease 
in the occurrence of intense mid-latitude storms.
    Clearly, claims that a warmer world will lead to more 
occurrences of droughts, floods, and storms are exaggerated.
    So what should we do? I feel first we must continue to 
develop and preserve efforts at climate monitoring and climate 
change detection. Efforts to establish new global climate 
observing systems are useful, but we must preserve the stations 
that we presently have. There simply is no surrogate for a 
long-term climate record taken with the same instrumentation 
and located in essentially the same environmental conditions.
    However, given that oceans cover nearly three-quarters of 
the Earth's surface, we must further develop satellite methods 
for monitoring the Earth's climate. We also need to better 
utilize a national network of WSR-88D, Nexrad weather radars to 
monitor precipitation and its variability.
    But foremost we must focus on developing methods and policy 
that can directly save lives and can mitigate the economic 
devastation that often is associated with specific weather-
related events.
    Climate change discussions usually focus on increases in 
mean air temperatures or percentage changes in mean 
precipitation, but it is not changes in the mean fields on 
which we need to place our efforts. Loss of life and adverse 
economic and environmental impact occurs not when conditions 
are normal, but rather they occur as a result of extreme 
climatic events--floods, droughts, storms at all spatial 
scales. One thing I can guarantee is that, regardless of what 
impact anthropogenic increases in atmospheric trace gases will 
have, extreme weather events will continue to be a part of our 
life and they will continue to cause the most weather-related 
deaths and have the largest weather-related economic impacts.
    Thus, we must focus on providing real-time monitoring of 
environmental conditions, which will yield to important 
benefits. First, it will provide immediate data to allow 
decisionmakers to make informed choices to protect citizens 
faced with these extreme weather events, and, if installed and 
maintained properly, it will assist with our long-term climate 
monitoring goals.
    For example, the State of Delaware has undertaken a project 
to develop the most-comprehensive, highest-resolution, State-
wide weather monitoring system available anywhere using our 
high-resolution weather data system technology.
    So I conclude, therefore, that, regardless of what the 
future holds, employing real-time systems with a firm 
commitment to supporting and maintaining long-term climate 
monitoring goals is our best opportunity to reduce the risk of 
weather-related events on human activities.
    I again thank the committee for inviting my commentary.
    Senator Jeffords. Thank you.
    Our next witness is Mr. Adam Markham, executive director of 
the Clean Air-Cool Planet, Portsmouth, NH.
    Please proceed.

 STATEMENT OF ADAM MARKHAM, EXECUTIVE DIRECTOR, CLEAN AIR-COOL 
                     PLANET, PORTSMOUTH, NH

    Mr. Markham. Good morning, Mr. Chairman and members of the 
committee. Thank you for inviting me here today. My name is 
Adam Markham. I am the executive director of Clean Air-Cool 
Planet.
    There is compelling evidence and sound science to suggest 
that there are significant and severe risks to continued 
greenhouse gas emissions to the atmosphere. Future warming 
scenarios described in the New England Regional Assessment that 
Senator Smith just referenced give a 6 F to 10 F range for 
warming over the next century for New England. Such a change 
would result in Boston getting the climate of Richmond, VA, in 
the best case, and that of Atlanta, GA, in the worst case.
    Risks identified in the regional assessment include a major 
threat to the maple syrup industry that Senator Jeffords 
mentioned. According to the most credible forest models, the 
sugar maple is one of the most sensitive trees to warming 
temperatures. Business-as-usual emission scenarios are almost 
certain to eventually drive the sugar maple northwards out of 
New England, entirely. For Vermont, alone, maple syrup is a 
more than $100 million industry, with over 2,000 mainly family-
owned sugar producers.
    A change in climate may also have severe repercussions for 
New England's winter tourism economy. A recent study of the 
past 19 years of weather data for the two most ski-dependent 
economies in New England, Vermont and New Hampshire, showed an 
average of 700,000 fewer ski visits in the years with the worst 
snow conditions. In New Hampshire, the industry generated $566 
million in visitor spending in the year 2000, and it creates 
more than 10 percent of the State's winter jobs.
    The indications are not good. There has been a 15 percent 
decrease in snowfall in northern New England since 1953.
    Climate models also suggest that in the longer term global 
warming will transform the conifer forests of northern New 
England into the type of forests now found further south. The 
conditions that currently support northern hardwood forests, 
their habitats, and their wildlife will shift up to 300 miles 
north during the next 100 years, potentially causing the loss 
of these forests or their transformation into other types of 
forests over much of the landscape. More than 300,000 people in 
New England and New York are employed in the forest sector and 
would likely be affected by these sorts of changes.
    Public health, too, is at risk. For example, 60,000 hikers 
a year visit Mt. Washington and the major peaks of the White 
Mountains. On hot summer days, air pollution poses a threat to 
hikers, especially at elevations above 3,000 feet. According to 
the regional assessment, there is a striking correlation 
between hot days--that's warmer than 90 F--and high levels of 
ozone pollution.
    Lyme disease is also a risk for people outdoors, and is on 
the increase in New York and parts of New England. Research on 
ticks suggests that warmer winters could increase the instance 
of Lyme disease and push its range further into northern New 
England.
    Heat waves kill more people in the United States than 
hurricanes, flooding, or tornadoes. Heat-related deaths in the 
summer time could double under likely U.S. global warming 
scenarios. The poor, elderly populations are at particular 
risk, and northern cities may also be more at risk because 
people are less adapted to high temperatures.
    The cost of climate impact in the coastal zones may be 
particularly large. Sea levels are currently rising at about a 
foot per century. This rate is increasing. The State of New 
Hampshire recently calculated that this will significantly 
increase the area of sea coast vulnerable to flooding and could 
turn 100-year storms into 10-year storms, or the damage from 
10-year storms.
    On the positive side, the Northeast States have long been 
leaders in reducing air pollution. New York's green building 
law, New Hampshire's greenhouse gas registry, and 
Massachusetts' full pollutant regulation were all firsts. 
Connecticut is at the forefront of efforts to support the 
development of commercial fuel cell technologies, and 
Efficiency Vermont is the Nation's first public energy 
efficiency utility. A first in the Nation bipartisan full 
pollutant bill recently passed strongly in the New Hampshire 
House.
    In August 2001, the New England Governors and eastern 
Canadian premiers signed a climate change action plan with the 
ambitious, long-term goal of reducing greenhouse gases by 75 to 
85 percent from current levels. Thirty-five cities and counties 
in the region have passed resolutions pledging to reduce 
greenhouse gas emissions and implement local climate action 
plans, and many businesses in the Northeast are convincingly 
demonstrating that common-sense investments in energy saving 
can pay off handsomely.
    All over New England and the Northeast individuals, 
institutions, and corporations are inventing, exploring, and 
implementing innovative solutions to climate change, but this 
is not enough. Without effective national legislation, regional 
efforts such as those in the northeast will founder and may 
ultimately fail.
    Energy efficiency and alternative fuels may be the real 
roots to energy security. If we are serious about reducing our 
reliance on foreign oil and about competing in world markets, 
we must produce more-efficient automobiles. If we want energy 
security and more jobs, we should aim to be producing 20 
percent of our electricity from renewable resources by 2020. 
Federal controls on CO2 I believe are essential and 
urgently needed.
    If greenhouse gases are not curbed, climate change will 
likely transform the character of many of the things in New 
England that those of us who live there hold dear. The loss of 
sugar maples, changes in the northern forests, warmer winters, 
more frequent heat waves, and the distribution of coastal 
wetlands may eventually deliver a body blow to much of the 
region's character and economy.
    Thank you for inviting me here today.
    Senator Jeffords. Thank you, Mr. Markham.
    Our next witness is Sallie Baliunas, astrophysicist from 
Harvard-Smithsonian Center for Astrophysics.
    Thank you for coming, and please proceed.

     STATEMENT OF SALLIE BALIUNAS, ASTROPHYSICIST, HARVARD-
       SMITHSONIAN CENTER FOR ASTROPHYSICS, CAMBRIDGE, MA

    Ms. Baliunas. Thank you, Senator, and committee members for 
inviting me here. I've worked for 25 years studying the changes 
in the sun and the impact on life and climate of Earth.
    The human effect on global warming remains a very serious 
scientific matter. A simulation that looks at the effect of the 
implementation of the Kyoto Protocol is included in my 
testimony. This is the Hadley Center's simulation for 
temperature change in the next 50 years, calling for a 1 C 
rise in temperature. Implementing a Kyoto-type cut would avert 
the temperature rise by the year 2050 by only .06 C. That 
shows that if the human concentrations of greenhouse gases in 
the atmosphere are a major problem, then much more steeper cuts 
than outline din the Kyoto Protocol are warranted, yet the 
Kyoto Protocol, itself, runs costs in most analysis of $100 to 
$400 billion a year, not insignificant.
    That means that science remains critical to helping address 
this issue, and one key scientific question is: What has been 
the response of climate thus far to the small amount of energy 
that has been added by humans from greenhouse gases in the air?
    Now, there has been substantial new Federal investment made 
very wisely, especially in space-based instrumentation, to 
address this key issue. The two capital tests that I talk about 
in my testimony are comparing the record of the surface 
temperature, which has warmed over the past 20 years, and the 
record of the lowest layer of air from about 5,000 to 28,000 
feet.
    The surface temperature has warmed in the 20th century, but 
there are three phases to the surface temperature record. There 
was a warming early in the 20th century, before most of the 
greenhouse gases were put into the air, peaking around 1940, 
followed by a cooling until the late 1970's, and then a recent 
warming.
    Now, the recent surface warming may, indeed, have a human 
component, but the recent surface warming is about .1 C per 
decade, and that would set an upper limit to what the human 
effect would be. Accumulated over a century, that suggests 1 C 
warming.
    Now, the computer simulations estimate more warming than 
that, but, in fact, that warming, seen from the surface, may 
not be primarily human at all. The computer simulations insist, 
or science insists, that not only the surface layer but the 
layer of air just above it must warm. Both must warm, and, in 
fact, the layer of air in the lower troposphere must warm 
faster and greater and much more steeply than the surface 
layer.
    Those records have been brought before this committee 
before by John Christy. The NASA microwave sounder unit 
experiments aboard satellites now go back 21 years and cover 
essentially most of the Earth. Professor Christy's latest 
charts are shown in my testimony. The striking thing about the 
lower layer of air is that there are significant variations in 
temperature. On short time scales, for example, the very large 
El Nino warming pulse of 1997-98, but there is no long-term 
warming trend that is very significant, as forecast by the 
computer models. It is much smaller. The most warming that can 
be seen in the data of the lowest troposphere are .04 C per 
decade.
    Those satellite results, as you know from Professor 
Christy's previous testimonies, are validated by independent 
records made by radio sounds aboard balloons. Those records go 
back to 1957, which is a period that includes the recent rapid 
rise in the air's greenhouse gas concentration.
    The balloon radio sound records and the satellite records 
both agree that there is no significant warming that can be 
attributed to human activities in the last 20 years or the last 
40 years.
    There is a very strong warming pulse called the ``Great 
Pacific Climate Shift'' apparent in the radio sound record in 
1976-77, but so far no one can attribute that to human causes 
because it is something that the Pacific Ocean has been 
observed to do every 20 or 30 years prior to the great increase 
in greenhouse gases in the atmosphere.
    Now, this is all good news. It means that the human global 
warming effect, if it is small--the best and most reliable data 
says that its amplitude is small and slow to develop, so that 
is creating a window of time and opportunity to continue to 
improve the observations of the computer simulations and to 
make better measurements of climate characteristics that are 
needed to address this issue. These remain essential to the 
problem of what to do.
    Proposals like the Kyoto agreement to sharply cut 
greenhouse gas emissions are not enough, atmospherically 
speaking, yet temperature speaking the impacts have not shown 
up at the degree to which the models say that they should.
    These cost estimates are severe, and these costs would fall 
disproportionately on America's poor and the world's elderly 
and poor, besides America's. So the window of opportunity is to 
continue the observations in order to better define the human 
magnitude of global warming, but our best and most reliable 
evidence says that it is quite small and slow to grow to date.
    Senator Jeffords. Our next witness is Dr. Martin Whittaker, 
managing director of Innovest, Richmond Hill, Ontario, Canada.
    Please proceed and welcome here.

  STATEMENT OF MARTIN WHITTAKER, MANAGING DIRECTOR, INNOVEST, 
                 RICHMOND HILL, ONTARIO, CANADA

    Mr. Whittaker. Thank you and good morning. We are very 
pleased and honored to be here, especially pleased because we 
think we have a story to tell that creates a positive link 
between corporate environmental performance and financial 
performance.
    We are a pure research investment house. Our business is to 
provide impartial research to Wall Street on corporate, 
environmental, and social performance as it affects financial 
performance and shareholder value.
    Climate change is an issue which cuts across all our 
research and one that seems to be of rising importance to the 
companies and to investors, alike. It is also an issue where 
the financial industry can play a positive leadership role, and 
I draw the committee's attention to the World Economic Forum 
held in Davos in February 2000, ``The greatest challenge facing 
the world at the beginning of the 21st century is climate 
change. Not only is climate change the world's most pressing 
problem, it is also the issue where business could most 
effectively adopt a leadership role.''
    We see climate change as a source of business risk and 
opportunity--risk to both exposure to weather extremes, for 
example, in the insurance business, where each year now brings 
about 5.5 times as many weather-related natural disasters as 40 
years ago, resulting in 13.6 times the insurance losses--that's 
according to Munich Re--but also risks to government policies 
to constrain greenhouse gas emissions, for example, in heavy 
greenhouse-gas-emitting industries, but also the opportunities 
through energy efficiency where companies can gain tangible 
financial benefits from energy efficiency measures, which also 
lower emissions, and also, of course, in the growing clean 
energy markets.
    California, alone, has almost, I think, about $1 billion in 
export sales now in clean technologies, and that market will 
grow if we shift gradually toward a cleaner technology base.
    This yin-yang risk opportunity image provides fiduciaries 
and companies with an opportunity not only to hedge emissions, 
hedge their exposures, but also to potentially increase their 
risks through a compounded effect. I'll explain that in a 
second.
    I want to pick out five key combinations of trends from the 
submission that I made, which really explain why I think 
business attention is being more squarely focused on this 
climate change issue.
    Growing sophistication in the understanding of the 
scientific impacts, as we've heard today, and a need really to 
see beyond Kyoto insofar as the wider sustainability context 
affects future greenhouse gas emissions. We think Kyoto is a 
critical first step toward that in focusing attention, but also 
the idea that economic win/win situations do exist and are 
there. We don't have time to go into them today, but we can 
certainly draw the committee's attention to examples of that.
    Second, new thinking on the breadth of sectoral impacts. 
Risks are not just faced by greenhouse-gas-intensive heavy 
industries, but, as you've heard today, also tourism, 
agriculture, real estate, building materials, and, of course, 
finance, which is the sector we serve, but also, as regards the 
company impacts, we are seeing increasing differentials between 
companies, and so company strategy here can translate into 
future final performance, we think.
    A third trend is really an evolution of the term 
``fiduciary responsibility'' and the need to incorporate 
environmental and social issues into investment decisionmaking 
because they affect financial performance. This has been driven 
by the evolution of socially responsible investing, but it is 
now entering the mainstream, and the formation of the carbon 
disclosure project, which is a coalition of institutional 
investors now over $2 trillion in assets under management, are 
now engaged with, I think, 500 of the world's largest companies 
as shareholders to say, ``This is a business risk issue. What 
are you doing?''
    I think also this year we are going to see both the city of 
New York and the State of Connecticut will be filing 
shareholder resolutions on climate change in an effort to 
encourage greater transparency on that issue.
    The fourth trend set is regulatory momentum both here and 
abroad. U.S. companies working in the United Kingdom, for 
example, in Europe, will be abiding by the regulations in those 
regions. That, I think, is a key reason why corporate attention 
is being focused on this issue, even though domestic support of 
Kyoto has waned, to say the least.
    Last, the growing importance of disclosure, in general, to 
investors on hidden liabilities. Climate change liabilities may 
well fall under this rubric. The market is jittery over 
perceived corporate environmental performance and 
transgressions, and climate change liabilities may well be 
included there.
    So I'd just like to wrap up with two recommendations, I 
suppose. We are a great believer in the power of the markets 
and creating a virtual circle whereby corporate environmental 
performance can be encouraged by financial institutions seeking 
that from their investee companies.
    The effect of light regulatory action in the United Kingdom 
on requiring institutional investors to disclose their 
possession on social and environmental issues has had a 
tremendous effect in focusing business attention on these 
issues, and similar requirement on climate change in the spirit 
of the carbon disclosure project that I mentioned may well 
encourage investee company leadership on this issue and 
encourage the creation of carbon risk screening tools within 
the financial community.
    I think we need to also finally educate the marketplace, 
the investment community certainly, but also companies and 
small- or medium-sized enterprises to encourage them to become 
more climate literate. The financial services industry can play 
a key role in that, and I think that if there is a message here 
it is: If we can get the political and investment communities 
working together to finance solutions, we would be on the right 
track, instead of getting bogged down in the nuances of the 
Kyoto Protocol.
    Thank you.
    Senator Jeffords. Thank you, Mr. Whittaker.
    Our next and last witness is Jack D. Cogen, president of 
Natsource, New York, NY.
    Please proceed.

 STATEMENT OF JACK D. COGEN, PRESIDENT, NATSOURCE, NEW YORK, NY

    Mr. Cogen. Good morning, Mr. Chairman and members of the 
committee. Thank you for inviting me to testify.
    My name is Jack Cogen. I am president of Natsource, LLC, an 
energy and environmental commodity broker headquartered in New 
York City with offices in Washington, DC., Europe, Japan, 
Canada, and Australia.
    My testimony will address the financial risk associated 
with climate change policy.
    At the outset, I want to acknowledge that there are 
legitimate differences of opinion as to what should be the 
nature, degree, and timing of policy responses to the risk 
associated with climate change, itself. However, the role of 
Natsource is to work with clients who decide it is in their 
best interest to evaluate the extent of their financial 
exposure under possible greenhouse gas policies. Our clients 
make the threshold decision that they are at risk financially.
    After that, the next step for them is to analyze the extent 
of their financial risk and develop strategies that make sense 
for mitigating that risk. Natsource contributes its policy and 
market expertise to helping clients assess and manage risk.
    The client base of Natsource includes multi-national 
corporations, as well as foreign and domestic firms. Natsource 
assists them in quantifying their financial exposure under 
different policies that might be adopted to limit greenhouse 
gas emissions.
    Our experience indicates that companies consider a variety 
of factors when they weigh the degree of risk they face and 
what to do about it. The primary factors are, No. 1, the 
probability they will be subject to emission limitation 
policies; and, No. 2, the potential direct and indirect costs 
of those policies to the company.
    Natsource provides analysis, strategic advice, and market 
intelligence once a company decides to undertake a 
comprehensive risk assessment. Generally, we help clients 
assess their financial exposure by identifying policies that 
might be adopted, assigning probabilities to those policies--in 
other words, we're handicapping the committee--quantifying the 
net emissions shortfall or surplus the company faces under each 
policy, and estimating potential compliance cost based on the 
company's emissions profile, internal reduction opportunities, 
and our knowledge of various commodities available in the 
greenhouse gas emission markets.
    Multi-national companies face an especially complicated 
risk, because they operate across multiple jurisdictions with 
different policies. In addition, many of these companies must 
evaluate the effect of climate change policies on the market 
demand for their products in different countries.
    If potential compliance costs are substantial and the 
probability of emission limitations is significant enough, the 
next step for many companies is to develop a cost-effective 
risk management strategy. This involves assembling an optimal 
mix of measures for reducing of offsetting emissions. These 
include internal and external emission reduction projects, 
internal emission trading programs, and the use of external 
trading markets.
    Companies choose to undertake emission reduction measures 
in spite of or because of policy uncertainty for a variety of 
reasons, including to reduce future compliance cost, gain 
experience in the greenhouse gas markets, maintain or enhance 
their environmental image, and place a value on internal 
reduction opportunities.
    Greenhouse gas markets are evolving and will continue to 
evolve over the next several years. In the future, these 
markets will function more smoothly and with lower transaction 
costs as greenhouse gas policies become clearer and markets 
become more liquid.
    Even now, more-sophisticated financial instruments such as 
call options are being used as a hedge against risk. Natsource 
recently complete the first comprehensive analysis of the 
greenhouse gas trading market for the World Bank. The analysis 
identified approximately 60 greenhouse gas transactions 
involving some 55 million tons of emissions. These numbers 
actually under-estimate the total number of transactions, 
because they do not include internal only transactions and 
small volume transactions.
    Current market prices for greenhouse gas commodities range 
from less than $1 to over $9 per ton of carbon dioxide 
equivalent, depending on the type of commodity and vintage. I 
will add that the United Kingdom just over the past 2 days 
completed their auction for emission allowances in the direct 
sector there. The price has not yet been released, but the 
after market is already saying that you can buy a U.K. 
emissions allowance for 7 pounds per metric ton. You will find, 
by the way, that that will turn out to be much lower than the 
price that the U.K. government paid for them.
    In conclusion, Mr. Chairman, a small but growing number of 
companies are beginning to more carefully analyze their 
financial risk under possible greenhouse gas policies. For a 
variety of reasons, some companies have decided to take steps 
now to reduce emissions, even though final policy decisions in 
most cases are still pending. As a consequence, these companies 
are able to take advantage of cost-effective opportunities 
provided by the market to reduce their financial exposure.
    As the acid rate allowance system has demonstrated, 
emissions trading provides flexibility that can significantly 
lower the cost of emission reductions.
    That concludes my remarks, Mr. Chairman. I would be glad to 
answer any questions you or other members of the committee may 
have.
    Senator Jeffords. Thank you.
    Thank all of the witnesses for very excellent and 
stimulating testimony.
    Now it comes our time to have a chance to have a little 
dialog, and perhaps pursue our own specific desires, but, more 
hopefully and more importantly, further allow our understanding 
of what is going on.
    Dr. Rowland, the Academy's 2001 report, which you helped 
write, was stunningly clear. It confirmed the seriousness of 
human-induced climate change, and it contains a real sense of 
urgency about the problem.
    What should be done to reduce the risks that the report 
outlines and to clear up related scientific uncertainties?
    Mr. Rowland. The Academy report, of course, did not go 
beyond basically the IPCC Volume I, the scientific bases. It 
did not go into adaptation and mitigation. Those have been the 
subjects of extensive discussion under IPCC with Volumes II and 
III, each of which are roughly 1,000 pages long, so that there 
is a very extensive literature on what the possibilities are.
    I think that the recognition is always there, that carbon 
dioxide is spread throughout the world in energy use by 
everybody, more intensively in the United States than other 
places, but definitely there in India and China and every 
country, because, by and large, the development of civilization 
has paralleled the more-intensive use of energy, and that has 
been true in every country.
    The problem that we face in the future is how to reduce the 
strict dependency that more energy is required to have a better 
standard of living, and that means we have to look at all 
aspects of the civilization.
    I don't think there is any silver bullet that one can give 
that says, ``If we did this, then everything would be taken 
care of.'' It means energy conservation, it means looking for 
alternative energy sources, it means more research on how to 
put carbon dioxide some place other than the atmosphere--that 
is, sequestration.
    It has always been very inexpensive to release carbon 
dioxide to the atmosphere, and putting it anywhere else--
trapping it at a power plant and putting it some place other 
than the atmosphere is clearly more expensive than just 
releasing it. So that's not a problem that is going to be 
easily solved, nor will it be a problem that can be solved 
without cost, but it is something that needs to be very, very 
intensively investigated.
    I think that we have been in a situation in which we have, 
for the last 10 or 20 years, ignored the fact that carbon 
dioxide is accumulating, that there is a long-term problem, and 
it is going to require a solution that takes decades to bring 
about a society in which the energy dependence is not 
escalating as it is presently.
    I don't have any good solutions other than all of those 
things which have been discussed before in a ``no regrets'' 
strategy. If you have energy conservation, then that is an 
improvement. If you have an alternative source that doesn't 
require releasing CO2, that is an improvement.
    I think in many countries, probably, there will be reliance 
on nuclear energy, which has a different problem, but it 
doesn't release carbon dioxide.
    Senator Jeffords. The Academy's report says that, 
``National policy decisions made now will influence the extent 
of any damage suffered by vulnerable human populations and 
ecosystems later in the century.'' The Administration's new 
policy decision appears to be business as usual. How will this 
policy affect the future?
    Mr. Rowland. I think that what one has observed over the 
last 50 years, if you put carbon dioxide emissions and GNP and 
say carbon dioxide emissions per GNP, that that is a number 
which has been going down. That is, as you multiply GNP, you do 
not necessarily take up the carbon dioxide emissions at the 
same rate, and over a period of time, there have been 
efficiencies that have occurred. But that, alone, is not going 
to solve the problem, because GNP is going to go up steadily in 
the future.
    I'll give you just one example that illustrates the problem 
of just doing dollars per GNP, and that is if you compare an 
SUV versus a high-mileage automobile. One uses much more gas, 
but they have to pay for that gas, and so the carbon dioxide 
emission per GNP unit is the same as far as the gasoline use of 
those two. What we really need to do is to have policies that 
get things done without as much expenditure of carbon dioxide 
for whatever that activity is. That means looking very much at 
the energy conservation side.
    Senator Jeffords. Thank you. Is it generally safe to say 
that increasing greenhouse gas emissions is likely to increase 
the probability and the magnitude of negative impact on humans 
and ecosystems?
    Mr. Rowland. As far as humans are concerned, the 
infrastructure that they live in has been built for the present 
climate, and if that climate starts to change, then that 
infrastructure is not necessarily the right one for the new 
climate.
    The faster that that change occurs, the more the 
infrastructure gets out of whack, no longer the right one for 
that location, so that slowing climate change is almost as 
important as controlling greenhouse gas emissions totally.
    There is no way that the world is going to stop emitting 
carbon dioxide without coming very close to doubling the amount 
that is in the atmosphere, and that means that some time over 
the next century or two we're going to have a very different 
climate. We don't know how much difference that is going to be, 
but we need to slow down the rate at which we approach that 
and, as the other Academy report says, ``We have to worry about 
whether climate change may occur on a very short time scale.''
    The kind of question that is running around the climate 
community is whether climate is a dial where the warming just 
gradually changes, or whether it is a switch and you quickly go 
to a new climate. That's not something that we have any way of 
predicting, but it doesn't--just because we are changing slowly 
at a particular time does not mean that we will not yet come to 
some new position where the climate is just different than what 
it was.
    Senator Jeffords. Senator Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman.
    Dr. Rowland----
    Senator Jeffords. I'm going to pick a witness, and you can 
pick your witness or go after the same one I did.
    Senator Voinovich. I'm going to go after all of them.
    Dr. Rowland, I'm interested in your opinions. In your 
written testimony you said that increased greenhouse gas 
concentrations are often because of the activities of mankind, 
and in your oral comments just now you said they were mostly 
caused by the activities of man. As I listened to the 
testimony, there is marked differences of opinion about the 
causality and the temperature of manmade activity and natural 
activity.
    Mr. Markham, you talked about 6  increase in temp, Dr. 
Baliunas--who is from Ohio, very nice to see you again. I saw 
you at our energy meeting about 6 months ago--you talk about 
.06 C increase in temperature. By the way, Dr. Markham, I'm 
going to get a hold of my sugar maple people to see if they 
feel the same way as you do about things, because I refer to 
our sugar maple industry as ``Ohio gold.'' But, you know, there 
is a difference of opinion here.
    For example, I'll get to one specific question. Dr. 
Legates, in his testimony, Mr. Markham discusses the potential 
effects of rising temperatures in the Northeast. The question 
is: Can the climate models predict with any accuracy whether 
manmade emissions will cause these effects? I mean, Mr. 
Markham, you had the most dire predictions that we had of 
anybody here at the table. It's, like, ``It's the end in terms 
of your part of the world unless something is done.''
    The issue is: What's the basis of it? How do you get those 
results?
    Dr. Legates, I'd like to have you comment on what he had to 
say. I'd like to know could you believe, Dr. Legates, that the 
climate models predict with any accuracy whether manmade 
emissions will cause the effects that we just heard from Mr. 
Markham.
    Mr. Legates. I think there's a serious problem with climate 
models in that, like I say, they are designed to produce only 
the mean field, not its variability. What we're interested in 
with climate models is to try to see how the mean changes. The 
problem is that on very small spatial scales we get quite a bit 
different characteristics than we normally see in the 
environment.
    For example, one of the things I've found that is 
characteristic of models from when I started looking at them in 
1990 to just a couple years ago when I did another analysis is 
that in the southern Great Plains of the United States, almost 
every model has Colorado being much wetter than northeast 
Louisiana. I needn't tell you that that's not the way the real 
world works.
    The issue with that then is, if we start to look at 
regional scale fluctuations, we can look at fluctuations on the 
mean field. But if that mean field is specified wrong, we know 
it is biased in this case in completely the wrong direction 
from the way precipitation variability exists, the question 
then becomes: if the model changes in a field, is that change a 
result of what would really happen, or is that change a result 
simply because our initial specification of the model is wrong; 
and hence the results are going to be entirely different from 
what might really happen?
    So, to come back to sort of what he's saying, I have 
concerns when we simply average out the mean conditions and 
only look at changes in the mean, because when we look closer 
at climate models they don't reproduce the smaller scale 
spatial variability that really is important to climate. 
Climate is not just a global phenomenon. Global climate is a 
net result of regional scale fluctuations.
    There are areas where we normally expect a lot of moisture, 
areas where we expect little moisture, and we have to maintain 
that fidelity in the climate system. By just averaging out and 
focusing on large-scale features, which is what climate models 
do, a lot of these subtle things get missed.
    Senator Voinovich. Does anybody else want to comment on 
models?
    Mr. Markham?
    Mr. Markham. Yes. I think the figures that I were giving 
you came from the New England regional assessment, and those 
were scenarios that were developed to give a broad range of 
potential changes in the New England region. I think it is 
certainly true that, as you take global models and look at what 
they will mean for a particular region or a particular place, 
then the accuracy of those potential predictions is less; 
nevertheless, what it shows is that there is very significant 
risk. This is also backed up by actual observed changes, so the 
New England regional assessment looks at an average of about 
0.7 F increase in temperature over the last century in New 
England.
    Again, as you go more local you can see that there have 
been much greater increases in temperature over the century in 
southern New England, and precipitation various across the 
region, so the more local we go the more difficult it is to 
make predictions. Nevertheless, the general trend is toward 
observation of warming and likely increased warming.
    Senator Voinovich. The real issue is that, in terms of 
public policy, that you have general trends and people grab a 
hold of the worst numbers, and then they say with these numbers 
you have to do this because if you don't do it the world is 
going to come to an end, you know, or we're in bad shape. 
Somewhere through this we need to try to get a balance of how 
we work things out.
    Mr. Cogen, you talked about some of the businesses, I 
guess, over in England that are doing some things. Are they 
doing these things because of command and control, or are they 
doing it because they feel it is in their best interest to look 
at reducing carbon dioxide and have found it to be a good 
investment overall in terms of efficiency and just good 
citizenship?
    Mr. Cogen. In the United Kingdom it is a mixture of both. 
The United Kingdom has put a carbon levy, which is a tax on 
carbon intensity, and then they have designed a trading program 
underneath it to give companies flexibility and the ability to 
reduce their tax by 80 percent, so it is a combination of the 
two.
    Having said all that, many of the multi-nationals who are 
operating in the United Kingdom look at this as much from the 
sales side of their products and what the public expects of 
them, not just under the United Kingdom. Yesterday, in fact, 
the chairman of British Petroleum announced--I'm reading from 
``Air Daily,'' which is an industry publication--that they cut 
their greenhouse gas emissions by more than 9 million tons 8 
years ahead of schedule. To quote the chairman, ``I believe 
that the American people expect a company like BP to offer 
answers and not excuses.''
    That's clearly the positioning of a multi-national that 
this is an issue that they think their customer base cares 
about. It's not just something that the Government is doing 
from a command and control. So it is a market-driven force that 
is making BP do this internationally, as well as government 
incentives and requirements in the United Kingdom.
    Senator Voinovich. I'm familiar with BP. I know Sir John 
Brown. They had great presence in Cleveland for a number of 
years. I think their colors even advanced their issue of trying 
to be good corporate citizens in climate.
    The only comment I'm going to make is that the issue 
becomes, from a public policy point of view, in terms of 
command and control and that you must do this, and so forth, 
and my experience in Ohio when I was Governor is that we got 
involved in this 35/50 reduction in the 17 worst toxins and 
basically went to the companies and said, you know, ``We think 
you ought to do this, and we're not going to demand that you do 
it, but we're going to suggest that you ought to look at 
this.'' It amazed me the number of companies that signed up and 
the impact that had in terms of reducing the 17 worse toxins in 
the State.
    You've got a situation where you want to do something about 
a problem. There's a disagreement about what man is doing in 
regard to that, but there is no question that man has something 
to do with it. Then the issue is: what is the public policy 
response to that that will get at it, and at the same time not 
put you in a position where you are non-competitive or, in the 
alternative, have a dramatic impact on the economy and the 
well-being of the citizens that live in your respective 
communities.
    Mr. Chairman, that's a real problem here, because, in terms 
of regionalism, we have a different economy in my part of the 
country than they have in the Northeast. It is a manufacturing 
based economy. Reasonable cost energy has been the basis of 
that economy. In the Northeast they have a different kind of 
economy. Our economy is impacting on their economy.
    That's our challenge is how do we reconcile all of these 
things to the extent that we move ahead and get something done, 
rather than end up in a debating society or in multiple 
lawsuits that clog up the courts and don't do anything for 
improving the environment or dealing with the energy needs that 
we have in the country. You folks are the experts.
    My time is up, but maybe the next time around you can maybe 
comment on that.
    Mr. Chairman.
    Senator Jeffords. Senator Chafee.

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

    Senator Chafee. Thank you, Mr. Chairman. Thank the 
witnesses for their testimony.
    I guess, to followup on Senator Voinovich, some countries, 
as Dr. Whittaker testified, are already implementing policy 
changes to comply with Kyoto, and Dr. Whittaker said that the 
European Union has already committed itself to a legally 
binding timetable for Kyoto implementation, and that Japan, the 
United Kingdom, and Canada have signaled their attempt to 
ratify the Kyoto Protocol during the coming weeks, so the other 
countries are doing it.
    I guess my question is, Dr. Rowland said, ``Unfortunately, 
that means a lot of them are turning to nuclear.'' Dr. 
Whittaker, is that what you're finding in the international 
community? Is that the sad reality? Is that the option?
    Mr. Whittaker. That's not what we're finding. No. The 
benefits are really coming from greater efficiency, I would 
say, through the kind of mix of command and control and 
economic incentives that Jack talked about.
    Senator Chafee. Do you want to repeat that again?
    Mr. Whittaker. Yes. The mix of economic incentive and 
command and control is really what is helping businesses in 
those countries move toward solutions. I'll give an example of 
NTT, which is a Japanese telecoms company. I think it is 
Japan's largest electricity consumer. Over the next 10 years, 
it proposes to save about 100 billion yen through the adoption 
of clean energy technologies. Those types of actions are not 
coming from any legislation or from the Japanese government 
yet, although the Japanese government hasn't announced its 
intention to ratify. It may be a preemptive strike, sort of in 
anticipation of regulation, but still there are tangible 
benefits for NTT shareholders. I think that's the message that 
we're seeing time and time again in different parts of the 
world.
    Senator Chafee. In your home country of Canada, how are 
they planning to comply with Kyoto? Is it more reliance on 
nuclear or the Hydro Quebec Power taking a slice out of the 
emissions of carbon dioxide? How is Canada going to comply? 
It's such a similar economy to our own.
    Mr. Whittaker. If I knew the answer to that question, I 
would be very popular in Canada. They haven't decided yet. 
There is a tremendous amount of concern in Alberta, which is, 
of course, oil rich, and particularly the oil sands, which are 
extremely greenhouse gas intensive, to produce.
    The role of emissions trading is going to be crucial in 
helping Canada achieve its targets, so it will be looking 
internationally to achieve credits, to buy credits to help 
offset its emissions in order to meet its targets.
    It is also going to be encouraging its renewables and clean 
energy sector, and there are various efforts underway to 
expedite that already.
    Again, it is a combination of approaches, but certainly the 
answer is not clear yet.
    Senator Chafee. Thank you very much.
    Senator Jeffords and Senator Lieberman have introduced a 
bill which would reduce the carbon dioxide emissions to the 
1990 levels, probably the most aggressive bill in the Senate, I 
would say. I don't know if I can run down the panel and get a 
30-second opinion on that bill before my time runs up.
    Dr. Rowland.
    Senator Jeffords. Well, you can take extra time for that.
    Mr. Rowland. Reducing to the 1990 level of emissions would 
require substantial cutback, and the question of how much 
economic dislocation it would do would surely depend upon the 
rate at which that was done, but we are well above the--we have 
increased since 1997, continued to increase our CO2 
emissions, and so the 1990 goal has been receding from where we 
have been as a country.
    It means that we really haven't taken hold of trying to cut 
back on a voluntary basis. As Senator Voinovich says, clearly 
Ohio is different from New Hampshire, Rhode Island, and it's 
different from California, and the solutions in each of those 
places for becoming more energy efficient may not be the same, 
and they require somebody who is there and who knows their 
particular conditions that can do that, but we have not 
adopted, as a country, that energy conservation is a major goal 
in order to minimize carbon dioxide emissions.
    Mr. Pielke. Let me say what may be, I guess, an unpopular 
truth here. I'm not familiar with this bill, but if we assume 
in a thought experiment full and comprehensive implementation 
of the Kyoto Protocol around the world, it is safe to say it's 
not going to do much at all to address the environmental and 
economic risks associated with climate change.
    I should point out that the framework convention on climate 
change that the United States signed onto in the last decade 
makes a distinction in the term ``climate change.'' It defines 
climate change as only those impacts that are the result of 
greenhouse gas impacts. Any other climate impact is not covered 
by the framework convention. So whether it is maple syrup 
growers or people worried about hurricanes or human life in 
developing countries, it doesn't make much sense from a policy 
perspective to try to separate out human climate impacts from 
non-human climate impacts. I would say it is a broader issue.
    Mr. Legates. I'm also not familiar with the legislation, 
but I do recall in 1997 that American Viewpoint conducted a 
survey of State and regional climatologists, and one of the 
questions they did ask was: if we rolled back to 1990 levels, 
would it have a significant impact. I believe I remember 
somewhere between one-half and two-thirds of the respondents 
indicated that it would have little or no impact.
    I don't think it would have much of an impact, either. My 
concern is that a lot of the variability, particularly a lot of 
the loss of life that we see is going to be as a result of the 
extreme events, and these extreme events are going to continue 
to occur. So we need to take into account, to some extent, how 
we alert the people, how we deal with growth along coasts, for 
example, and things like that. These issues would be impacted 
by climate change, but also in this case I think, while cutting 
back would be beneficial for some other reasons, I don't think 
it presently is necessary from a pure ``global warming'' 
standpoint.
    Mr. Markham. If you accept the science that greenhouse gas 
emissions are increasing the risk of climate change, then it 
seems to make sense to reduce CO2 emissions, and 
this bill would do that.
    I think that the target of 1990 is a good first-step 
target. It is an aggressive target, but it still won't take us 
back to the levels that are probably required.
    Although it takes a long time to bring down the 
CO2 level, CO2 can stay up in the 
atmosphere for more than 100 years. We need to be acting now to 
protect future generations. I think that's why maple syrup is a 
good example, because people planted those trees for their 
children and grandchildren, usually. They can't harvest them 
for 40 or 50 years or so. So we need to be looking down the 
road and thinking about future generations, and we need to, I 
believe, be acting now to start reducing CO2 
emissions, and this bill would take us a long way in that 
direction.
    Ms. Baliunas. Assuming the climate projections are 
accurate, then reducing to 1990 levels for the United States 
would mean about a 20 percent cutback in carbon-based energy 
use or carbon dioxide emissions. Replacing that--I agree with 
Dr. Rowland--is going to be extremely difficult to do, and yet 
climactically, temperature-wise, assuming the models are 
accurate, this averts, off the top of my head, less than .05 C 
of the warming by the year 2050. So it is, on the one hand, 
extremely costly, and on the other hand ineffective. That's why 
it is important to realize that a policy like this is only a 
scant first step. There has to be much more done much more 
dramatically if one accepts the models. That's why the science 
is still very critical in this debate.
    Mr. Whittaker. I guess the question is where would the 
emissions come from? If you look at the key source categories, 
the stationary--essentially, the power production sector, coal 
combustion sector, is the No. 1 by a country mile.
    We've done some financial modeling around this issue and 
looked at what would happen if the top U.S. utilities all had 
to reduce their emissions to their own 1990 levels to 1998 
levels and played around with different scenarios there. A 
softened Kyoto, which essentially is leveling at 1998 levels, 
corresponds to, according to our analysis, roughly 11 percent 
of the current total market capitalization of some of the most 
coal intensive utilities, so the financial cost of doing that, 
if that's what you wanted to do, would need to be taken into 
account.
    Mr. Cogen. In discussions with our customers about Senator 
Jeffords' bill, the impact of it has been slightly different. 
It's not the details of the bill or whether it will pass or not 
pass, it's raising the conversation to a level that has to be 
taken seriously, and combined with a movement overseas to 
ratify Kyoto with the United Kingdom or Danish programs, with 
many regional or State programs here, it is forcing 
corporations--especially that have long-term assets planning 
cycles, whether it is 40 years for maple trees or 30 years on a 
power plant--to take this into consideration that we may be in 
a carbon strait in the future and what the effects of that 
would be. So I think it is galvanizing the conversation and 
forcing companies who have fiduciary responsibilities to make 
decisions to decide for themselves not so much on the science, 
but on the policy and what investigation decisions they will 
make under different policy regimes.
    Senator Jeffords' bill is forcing them to take it seriously 
now, which is a good thing.
    Senator Jeffords. Senator Corzine.

OPENING STATEMENT OF HON. JON S. CORZINE, U.S. SENATOR FROM THE 
                      STATE OF NEW JERSEY

    Senator Corzine. Mr. Chairman, I appreciate your holding 
the hearing. I had a formal statement I'll put in the record.
    I feel like I am an interloper coming in at the end, and so 
I will pass, but I do want to emphasize how strongly I feel 
that we need to fully understand in the terms of science these 
risks that are associated with climate change.
    I would just mention that there are studies that show the 
127-mile shoreline in New Jersey is potentially at risk to 
complete erosion, something in a foot rise over the next 50 
years. For a $40 billion industry, for enormous amounts of 
property, this is an issue that concerns the citizens of New 
Jersey, concerns me, and I think it should anyone.
    I apologize for being late. We had three hearings at one 
time. But there is nothing more important, long-run, for my 
community and the people I represent than this issue.
    [The prepared statement of Senator Corzine follows:]

 Statement of Hon. Jon S. Corzine, U.S. Senator from the State of New 
                                 Jersey

    Thank you, Mr. Chairman. I appreciate you holding this 
hearing today on the economic and environmental risks of 
increasing greenhouse gas emissions.
    I want to make just a few points before we begin to hear 
testimony from the panel.
    The Science Warrants Action. First, I think that the 
science warrants a hard look at risks and potential impacts. 
Last year, the Intergovernmental Panel on Climate Change (IPCC) 
recently released its Third Assessment Report. The report as I 
read it indicated that the science is increasingly clear and 
alarming.
    The report indicated that human activities, primarily 
fossil fuel combustion, have raised the atmospheric 
concentration of carbon dioxide to the highest levels in the 
last 420,000 years.
    The report further indicated that the planet is warming, 
and that the balance of the scientific evidence suggests that 
most of the recent warming can be attributed to increased 
atmospheric greenhouse gas levels. Mr. Chairman, these IPCC 
findings were validated later in the year by the National 
Academy of Sciences.
    Mr. Chairman, we also know that without concerted action by 
the United States and other countries, greenhouse gases 
emissions and concentrations will continue to increase. Climate 
models currently predict warming under all scenarios that have 
been considered. Even the smallest warming predicted by current 
models--2.5 degrees Fahrenheit over the next century--would 
represent the greatest rate of increase in global mean surface 
temperature in the last 10,000 years.
    So while scientific uncertainty remains, I think the trend 
is clear. As a result, we need to focus on risks.
    New Jersey and Other Coastal States Will be Impacted by 
Climate Change. For my State of New Jersey, Mr. Chairman, the 
threat of continued sea-level rise is one of the risks that I 
am most concerned about. With the exception of the 50-mile 
northern border with New York, New Jersey is surrounded by 
water. The state's Atlantic coastline stretches 27 miles. 
Fourteen of 21 counties have estuarine or marine shorelines. 
Rising sea level is already having impacts, by exacerbating 
coastal erosion, and causing inundation, flooding, and saline 
intrusions into ground water. The N.J. coastal area also 
supports one of New Jersey's largest industries--tourism.
    Sea level is rising more rapidly along the U.S. coast than 
worldwide. Studies by EPA and others have estimated that along 
the Gulf and Atlantic coasts, a one-foot rise in the sea level 
is likely by 2050 and could occur as soon as 2025. In the next 
century, a two-foot rise is most likely but a four-foot rise is 
possible. So I'm concerned about this risk to my home state.
    We Need to Take Steps to Reduce Risks. Given the state of 
the science and the risks we face, I think we need to take 
steps to reduce risks. The president's plan, which represents 
only an incremental step over business as usual, is simply not 
enough in my judgment.
    At the state level, New Jersey is already taking aggressive 
steps to reduce emissions. The state has a plan to reduce 
greenhouse gas emissions to 3.5 percent below 1990 levels by 
2005. Specifically, the plan would achieve a 6.2 million ton 
reduction through energy conservation initiatives in 
residential, commercial and industrial buildings, another 6.3 
million ton reduction through innovative technologies in 
residential, commercial and industrial buildings, a 2.2 million 
ton reduction through energy conservation and innovative 
technologies in the transportation sector, a 4.5 million ton 
reduction through waste management improvements, and a half 
million ton reduction through natural resource conservation.
    So I think what New Jersey is doing--under a plan that 
Governor Whitman got underway--shows that we can and should do 
much better than what the president proposed.
    Support the Climate Titles in the Energy Bill. Finally, Mr. 
Chairman, I want to urge my colleagues to support the climate 
change titles in the energy bill. In particular, I want to urge 
my colleagues to support the registry provisions in Title XI of 
the bill. These provisions will require the largest emitters to 
report greenhouse gas emissions--as utilities are already 
required to do. These provisions also enable companies that 
undertake emissions reductions to register them, so that they 
will receive credit for their actions if reductions are 
required at any point in the future.
    Taken together, Mr. Chairman, I believe that these 
greenhouse gas registry provisions will provide a powerful 
incentive for companies to take actions to reduce emissions. I 
know you agree, as you are a cosponsor of S. 1870, a bill 
containing similar provisions that I introduced in December. 
The energy bill registry provisions represent a compromise 
between S. 1870 and related legislation in the Energy and 
Commerce committees, and I urge my colleagues to support them.
    Thank you, Mr. Chairman.

    Senator Jeffords. Dr. Rowland.
    Mr. Rowland. So far all of the discussion has been on 
controlling carbon dioxide, and there are other greenhouse 
gases. The one that I would draw particular attention to is 
tropospheric ozone--that is, one of the components of smog is 
ozone formed by the interactions of nitrogen oxides and 
unburned hydrocarbons and light, and that mostly takes place in 
cities, although we have run into it experimentally in burning 
forests especially in the Southern hemisphere.
    The failure to burn gasoline completely in an automobile 
results in the formation of ozone, which is a greenhouse gas. 
Then the hydrocarbons eventually become carbon dioxide, anyway, 
but on the way it produces another greenhouse gas that adds to 
the total interception of infrared radiation.
    This is happening in hundreds of cities all over the world. 
It would be to our advantage and to the globe's advantage if 
the pollution problems of these cities, with respect to ozone, 
could be reduced, and that's something that is a problem in 
China; it's a problem in India; it is a problem in the United 
States and everywhere.
    We know how to do it. In places like Los Angeles, the smog 
has been reduced by adopting certain policies. And, to the 
extent that we can get those policies in place in cities all 
over the world, then that reduces the amount of tropospheric 
ozone and is the equivalent of cutting back on some carbon 
dioxide because it is a greenhouse contributor.
    So it doesn't get rid of the fact that the automobile 
eventually puts the carbon dioxide in the atmosphere, but on 
the way it also produces another problem, and if we could just 
go to clean-burning in an automobile, helping in reducing 
tropospheric ozone, and that helps because it is a greenhouse 
gas. So it is a policy that would be useful on our part to 
encourage and assist, if we can, in the cities that have these 
problems.
    Senator Jeffords. You mentioned India. I have been to the 
places--India, China, and other places in that area--which have 
extensive coal burning, as you well know, and the problems 
there are much greater than we have here. Internationally, what 
should we be doing to try to assist in those countries having 
the capacity to reduce their pollution?
    Mr. Rowland. In the cases of both India and China, they 
have very high ash coal, and much of their pollution in the 
cities comes about by having particles in the atmosphere coming 
about by burning coal that has material in it that's not going 
to burn. City pollution problems can be sort of divided in two 
categories. One has to do with producing particles, and that 
has a lot of bad things happening, particularly when you 
breathe them in. In addition, there are the photochemical 
problems that come from the chemical interactions that take 
place.
    What I was talking about earlier would be trying to reduce 
the photochemical problems by adopting the kinds of procedures 
that have been put into place by the Southern California Air 
Quality District.
    The question of getting the particles out of the air in 
Beijing and Delhi is a matter of people in China and India 
deciding on some way of using cleaner fuel to begin with. How 
they treat their coal in order to get rid of the particles 
before they burn it would be a very complicated problem. That's 
one that I don't know exactly how they would do it.
    Senator Jeffords. Senator Voinovich?
    Senator Voinovich. Yes. I would like to ask the witnesses: 
how many of you are familiar with President Bush's climate 
change initiative?
    [Show of hands.]
    Senator Voinovich. Senator Chafee asked you your opinion 
about Senator Jeffords' bill, and I have: Rowland, question 
mark; Pielke, question mark; no, Legates; yes, Milburn [sic]; 
no, Whittaker. I mean, no one really came out and said yes/no. 
You kind of all waffled to a degree except Mr. Markham.
    Senator Jeffords. That shouldn't surprise you.
    Senator Voinovich. Right.
    Senator Jeffords. We do the same thing though.
    Senator Voinovich. The way I summarize it, it provides the 
necessary funding for both the science and technology research, 
encourages companies to register their CO2 
emissions, sets a national goal to reduce our carbon intensity, 
which is the best way to protect our economy and begin to 
address the issue.
    Anyhow, the No. 1 issue is: What do you think of that 
policy? No. 2, what other things should we be doing? We get 
into this whole issue of the technology and where we are in the 
models and the rest of that and where should we be investing 
our money in that regard. I'll make a comment before you answer 
the questions, but, Dr. Rowland, you're talking about coal in 
China and the ash problem. Whether we like it or not, 
regardless of what happens to Kyoto, a lot of these newly 
emerging economies are going to burn coal. Coal produces about 
55 percent of our energy here in the United States, and my 
State is about 85 percent.
    It seems to me that one of the greatest things that we 
could do as a matter of public policy, Mr. Chairman, would be 
to really put some money into clean coal technology and also 
provide some incentives so that we could go ahead and really do 
a job with that technology that could be exported around the 
world that would help deal with the problem that these 
countries are dealing with now.
    If that's not what we're going to do, and faced with what 
the real world is, then we have to go to some other alternative 
source of energy. We talked about nuclear is what many others 
have said. Then what's left is gas, hydro, and then some of the 
renewables that we have, but most of us recognize that 
renewables produce about 1/10th of 1 percent of the energy in 
this country, so that's the real world we're dealing with.
    I guess the issue is: how do you deal with the real world? 
In the remainder of my time, what do you think of the Bush 
policy? We'll start off with that.
    Dr. Rowland.
    Mr. Rowland. I'll make a response to your question about 
clean coal technology. Yes, there's no question that India and 
China are going to depend for the next decades very heavily on 
coal, and they both, unfortunately, have very poor coal, so if 
they could have technology available--that is, clean coal 
technology--then it would help them quite substantially with 
their own local environmental problems. Still, you end up with 
carbon dioxide from burning the coal. But we might be able, as 
part of the cleanup of their cities, to persuade them also to 
take care of the other aspects of air pollution that they have 
in the urban areas. But I'm sure that clean coal technology in 
India and China would be very beneficial to them and to the 
atmosphere, generally.
    Mr. Pielke. Let me say, from the standpoint of climate 
risk, the choice between, let's say, the Kyoto Protocol and the 
Bush plan, there is a distinction without a difference there. 
There are really no differences in risk because neither 
addresses the underlying causes of risk, which are the 
increasing vulnerability of society and the environment to 
climate events.
    Clearly, there are economic, political, and symbolic----
    Senator Voinovich. Can I?
    Mr. Pielke. Yes.
    Senator Voinovich. That's really interesting. You're 
saying--and I want to make sure I understand. You're saying 
that, in your opinion, we're seeing, if you look at history, a 
much greater vulnerability to changes in natural climate types 
of things? In other words, is that--am I understanding that 
right?
    Mr. Pielke. Yes. What I'm saying is that, even in the 
context--forgetting about the natural versus human cause of 
climate change--climate has changed. I mean, it is clear in 
different locations over different time periods. But if you 
take a look, for example, at hurricanes, for which we have very 
good data, the same storm which would have caused $100 million 
inflation-adjusted in 1926 Miami, today would cause about $90 
billion. That has nothing to do with the changing frequency or 
nature of storms, only that Miami Beach and associated property 
develop is much different than it was the beginning of the last 
century.
    So when we're looking at risk and we're worried about 
impacts of climate, you can't just say, ``We have more 
precipitation. Will the temperature be warmer,'' and so on. We 
also have to look at how the economy changes, how society 
changes, and so on.
    When you put those two things together, by far the largest 
signal--and, again, this is talking about humans and not the 
environment--by far the largest signal are the changes we make 
every day, how we develop, how much more wealth we accumulate, 
where we live, and so on. Those are the determining factors in 
risk.
    The insurance company insures against property damage. It 
doesn't ensure against number of storms.
    Senator Voinovich. OK. So, again, I want to understand 
this. It's like Senator Corzine was talking about the 
coastline. In my State, the water level is way down, and I 
suspect it will go way up, and I haven't figured out what it 
is. Some people say that if somebody turns a spigot on it turns 
it up, but we know that isn't the case. But the question we 
have, like, for instance, when I was Governor, we did coastal 
plain. We advised people not to build in certain places. We 
required, when people buy a home now, that they've got to be 
given information about the erosion and some other things. 
Those are the kinds of things you're talking about that we'd 
better start thinking about in terms of our overall policies?
    Mr. Pielke. Yes. There's a disconnect here. I think Senator 
Corzine is properly concerned about erosion on the coast. But 
let's not kid ourselves. Let's not think that the choices we 
have before us on energy policy are going to make any 
difference whatsoever on what happens on the coast. Many other 
decisions that you folks will face will affect that, such as 
development, replenishment of beaches, and so on--the decisions 
that are made every day that go, I guess, underneath the radar 
screen of energy policy. But I think there is a policy 
disconnect here. If we are talking about energy policy and 
justifying changes in terms of beach erosion or water tables 
and so on, it is not in concert with how we understand how 
climate and people interact.
    From that standpoint, I would say Bush versus Kyoto, you're 
talking to the wrong experts here. It may make sense from the 
standpoint of keeping our allies happy with respect to 
international relations or showing environmental symbolism, but 
it is not at all going to address these issues of risk.
    I think it is time that the debate moved on to acknowledge 
that.
    Senator Jeffords. Dr. Rowland.
    Mr. Rowland. I'd comment about climate models and weather. 
The climate models are not designed to reproduce weather, and 
most of what Roger Pielke is talking about and also what Mr. 
Legates talked about are weather-related questions of how much 
precipitation there is very locally. When you live locally, 
then that's very important to you. It is what happens right 
there.
    If you build on the barrier beach in Florida, then 
eventually you're going to get hit by a hurricane, and that's 
why he's saying that the beach damages weren't there in 1926. 
The beaches were there in 1926 and the hurricanes went over 
them, but people weren't there. If you build on them, then at 
some time it is going to hit you. That's the weather-related 
aspect.
    The climate-related aspects have to do with 50 or 100 
years, and there the question of the storms--the climate models 
don't reproduce storms. Storms happen, are created and produced 
on a much smaller spatial scale than the climate models can do.
    If I give you an example for myself, I live on the coast in 
southern California. My office is about 4 miles inland. The 
weather is different there because there is a low hill, low 
hills in between, and 50 miles away there is a 12,000-foot 
mountain with snow on top of it.
    If you have a climate model that has a box that is 100 
miles by 100 miles, then the beach and the desert and the 
mountain are all in the same box. You can't predict any kind of 
weather out of that. For that you need a very much smaller-
scale model, and if you build a smaller-scale model that only 
does the weather, then it does pretty well. They do pretty well 
on precipitation. But you can't expect a climate model to do 
that because the scales are so different. Climate modeling is 
really looking 50 to 100 years in the future and under 
conditions when the hydrological cycle would be three, four or 
five times as severely changed as now, and that's when they 
start worrying about the storms, but they can't predict them 
because that is much too fine a scale for their model.
    Senator Jeffords. Mr. Markham, go ahead. I was going to ask 
you.
    Mr. Markham. Yes. I just wanted to respond to Senator 
Voinovich's question about the President's climate policy.
    I think the simple answer to that is that that is a 
business as usual policy which will allow carbon emissions to 
increase over the next decade at roughly the same rate at which 
they've increased over the last decade, so, by tying the issue 
to carbon intensity rather than to overall CO2 
emissions, that policy is not a policy for reduction, it is a 
policy for continued increase. For that reason, I don't think 
that it will help us if our objective is to reduce greenhouse 
gas emissions.
    I would also like to just say that I think it doesn't help 
to try and totally separate energy policy from response to 
climate change. We are almost certainly locked into a certain 
amount of climate change, to which we will have to adapt, but 
at the same time, by having a secure and sensible energy 
policy, we can reduce the potential future impacts. Climate 
change doesn't happen on its own, it happens in a context of 
social change. Wildlife habitats are unable to adapt to rapidly 
changing climate. The coasts--we are spending tens of millions 
of dollars on armoring the eastern coasts at the moment. As sea 
level accelerates over the next century, then that will be an 
increased cost, so we shouldn't always just talk about the cost 
of reducing emissions, we should also talk about the cost of 
not reducing emissions. I think the coastal zone is one of the 
areas where we need to look at that more closely.
    Senator Voinovich. Dr. Baliunas.
    Ms. Baliunas. The reason I abstained on the vote on the 
earlier bill is because I hadn't seen the full bill. I like 
Bush's bill because, for some reason, one is it focuses on the 
science, and the science is clearly the driver of the issue 
here. The models need improvement. They need improvement in the 
major greenhouse effect, which are 02 water vapor and the 
effect of clouds. Those are poorly to improperly modeled at 
present in all climate models. All climate models assume them 
to be, especially water vapor, strong positive feedback that 
amplifies any warming that would be there from, say, doubling 
carbon dioxide concentrations in the air. That is wrong. That 
has been demonstrated incorrect from the satellite data and the 
balloon data that we have. Those models are incorrect based on 
the surface data measurements. They are exaggerating the 
warming.
    So anything that affords science to progress in those areas 
will give us a better definition of the risk, the amount, the 
amplitude of climate change from manmade sources. This has to 
be weighed against the cost.
    Talking about cutting energy use in this country, carbon 
dioxide emissions, by 20 percent on a time scale of a decade is 
extremely costly. There is no way around it. One can only look 
at what Senator Chafee called the sad reality of nuclear to 
replace these. Renewables won't do it. Hydro is not going to 
expand in this country. Solar is not going to add on that 
scale. Wind towers are not going to add on that scale. So we're 
going to end up shutting down coal, adding a lot more natural 
gas, and adding nuclear. I just don't see how it is possible to 
do that.
    But, in any case, the science says that the manmade 
emissions that are present are having a very small climate 
effect.
    Senator Voinovich. Thank you.
    Mr. Whittaker. I would only add that, from a business 
standpoint, certainly the policy encourages technology 
development, and if I was with a cogeneration or with a 
combined heat and power company right now, I would be quite 
pleased. I think my business is going to improve over the next 
few years.
    We ask about how can we encourage China and India to 
embrace these new technologies. Well, there is a mechanism 
under the Kyoto Protocol called ``a clean development 
mechanism,'' which is designed precisely to do that and to 
credit U.S. companies for doing so.
    I would have liked to have seen mandatory reporting. I 
think disclosure on issues brings consistency, and the 
consistency of information is very valuable for those wishing 
to estimate companies, certainly in the financial services 
industry, which brings me on to my final point.
    I would like to see more of a dialog with Wall Street and 
with the investment community. I think institutional investors 
are increasingly invested in the equities markets and have 
tremendous sway over companies, and the slightest level of 
concern expressed by investors would be a powerful catalyst, I 
think, for companies to look at this issue more seriously.
    Senator Jeffords. Dr. Rowland.
    Mr. Rowland. I should register dissent to what Dr. Baliunas 
said about the modeling of the clouds and the modeling of water 
vapor. In the consensus discussion of the Academy scientists 
that were involved, they agree that there are some 
uncertainties involved in any of that, but at the present 
modeling, assuming that the relative humidity would be the same 
and handling clouds as they are is as good as you can do at the 
present time for doing the modeling. It is not introducing a 
bias one way or the other.
    Ms. Baliunas. I want to register dissent to the dissent, 
and that is they may be the best we can do today, but they are 
insufficient for making projections 50 to 100 years in the 
future. We cannot even explain the lower troposphere 
temperature of the last 20 to 40 years, where we've gone almost 
halfway to a doubling of carbon dioxide, equivalent carbon 
dioxide in the air--that is, summing all the greenhouse gases 
in the air.
    The models make an error of a factor of at least five in 
projecting the warming. That error has to be due to the largest 
feedback, the largest gain, which is water vapor. It is a 
distribution of water vapor in the air. We don't have good 
measurements for it, the vertical distribution of it, and we 
don't know how it interacts with the rest of the climate 
system. Ditto for clouds.
    Mr. Pielke. I could. This dialog is exactly what's wrong 
with the climate change debate. This country spends an enormous 
amount of money--about $20 billion over the last 10 or 12 
years--on climate change research, and, while we have a much 
better understanding and much better sense that yes, people can 
affect the climate, esteemed scientists such as these will be 
debating these issues far into the future. That's how science 
progresses.
    But what hasn't come out of the Nation's $20 billion 
investment in research are more alternatives, more choices. The 
choices that we face today are essentially the same that were 
discussed in 1982, in 1985. It's, ``Do we reduce 
CO2? Yes or no?''
    There are thousands, if not millions, of decisions made 
about climate every single day in each of your States, in my 
State, around the world. I think it is fair to ask if the 
scientific community is providing information that leads to a 
greater range of choices with respect to mitigation and 
adaptation to climate change. There's clearly a lot of reasons 
to change energy policy independent of climate and a lot of 
reasons to better adapt a climate independent of change.
    It seems to me that the research that we're funding as a 
country is not leading to those choices, meaning that all of 
the science we get is fed into the same very narrow range that 
we'll be talking about in 10 years. So I think maybe it is time 
to think a little bit more broadly about the problem, because 
this hearing and the debate among scientists, if you look in 
1985 or even 1982, when Representative Al Gore held hearings, 
is very similar, and yet our choices remain the same.
    I would encourage you to do what you can to expand the 
choices available.
    Senator Jeffords. Mr. Cogen.
    Mr. Cogen. Thank you, Senator.
    In responding to President Bush's proposals, I will take 
the same approach I took to Senator Jeffords' bill, which is 
not actually have an opinion, but I will say that we represent 
a lot of very large emitters, a lot of industrial companies are 
typically the companies that hire us--many, in fact, in the 
State of Ohio. There's three things that they're looking for in 
a bill, and I think maybe that's what I'd like to point out and 
focus.
    One is flexibility. Universally they support market-based 
mechanisms for dealing with the problem as far as their 
solutions.
    The second, which is the hardest to get under any 
environment, is some sort of regulatory certainty.
    Senator Voinovich. Is what?
    Mr. Cogen. Regulatory certainty. It is very hard to make 
investment decisions for long-term assets when you think the 
law might change in 5 or 6 years and you're talking about a 30-
year asset.
    Another issue, which goes to the issue of the voluntary 
nature of programs, is protection of baselines. That is, a 
number of companies have witnessed this, and certainly there 
has been talk over the years of credit for early action. I 
think that gets to the heart of it.
    It is very hard to take a voluntary action now as a 
corporation for all of the good corporate citizens reasons and 
find out years later that you are now established at a lower 
baseline from which you must reduce because of a mandatory 
program, where if that is the case the best economic solution 
is, in fact, put as much carbon out as you can now so that you 
have a higher baseline that you have to reduce 10 percent off 
of.
    That's the situation that we are actually seeing, 
especially under the trading program proposed in the European 
Union, that right now, for example, some chemical firms have 
taken great efforts and expense in reducing their nitrous oxide 
output, and we're finding that, in fact, the chemical industry 
is not under the trading program at all. Then there's talk, as 
a secondary, ``Well, we'll put them in and then we'll establish 
the baseline pretty much on basic level, as they're doing 
now,'' when some of them have spent 10 years actually reducing 
their CO2 equivalent out put. It might just all go 
away for them.
    That, to me, is maybe the key issue that can be addressed 
is: if you're going to have any sort of voluntary program, how 
do you protect it? What assurances can be given that it is 
going to count later?
    Senator Jeffords. Anyone--Dr. Rowland.
    Mr. Rowland. I have just a comment about satellite 
measurements of temperature. We all know how thermometers work. 
We've all used them. A satellite can't do what a thermometer 
does, and that is contact the material directly. So if a 
satellite wants to measure temperature, it has to measure some 
kind of emission that gives radiation that travels 500 miles to 
the satellite. It doesn't get it just from the place that you 
want to measure it. It gets it from all through the atmosphere, 
so you have to have an algorithm that calculates it.
    The history of the satellite measurements of temperature in 
the troposphere have been that the algorithm was shown that 
existed for quite a period of time, 5 or 10 years, had some 
problems in it. The same satellite doesn't stay there. There 
have been 9 or 10 of these satellites, and their orbits decay, 
and then you have to pass it from one to the next. So it is not 
just sticking your thermometer in and measuring it, which that 
at least we know how to do. It is a very--it often takes 
adjustment of the algorithm 5 or 10 times, and it is not clear 
to me that we've got the final algorithm for measuring 
tropospheric temperatures by satellite.
    In the end, satellites always give you the global coverage 
that is needed, but interpretation of the measurement that 
actually reaches the satellite is a complicated thing, which is 
very valuable if more than one research group--if there are 
several research groups and they repeat and they can come 
together on it, and I don't think we're in that position on the 
tropospheric temperatures.
    Senator Jeffords. Yes.
    Mr. Legates. I agree, and that's one of the things I point 
out in my statement is that we need more work on satellite 
measurements. But I disagree strongly that a thermometer is a 
perfect measurement. A thermometer can measure temperature at a 
given point. The problem with that is a thermometer is good for 
measuring a temperature here but not for across the room, so we 
have a single thermometer located at, say, a National Weather 
Service observing site. It is representative only of that site, 
not of the larger region.
    Now, the problem is that things change on that site over 
time. We've moved a lot of the stations around, for example, in 
the 1940's, early 1950's. We decided we really didn't need the 
Weather Services offices downtown, it was better to have them 
out at the airports, so we moved our thermometers out to the 
airports, which created discontinuity.
    Well, what's happened over time? We've had urbanization. So 
the thermometers, which originally were in land outside of the 
cities, and now with a growing metropolis a lot of cases, these 
thermometers now are associated with urbanization right around 
the site. That is, the growth of cities leads to more asphalt 
and warmer conditions so we have the effect of urbanization 
biasing our measurement with the thermometers.
    We also have changes in thermometers over time. We don't 
necessarily use the same type of thermometer in 1930 that we do 
now, so there is a discontinuity in instrumentation.
    Most importantly, we only put thermometers over land 
surfaces. We have most of our observations associated with 
locations that are over land, that are at lower altitudes, that 
are generally in wetter conditions and in more economically 
developed countries.
    So thermometer-based measurements are good only for a 
single point, but they don't give you a good indication as to 
what the actual background change has been, because there is a 
lot of variability and bias associated with taking a 
thermometer measurement.
    Ms. Baliunas. I want to add that the lower troposphere 
measurements by satellite have been independently validated by 
balloons that are launched daily and make measurements in situ, 
and there are at least four sets of balloon measurements that 
are made independently across the world, groups that analyze 
it, and they agree with a high degree of correlation with the 
tropospheric data from satellites.
    So the argument is that the lower troposphere data are 
probably on a very good footing. They cover almost essentially 
all the globe, as opposed to between 10 and 20 percent for the 
ground-based thermometer measurement data that have, as Dr. 
Legates has pointed out, have changed substantially over time 
and have many corrections made to their algorithms, as well.
    Mr. Pielke. Yes. I'd like to suggest that there's really no 
solution to the problem of climate change, but we can do 
better. I'd like to go on record as saying I'm a big supporter 
of using less energy, being cleaner in our energy use, and so 
on, but we don't need better thermometers, better satellites, 
or any of that to start making progress. There's a lot of so-
called ``low-hanging fruit.'' National security, alone, 
provides a compelling reason to be more efficient in our energy 
use.
    It seems to me that in tackling the greenhouse gas 
emissions of 6 billion people focused on understanding the 
science 100 years in the future, we couldn't have created a 
problem that could be more easily gridlocked.
    There's a lot of relatively easy, by comparison, steps--no 
regrets adaptation and no regrets mitigation--for which the 
debate over the science, while important, shouldn't stand in 
our way. We ought to be being better with our energy use and 
reduce our vulnerability to climate in any case, and we should 
start taking those steps. We should have taken them before, but 
we should start now instead of trying to wait for science to 
resolve itself.
    Senator Jeffords. I'll give you all a last shot here. Dr. 
Rowland.
    Mr. Rowland. I have no more.
    Senator Jeffords. Mr. Legates.
    Mr. Legates. [Shaking head negatively.]
    Senator Jeffords. Mr. Markham.
    Mr. Markham. Just to say that I think the risks from 
greenhouse gas emissions are very great. The science--we have 
good, sound science. It's getting stronger every day. We know a 
lot more than we did 5, 10, or 15 years ago. As. Dr. Pielke 
says, there are many low-cost actions we can take now, which 
include both voluntary and hopefully regulatory actions like 
your bill.
    Ms. Baliunas. The science has gotten extraordinarily 
better. The models still cannot be used to make reliable, 
credible predictions in the future. They fail validation by 
scientific testing. We should not hold this to energy policy.
    Mr. Whittaker. Only to say that this is very definitely a 
business issue. It is a business risk and it is a business 
opportunity, and it will intensify in the coming years.
    Mr. Cogen. Yes. I'll agree with that. From the business 
point of view, people are looking to the Senate for leadership. 
Businesses are taking actions and they want to see some 
regulatory framework for it.
    Senator Jeffords. Let me ask this last question. Do any of 
you believe that it is safe to continue increasing manmade 
greenhouse gas emissions without any limit?
    [All witnesses indicate in the negative.]
    Senator Jeffords. No one says yes, and so that must be no, 
and we'll see you later. Thank you very much.
    [Whereupon, at 11:42 a.m., the committee was adjourned, to 
reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
  Statement of Hon. Joseph Lieberman, U.S. Senator from the State of 
                              Connecticut
    I thank Chairman Jeffords for calling this important hearing on the 
economic and environmental risks associated with increasing greenhouse 
gas emissions, and thank him for his leadership on this issue. The 
issues are timely, they are important, and the witnesses are 
impressive. I am sorry that I could not personally attend; I had a 
conflicting duty to chair a hearing of the Governmental Affairs 
Committee. I want to leave no doubt about the importance of this 
hearing.
    The causes and potential effects of global warming have been well 
documented through the Intergovernmental Panel on Climate Change, an 
international process that is engaged in by over 2,000 scientists from 
around the world. The potential effects are serious and far-reaching.
    Global warming is a global problem that requires a global solution. 
The international community has come together under the auspices of the 
United Nations Framework Convention on Climate Change to address the 
problem. The original 1992 agreement, signed by then-President Bush and 
unanimously ratified by the U.S. Senate, contained no mandatory targets 
or timetables for greenhouse gas emissions. It was important, however, 
for recognizing the problem and committing the countries of the world 
to an ongoing multilateral process to seek ways to reduce the threat of 
global warming. In 1997, the international community negotiated the 
Kyoto Protocol, which included binding targets and timetables for 
industrialized countries to reduce greenhouse gas emissions by a little 
over 5 percent by 2008-2012, as a first step in reducing global 
emissions of greenhouse gases. The United States committed to a 7 
percent reduction. Other countries, including the European Union and 
Japan, are moving toward ratification of this agreement. The current 
administration has rejected the Kyoto Protocol and offered us what can 
best be described as a tepid response to what even the President 
describes is a very serious issue.
    The United States has a large stake in the climate change debate; 
among other things, we have a very large land mass, with thousands of 
miles of coastline, and a very large population, magnifying the health 
threats associated with climate change. We also emit about 25 percent 
of the entire world's emissions of carbon dioxide, the most prevalent 
greenhouse gas, even though we have less than 5 percent of the world's 
population. We have a responsibility to ourselves as well as the world 
community to take action to reduce greenhouse gases. We led the 
international effort to protect the stratospheric ozone layer, and 
found a way to bridge differences between developed and developing 
countries. That system is working and we should be proud of the 
leadership the United States exhibited.
    I fear we have now abdicated our leadership role. In 1989, then-
President Bush, talking to Congress about the issue of acid rain 
declared that the ``time for study alone is over . . . the time for 
action is now.'' The President then went on to work with the Congress 
to establish a market-based cap and trade program that significantly 
reduced emissions of sulfur dioxide, the main ingredient of acid rain. 
I would suggest that the current administration follow this example for 
carbon dioxide. I have been working with Chairman Jeffords and other 
progressive-minded Senators to move toward passage of S. 556, the Clean 
Power Act of 2001, which would set limits on carbon dioxide emissions 
from electric power plants, which are responsible for about 40 percent 
of U.S. carbon dioxide emissions. We have been working with colleagues 
from the other side of the aisle on this important first step on 
greenhouse gas emissions, and hope that we can reach an agreement to 
move forward. I am also working with Senator McCain to develop an 
economy wide cap and trade proposal for greenhouse gas emissions as one 
more step in re-establishing U.S. leadership in this critical area. As 
our distinguished witness Dr. Rowland, a Nobel laureate wrote in his 
testimony: ``The increasing global temperatures will have many 
consequences, often adverse in the long run. Because of the many causes 
of this temperature increase have their origins in the activities of 
mankind, actions can and should now be taken which will slow this rate 
of increase.''
    Thank you Mr. Chairman, that concludes my opening statement.
                               __________
Statement of Hon. Ben Nighthorse Campbell, U.S. Senator from the State 
                              of Colorado
    Thank you, Mr. Chairman. I would like to welcome all of the 
witnesses, especially Professor Roger Pielke of the University of 
Colorado.
    I look forward to the witnesses' testimony and hope that we can use 
your collective knowledge to reach a better understanding of the 
economic and environmental impacts of greenhouse gas emissions on 
global climate change.
    Climate change or global warming has become one of the most talked 
about environmental issues for the last several years. The United 
States and other nations have spent millions of dollars to study 
climate change. It seems that the more we spend and study, the more we 
realize that we don't know.
    Our studying climate change for the last 10 years has led us to two 
conclusions:
    First, human activity has had an impact on the global climate. In 
announcing his global climate change strategy, President Bush 
acknowledged this fact.
    However, our years of careful study have made, for policymakers, an 
even more important conclusion: that we have inadequate evidence to 
demonstrate humanity's affect on climate change. Since our science is 
unable to tell us the level of causation, science can't tell us what 
mitigation strategies we, in Congress, should pursue.
    Throughout my career of public service I have tried to base my 
decisions on the best available information, particularly when those 
decisions have dramatic consequences on the lives of Coloradans. 
Unfortunately, in the case of global climate change, we are seeking to 
craft a policy with profound implications on completely inadequate and 
speculative information.
    In his book, The Skeptical Environmentalist, Bjorn Lomborg (Bee-
Yorn Lom-Borg) simply asked, ``Do we want to handle global warming in 
the most efficient way or do we use global warming as a stepping stone 
to other political projects.''
    Even Mr. Lomborg, a Danish statistician, noted the political 
salience of the climate change debate. Unfortunately, this important 
issue has become so politicized that many people look past the facts 
and, instead, focus on doomsday scenarios.
    In noting our lack of understanding of the Earth's climate system, 
one of our very own witnesses made an equally important point. In her 
testimony today, Doctor Sallies Baliunas stated, ``A value judgment is 
prerequisite to evaluating the need for human mitigation of adverse 
consequences of climate change.''
    Again, ``a value judgment is prerequisite.'' In short, since we 
don't have enough information, some suggest that we just assume that 
humans can mitigate adverse consequences of climate change.
    Well, this Senator is not ready to make that assumption when making 
that leap of faith could result in the loss of countless U.S. jobs.
    I am happy that the President has chosen to look at the facts in 
rejecting the Kyoto Protocol. He properly noted that greenhouse gas 
emissions is directly attributable to U.S. production and economic 
growth. In my state of Colorado, implementing Kyoto would have 
translated in the loss of 47,400 jobs and $2 billion in tax revenue by 
2010.
    I am not ready to make decisions with such consequences without 
adequate information.
    We all make ``value judgments'' in policymaking. I would ask my 
friends to ask themselves what it is they value.
    In making that ``value judgment'' I would ask them to consider the 
words of John Adams when he said: ``Facts are stubborn things; and 
whatever may be our wishes, our inclinations, or the dictates of our 
passions, they cannot alter the state of facts and evidence.''
    I look forward to the distinguished panel's testimony, and ask that 
my testimony be reported in the Record.
    Thank you.
                               __________
 Statement of Dr. F. Sherwood Rowland, Bren Professor of Chemistry and 
   Earth System Science, University of California Irvine, Irvine, CA
    A natural greenhouse effect has existed in Earth's atmosphere for 
thousands of years, warming the Earth's surface for a global average of 
57 F. During the 20th Century, the atmospheric concentrations of a 
number of ``greenhouse gases'' have increased, mostly because of the 
actions of mankind. Our current concern is not whether there is a 
greenhouse effect, because there is one, but rather how large will be 
the enhanced greenhouse effect from the additional accumulation in the 
atmosphere of these greenhouse gases.
    The Earth intercepts daily energy from the sun, much of it in the 
visible wavelengths corresponding to the spectrum of colors from red to 
violet, and the rest in ultraviolet and nearby infrared wavelengths. An 
equal amount of energy must escape from the Earth daily to maintain a 
balance, but this energy emission is controlled by the much cooler 
average surface temperature of the Earth, and occurs in wavelengths in 
the Afar infrared''. If all of this terrestrially emitted infrared 
radiation were able to escape directly to space, then the required 
average temperature of Earth would be 0 F. However, the greenhouse 
gases--carbon dioxide (CO2), methane (CH4), 
nitrous oxide (N2O), and others--selectively intercept some 
of this far infrared radiation, preventing its escape. A warmer Earth 
emits more infrared radiation, and Earth with an average surface 
temperature of 57 +F was able to make up the shortfall from greenhouse 
gas absorption. However, at Exist slowly during the 19th century and 
then more rapidly throughout the 20th century, the atmospheric 
concentrations of these greenhouse gases increased, often because of 
the activities of mankind. Other greenhouse gases have also been added, 
such as the chlorofluorocarbons or CFCs, (CCl2F2, 
CCl3F, etc.) and tropospheric ozone (O3). With 
more of these gases present in the atmosphere, more infrared will be 
intercepted, and a further temperature increase will be required to 
maintain the energy balance.
    Carbon dioxide is released by the combustion of fossil fuels--coal, 
oil and natural gas--and its atmospheric concentration has increased 
from about 280 ppm as the 19th century began to 315 ppm in 1958 and 370 
ppm now. Water (H2O) is actually the most significant 
greenhouse gas in absorbing infrared radiation, but the amount of 
gaseous water is controlled by the temperature of the world's oceans 
and lakes. Methane has a natural source from swamps, but is also 
released during agricultural activities--for example, from rice paddies 
while flooded, and from cows and other ruminant animals--and by other 
processes, increasing from about 0.70 ppm in the early 1800's to 1.52 
ppm around 1978 and 1.77 ppm currently. Nitrous oxide concentrations 
grew from 0.27 to 0.31 ppm during the 20th century, formed by microbial 
action in soils and waters on nitrogen-containing compounds including 
fertilizers. The chlorofluorocarbons (CFCs) were not a natural part of 
the atmosphere, but were first synthesized in 1928, and were then, 
applied to a variety of uses--propellant gases for aerosol sprays, 
refrigerants in home refrigerators and automobile air conditioners, 
industrial solvents, manufacture of plastic foams, etc. The CFC 
concentrations started from zero concentration in the 1920's, and rose 
rapidly during the latter part of the 20th century until the early 
1990's. They are no longer increasing because of the Montreal Protocol, 
an international ban on their further manufacture. Tropospheric ozone 
is a globally important compound formed by photochemical reactions as a 
part of urban smog in hundreds of cities. Other potential influences on 
temperature changes for which the globally averaged data are still very 
sparse include the concentrations of particulate matter such as sulfate 
and black carbon aerosols.
    Measurements of surface temperatures only became sufficiently broad 
in geographical coverage about 1860 to permit global averaging with 
improved coverage as the years passed. The globally averaged surface 
temperature increased about 1.1 F during the 20th century, with about 
half of this change occurring during the past 25 years. 1998 was the 
warmest year globally in the entire 140-year record, and the 1990's 
were the warmest decade. Fluctuations in solar activity have been 
directly observed wince the invention of the telescope 400 years ago, 
but accurate, direct measurements of total solar energy output have 
only been possible with the advent of satellite measurements in the 
late 1970's. These satellite data exhibit a small but definite cyclic 
variation over the last two decades, paralleling the 11-year solar 
sunspot cycle, but with little long term difference in solar energy 
output contemporary with the rising global temperatures of the past two 
decades.
    Predictions of future temperature responses require atmospheric 
model calculations that effectively simulate the past, and then are 
extrapolated into the future with appropriate estimates of the future 
changes in atmospheric greenhouse gas concentrations. These models 
calculate the direct temperature increases that additional greenhouse 
gases will cause, and the further feedbacks induced by these 
temperature changes. One of the most prominent of these is the change 
in albedo (surface reflectivity) in the polar north--when melting ice 
is replaced by open water (or melting snow replaced by bare ground), 
less solar radiation is reflected back to space, and more remains at 
the surface causing a further temperature increase. The models also 
assume that more water will remain in the atmosphere inn response to 
the temperature increases, providing another positive feedback. There 
is an additional possible feedback from the changes in clouds--amount, 
composition, and altitude. In present models, the cloud feedback is 
assumed to be small, but data for better evaluation are very difficult 
to obtain.
    Extrapolations for 50 or 100 years in the future necessarily 
include hypotheses about future societal developments, including 
population growth, economic activity, etc. The Intergovernmental Panel 
on Climate Change (IPCC) developed a large set of scenarios about the 
possible course of these events over the next century, with resulting 
model calculations of globally averaged temperature increases for the 
year 2100 relative to 1990 ranging from 2.5  to 10.4 F (1.4-5.8 C). 
These results were only a small part of the three IPCC reports issued 
during 2001 about Climate change. Volume I of the IPCC reports treated 
the ``Scientific Basis'', Volume II covered ``Impacts, Adaptation and 
Vulnerability'', and Volume III ``Mitigation''.
    The National Academy of Sciences, in response to a May 2001 request 
from the White douse, and following discussions between the 
administration and the Academy over some questions raised by the 
former, convened an 11-member scientific panel, which issued in June a 
24-page report ``Climate Change Science. An Analysis of Some Key 
Questions'' from a select committee of atmospheric scientists. I quote 
the first few sentences of this report, and have appended the entire 
report to this testimony: ``Greenhouse gases are accumulating in 
Earth's atmosphere as a result of human activities, causing surface air 
temperatures and subsurface ocean temperatures to rise. Temperatures 
are, in fact, rising. The changes observed over the last several 
decades are likely mostly due to human activities, but we cannot rule 
out that some significant part of these changes is also a reflection of 
natural variability.''
    The increasing global temperatures will have many consequences, 
often adverse in the long run. Because many of the causes of this 
temperature increase have their origin in the activities of mankind, 
actions can and should now be taken which will slow this rate of 
increase.

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  Responses of Sherwood Rowland to Additional Questions from Senator 
                                Jeffords
    Question 1. The Academy's 2001 report, which you helped write, was 
stunningly clear. It confirmed the seriousness of human-induced climate 
change. And, it contains a real sense of urgency about the problem. 
Beyond the comments you made at the hearing, are there other things 
that the U.S. Government should do to reduce the risks that the report 
outlines and to clear up related scientific uncertainties?
    Response. I believe that it is important to begin carrying out 
diverse policies which will have an ameliorating effect on climate 
change. For too many years, the world has operated with little regard 
to the long term effects of increasing population, increasing energy 
use per capita, and rather indiscriminate discharge of waste materials 
into the environment. The global system is so immense and so 
complicated that a very large set of policy changes are needed. What we 
need is the establishment of a mind-set that recognizes these problems, 
and begins to take steps toward solutions. Once the general direction 
begins to change, more and more opportunities will appear which can 
accelerate the progress.

    Question 2. The Academy's report says that ``national policy 
decisions made now . . . will influence the extent of any damage 
suffered by vulnerable human populations and ecosystems later in this 
century.'' The Administration's new policy decision appears to be 
business as usual. How will this policy affect the future, in terms of 
greenhouse gas concentrations?
    Response. The history of the past two centuries is a period in 
which most of the advances in standard of living have been accompanied 
by the progressive substitution of animal power for human power and 
then machine power for animal power. These changes have been 
accompanied, of course, by the increasing use of energy to supply the 
machine power--first steam from wood burning, then coal, oil and 
natural gas combustion as power sources. We urgently need to develop 
policies by which the major industrial powers can maintain sustainable 
prosperity, while the developing countries seek sustainable 
development. These changes will surely need to be accompanied by more 
careful disposal of the waste products from energy production.

    Question 3. As you and all the other witnesses indicated, it is not 
safe to continue increasing greenhouse gas emissions without limit. 
What needs to be done to assure that we can avert the point of no 
return or ``dangerous levels'' of ``greenhouse gas concentrations?
    Response. We are unlikely to know enough because of the extreme 
complexity of the global system and its interconnections to permit 
identification of ``points of no return'' or to know a precise value of 
a ``dangerous level'' until we have passed the first, or exceeded the 
latter. Under the circumstances, this argues for doing what we can to 
slow the rate of change in the hope that we can recognize the dangers 
before we have passed the choke point.

    Question 4. The NAS report advocates, ``Maintaining a vigorous, 
ongoing program of basic research, funded and managed independently of 
the climate assessment activity, will be crucial for narrowing . . . 
uncertainties . . . In addition, the research enterprise dealing with 
environmental change and the interactions of human society with the 
environment must be enhanced.'' `What are your views of current 
Federal-level research programs' direction and budgets for achieving 
these ends?
    Response. The need for separation of research versus assessment is 
the difference between exploring and judging. Assessment involves 
judging the adequacy of the present understanding of the system by, for 
example, its ability to reproduce the observations in that system. 
Exploring will often mean the postulation of a different possible 
explanation, devising an appropriate test, and then discarding the 
explanation if it fails the test--but carrying out a continuing series 
of postulates and tests.

    Question 5. To date, much of the research regarding the 
environmental, human health, or economic impacts of climate change has 
been limited to projections for the next 100-150 years, or assuming a 
doubling of atmospheric CO2. What are the risks of climate 
change on a longer timeframe, or those associated with a tripling or 
quadrupling of atmospheric CO2? Does the NAS plan to update 
its 2001 report?
    Response. Answering the second question first, the main purpose of 
the NAS report of 2001 was evaluation of the state of understanding of 
the Earth's climate system, for which the IPCC 2001 report, and 
particularly in its Volume 1 on the ``Scientific Base'', was the latest 
and most complete compilation. This NAS report was prepared in about 5 
weeks by a group of 11 scientists quite familiar with the content and 
preparation of the IPCC report, while the IPCC report itself was the 
product of 5 years of work by about 3,000 scientists. Until the next 
IPCC report is ready in 2006 or 2007, another NAS report is quite 
unlikely. Reports on specific, limited aspects can certainly be 
anticipated, as that need rises.
    The further out in the future the projection, the greater the 
uncertainty. Probably the ultimate worry is captured by the phrase 
``runaway greenhouse'', as applied to our sister planet Venus, which 
has an atmospheric much thicker than ours, composed mostly of carbon 
dioxide, and surface temperatures which will not permit biological 
life, at least in the forms existing on Earth. Of course, no one knows 
the history of the Venusian atmosphere, so that the phrase might be 
totally misleading.

    Question 6. What do you think is the greatest risk, in the next 30-
50 years, of continuing to increase human-made greenhouse gas 
emissions? And, what is the most feasible way to reduce or eliminate 
that risk?
    Response. My experience with the atmospheric problem of 
``stratospheric ozone depletion'' makes me answer this question with 
the reply ``some problem that has not yet been identified, some 
surprise.'' In 1984, the scientific community was quite aware that 
chlorofluorocarbons (CFCs) were reaching the stratosphere and 
decomposing there with the release of chlorine atoms, which could then 
react with the molecules of ozone in the stratosphere. What only a few 
scientists knew then was that were particles, polar stratospheric 
clouds, present in the very cold stratosphere over Antarctica. What 
only a few other scientists knew then--none of them in the first group, 
who likewise were ignorant of this other development--was that some 
chemical reactions between two types of chlorine containing molecules, 
hydrogen chloride and chlorine nitrate, could occur on the surfaces of 
particles, thereby facilitating the removal of ozone. Then, the 
``Antarctic ozone hole'' was discovered, and reported in 1985 by the 
British scientist Joe Farman, and suddenly the 1984 view that ozone 
loss would occur slowly over a period of several decades was replaced 
by the knowledge that ozone loss could occur extremely rapidly, and 
that major losses were already happening every spring in the Antarctic.
    What would be the surprise? Probably the unexpected collapse of 
some ecosystem. I won't provide an example of an unexpected collapse, 
because then it would probably be said that I, or scientists in 
general, expected it. The basic point is that the climate system is 
still very much under study, and when and how it goes about changing an 
area under active investigation.

                               __________

  Responses of Sherwood Rowland to Additional Questions from Senator 
                                 Smith
    Question 1. Dr. Pielke testified that ``the primary cause for . . . 
growth in impact is the increasing vulnerability of human and 
environmental systems to climate variability and change, not changes in 
climate, per se.'' Do you agree with this claim? Why or why not?
    Response. The first 75 years of the 20th century were a time of 
great population growth, and relatively little change in climate. 
During the last 25 years, the global temperature has risen steadily, 
and signs of climate change are beginning to be seen in many locations. 
Over the whole century then, climate change should not be expected to 
have caused a great change in impacts. The questions for the future 
include a mixture of the consequences from increasing global population 
coupled with the extra impositions from temperature rise. The larger 
the temperature increase the larger the role this climatic fluctuation 
will play in impacts on civilization.

    Question 2. Dr. Pielke also stated that ``the present research 
agenda is focused . . . improperly on prediction of the distant climate 
future'' and that ``instead of arguing about global warming, yes or no 
. . . we might be better served by addressing things like the present 
drought. . . .'' Do you agree with that proposition? Why or why not?
    Response. The arguments in most of the scientific world are not 
about global warming, yes or no, but rather about the nuances of the 
global warming which is occurring. There are always the simultaneous 
needs for putting out the present fire, and also developing a long term 
strategy to use non-combustible materials and install sprinkler 
systems.

    Question 3. Do you believe we should fully implement the Kyoto 
Protocol? Do you agree with the assertion that full implementation of 
the Kyoto Protocol would only avert the expected temperature change by 
6/100 of a degree, Celsius? Why or why not?
    Response. I wrote in the summer of 2000 the following (see ``U.S. 
Policy and the Global Environment'', Donald Kennedy and John Riggs, 
editors) ``None of the currently available remedial responses, such as 
the Kyoto Protocol, provide a solution to the problems brought about by 
climate change. Rather they are directed toward slowing the pace of 
change, amelioration, and adaptation rather than cure. Consequently, 
the climate change problem will be much more serious by the year 2050 
and even more so by 2100.''
    The development of an adequate response to the climate change 
problem will surely require many different approaches, strengthening 
and altering possible control efforts over time. The Kyoto Protocol is 
one possible initial step, and the only one that is seriously on the 
table at the present time. It has some built-in weaknesses, such as the 
basic rule built into the future negotiations during the 1992 Rio de 
Janeiro conference that excluded India and China and other developing 
countries from any control efforts in Kyoto. By now, too, the choice of 
1990 as the base comparison year might well be replaced by some year 
nearer to the present. However, the most important need is a signal to 
the world that global warming is a problem about which many different 
groups should be thinking and acting in efforts to slow it down-and if 
Kyoto is not the signal, then another process should be proposed that 
would also provide a start toward the control of emissions of 
greenhouse gases.

    Question 4. Since the hearing there has been much press attention 
paid to the breakup of the Antarctic Ice Sheet, especially a 500-
billion ton iceberg known as ``Larsen B,'' that has been attributed to 
climate change. What scientific evidence is there that climate change 
is the sole cause of this phenomenon? Is there any scientific evidence 
that anthropogenic influences bore any role in the breakup of Larsen B?
    Response. The temperatures in Antarctica seem to be simultaneously 
warming on the low altitude fringes and cooling in the central ice 
plateau. The breakup of the Ice Sheet occurs at sea level, and the 
warming there may facilitate the breakup. There are also quite 
plausible scientific suggestions that link central-cooling/peripheral-
warming observations to the lesser amounts of ozone now found in the 
Antarctic stratosphere, and the consequent lesser conversion of 
ultraviolet light to heat in the absence of ozone in the central core 
of the polar vortex. But sole cause? Almost all geoscientific events 
occur under circumstances in which there are a mixture of causes, 
although sometimes these second and third contributing causes are 
minor.

    Question 5a. Included in the hearing record as part of my opening 
statement was a Swiss Re report titled, ``Climate research does not 
remove the uncertainty; Coping with the risks of climate change''. 
Please explain why you agree or disagree with the following assertions 
or conclusions from that report: ``There is not one problem but two: 
natural climate variability and the influence of human activity on the 
climate system.''
    Response. Certainly. Any changes induced by man's activities are 
superimposed on a system which has its own inherent variability to 
begin with.

    Question 5b. It is essential that new or at least wider-ranging 
concepts of protection are developed. These must take into account the 
fact that maximum strength and frequency of extreme weather conditions 
at a given location cannot be predicted.
    Response. I am not in the insurance business. If there are really 
no parametric limits to the maximum strength and frequency of extreme 
weather conditions at a given location, then it is hard for an outsider 
to see how the company would set their insurance rates. I would think 
the largest problem an insurance company encounters in considering 
climate change is that the statistically observed probability of 
disasters over the previous 100 or 200 years may no longer be 
applicable to the new, warmer climate.

    Question 5c. Swiss Re considers it very dangerous (1) to put the 
case for a collapse of the climate system, as this will stir up fears 
which-if they are not confirmed will in time turn to carefree relief; 
and (2) to play down the climate problem for reasons of short-term 
expediency, since the demand for sustainable development requires that 
today's generations take responsible measure to counter a threat of 
this kind.
    Response. These are straw-man arguments-''collapse of the climate 
system'' versus ``short-term expediency''

    Question 6. Do you believe that our vulnerability to extreme 
weather conditions is increasing? Why or why not?
    Response. I can't give a why/why-not answer to this question. 
Vulnerability is a function of the strength of the precautions taken. 
When processes for strengthening are developed, people allow this 
improvement to push into areas that were formerly thought to be 
vulnerable.
  Responses of Sherwood Rowland to Additional Questions from Senator 
                               Voinovich
    Question 1a. Advocates of the Kyoto Protocol expect aggressive 
reductions in emissions beyond 2012. Some advocate a global 
CO2 concentration target of 550 ppm CO2 by 2100 
which will require substantial reductions in the emissions of developed 
countries (including the United States). If a concentration target of 
550 ppm by 2100 is adopted, what is your estimate of the caps on 
emissions for the United States by 2050? By 2100?
    Response. I have not devoted any scientific time to emission 
estimates for 100 years from now. The largest present question for me 
is the future demand for nuclear power. I can imagine either limit 
might turn out to be the world situation 50 years from now--either that 
nuclear power will be essentially banned worldwide by 2050, or that 
nuclear power will be the dominant global energy source by 2050, 
furnishing more electricity than coal, oil and natural gas combined.

    Question 1b. Are you aware of any economic analysis of the impact 
of these reductions beyond the initial Kyoto target? If so, can you 
provide this analysis?
    Response. I would certainly assume that the conclusions about the 
economic impact of carbon dioxide reductions would be drastically 
dependent upon the global acceptance of nuclear power at that point in 
the future.

    Question 2. Where do we need to concentrate research to better 
understand climate modeling and the scientific uncertainties?
    Response. A constant tension exists between the demand for a more 
finely gridded atmospheric model in order to look for the regional 
effects of climate change, and the need for a more elaborate data set 
with which to compare the model calculations. Higher powered computers 
are needed for more detailed calculations; measurements are needed to 
furnish the ``ground truth'' which can validate the models.

    Question 3. What technologies offer the most realistic opportunity 
to reduce man-made emissions with the least detrimental impact to the 
economy?
    Response. Nuclear power is the obvious answer here, but whether the 
country will accept nuclear power as a replacement for coal, oil and 
gas remains to be seen. One doesn't read much about the French 
experience with their heavy reliance on nuclear power. Every energy 
source has its associated environmental problem(s) but nuclear power 
plants are not a source of greenhouse gas emissions.

    Question 4. What are the effects of removing black soot from the 
atmosphere?
    Response. From a theoretical point of view, black soot serves to 
absorb solar energy into the soot particle, rather than reflecting the 
radiation back to space. From a quantitative point of view, the 
contribution of black soot is an enormous question mark. The material 
does not last long in the atmosphere before dropping out, and is quite 
variable in time and space. Measurements of the global effects of black 
soot would require detailed daily measurements all over the world in 
order to have an appropriate average for the world. Such data do not 
exist.

    Question 5. What are the benefits of using U.S. clean coal 
technology in countries like China and India in terms of removing black 
soot?
    Response. To the locals, obviously cleaner air. On a global warming 
basis, highly uncertain in the absence of the global daily coverage 
mentioned above.

    Question 6. Who wrote the Summary of the NRC's June 2001 ``Climate 
Change Science'' report? Can you document the uncertainties reflected 
in the underlying report?
    Response. The first conference call led to agreement among the 
committee members about the general nature and the individual 
components of the report, and then to multiple assignments to create 
drafts on particular topics. As the report took shape, the chairman 
began drawing out the essence of each and circulating that for comment 
and discussion. Basically, the report and its summary were written by 
the committee members with the chair a very active participant in 
almost all of the individual discussions.
    The decision was made early not to provide individual documentation 
and references for this report because of the time constraints. Almost 
all of the uncertainties mentioned in the ``Climate Change Science'' 
report are discussed in the IPCC reports, both the Summary for Policy 
Makers, and Volume One, ``The Scientific Base'', but are not 
individually referenced.

    Question 7. Please provide the documentation of how the NRC report 
addressed the satellite, weather balloon and surface temperature 
measurements.
    Response. This question had been addressed separately by another 
NRC committee, with a report issued in 1999. The chairman of that 
committee was a member of the Climate Change Science committee.

    Question 8. Who wrote the IPCC summary for policymakers?
    Response. I was not part of the IPCC process, and know only 
anecdotally that the listed authors appear to have worked much like the 
Climate Change Science committee, except that their interactions were 
stretched out over months and years.

    Question 9. Which uncertainties in the underlying IPCC Working 
Group reports were also reflected in the NRC (June 2001) report?
    Response. I think that the same general sets of uncertainties were 
involved in both, but the IPCC Working Group reports cover more than 
2500 pages as published and obviously can discuss uncertainties on a 
more micro scale.

    Question 10. In your written testimony you said that increased 
greenhouse gas concentrations are ``often because of the activities of 
mankind.'' Yet in you oral comments you said they were ``mostly caused 
by the activities of man.'' There is a significant difference between 
``often'' and ``mostly.'' Many people attach much meaning to the 
individual words of the IPCC Reports and other Climate Reports. Could 
you explain what you meant in your two different testimonies?
    Response. The two terms ``often'' and ``mostly'' are complementary, 
and both are different from ``always'' because some of the emission 
sources for some of the greenhouse gases are of natural origin. For 
those molecules with both natural sources and releases by the 
activities of mankind, the source is no longer distinguishable when the 
molecule is in the atmosphere, but the increase in the atmospheric 
concentration is then usually caused by the addition of the 
anthropogenic source rather than by a change in the non-human 
processes. There are many different greenhouse gases and many different 
ways in which mankind causes them to be put into the atmosphere. Thirty 
years ago discussions about global warming might be alternately 
described as ``the carbon dioxide problem''. Then, in the 1970's a 
succession of measurements showed increasing concentrations in the 
atmosphere of methane, nitrous oxide, and the chlorofluorocarbons (CFC-
11, CFC-12 and CFC-113, and the alternate description became ``the 
greenhouse gas problem''. The only important greenhouse gas not listed 
as such is water vapor, for which the atmospheric concentration is 
controlled by the temperature of the ocean through evaporation. With 
further research, the greenhouse gas list was expanded to include 
sulfur hexafluoride, the perfluorocarbons (such as CF4 and 
C2F6) and the hydrofluorocarbons (such as 
CH2FCF3, now the common refrigerant 134A in 
automobile air conditioners.). Volume One of the IPCC 2001 report lists 
64 greenhouse gases. Carbon dioxide, methane and nitrous oxide have 
been components of the atmosphere for hundreds of thousands of years, 
and have always had natural sources. However, for each of three 
molecules, there now exist substantial sources of emissions under the 
control of mankind, and most of the increase, in their concentrations 
arises from these widely varying activities of mankind: burning of 
coal, gas and oil for carbon dioxide, release from rice paddies and 
cattle for methane, microbial action on fertilizers for nitrous oxide. 
For the other 60+ molecules, no natural sources are known and their 
presence in the atmosphere results from chemical synthesis by man, and 
then release to the atmosphere unchanged. These compounds are used in a 
very wide variety of human activities, with the common characteristic 
that release to the atmosphere unchanged is the usual occurrence. When 
it comes to evaluation of the cumulative greenhouse effect of all of 
these gases, then carbon dioxide is the most important, accounting for 
roughly half of the total, with methane and nitrous oxide having 
significant roles. The incremental changes in the total greenhouse gas 
effect are mostly the product of some activity of mankind.

                               __________

Statement of Dr. Roger A. Pielke, Jr., University of Colorado, Boulder, 
                                   CO
    I thank the chairman and the committee for the opportunity to offer 
testimony this morning on the economic and environmental risks 
associated with increasing greenhouse gas emissions.
    My name is Roger Pielke, Jr. and I am an Associate Professor of 
Environmental Studies at the University of Colorado where I also direct 
the CIRES Center for Science and Technology Policy Research. My 
research focuses on the connections of science and decisionmaking. A 
short biography can be found at the end of my written testimony.
    In my oral testimony I'd like to highlight six ``take home 
points,'' which are developed in greater detail in my written testimony 
and in the various peer-reviewed scientific papers cited therein.
                            take home points
     Weather and climate have growing impacts on economies and 
people around the world.\1\
     The primary cause for the growth in impacts is the 
increasing vulnerability of human and environmental systems to climate 
variability and change, not changes in climate per se.\2\
     To address increasing vulnerability, and the growing 
impacts that result, requires a broader conception of ``climate 
policy'' than now dominates debate.\3\
     We must begin to consider adaptation to climate to be as 
important as matters of energy policy in discussion of response 
options. Present discussion all but completely neglects adaptation.\4\
     Increased attention to adaptation would not mean that we 
should ignore energy policies, but instead is a recognition that 
changes in energy policy are insufficient to address the primary 
reasons underlying trends in the societal impacts of weather and 
climate.\5\
     The nation's investments in research could be more 
efficiently focused on producing usable information for decisionmakers 
seeking to reduce vulnerabilities to climate. Specifically, the present 
research agenda is improperly focused on prediction of the distant 
climate future.\6\
    The remainder of this document develops these points through a case 
study focused on tropical cyclones. Considerably more detail can be 
found in the set of peer-reviewed articles cited in support of the 
arguments presented here.
    Policy debate and advocacy on the issue of climate change 
frequently focus on the potential future impacts of climate on society, 
usually expressed as economic damage or other human outcomes. Today I 
would like to emphasize that societal impacts of climate are a joint 
result of climate phenomena (e.g., hurricanes, floods, and other 
extremes) and societal vulnerability to those phenomena. The paper 
concludes that policies focused on reducing societal vulnerability to 
the impacts of climate have important and under-appreciated dimensions 
that are independent of energy policy.
    In the climate change debate, people often point to possible 
increases in extreme weather events (e.g., hurricanes, floods, and 
winter storms) as a potentially serious consequence of climate change 
for humans around the world. For instance, the January 22, 1998 issue 
of Newsweek carried the following headline: ``THE HOT ZONE: Blizzards, 
Floods, and Hurricanes, Blame Global Warming.'' In this testimony I use 
the case of hurricanes to illustrate the interrelated climate-society 
dimensions of climate impacts. Research indicates that societal 
vulnerability is the single most important factor in the growing damage 
related to extreme events. An implication of this research for policy 
is that decisionmaking at local levels (such as related to land use, 
insurance, building codes, warning and evacuation, etc.) can have a 
profound effect on the magnitude and significance of future damage.\7\
    Figure 1 shows economic damage (adjusted for inflation) related to 
hurricane landfalls in the United States, 1900-1998.\8\ Because damage 
is growing in both frequency and intensity, one possible interpretation 
of this figure is that hurricanes have become more frequent and 
possibly stronger in recent decades. However, while hurricane 
frequencies have varied a great deal over the past 100+ years, they 
have not increased in recent decades (Figure 2, provided courtesy of C. 
Landsea, NOAA).\9\ To the contrary, although damage increased during 
the 1970's and 1980's, hurricane activity was considerably lower than 
in previous decades.
[GRAPHIC] [TIFF OMITTED] 

    To explain the increase in damage it is necessary to consider 
factors other than climate. In particular, society has changed 
enormously during the period covered by Figure 2. Figures 3a and b show 
this dramatically. Figure 4a shows a stretch of Miami Beach in 1926. 
Figure 3b shows another perspective of Miami Beach from recent years. 
The reason for increasing damages is apparent from the changes easily 
observable in these figures: today there is more potential for economic 
damage than in the past due to population growth and increased wealth 
(e.g., personal property).
[GRAPHIC] [TIFF OMITTED] 


    Figure 4b shows the increase in population along the Gulf and 
Atlantic coasts for 168 coastal counties from Texas through Maine 
(Figure 4a). In 1990, the population of Miami and Ft. Lauderdale (2 
counties) exceeded the combined population of 107 counties from Texas 
to Virginia.\10\ Clearly, societal changes such as coastal population 
growth have had a profound effect on the frequency and magnitude of 
impacts from weather events such as hurricanes.\11\
[GRAPHIC] [TIFF OMITTED] 


    One way to present a more accurate perspective on trends in 
hurricane-related impacts is to consider how past storms would affect 
present society. A 1998 paper presented a methodology for 
``normalizing'' past hurricane damage to present day values (using 
wealth, population and inflation). Figure 5 shows the historical losses 
of Figure 1 normalized to 2000 values.\12\
    The normalized record shows that the impacts of Hurricane Andrew, 
at close to $40 billion (2000 values), would have been far surpassed by 
the Great Miami Hurricane of 1926, which would cause an estimated $90 
billion damage had it occurred in 2000. We can have confidence that the 
normalized loss record accounts for societal changes because the 
adjusted data contains climatological information, such as the signal 
of El Nino and La Nina.\13\
    The normalization methodology provides an opportunity to perform a 
sensitivity analysis of the relative contributions of climate changes 
and societal changes, as projected by the Intergovernmental Panel on 
Climate Change (IPCC), to future topical cyclone damages. Figure 6 
shows the results of this analysis.\14\ The three blue bars show three 
different calculations (named for their respective authors) used by 
IPCC in its Second Assessment Report for the increase in tropical 
cyclone-related damage in 2050 (relative to 2000) resulting from 
changes in the climate, independent of any changes in society. The four 
green bars show the sensitivity of tropical cyclone-related damage in 
2050 (relative to 2000) resulting from changes in society based on four 
different IPCC population and wealth scenarios used in its Third 
Assessment Report. These changes are independent of any changes in 
climate.
    Figure 6 illustrates dramatically the profound sensitivity of 
future climate impacts to societal change, even in the context of 
climate changes projected by the IPCC. The relative sensitivity of 
societal change to climate change ranges from 22 to 1 (i.e., smallest 
societal sensitivity and largest climate sensitivity) to 60 to 1 (i.e., 
largest societal sensitivity and smallest climate sensitivity). This 
indicates that insofar as tropical cyclones are concerned, steps taken 
to modulate the future climate (e.g., via greenhouse gas emissions or 
other energy policies) would only address a very small portion of the 
increasing damages caused by tropical cyclones. Similar results have 
been found for tropical cyclone impacts in developing countries,\15\ 
flooding,\16\ other extremes,\17\ and water resources.\18\
[GRAPHIC] [TIFF OMITTED] 

[GRAPHIC] [TIFF OMITTED] 


    The perspective offered in this discussion paper raises the 
possibility that the U.N. Framework Convention on Climate Change (FCCC) 
has a critical, but largely unrecognized flaw with profound 
implications for policy. Under the FCCC the term ``climate change'' is 
defined as ``a change of climate which is attributed directly or 
indirectly to human activity that alters the composition of the global 
atmosphere and which is in addition to natural climate variability over 
comparable time periods.'' This definition stands in stark contrast to 
the broader definition used by the Intergovernmental Panel on Climate 
Change (IPCC) which states that climate change is ``any change in 
climate over time whether due to natural variability or as a result of 
human activity.''
    As a consequence of the FCCC definition, ``adaptation'' refers to 
actions in response to climate changes attributable solely to 
greenhouse gas emissions. It does not refer to efforts to improve 
societal responses to ``natural'' climate variability. Consequently, 
adaptation has only ``costs'' because adaptive responses would by 
definition be unnecessary if climate change could be prevented. Hence, 
it is logical for many conclude that preventative action is a better 
policy alternative and recommend adaptive responses only to the extent 
that proposed mitigation strategies will be unable to prevent changes 
in climate in the near future. But this overlooks the fact that even if 
energy policy could be used intentionally to modulate future climate, 
other factors will play a much larger role in creating future impacts 
and are arguably more amenable to policy change.
    Based on these results implicit in the work of the IPCC and shown 
in Figure 6, an increased focus on ``adaptation'' makes sense under any 
climate scenario. But the Framework Convention is structured to deal 
only with the growth in impacts related to the greenhouse gas impacts 
on the climate (the blue bars) and not the profound societal 
vulnerability (green bars) that will dominate future climate impacts 
under any climate change scenario.
    Consider that the International Red Cross estimates that in the 
1990's around the world, weather and climate events were directly 
related to more than 300,000 deaths and more than U.S. $700 billion in 
damages.\19\ Many of these human losses are preventable and economic 
losses are manageable with today's knowledge and technologies.\20\ 
Simple steps taken to reduce societal vulnerability to weather and 
climate could also make society more resilient to future variability 
and change. Seen from this perspective, costs of adaptation could 
easily be exceeded by the benefits of better dealing with the impacts 
of climate, irrespective of future changes in climate and their causes. 
The Framework Convention's definitional gerrymandering of ``climate 
change'' according to attribution prejudices policy and advocacy 
against such common sense activities.
    An implication of this work is that policy related to societal 
impacts of climate has important and under-appreciated dimensions that 
are independent of energy policy. It would be a misinterpretation of 
this work to imply that it supports either business-as-usual energy 
policies, or is contrary to climate mitigation. It does suggest that if 
a policy goal is to reduce the future impacts of climate on society, 
then energy policies are insufficient, and perhaps largely irrelevant, 
to achieving that goal. Of course, this does not preclude other 
sensible reasons for energy policy action related to climate (such as 
ecological impacts) and energy policy action independent of climate 
change (such as national security, air pollution reduction and energy 
efficiency).\21\ It does suggest that reduction of human impacts 
related to weather and climate are not among those reasons, and 
arguments and advocacy to the contrary are not in concert with research 
in this area.
[GRAPHIC] [TIFF OMITTED] 


    The arguments presented in this testimony highlight a need to 
distinguish ``climate policy'' from ``energy policy'' (Figure 7). 
``Climate policy'' refers to the actions that organizations and 
individuals take to reduce their vulnerability to (or enhance 
opportunities afforded by) climate variability and change.\22\ From 
this perspective governments and businesses are already heavily 
invested in climate policy. In the context of hurricanes and floods, 
climate policies might focus on land use, insurance, engineering, 
warnings and forecasts, risk assessments, and so on. These are the 
policies that will make the most difference in reducing the future 
impacts of climate on society.
    The conventional view is that climate policy is energy policy. 
However, much of the debate and discussion on climate change revolves 
around energy policy and ignores the fact that such policies, 
irrespective of their merit, can do little to address growing societal 
vulnerabilities to climate around the world. In all contexts, improving 
policies targeted on the societal impacts of climate depends on a wide 
range of factors other than energy policy. Consequently, in light of 
the analyses presented here, a common interest objective of climate 
policy would be to improve societal and environmental resilience to 
climate variability and change, and to reduce the level of 
vulnerability. Climate policy should be viewed as a complement, not an 
alternative, to energy policies.

                            figure captions

    Figure 1. U.S. hurricane damage 1900-1998, adjusted for inflation 
to 1998 values.
    Figure 2. U.S. hurricane landfalls, 1851-1998, figure courtesy of 
C. Landsea.
    Figure 3a. Miami Beach, 1926. Photo from the Wendler Collection, 
Florida State Archives.
    Figure 3b. Miami Beach, recent decades. Undated photo from the NOAA 
Arcive.
    Figure 4a. Map of 168 coastal counties from Texas through Maine.
    Figure 4b. Population of the 168 coastal counties from Texas 
through Maine for 1930 and 1990 based on U.S. Census data.
    Figure 5. Historical losses from hurricanes adjusted to 2000 values 
based on inflation, population, and wealth. The graph suggests the 
damage that would have occurred had storms of past years made landfall 
with the societal conditions of 2000.
    Figure 6. A sensitivity analysis of the impacts of tropical 
cyclones in 2050 based on the assumptions of the Intergovernmental 
Panel on Climate Change. The green bars show sensitivity of future 
impacts to societal changes and the blue bars show sensitivity to 
climate changes. Societal changes are the overwhelmingly dominant 
factor.
    Figure 7. How our perspective on ``global warming'' might change. 
Rather than defining climate policy as energy policy, we might instead 
more clearly distinguish the two with implications for research and 
policy.
                                Endnotes
    \1\For a review, see Kunkel, K., R. A. Pielke, Jr., S. A. Changnon, 
1999: Temporal Fluctuations in Weather and Climate Extremes That Cause 
Economic and Human Health Impacts: A Review, Bulletin of the American 
Meteorological Society, 80:1077-1098, online at http://
sciencepolicy.colorado.edu/pielke/hp--roger/pdf/bams8006.pdf
    \2\For documentation of this assertion, see Pielke and Landsea 
(1997), Kunkel et al. (1999), Pielke et al. (2000), Pielke and Downton 
(2000), Downton and Pielke (2001), cited in the endnotes below.
    \3\For an in depth presentation of this perspective, see Sarewitz, 
D., R. A. Pielke, Jr., 2000: Breaking the Global-Warming Gridlock. The 
Atlantic Monthly, July:55-64, online at
    http://www.theatlantic.com/cgi-bin/o/issues/2000/07/sarewitz.htm
    \4\For discussion, see Pielke, Jr., R. A., 1998: Rethinking the 
role of adaptation in climate policy. Global Environmental Change, 
8:159-170, online at

    http://sciencepolicy.colorado.edu/pielke/hp--roger/pdf/1998.13.pdf
    \5\See Pielke, Jr., R. A., R. Klein, and D. Sarewitz, 2000: Turning 
the Big Knob: An Evaluation of the Use of Energy Policy to Modulate 
Future Climate Impacts, Energy and Environment, 11:255-276, online at 
http://sciencepolicy.colorado.edu/pielke/knob/index.html
    \6\On the use of predictions in decisionmaking see Sarewitz, D., R. 
A. Pielke, Jr., and R. Byerly, (eds.), 2000: Prediction: Science, 
Decision-Making and the Future of Nature. Island Press: Washington, DC. 
On the history and performance of the U.S. global Change Research 
program, see Pielke, Jr., R. A., 2000. Policy History of the U.S. 
Global Change Research Program: Part I, Administrative Development. 
Global Environmental Change, 10:9-25. Pielke, Jr., R. A., 2000: Policy 
History of the U.S. Global Change Research Program: Part II, 
Legislative Process. Global Environmental Change, 10:133-144. Pielke 
Jr., R. A., 1995. Usable Information for Policy: An Appraisal of the 
U.S. Global Change Research Program. Policy Sciences, 38:39-77, online 
at: http://sciencepolicy.colorado.edu/pielke/hp--roger/pdf/1995.07.pdf
    \7\See Sarewitz and Pielke 2000, op. cit.
    \8\For discussion, see Pielke, Jr., R. A., and C. W. Landsea, 1998: 
Normalized Hurricane Damages in the United States: 1925-1995. Weather 
and Forecasting, 13:351-361, online at http://
sciencepolicy.colorado.edu/pielke/hp--roger/pdf/wf13.pdf
    \9\See Landsea, C. L., R. A. Pielke, Jr., A. Mestas-Nunez, and J. 
Knaff, 1999: Atlantic Basin Hurricanes:
    Indicies of Climate Changes, Climatic Change, 42:89-129, online at 
http://www.aoml.noaa.gov/hrd/Landsea/atlantic/index.html
    See also Landsea, C. W., C. Anderson, N. Charles, G. Clark, J. 
Partagas, P. Hungerford, C. Neumann and M. Zimmer, 2001: The Atlantic 
Hurricane Data base Re-analysis Project: Documentation for the 1851-
1885 Addition to the HURDAT Data base. Chapter for the Risk Prediction 
Initiative book, R. Murnane and K. Liu, Editors. Online: http://
www.aoml.noaa.gov/hrd/hurdat/index.html
    \10\Pielke, Jr., R. A., and R. A. Pielke, Sr., 1997: Hurricanes: 
Their Nature and Impacts on Society.
    John Wiley and Sons Press: London.
    \11\See Kunkel et al. 1999, op. cit.
    \12\After Pielke and Landsea, 1998, op. cit.
    \13\Pielke, Jr., R.A., and C.W. Landsea, 1999: La Nina, El Nino, 
and Atlantic Hurricane Damages in the United States. Bulletin of the 
American Meteorological Society, 80:2027-2033, online at http://
sciencepolicy.colorado.edu/pielke/hp--roger/pdf/bams8010.pdf
    \14\Details on this sensitivity analysis can be found in Pielke et 
al. 2000, op. cit.
    \15\Pielke, Jr., R. A., J. Rubiera, C. Landsea, M. Molina, and R. 
Klein, 2001: Hurricane Vulnerability in Latin America and the 
Caribbean, Natural Hazards Review, (in review).
    \16\Pielke, Jr., R.A., and M.W. Downton, 2000: Precipitation and 
damaging floods: Trends in the United States, 1932-1997. Journal of 
Climate, 13:3625-3637, online at http://sciencepolicy.colorado.edu/
pielke/hp--roger/pdf/jc1320.pdf and, Downton, M. and R. Pielke, Jr., 
2001. Discretion Without Accountability: Climate, Flood Damage and 
Presidential Politics, Natural Hazards Review, 2:157-166, online at 
http://sciencepolicy.colorado.edu/pielke/hp--roger/pdf/
downtonpielke2001.pdf
    \17\See Kunkel et al. 1999, op. cit.
    \18\C. J. Vorosmarty, P. Green, J. Salisbury, and R. B. Lammers, 
2000. Global Water Resources: Vulnerability from Climate Change and 
Population Growth, Science 289: 284-288. D.P. Lettenmaier, A.W. Wood, 
R.N. Palmer, E.F. Wood, and E.Z. Stakhiv, 1999, Water Resources 
Implications of Global Warming: A U.S. Regional Perspective, Climatic 
Change, 43:537-579.
    \19\International Federation of Red Cross and Red Crescent 
Societies (IFRC), 2000.World Disasters Report, www.ifrc.org.
    \20\See, e.g., D. Mileti, 2000. Second Assessment of Natural 
Hazards, (Joseph Henry Press).
    \21\See, e.g., F. Laird 2001, Just say no to emissions reductions 
targets, Issues in Science and Technology, Winter, online: http://
www.nap.edu/issues/17.2/laird.htm R. Brunner 2001. Science and the 
Climate Change Regime, Policy Sciences 34:1-33.
    \22\Note that here I use the broad definition of ``climate change'' 
used by the IPCC: ``. . . related to any source'' rather than the more 
restricted definition of the FCCC which defines climate change only in 
terms of those changes directly or indirectly attributable ``to human 
activity that alters the composition of the global atmosphere . . . '' 
For discussion, see Pielke, Jr., R. A., 1998, op. cit.
                                 ______
                                 
  Responses of Dr. Roger A. Pielke, Jr. to Additional Questions from 
                            Senator Jeffords
    Question 1. In your testimony, you provided some estimates of the 
costs of adapting our communities and infrastructure to a changing 
climate. Obviously, we need to do a much better job of discouraging 
development in vulnerable areas. How do your cost projections take into 
account the risks associated with abrupt climate changes described in 
the Academy's December 2001 report?
    Response. The sensitivity analyses reported in my testimony (based 
on Pielke et al. 2000) rely on the assumptions of the Second Assessment 
Report of the Intergovernmental Panel on Climate Change (IPCC) for both 
changes in climate and changes in society. Because the IPCC did not 
consider abrupt climate changes for the particular impacts we 
evaluated, neither does our analysis.
    I served as a member of the Academy committee that prepared the 
Abrupt Climate Change report. We discussed at great length the topic of 
economic and ecological impacts associated with abrupt climate change, 
and Chapter 5 of our report focused on that topic. The committee's main 
recommendation that focused on reducing risk associated with abrupt 
climate change is entirely consistent with the approach recommended in 
my testimony. I reproduce that particular recommendation (number 5 in 
the report, Abrupt Climate Change: Inevitable Surprises, National 
Research Council, 2002, pp. 164-165) in its entirety here:
    Recommendation 5. Research should be undertaken to identify ``no-
regrets'' measures to reduce vulnerabilities and increase adaptive 
capacity at little or no cost. No-regrets measures may include low-cost 
steps to: slow climate change; improve climate forecasting; slow 
biodiversity loss; improve water, land, and air quality; and develop 
institutions that are more robust to major disruptions. Technological 
changes may increase the adaptability and resiliency of market and 
ecological systems faced by the prospect of damaging abrupt climate 
change. Research is particularly needed to assist poor countries, which 
lack both scientific resources and economic infrastructure to reduce 
the vulnerabilities to potential abrupt climate changes.''
    Reference: Pielke, Jr., R. A., R. Klein, and D. Sarewitz, 2000: 
Turning the Big Knob: An Evaluation of the Use of Energy Policy to 
Modulate Future Climate Impacts. Energy and Environment, 11, 255-276.

    Question 2. How do those cost projections consider the impacts on 
intangible assets, such as cultural heritage, scenery, and other 
quality of life-related matters?
    Response. The sensitivity analysis presented in my testimony was 
based on three different analyses used by the IPCC for projecting 
tropical cyclone damage in 2050. Pielke et al. 2000 summarizes these 
projections as follows:
     Cline (1992) relied on Emanuel's (1987) estimate that the 
destructive potential of tropical cyclones could rise by 40-50 percent 
under a doubling of greenhouse gases. The study assumed U.S. annual 
average hurricane losses of $1.5 billion and that damage would rise 
linearly with increased intensity. Cline thus multiplied $1.5 billion 
by 50 percent to project an increase in annual U.S. hurricane-caused 
damages of $750 million. Cline assumed that increased damage from 
global warming would be more than linear in relation to rising 
temperatures and estimated that annual hurricane-related damages from a 
10 +C warming could be as high as $6.4 billion (Cline 1992).
     Fankhauser (1995) assumed worldwide annual average 
tropical cyclone damages of $1.5 billion and loss of 15,000-23,000 
lives. This study also relied on Emanuel's estimate of a 40-50 percent 
increase in tropical cyclone intensity resulting from a 4.2 
+C warming. It adjusted this to 28 percent for a 2.5 
+C warming and assumed storm damages increase exponentially 
with intensity. Thus, the study multiplied 28 percent by 1.5 by $1.5 
billion to arrive at an estimate of $630 million in additional 
worldwide annual average hurricane-related damages due to a 2.5 
+C warming. It also estimated that an additional 8,000 
deaths would occur, which were valued at $2.1 billion, bringing total 
additional tropical cyclone-related worldwide losses to $2.7 billion. 
Fankhauser estimated that the U.S. share of these damages would be $223 
million ($115 million from destruction, $108 million from lost lives).
     Tol (1995) assumed that tropical cyclone intensity will 
increase 50 percent due to a 2.5 +C warming, and that a 
fraction of the damages are related quadratically to an increase in 
intensity. This study estimated that additional tropical cyclone-
related damages from a doubling of greenhouse gases in 1988 dollars 
will be $.3 billion in the United States and Canada and $1.4 billion 
worldwide, but did not describe the baseline damage estimates.
    Reference and source for references cited above: Pielke, Jr., R. 
A., R. Klein, and D. Sarewitz, 2000: Turning the Big Knob: An 
Evaluation of the Use of Energy Policy to Modulate Future Climate 
Impacts. Energy and Environment, 11:255-276.

    Question 3. As you know, this committee is very interested in the 
effects of disasters on public infrastructure. We have jurisdiction 
over FEMA, water supplies, highways, etc. What work is being done to 
quantify the costs of investments that could be made now to reduce the 
impacts of disasters and climate change on human-made and natural 
systems?
    Response. I suggested in my testimony ``the possibility that the 
U.N. Framework Convention on Climate Change (FCCC) has a critical, but 
largely unrecognized flaw with profound implications for policy. Under 
the FCCC the term ``climate change'' is defined as ``a change of 
climate which is attributed directly or indirectly to human activity 
that alters the composition of the global atmosphere and which is in 
addition to natural climate variability over comparable time periods.'' 
This definition stands in stark contrast to the broader definition used 
by the Intergovernmental Panel on Climate Change (IPCC) which states 
that climate change is ``any change in climate over time whether due to 
natural variability or as a result of human activity.'' As a 
consequence of the FCCC definition, ``adaptation'' refers to actions in 
response to climate changes attributable solely to greenhouse gas 
emissions. It does not refer to efforts to improve societal responses 
to ``natural'' climate variability. Consequently, adaptation has only 
``costs'' because adaptive responses would by definition be unnecessary 
if climate change could be prevented. Hence, it is logical for many to 
conclude that preventative action is a better policy alternative and 
recommend adaptive responses only to the extent that proposed 
mitigation strategies will be unable prevent changes in climate in the 
near future. But this overlooks the fact that even if energy policy 
could be used intentionally to modulate future climate, other factors 
will play a much larger role in creating future impacts and are 
arguably more amenable to policy change.''
    As a consequence, very little work (both in an absolute and 
relative sense) has been done to evaluate adaptation alternatives. In 
1996 the IPCC wrote that adaptation offers a ``very powerful option'' 
for responding to climate change and ought to be viewed as a 
``complement'' to mitigation efforts (IPCC 1996, 187-188). Yet, the 
IPCC also wrote ``little attention has been paid to any possible 
tradeoff between both types of options.'' (IPCC 1996, 250). These 
conclusions, in my view, remain current today.
    Reference: Intergovernmental panel on Climate Change (IPCC), 1996. 
Climate Change 1995: Economic and Social Dimensions of Climate Change, 
J. P. Bruce et al. (eds.), Cambridge University Press.

    Question 4. You mention in your testimony that ``decisionmaking at 
local levels . . . can have a profound effect on the magnitude and 
significance of future damage.'' Are local governments beginning to 
make the connection between urban and land use planning and 
vulnerabilities to climate change? Do you know of any efforts to 
disseminate academic research findings and recommendations regarding 
climate change adaptation techniques to local governments and 
communities?
    Response. If local governments are beginning to make the connection 
between urban and land use planning and vulnerabilities to climate 
change, they are doing so on an ad hoc and unsystematic basis. A 
considerable effort in government, academia and the private sector 
exists in the United States (and globally) to improve decisionmaking 
with respect to ``hazards.'' However, this effort is largely separate 
in both research and action from the climate change community. In 1997 
I wrote of this in an editorial (http://sciencepolicy.colorado.edu/
zine/archives/1-29/5.html):
    ``The concept of ``mitigation'' is central to the natural disaster 
policy in the United States. At the same time, the concept of 
``mitigation'' is also central to ongoing debate about global climate 
change. But as used by the natural disaster community and the climate 
change community, the term ``mitigation'' takes on almost exactly 
opposite meanings. Natural hazard mitigation is defined by the Federal 
Emergency Management Agency (FEMA) as ``a sustained action taken to 
reduce or eliminate the long-term risk to people and property from 
natural hazards and their effects.'' A recent FEMA report on Costs and 
Benefits of Natural Hazard Mitigation provides examples of mitigation, 
which include business interruption insurance, wind shutters, building 
codes, and community relocation. Climate change mitigation is defined 
by the Intergovernmental Panel on Climate Change (IPCC) as ``actions 
that prevent or retard the increase of atmospheric greenhouse gas 
concentrations by limiting current and future emissions from sources of 
greenhouses gases and enhancing potential sinks.'' What the natural 
hazards community calls mitigation, the climate change community calls 
``adaptation'' which the IPCC defines as ``any adjustment--whether 
passive, reactive, or anticipatory--that can respond to anticipated or 
actual consequences associated with climate change.'' The different use 
of terminology creates a situation that is potentially confusing for 
policymakers and other practitioners. While academics often work in 
communities that are relatively isolated from one another, policymakers 
typically do not. And since natural hazards are one of the threats 
being associated with climate change, it is probably worth paying 
attention to the words used in this regard. At a minimum, the 
conflicting terminology is symptomatic of the general lack of 
interaction between the hazards and climate change communities. In the 
climate change world, there is a tension between those who seek to 
prevent climate change through energy policies (i.e., climate change 
mitigation) and those who emphasize adaptation (i.e., natural hazards 
mitigation). To date, the advocates of prevention have dominated the 
debate. This creates a disincentive for the natural hazards community 
to play a significant role in the development of climate policy, which 
is unfortunate, as without a doubt the knowledge gained by the hazards 
community has an important role to play in the climate policies of the 
future.''

    Question 5. You also state, ``Many . . . human losses are 
preventable and economic losses are manageable with today's knowledge 
and techniques . . . . [C]osts of adaptation could easily be exceeded 
by the benefits of better dealing with the impacts of climate, 
irrespective of future changes in climate and their causes.'' What are 
some specific examples of adaptation strategies or investments that you 
recommend vulnerable coastal communities implement today that could 
prove to be cost-effective in the long-term?
    Response. There is a considerable list of activities that might be 
considered under the label ``adaptation'' for reducing vulnerability to 
climate impacts along the coasts, including improving land use, 
insurance, evacuation, ecosystem management, and other policies. A 
starting point for understanding the breadth of such activities is the 
NOAA Coastal Services Center, http://www.csc.noaa.gov/. In 
collaboration with the H. John Heinz III Center for Science, Economics, 
and the Environment, the NOAA CSC contributed to the publication of a 
book that discusses a wide range of efforts that would address coastal 
vulnerability:
    The Hidden Costs of Coastal Hazards: Implications for Risk 
Assessment and Mitigation. Washington, DC: Island Press, 2000. 220 pp. 
ISBN 1-55963-756-0 (paper).

    Question 6. As you and all the other witnesses indicated, it is not 
safe to continue increasing greenhouse gas emissions without limit. 
What needs to be done to assure that we can avert the point of no 
return or ``dangerous levels'' of greenhouse gas concentrations?
    Response. I reject the premise underlying this question. As I 
stated in my testimony, any policy designed to reduce risks and 
vulnerabilities to climate impacts on environment and society is 
necessarily incomplete if focused exclusively on energy policies. 
Consequently, any energy policy including instantaneous, magical 
abatement of emissions would be insufficient to address growing risks 
and vulnerability to future climate impacts. As I concluded in my 
testimony:
    ``It would be a misinterpretation of this work to imply that it 
supports either business-as-usual energy policies, or is contrary to 
climate mitigation. It does suggest that if a policy goal is to reduce 
the future impacts of climate on society, then energy policies are 
insufficient, and perhaps largely irrelevant, to achieving that goal. 
Of course, this does not preclude other sensible reasons for energy 
policy action related to climate (such as ecological impacts) and 
energy policy action independent of climate change (such as national 
security, air pollution reduction and energy efficiency). It does 
suggest that reduction of human impacts related to weather and climate 
are not among those reasons, and arguments and advocacy to the contrary 
are not in concert with research in this area.''

    Question 7. In an answer to a question from Senator Chafee 
regarding your opinion on achieving the 1990 level of emissions, our 
UNFCC target, by the date (2007) set in the Clean Power Act, you said 
that ``. . . full and comprehensive implementation of the Kyoto 
Protocol around the world . . . is not going to do much at all to 
address the environment and economic risks associated with climate 
change.'' Does that mean you believe that the potential social, 
economic, and environmental costs associated with long-term global 
warming cannot or will not be reduced by reducing anthropogenic 
emissions? If so, how does that comport with the statement in question 
5?
    Response. This question focuses on the issue raised in the 
sensitivity analysis presented in my testimony. Climate impacts are a 
joint result of climate events and the vulnerability to such impacts of 
human or natural systems. Both climate and human and natural systems 
are subject to change. The assertion presented in my testimony was, 
``The primary cause for the growth in impacts is the increasing 
vulnerability of human and environmental systems to climate variability 
and change, not changes in climate per se.'' This is borne out by a 
growing body of research. If impacts are indeed the result of changes 
in climate and vulnerability, it would only make sense that policies 
designed to address climate-related risks would focus on both changes 
in climate and vulnerability. This is the essence of my proposal to 
recognize that climate policy has important and under-appreciated 
dimensions that are independent of energy policy. Such dimensions would 
include the sorts of adaptation strategies referred to in Question 5 
above. Further, because there are important reasons to improve the 
nation's energy policies other than climate change (e.g., for reasons 
of national security, human health, and economic efficiency), it may 
make pragmatic sense to expand national discussion of energy policy 
beyond a narrow focus on global warming to the exclusion of other, 
perhaps more compelling, reasons for improving national energy 
policies. The bottom line is that even if the Kyoto Protocol were fully 
and successfully implemented, it would do little to address ``social, 
economic, and environmental costs associated with long-term global 
warming'' and additional steps would be needed. Thus, whatever one's 
perspective on the Kyoto Protocol, whether viewing it as a ``first 
step'' or a ``dead end,'' there is no controversy that additional 
efforts are needed.

    Question 8. What do you think is the greatest risk, in the next 30-
50 years, of continuing to increase human-made greenhouse gas 
emissions? And, what is the most feasible way to reduce or eliminate 
that risk?
    Response. I see two risks. First, when humans alter the Earth 
system, there are risks of unforeseen, unintended effects on that 
system. A second risk, which has largely gone unnoticed, is that in 
focusing primarily on the potential risks to the Earth system resulting 
in changes to that system, we neglect to observe that (a) environmental 
and societal impacts associated with human-climate interactions can in 
many cases be addressed through a focus on reducing vulnerability to 
those impacts, and (b) that there are many ``no-regrets'' energy policy 
actions that make immediate sense irrespective of climate change. Both 
the science and policy communities appear to be neglecting the second 
type of risk and as a consequence there is a large opportunity cost in 
actions not taken to improve climate policies and energy policies. The 
most feasible way to address both types of risk is to follow a ``no-
regrets'' strategy of reducing vulnerability to climate variability and 
change (i.e., to improve adaptation) and as well to improve the 
nation's energy policies with respect to national security, human 
health, and economic efficiency.
    On this, see:
    Sarewitz, D., R. A. Pielke, Jr., 2000: Breaking the Global-Warming 
Gridlock. The Atlantic Monthly, 286(1), 55-64. http://
www.theatlantic.com/cgi-bin/o/issues/2000/07/sarewitz.htm
                                 ______
                                 
  Responses of Dr. Roger A. Pielke, Jr. to Additional Questions from 
                             Senator Smith
    Question 1. Dr. Rowland testified that ``during the 20th Century, 
the atmospheric concentrations of a number of greenhouse gasses have 
increased, mostly because of the actions of mankind.'' Do you agree 
with that statement? Why or why not?
    Response. I agree with the IPCC conclusions.

    Question 2. Do you believe we should fully implement the Kyoto 
Protocol? Do you agree with the assertion that full implementation of 
the Kyoto Protocol would only avert the expected temperature change by 
6/100 of a degree, Celsius? Why or why not?
    Response. See my answer to Question 7 from Senator Jeffords. There 
is no controversy that if the goal of the Kyoto Protocol is to reduce 
the risks of future climate impacts on the environment and society, 
even if fully implemented, it cannot meet this goal, for reasons 
discussed at length in my testimony. Consequently, whether or not Kyoto 
is fully implemented, considerable additional policy action will be 
needed to address climate impacts on society and the environment. 
However, as I noted in the question and answer period of the hearing, 
there are other reasons to implement the Kyoto Protocol, such as 
considerations of international relations, national security, 
environmental symbolism, etc. It may well be that such considerations 
lead to support for full implementation of the Kyoto Protocol, 
completely independent of risk associated with climate impacts. My 
testimony and this answer focus on the role of the Kyoto Protocol in 
reducing risk of climate impacts.

    Question 3. Since the hearing there has been much press attention 
paid to the breakup of the Antarctic Ice Sheet, especially a 500-
billion ton iceberg known as ``Larsen B,'' that has been attributed to 
climate change. What specific evidence is there that climate change is 
the sole cause of this phenomenon? Is there any scientific evidence 
that anthropogenic influences bore any role in the breakup of Larsen B?
    Response. I have no special expertise to contribute to this 
subject.

    Question 4a. Included in the hearing record as part of my opening 
statement was a Swiss Re report titled ``Climate research does not 
remove the uncertainty; Coping with the risks of climate change'' (copy 
attached). Please explain why you agree or disagree with the following 
assertions or conclusions from that report: ``There is not one problem 
but two: natural climate variability and the influence of human 
activity on the climate system.''
    Response. I would frame the problem a bit differently. There are 
changes in climate, caused by many reasons, including human activity. 
There are also changes in society and caused by society to the 
environment that result in increased vulnerability to climate impacts. 
This definition of the problem underlies the recommendations presented 
in my testimony.
    See Sarewitz, D., R. A. Pielke, Jr., 2000: Breaking the Global-
Warming Gridlock. The Atlantic Monthly, 286(1), 55-64. http://
www.theatlantic.com/cgi-bin/o/issues/2000/07/sarewitz.htm

    Question 4b. It is essential that new or at least wider-ranging 
concepts of protection are developed. These must take into account the 
fact that the maximum strength and frequency of extreme weather 
conditions at a given location cannot be predicted.
    Response. Agreed. Along with colleagues we have examined the role 
of prediction in decisionmaking and arrive at substantially similar 
conclusions.
    See: Sarewitz, D., R. A. Pielke, Jr., and R. Byerly, (eds.), 2000: 
Prediction: Science, Decision-Making and the Future of Nature. Island 
Press: Washington, DC.

    Question 4c. Swiss Re considers it very dangerous (1) to put the 
case for a collapse of the climate system, as this will stir up fears 
which--if they are not confirmed--will in time turn to carefree relief; 
and (2) to play down the climate problem for reasons of short-term 
expediency, since the demand for sustainable development requires that 
today's generations take responsible measures to counter a threat of 
this kind.
    Response. Agreed and I point you to my answer to Question 1 from 
Senator Jeffords for elaboration.

    Question 5. Do you believe that our vulnerability to extreme 
weather conditions is increasing? Why or why not?
    Response. Vulnerability to extreme weather has increased as 
populations and wealth have grown and more people have located in 
exposed locations. This perspective is now well documented in the peer-
reviewed literature. A 1999 review (Kunkel et al. 1999) concluded, ``. 
. . increasing losses are primarily due to increasing vulnerability 
arising from a variety of societal changes, including a growing 
population in higher risk coastal areas and large cities, more property 
subject to damage, and lifestyle and demographic changes subjecting 
lives and property to greater exposure.'' Numerous other references 
supporting this conclusion are provided in my testimony.
    Reference: Kunkel, K., R. A. Pielke Jr., S. A. Changnon, 1999: 
Temporal Fluctuations in Weather and Climate Extremes That Cause 
Economic and Human Health Impacts: A Review. Bulletin of the American 
Meteorological Society, 80:1077-1098.
                                 ______
                                 
  Responses of Dr. Roger A. Pielke, Jr. to Additional Questions from 
                           Senator Voinovich
    Question 1a. Advocates of the Kyoto Protocol expect aggressive 
reductions in emissions beyond 2012. Some advocate a global 
CO2 concentration target of 550 ppm CO2 by 2100 
which will require substantial reductions in the emissions of developed 
countries (including the United States). If a concentration target of 
550 ppm by 2100 is adopted, what is your estimate of the caps on 
emissions for the United States by 2050? By 2100?
    Response. I have no special expertise to contribute to this 
subject.

    Question 1b. Are you aware of any economic analysis of the impact 
of these reductions beyond the initial Kyoto target? If so, can you 
provide this analysis.
    Response. I have no special expertise to contribute to this 
subject.

    Question 2. Please provide an assessment of the approaches of 
various States to address normal beach erosion?
    Response. I have no special expertise to contribute to this 
subject.

    Question 3. How significant are the effects of land use changes 
versus other input to climate models?
    Response. I have no special expertise to contribute to this 
subject.

    Question 4. If the estimates that Kyoto would cost the United 
States between $100 and $400 billion per year to implement are true and 
the results would just be a change of 0.06 degrees Celsius; would money 
be better spent on programs like Project Impact (a program at FEMA 
which helps communities mitigate against future natural disasters by 
encouraging different building techniques in disaster-prone areas)? Are 
Kyoto-like reductions cost effective? Please explain.
    Response. The answer to this question is predicated upon the answer 
to a prior question, ``Cost effective with respect to what criteria and 
outcomes?'' If the goal of the Kyoto Protocol is to reduce future 
climate impacts, then it is clearly insufficient, and perhaps even 
irrelevant. However, there are other reasons why implementation of the 
Protocol might make sense, which would lead to different conclusions as 
to its cost effectiveness. See my answer to Question 2 from Senator 
Smith for discussion.
    See Sarewitz, D., R. A. Pielke, Jr., 2000: Breaking the Global-
Warming Gridlock. The Atlantic Monthly, 286(1), 55-64. http://
www.theatlantic.com/cgi-bin/o/issues/2000/07/sarewitz.htm
                                 ______
                                 
  Response of Dr. Roger A. Pielke, Jr. to an Additional Question from 
                            Senator Campbell
    Question. You mentioned in your testimony that, ``The present 
research agenda is improperly focused on prediction of the distant 
climate future.'' I am inclined to agree. What sorts of research, in 
your expert opinion, would be of immediate benefit in relation to 
adaptation to climate change?
    Response. To answer this question I point you to the testimony at 
an April 17, 2002, House Science Committee hearing of my colleague 
Radford Byerly, who was asked by the committee:
    ``How could a climate initiative yield information of greater 
relevance to end-users, people who make decisions related to climate?''
    Dr. Byerly's response is worth quoting at length.
    ``To assure that a research program generates information of great 
relevance to end-uses, the users must be involved in planning and 
evaluating the research. That is, they must have a say in what research 
is done and in what counts as a success. Users must be able to ensure 
that research addresses their problems, and delivers usable results.
    In the present program climate scientists typically develop 
information they want to develop, i.e., answers to scientific 
questions, and then try to get bewildered users to use it (the users 
may never have heard of the scientific question). Research results 
become a solution looking for a problem.
    Sound research programs dedicated to problem solving typically have 
three phases: A beginning--planning, a middle--the research, and an 
end--application and evaluation. The present program is almost all in 
the middle phase, that is, it is scientific research on scientific 
questions.
    A better program, i.e., a program that would do more toward solving 
identified problems, would be conducted as follows: Research would be 
preceded by a planning phase in which users and scientists would 
identify and define specific problems to be attacked, as well as 
specific questions and information needs, and would look ahead to the 
application of the results. At this planning stage the primary sources 
of information about the problems are future users, the owners of the 
problems, not climate scientists. This planning process can be thought 
of as the researchers taking joint ownership of the problem with the 
users. The researchers do not relieve the users of responsibility, but 
together they take responsibility for solving the problem. Then in the 
middle the research is done, and new information is obtained and 
published. This second phase is often erroneously considered the entire 
project. Finally, in the third phase the results are applied in the 
field by the users on their problem and the research is evaluated in 
terms of how it helps solve the problems.
    We hope that users will eagerly, fruitfully use the information, 
since they participated in planning the research. But such planning is 
hard and unfamiliar. Users may not express their needs clearly, or 
researchers may not hear them, and not every project will succeed. This 
is why the projects must be evaluated based on success in the field. 
Research projects unsuccessful in addressing the problem are terminated 
and successful ones are continued or replicated in a new context, as 
appropriate. That is, you correct and iterate.
    Of course provision is made for projects that are making good 
progress in a demonstrably practical direction. In this way a program 
of projects solving real problems is grown. Along the way good science 
of a different kind is done.''
    Dr. Byerly's testimony can be view in its entirety at:
    http://sciencepolicy.colorado.edu/homepages/rbverly/house testimony 
apr 2002/index.html
Statement of David R. Legates, Director, Center for Climatic Research, 
                         University of Delaware
    I would like to thank the committee for inviting my commentary on 
the important topic of the economic and environmental risks associated 
with increasing greenhouse gas emissions.
    As a matter of introduction, my background in global change 
research has focused primarily on precipitation measurement and an 
examination of precipitation variability. My Ph.D. dissertation 
resulted in the compilation of the most reliable, highest resolution, 
digital air temperature and precipitation climatology available to 
date. Today, these fields still are being used to evaluate general 
circulation model (GCM) simulations of present-day climate and to serve 
as input fields for hydrological and climatological analyses. In 
particular, my research has focused on the accuracy of and biases 
associated with precipitation measurement and on the attempt to use 
existing climatological time-series to determine long-term fluctuations 
in climate. I also was a member of the United States delegation at the 
joint USA/USSR Working Meeting on Development of Data Sets for 
Detecting Climate Change held in Obninsk, Russia on September 11-14, 
1989 where a joint protocol for data exchange was signed.
    Indeed, an answer to the question, ``Do we have the capability to 
determine whether we are changing our climate'' is of obvious concern 
to both scientists and policymakers. I agree strongly that we need to 
enact sensible environmental policy--one that is based on scientific 
fact with foreseeable outcomes that can reasonably be expected to have 
beneficial results. As a scientist, I choose here to focus my comments 
on the scientific basis of climate change and the capabilities of the 
climate models, as that is my area of expertise. In the past, we have 
recognized a need for cleaner air and cleaner water, demonstrated the 
problems associated with detrimental human influences, and developed 
policy that has resulted in our air and water becoming markedly cleaner 
than they were just 30 years ago. I urge that this issue be treated 
with the same common-sense approach.
   problems with the observational record leaves questions unanswered
    In light of my research on climatological observations, 
particularly precipitation, I have come to realize that looking for 
long-term trends in climate data is a very difficult undertaking. 
Precipitation data, for example, exhibit many spurious trends resulting 
from, in part, biases associated with the process of measuring 
precipitation. Indeed, attempts to measure snowfall using automatic 
methods have proven to be largely useless and, given the biases 
associated with measuring snowfall by traditional human-observed rain 
gages, our estimates of snowfall can be underestimates by almost a 
factor of two. Urban development of the environment surrounding the 
rain gage and, in particular, changes in rain gage design and the 
location of rain gages over time has adversely affected our ability to 
ascertain climatic trends in precipitation. Even a cursory examination 
of our most reliable records of precipitation shows that we frequently 
move meteorological stations, change instrumentation, and even the 
environment surrounding the site changes over time, which undermines 
attempts to answer the question ``Is the climate changing?'' 
Furthermore, precipitation is a highly variable field so, from a purely 
statistical standpoint, it is difficult to ascertain a small climate 
change signal from this high year-to-year variability. Air temperature 
measurements also are subject to these same measurement difficulties; 
in fact, the IPCC agrees that--as much as one-fifth of the observed 
rise in air temperature may be attributable to urbanization effects. As 
some of this change may be a direct result of natural climatic 
fluctuations, attributing a cause to any detected changes also is an 
extremely difficult undertaking. Indeed, as has been argued, ``the data 
are dirty''!
    Moreover, nearly all of our surface-based observations are taken 
from land-based meteorological stations, leaving the nearly 70 percent 
of the Earth's surface covered by oceans largely unobserved. In 
particular, location of these land-based stations is biased toward 
midlatitudes, low elevations, wetter climates, and technologically 
developed nations. Efforts to use sea surface temperatures over the 
oceans as a surrogate for air temperature measurements are largely 
invalid as the two temperatures are not often commensurate. This 
``land'' bias, in my view, is one of the main limiting factors in using 
the observational record to infer global trends.
    Satellite observations of air temperature and precipitation have 
proven very useful in addressing the climate change question in that 
they provide a complete coverage of the Earth's surface and are not 
subject to the biases associated with meteorological observing sites on 
the ground. Spencer and Christy's analysis of air temperature changes 
over the lower portion of the troposphere for the last 20 years 
exhibits no significant climate change signal as does an analysis using 
regularly launched weather balloorigi,--This is in stark contrast to 
the observed surface air temperature rise of 0.6   0.2 C that has 
occurred over the entire twentieth century. A blue-ribbon panel 
convened to address this apparent discrepancy concluded that the 
temperature of the lower atmosphere might have remained relatively 
constant while an increase in near surface air temperature was 
observed. Some have argued that the surface warming is a delayed 
response to warming that had earlier occurred in the troposphere, 
although the abrupt warming of the troposphere is not consistent with 
expected scenarios of anthropogenic warming. The National Academy of 
Sciences (NAS) concluded that the difference between surface air 
temperatures and those of the troposphere was real but inconsistent 
with anthropogenic warming scenarios. In particular, the NAS only 
considered whether the satellite and surface records could both be 
correct and yet contradictory; they never addressed the issue of 
whether the surface records could, in fact, be biased.
    Another problem in tying the observed increases in air temperature 
to an anthropogenic cause is timing. Most of the warming in the 
observed record occurred during two periods: 1910 to 1945 and 1970 to 
present. Much of the warming actually predates the rise in 
anthropogenic trace gas emissions, which makes it difficult to ascribe 
anthropogenic causes to the entire record. Indeed, we know that our 
observed record began in the late 1800's when air temperature 
measurements were sparse and more prone to bias. This timing also 
coincides with the demise of the Little Ice Age--a period of cooler-
than-normal conditions that lasted from the middle portion of the last 
millennium to about the mid-1800's. Thus, it is unclear how much of the 
observed warming should be attributed to anthropogenic increases in 
atmospheric trace gases and how much of it is simply natural 
variability or measurement bias.
  modeling the complex climatic system is an extremely difficult task
    In theory, therefore, climate models should be our best ability to 
study climate change. With models, we are not constrained by biased and 
limited observing systems or by contamination by other signals; but 
rather, we can alter the simulated climate and see ``what if' while 
holding everything else constant. Such models, however, are predicated 
on their ability to replicate the real climate--after all, if climate 
models cannot replicate what we observe today, how can their 
prognostications of climate change possibly be expected to be 
transferable to the real world? Although I am not a climate modeler, 
much of my research has focused on comparing observations with climate 
model simulations of present-day conditions. Thus, I am very familiar 
with what climate models can and cannot do.
    I am dismayed by the fact that much of the rather limited success 
in simulating average conditions by most climate models is achieved at 
the expense of changing some parameters to highly unrealistic values. 
For example, some models drastically change the energy coming from the 
sun to levels that are well beyond those that solar physicists have 
observed. Many models employ what are called ``flux adjustments'', 
which can only be described as finagling factors to make the average, 
present-day surface air temperatures look reasonable. One has to 
question why such overt deviations from reality are necessary if, in 
fact, the models are able to realistically represent our climate 
system.
    In defense of climate modelers, I will say that they have a very 
difficult and daunting task. The climate system is extremely complex. 
Clouds, land surface processes, the cryosphere (ice and snow), 
precipitation forming mechanisms, the biosphere, and atmospheric 
circulation, just to name a few, are complex components of the global 
climate system that are not well understood or modeled appropriately at 
the scale employed by general circulation models. In essence, the 
climate change response can be directly affected by our 
parameterizations of many of these components. For example, an 
important question that now is being asked is ``Why is the warming 
exhibited by transient climate models not being seen in the observed 
record?'' There has been much discussion on the impacts of aerosols, 
black soot, high altitude clouds, and other so-called ``wild cards'' in 
the climate system--are they masking the climate change signal or 
should they be adding to it? How climate modelers treat these unknown 
processes in their models can affect dramatically the model 
simulations. Indeed, there are likely additional issues that we have 
not yet encountered.
 climate models cannot reproduce a key climatic variable: precipitation
    Despite these issues, do climate models well represent the Earth's 
climate? On three separate occasions--in 1990, 1996, and again in 
2000--I have reviewed the ability of state-of-the-art climate models to 
simulate regional-scale precipitation. In general, the models poorly 
reproduce the observed precipitation and that characteristic of the 
models has not substantially changed over time. One area where the 
models have been in continued agreement has been in the Southern Great 
Plains of the United States. In all three studies, the varied models I 
have examined agree that northeastern Colorado receives substantially 
more precipitation than northwestern Louisiana! That is in marked 
contrast with reality where Louisiana is obviously wetter than 
Colorado. But the important ramification of this is that if 
precipitation is badly simulated in a climate model, then that will 
adversely affect virtually every other aspect of the model simulation. 
Precipitation affects the energy, moisture, and momentum balances of 
the atmosphere and directly affects the modeling of the, atmosphere, 
the hydrosphere, the biosphere, and the cryosphere. In turn, a bad 
representation of these components will again adversely impact the 
precipitation simulation. In short, anything done wrong in a climate 
model is likely to be exhibited in the model simulation of 
precipitation and, in turn, errors in simulating precipitation are 
likely to adversely affect the simulation of other components of the 
climate system. Given its integrative characteristic, therefore, 
precipitation is a good diagnostic for determining how well the model 
actually simulates reality, especially since simple ``tuning'' 
adjustments cannot mask limitations in the simulation, as is the case 
with air temperature.
    If we examine climate model output a bit further, we uncover 
another disturbing fact--climate models simply do not exhibit the same 
year-to-year or even within-season variability that we observe. 
Precipitation in a climate model does not arise from organized systems 
that develop, move across the Earth's surface, and dissipate. Instead, 
modeled precipitation can best be described as ``popcorn-like'', with 
little if any spatial coherency. On a year-to-year basis, both air 
temperatures and precipitation exhibit little fluctuation, quite unlike 
what we experience. This is particularly important because it is the 
climatic extremes and not their means that have the biggest adverse 
impacts. Simply put, climate models cannot begin to address issues 
associated with changes in the frequency of extreme events because they 
fail to exhibit the observed variability in the climate system.
    I attach a piece I wrote regarding the climate models used in the 
National Assessment and their evaluation with my climatology, which 
further highlights our uncertainties in climate models. In fact, the 
National Assessment itself recognized that both the Canadian Global 
Coupled Model and the Hadley Climate Model from Great Britain used by 
the, Assessment provide more extreme climate change scenarios than 
other models that were available and that had been developed in the 
United States. Neither model is reasonably able to simulate the 
presentday climate conditions.
             our observational capabilities are in jeopardy
    Given that our observational record is inconclusive and that model 
simulations are fraught with problems, on what can we agree? In my 
view, there are two main courses of action that we should undertake. 
First, we need to continue to develop and preserve efforts at climate 
monitoring and climate change detection. Efforts to establish new 
global climate observing systems are useful, but we need to preserve 
the stations that we presently have. There is no surrogate for a long-
term climate record taken with the same instrumentation and located in 
essentially the same environmental conditions. Modernization efforts of 
the National Weather Service to some extent are undermining our 
monitoring of climatic conditions by moving and replacing observing 
sites, thereby further introducing inhomogeneities into these climate 
records. Some nations of the world have resorted to selling their data, 
which has adversely impacted our assessments of climate change. 
However, given that oceans cover nearly three-quarters of the Earth's 
surface, we need to exploit and further develop satellite-derived 
methods for monitoring the Earth's climate. We also need to better 
utilize the national network of WSR88D weather radars to monitor 
precipitation.
    But foremost, we need to focus on developing methods and policy 
that can directly save lives and mitigates the economic devastation 
that often is associated with specific weather-related events. Climate 
change discussions tend to focus on increases in mean air temperatures 
or percentage changes in mean precipitation. But it is not changes in 
the mean fields on which we need to place our efforts. It would be 
rather easy to accommodate even moderately large changes in mean air 
temperature, for example, if there were no year-to-year variability. 
Loss of life and adverse economic impact resulting from the weather 
occurs not when conditions are ``normal''; but rather, as a result of 
extreme climatic events: heat waves, cold outbreaks, floods, droughts, 
and storms both at small (tornado, thunderstorm, high winds, hail, 
lightning) and large scales (hurricanes, tropical storms, nor'easters). 
The one thing that I can guarantee is that regardless of what impact 
anthropogenic increases in atmospheric trace gases will have, extreme 
weather events will continue to be a part of our life and they will 
continue to be associated with the most weather-related deaths and the 
largest economic impact resulting from the weather.
    Ascertaining anthropogenic changes to these extreme weather events 
is nearly impossible. Climate models cannot even begin to simulate 
storm-scale systems, let alone model the full range of year-to-year 
variability. Many of these events are extremely uncommon so that we 
cannot determine their statistical frequency of occurrence from the 
observed record, let alone determine how that frequency may have been 
changing over time. While we need to continue to examine existing 
climate records for insights and to develop reliable theory to explain 
plausible scenarios of change, the concern is whether we can enact 
policy now that will make a difference in the future.
    However, is there cause for concern that anthropogenic warming will 
lead to an enhanced hydrologic cycle; that is, will there be more 
variability in precipitation resulting in more occurrences of floods 
and droughts? The IPCC Summary for Policy Makers states:

          Global warming is likely to lead to greater extremes of 
        drying and heavy rainfall and increase the risk of droughts and 
        floods that occur with El Nino events in many different 
        regions.

    However, if one reads the technical summary of Working Group I, we 
find that:

          There is no compelling evidence to indicate that the 
        characteristics of tropical and extratropical storms have 
        changed. Owing to incomplete data and limited and conflicting 
        analyses, it is uncertain as to whether there have been any 
        long-term and large-scale increases in the intensity and 
        frequency of extra-tropical cyclones in the Northern 
        Hemisphere. Recent analyses of changes in severe local weather 
        (e.g., tornadoes, thunderstorm days, and hail) in a few 
        selected regions do not provide compelling evidence to suggest 
        long-term changes. In general, trends in severe weather events 
        are notoriously difficult to detect because of their relatively 
        rare occurrence and large spatial variability.

    The IPCC goes on to further state ``there were relatively small 
increases in global land areas experiencing severe droughts or severe 
wetness over the 20th century''. Karl and Knight, who conducted a 
detailed study on precipitation variability across the United States, 
concluded that as the climate has warmed, variability actually has 
decreased across much of the Northern Hemisphere's midlatitudes, a 
finding they agree is corroborated by some computer models. Hayden, 
writing for the Water Sector of the U.S. National Assessment, agrees 
that no trend in storminess or storm frequency variability has been 
observed over the last century and that ``little can or should be said 
about change in variability of storminess in future, carbon dioxide 
enriched years.'' Soden concluded, ``even the extreme models exhibit 
markedly less precipitation variability than observed.'' In addition, 
Sinclair and Watterson have noted that, in fact, climate models tend to 
indicate that increased levels of atmospheric trace gases leads to a 
``marked decrease in the occurrence of intense storms'' outside the 
tropics and they argue that claims of enhanced storminess from model 
simulations are more the result of models that fail to conserve mass. 
Clearly, claims that anthropogenic global warming will lead to more 
occurrences of droughts, floods, and storms are wildly exaggerated.
    Thus, I believe it stands to reason that we need to focus on 
providing real-time monitoring of environmental conditions. This will 
have two benefits: it will provide immediate data to allow 
decisionmakers to make informed choices to protect citizens faced with 
these extreme weather events and, if installed and maintained properly, 
it will assist with our long-term climate monitoring goals. Such 
efforts are presently being developed by forward-looking states. For 
example, I am involved with a project, initiated by the State of 
Delaware in cooperation with FEMA, the National Weather Service, and 
Computational Geosciences Inc. of Norman, Oklahoma, to develop the most 
comprehensive, highest resolution, statewide weather monitoring system 
available anywhere. Louisiana and Texas also have expressed interests 
in using our High-Resolution Weather Data System technology for real-
time statewide weather monitoring. Regardless then of what the future 
holds, employing real-time monitoring systems, with a firm commitment 
to supporting and maintaining long-term climate monitoring goals, 
proves to be our best opportunity to minimize the impact of weather on 
human activities.
               final thoughts: the science is not yet in
    In 1997, I had the pleasure to chair a panel session at the Houston 
Forum that included seven of the most prominent climate change 
scientists in the country. At the close of that session, I asked each 
panelist the question, ``In 2002, given 5 more years of observations, 5 
more years of model development, and 5 more years of technological 
advances and knowledge about the climate system, will we have an answer 
to the question of whether our climate is changing as a result of 
anthropogenic increases in trace gas emissions?'' The panel, which 
consisted of both advocates and skeptics, agreed that we would have a 
definitive answer probably not by 2002, but certainly by 2007. I 
disagreed then and I continue to disagree today. I fear that the issue 
has become so politically charged that the political process will 
always cloud the true search for scientific truth. But more than that, 
I feel the climate system is far more complex than we ever imagined--so 
much so that we still will not have a definitive answer by 2007.
    I again thank the committee for inviting my commentary on this 
important topic.
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Responses of Dr. David R. Legates, to Additional Questions from Senator 
                                Jeffords
    Question 1. As you and all the other witnesses indicated, it is not 
safe to continue increasing greenhouse gas emissions without limit. 
What needs to be done to assure that we can avert the point of no 
return or ``dangerous levels'' of green house gas concentrations?
    Response. In response to your question, I would ask, ``What are 
`dangerous levels' or the `point of no return'?'' I do not think there 
is a definition of dangerous levels of carbon dioxide in this context--
we are not anywhere near levels of carbon dioxide that would inhibit 
our ability to extract sufficient oxygen from the atmosphere. Given too 
that many actions to reduce or eliminate greenhouse gas production are 
concomitant with additional problems, I do not see that I can define a 
level beyond which we cannot pass.
    My suggestion would be that we should seek to reduce the production 
of greenhouse gases where there clearly is another benefit to the 
reduction. For example, less reliance on foreign sources of fossil 
fuels would be beneficial to our national security and if they could be 
replaced by conservation, enhanced efficiency, and/or `cleaner' 
sources, then less greenhouse gases would be produced. Thus, I am in 
favor of technology that reduces emissions of greenhouse gases as a by-
product; but I strongly argue that reduction of greenhouse gases for 
reduction sake is not cost effective or, in many cases, even 
potentially beneficial.

    Question 2. What do you think is the greatest risk, in the next 30-
50 years, of continuing to increase human-made greenhouse gas 
emissions? And, what is the most feasible way to reduce or eliminate 
that risk?
    Response. To be able to define risk, one must be able to ascertain 
solid evidence of the effect of our actions. At present, we can neither 
determine the effects of anthropogenic increases in greenhouse gases 
nor guarantee that all effects will be detrimental. Most arguments in 
favor of reducing emissions are that if there is an impact, it must be 
detrimental because change is always bad. Over the last 1,000 years, we 
have seen climate change dramatically--from the Medieval Warm Period to 
the Little Ice Age to the warmer period we now enjoy. During those 
periods, civilization has adapted to that change and I do not see why 
adaptation to a globally warmed world cannot be considered. Moreover, I 
remain unconvinced that (1) global climate change will be detrimental 
to either humans or ecosystems as a whole or (2) that it will be as 
significant as climate models purport that change will be.
    Personally, I feel that the greatest risk we face in the next 30-50 
years as a result of the atmosphere will come from extreme weather 
events. Floods, droughts, heat waves, cold spells, and storms from 
hurricanes to nor'easters to flash flooding to lightning and high winds 
to tornados will take the most lives and cause the most economic 
damage. We will still be forced to face these extreme weather events 
regardless of what climate change scenario plays out. Thus, in keeping 
with my earlier Senate testimony, the most feasible way to reduce our 
risk from climate change is to develop strategies to mitigate the 
effects of extreme weather events. Forward-looking efforts such as the 
Delaware Environmental Observing System (DEOS) that is supported by the 
State of Delaware will yield benefits now and in the future--especially 
if global warming results in an increase in the frequency and intensity 
of these extreme weather events (a scenario that is not supported by 
current research, however). I would argue that money spent toward 
disaster mitigation (education, evacuation, and minimization of the 
impact) would be much better utilized than money spent toward the 
reduction of greenhouse gas emissions.
                                 ______
                                 
Responses of Dr. David R. Legates, to Additional Questions from Senator 
                                 Smith
    Question 1. Dr. Rowland testified that ``during the 20th Century, 
the atmospheric concentrations of a number of greenhouse gasses have 
increased, mostly because of the actions of mankind.'' Do you agree 
with that statement? Why or why not?
    I do not think this statement is debatable. We know that many 
industrialized activities emit carbon dioxide, methane, and other 
greenhouse gases either as a direct result (e.g., burning fossil fuels) 
or an indirect result (e.g., cattle feedlots which increase methane 
production) of human activities. Virtually all long-term measurements 
of greenhouse gases (most notably in Hawaii and Antarctica) have 
exhibited an increase in these gases as industrialization has occurred. 
Thus, the rise in concentrations of these gases is well documented and 
we have explicit anthropogenic sources for the rise in their 
concentrations.

    Question 2. Dr. Pielke testified that ``the primary cause for . . . 
growth in impact is the increasing vulnerability of human and 
environmental systems to climate variability and change, not changes in 
climate, per se. `` Do you agree with this claim? Why or why not?
    Response. Whether climate change occurs or not is largely 
irrelevant, what is relevant is the impact climate change is likely to 
have on ecosystems and human activities. In some sense, to state that 
we are increasingly vulnerable to climate variability and change is to 
recognize that an increasing population base is more likely to be 
vulnerable to a change of any kind. Thus my answer is a qualified ``I 
agree'', with a caveat that a definition of ``increasing 
vulnerability'' must be provided. I do not agree that all climate 
change must necessarily be bad, nor do I agree that human and 
environmental systems cannot adjust to climate change.

    Question 3. Dr. Pielke also stated that ``the present research 
agenda is focused . . . improperly on prediction of the distant climate 
future'' and that ``instead of arguing about global warming, yes or no 
. . . we might be better served by addressing things like the present 
drought . . . `` Do you agree with that proposition? Why or why not?
    Response. In my testimony, I argued that both human and 
environmental systems are most vulnerable to climate extremes--floods, 
droughts, heat waves, cold outbreaks, and severe weather. Debating 
whether the temperature will rise 1.5+C or 4 +C 
is academic; what will claim the most lives and provide the greatest 
economical damage are the extreme events. That is why in my testimony I 
focused on whether research indicates climate extremes are likely to 
change. Since we cannot state with any certainty that a future, warmed 
world is likely to exhibit any higher frequencies of extreme weather 
events, our focus therefore is better placed on efforts to prepare and 
warn our citizens for these extreme events. That was essentially a 
conclusion of my testimony.
    As for a discussion of the present drought, a quest for the cause 
for the drought is an academic exercise. Regardless of the cause, I can 
guarantee that we will have droughts again in the future. Thus, we 
would be better served by addressing how we can better manage our 
existing water resources in the future, than in focusing on whether 
drought frequency is likely to change in the future.

    Question 4. Do you believe we should fully implement the Kyoto 
Protocol? Do you agree with the assertion that full implementation of 
the Kyoto Protocol would only avert the expected temperature change by 
6/100 of a degree, Celsius? Why or why not?
    Response. As it exists, I would agree that the Kyoto Protocol 
should not be ratified by the United States. In ignoring obvious 
sources of greenhouse gas emissions from developing countries and in 
focusing on a system of ``credits'', it appears to be more of a 
political ``we're doing something'' statement rather than an attempt to 
address the true issue. In my testimony, I cited an American Viewpoint 
survey of State and regional climatologists who agreed by nearly a 2-
to-1 margin that going back to 1990 emission levels (a more stringent 
approach than Kyoto) would have little or no impact on global warming. 
I agree with the majority of these climatologists and note that such 
measures are likely to have dire economic consequences for virtually no 
return on the climate change issue. Thus, I would argue that a better 
approach would be one that reduces emissions where other benefits 
outweigh the climate change concern and one that allows us to cope with 
extreme weather events.
    I also do not agree with a modified Kyoto Protocol where 
restrictions in greenhouse gas emissions are relaxed in times of an 
economic downturn. All this would do is ignore climate change when the 
economy is bad and enact restrictions to squelch a booming economy. The 
Kyoto Protocol, in my view, is bad for the United States economy while 
doing virtually nothing to the climate. It is a system that should be 
abandoned and not tweaked.

    Question 5. Since the hearing there has been much press attention 
paid to the breakup of the Antarctic Ice Sheet, especially a 500-
billion ton iceberg known as ``Larsen B, `` that has been attributed to 
climate change. What scientific evidence is there that climate change 
is the sole cause for the phenomenon? Is there any scientific evidence 
that anthropogenic influences bore any role in the breakup of Larsen B?
    Response. There is no scientific evidence that climate change is 
the sole cause for the phenomenon. The hydrology of Antarctica is one 
of mass balance. In most of the United States, it snows and the snow 
melts, eventually. But the temperature of Antarctica is so cold that it 
does not melt, and subsequent yearly snowfall is added to the snow that 
already exists. This snowpack becomes compressed and forms ice, which 
slowly migrates out to the ice shelves over the oceans. Due to the 
topography, ice breaks off rather frequently forming the traditional 
icebergs that we find in the North Atlantic, for example. But in 
Antarctica, the ice extends over water until it becomes fragile and 
breaks off. Thus, calving (breaking off) of icebergs is a relatively 
common event.
    Before satellites, we did not have frequent observations of 
Antarctica. Thus, we do not know how frequent icebergs of this size 
form. With satellites, we are able to see them when they occur but our 
limited observational period precludes an assessment of the frequency 
of occurrence. Given though that it is a natural process, I cannot 
agree that climatic change is the sole cause. However, winds over the 
Southern Ocean during El Nino events are diverted southward over the 
Antarctic Peninsula. Researchers have noted that sea ice decreases 
during this time, which allows winds to pound surf against the ice 
sheet resulting in weakening of the structure. This may be a reason why 
large breakups of the Larsen Ice Sheet has occurred during major El 
Nino events.
    Prescribing anthropogenic assistance to the breakup of Larsen B is 
extremely difficult. How is it possible to know whether anthropogenic 
influences provided any assistance in the breakup of Larsen B? Although 
I am not a supporter of them, we could turn to climate models for 
assistance. Assuming that climate models provide our best assessment of 
climate change effects, I note that in the latest analysis of the 
National Center for Atmospheric Research (NCAR) model (Dai et al., 
Journal of Climate, February 2001) that near the Antarctic Peninsula 
(where Larsen B is located), a change of less than 1 +C is 
shown for the climate of 2100. This value is the least amount of any 
change anywhere over the Southern Ocean. So, I think it would be fair 
to say that climate models indicate little climate change for this 
region, which leads me to conclude that little scientific evidence 
exists that anthropogenic influences played a substantial role in the 
breakup of Larsen B.

    Question 6a. Included in the hearing record as part of my opening 
statement was a Swiss Re report titled ``Climate research does not 
remove the uncertainty; Coping with the risks of climate change'' (copy 
attached). Please explain why you agree or disagree with the following 
assertions or conclusions from that report: There is not one problem 
but two; natural climate variability and the influence of human 
activity on the climate system.
    I would agree that there are two issues that must be considered 
when trying to assess causes for climate change--natural climate 
variability and anthropogenic effects. In that sense, I would agree. 
However, the article postulates that we need to avert anthropogenic 
influences on the climate (problem #1), while simultaneously preparing 
for unexpected extreme weather occurrences (problem #2). I agree 
wholeheartedly with arguments to offset the second proposed problem. 
However, science has not determined the extent, either in magnitude or 
in effect, of the anthropogenic influence. In that light, how can we 
determine risk if we do not have solid evidence of the effect of our 
actions? Their argument seems to be that if there might be an impact, 
it will be detrimental because change is always bad and therefore the 
change must be averted. Environmental systems have adapted to change 
for eons and the human journey has been to both cause change (usually 
for the better) and adapt to changes. Their ``global climate 
protection'' is ``to avoid anthropogenic intervention in the natural 
climate system when potential consequences cannot be foreseen.'' Since 
science cannot ascertain the consequences, we must avert all possible 
changes. But taken literally, it is impossible to remove all human 
influences on the climate--cities must be eliminated, we must go back 
to a pre-industrial revolution age, etc. Good risk strategy is not to 
avoid all change at all costs; but rather to assess the effects of such 
change and outweigh the bad with the good.

    Question 6b. ``. . . it is essential that new or at least wider-
ranging concepts of protection are developed. These must take into 
account the fact that the maximum strength and frequency of extreme 
weather conditions at a given location cannot be predicted.''
    This statement is the crux of my Senate testimony. We need to be 
more concerned with protecting ourselves from extreme weather 
conditions and be less concerned by the small changes that may occur to 
mean global air temperature. We can be sure that this new century will 
contain floods, droughts, heat waves, and storms of all kinds and 
sizes. And we have no evidence the frequency or magnitude of these 
events will change in a globally warmed world. Moreover, we cannot 
guarantee that we have seen the worst event that is possible under 
current natural conditions. Therefore, I agree with this statement--
natural disasters will not abate in the future, regardless of any 
effects of anthropogenic climate change, and we must be poised to deal 
with them.
    Question 6c. ``Swiss Re considers it very dangerous (1) to put the 
case for a collapse of the climate system, as this will stir up fears 
which--if they are not confirmed--will in time turn to carefree relief, 
and (2) to play down the climate problem for reasons of short-term 
expediency, since the demand for sustainable development requires that 
today's generations take responsible measures to counter a threat of 
this kind.''
    In essence, this is simply common-sense practice--don't cry wolf 
and don't ignore the problem. As for fear mongering, every extreme 
weather event is accompanied by ``This could be caused by global 
warming!'' or ``We can expect more of these with global warming!'' It 
helps drum up support for the cause and when the future is 2100, it 
becomes difficult to ever find unconfirmed claims. Moreover if 
mitigation is undertaken, then unconfirmed claims are cause for 
celebration--``See, we did something about it!''--while the occurrence 
of extreme events are a rally for still more action. In the case of 
climate change, it seems that fear mongering yields substantial 
benefits with little concern for the onset of carefree relief due to 
the fact that effects are likely to occur only in the distant future.
    As for ignoring the problem for short-term expediency, I would 
agree. Ignoring potential problems can have serious ramifications at a 
later date. However, with respect to anthropogenic climate change, we 
have not ascertained the degree to which humans are changing the 
climate nor have we determined the extent to which anthropogenic 
climate change poses a hazard. To determine risk, you have to be able 
to determine the probability of occurrence. In this debate, we have 
neither determined what will occur nor its probability. Thus, it is 
irresponsible to simply declare that the change must be bad and it must 
be stopped at virtually all costs, particularly when the result of such 
actions can have dire consequences themselves.
    As a climatologist, I find the phrase ``a collapse of the climate 
system'' unintelligible. Economic systems can collapse, infrastructures 
can collapse, and buildings can collapse. But the climate system is a 
process that continues on. Too much carbon dioxide in the atmosphere 
will NOT bring an end to climatic processes or the Earth's climate. As 
such, the physics of the climate system will not collapse; they will 
continue on. In attempting to quantify the ``system collapse'', Swiss 
Re postulates that ``small increases in average temperature . . . can 
cause low pressure systems to shift from their usual paths and the 
frequency of heavy rainfall in a particular region to suddenly increase 
significantly''. What this tells me is that the authors of the Swiss Re 
piece do not have a good understanding of the climate system or the 
issues that are involved. No research of which I am aware indicates 
that such changes are likely. Little credible evidence exists to 
suggest that a small increase in air temperature will result in a major 
shift to precipitation patterns. In fact, precipitation is so poorly 
simulated in climate models, that traditional low pressure systems are 
not even represented by them.

    Question 7. Do you believe that our vulnerability to extreme 
weather conditions is increasing? Why or why not?
    Response. As per my Senate testimony, I definitely do agree that 
our vulnerability to extreme weather conditions is increasing. More 
people demanding more water usage will exacerbate droughts when they 
occur. Channelization of rivers (e.g., the Mississippi and the 
Missouri) will enhance flood peaks and confine river flow, resulting in 
flooding of downstream areas that are not protected by levees or 
flooding large portions of inhabited areas if a levee break occurs. 
Continued building on and urban development of coastal areas will put 
larger numbers of people at risk and require more extensive evacuation 
procedures during nor'easters and tropical storm/hurricane landfalls. 
With more people, the impact of thunderstorms, hailstorms, lightning, 
high winds, and tornadoes are bound to increase.
    Note that in my testimony, I indicated little evidence points to an 
enhancement of extreme weather conditions under a globally warmed 
world. The above-mentioned extreme weather conditions presently lead to 
the greatest loss of life and the greatest economic impact of weather--
not the increase of mean global air temperature. They will continue to 
do so in the future. Thus, I will continue to argue that better warning 
systems and preparation for these extreme weather events should be our 
primary meteorological concern, not global warming.
                               __________
Responses of Dr. David R. Legates, to Additional Questions from Senator 
                               Voinovich
    Question 1a. Advocates of the Kyoto Protocol expect aggressive 
reductions in emissions beyond 2012. Some advocate a global 
CO2 concentration target of 550 ppm CO2 by 2100 
which will require substantial reductions in the emissions of developed 
countries (including the United States). If a concentration target of 
550 ppm by 2100 is adopted, what is your estimate of the caps on 
emissions for the United States by 2050? By 2100?
    Response. My question is ``what is so magical about 550 ppm?'' That 
number is as contrived as any other number--there is no way to 
guarantee that effects resulting from 550 ppm will not be detrimental 
but that effects from, say 575 ppm, will be. As I am not an advocate of 
the Kyoto Protocol, I cannot advocate specific CO2 
concentration targets. Moreover, CO2 is not the only 
greenhouse gas. Note that levels of methane (CH4) have 
leveled off to rates far below those postulated by the 
Intergovernmental Panel on Climate Change (IPCC). Moreover, water is 
the most important greenhouse gas; more important than carbon dioxide 
or methane. Thus, defining CO2 levels is a nice way to 
perform bookkeeping but not a good way to conduct science.

    Question 1b. Are you aware of any economic analysis of the impact 
of these reductions beyond the initial Kyoto target? If so, can you 
provide this analysis?
    Response. Unfortunately, economics is not my area of expertise, as 
I am a climatologist. Thus, I am not aware of any economic analyses of 
the effect of such reductions.

    Question 2. Please provide your assessment of the surface 
temperature measurements including documentation of the location of the 
measurement sites on land and at sea.
    Response. In my testimony, I indicated that I felt thermometer 
measurements were generally good estimates of the temperature record at 
that location. Given that the effect of urbanization (growth of cities 
around the stations) has been prevalent during the twentieth century, 
we would expect that surface air temperature measurements would exhibit 
significant air temperature increases. Sites where urbanization has not 
been observed usually show little trend. Moreover, weather stations 
tend to be moved over time. This is done for a variety of purposes 
(e.g., moving stations from downtown to the airports in the 1940's) but 
it results in a discontinuity in the station record--the new site is 
seldom identical to the old location. Thus, a bias is introduced which 
is difficult to distinguish from a climate change signal.
    My view is that surface air temperature measurements are too biased 
to provide a complete picture of global patterns of air temperature. 
First, they tend to be biased toward lower elevations, middle-
latitudes, denser populations, and industrialized countries (see 
Addendum #1). Moreover, they only provide coverage of about two-thirds 
of the globe with oceanic areas remaining underrepresented. Ship 
reports, used by Legates and Willmott (Addendum #2) are useful for 
producing climatological averages but not for discerning temporal 
trends. Second, they represent the temperature at a height of only 
about 5.5 feet. This is well within the atmospheric boundary layer 
where urbanization and other biases due to the station location are 
prevalent.
    Locations of the 17,986 terrestrial air temperature stations that 
were used in my global precipitation data base are presented in 
Addendum #1. This figure is taken from Legates and Willmott (1990), the 
text of which is included as Addendum #2. Note section 2.3, Reliability 
Concerns, that discusses the assessment of the surface temperature 
measurements.

    Question 3. Has there been any comprehensive assessment of the 
accuracy of the surface temperature measurements?
    Response. I include Addendum #2 that includes a paper describing my 
global air temperature climatology. It contains a summary of and 
several references to papers that describe the accuracy of air 
temperature measurements.
    I also would note the National Research Council Report, Reconciling 
Observations of Global Temperature Change, chaired by John M. Wallace. 
Although many media outlets touted this report as the death-knell for 
climate change skeptics, the report does provide an assessment of 
surface temperature records (which show substantial warming) relative 
to satellite and radiosonde observations (which show little warming). 
Moreover, the report concludes that warming is real and that surface 
thermometers and satellites and radiosondes are likely measuring 
different things, most notably that the thermometers are solely surface 
observations (below 10 feet) whereas satellites and radiosondes 
(balloon observations) integrate temperature over the lower 
troposphere.

    Question 4. What are the effects of removing black soot from the 
atmosphere?
    Response. In February 2001, Stanford scientist Mark Jacobson 
published an article in Nature which indicated that the warming effect 
from the atmospheric aerosol carbon (black soot) was more than twice 
what the Intergovernmental Panel on Climate Change (IPCC) has assigned 
to it. Black soot also is likely to reduce cloud cover by heating 
portions of the atmosphere, thereby evaporating condensed water. This 
implies that much of the warming the IPCC projected to occur as a 
result of policies to reduce atmospheric aerosols would be offset since 
black carbon would also be removed. This has posed a problem since some 
have suggested that sulfate aerosols have countered the warming the 
climate models indicate should have occurred. Thus, anti-pollution 
measures to remove sulfate aerosols would result in a dramatic increase 
in the Earth's temperature.
    Black soot, however, exerts a warming effect that is exceeded by 
emissions only of carbon dioxide and is almost equal to the cooling 
caused by sulfate aerosols, Jacobson concluded. What this means is that 
the removal of both sulfate aerosols and black soot using electrostatic 
precipitators in smokestacks--which occurs since both particles are 
about the same size--negates any effect the IPCC suggests should occur 
as a result of anti-pollution efforts.
    From a health standpoint, it is desirable to reduce the 
concentrations of black soot and sulfate aerosols. From a climatic 
change standpoint, the removal of black soot would remove a large 
contributor to global warming. This would occur with obvious health 
benefits. Moreover, anti-pollution measures should have no net effect 
on the Earth's temperature since the net effect of sulfate aerosols and 
black soot should be near zero.
    What this entire argument on black soot and sulfate aerosols should 
indicate is that the science of climate change is still highly 
uncertain. The effects of both black soot and sulfate aerosols come 
with large uncertainties. Removal of black soot would seem to be a 
benefit both to atmospheric pollution concerns as well as to those 
concerned about anthropogenic warming. But further research might find 
that there are other effects--maybe positive, maybe negative--that can 
be attributed to the presence of these aerosols. Thus, I reiterate that 
it is impossible to determine the extent of our risk when the effects 
of atmospheric composition are extremely uncertain.

    Question 5. What are the benefits of using U.S. clean coal 
technology in countries like China and India in terms of removing black 
soot?
    Response. Although this is not in my area of expertise, I would 
argue that clean coal technology would be beneficial to developing 
countries whose economies are still dependent on coal. However, I 
always am concerned about exporting technology and how it may be used 
in ways that we did not intend. Clean coal technology should decrease 
emissions of pollutants (sulfate aerosols and black soot), which are a 
particular problem in developing countries. However, by increasing 
burning efficiency, more CO2 will be released as a result.

    Question 6. Please provide your assessment of the models used in 
the New England Regional Assessment referred to by Mr. Markham. Also, 
please comment on the use of these models for driving impact studies. 
If available, please provide any alternative assessments for States in 
New England.
    Response. The U.S. National Assessment prescribed the models used 
in the New England Regional Assessment. Thus, the models used were the 
Canadian Climate Centre Model and England's Hadley Centre Model. I have 
provided an extensive assessment of these models in a manuscript 
published by the George C. Marshall Institute. That manuscript was 
appended to my Senate testimony.
    In summary, these models were out of date at the time the National 
Assessment went to press. Moreover, they provided two of the most 
extreme climate scenarios of all models the Assessment had from which 
to choose. As for driving impact studies, I will note that for current 
conditions, both models simulated a wetter climate for eastern Colorado 
than for northwestern Louisiana! The ``trick'' that is used is to 
simply ignore the current field but look at changes from the present-
day simulation to the doubled CO2 Simulation. Obviously, if 
one is interested in regional-scale impacts, it is important that the 
model reproduces the salient features of the regional climate.

    Question 7. Please provide an assessment of the models used in the 
reports by Swiss RE and Munich RE, including their use to predict local 
impacts.
    Response. In their discussion, Swiss RE cites only the Switzerland 
National Research Programme 31 (NFP 31) as a source for their 
information. The Swiss National Research Programme is their equivalent 
of our National Science Foundation. In the documentation of NFP 31, I 
found the following climate model reference: ``A regional climate model 
for the Alpine region,'' by Luthi et al. (1997). Only an abstract is 
available but they note, ``The modelling suite employed comprises a 
doubly nested system with an outer coarse mesh model (horizontal 
resolution 56km) capable of capturing synoptic-scale features and an 
embedded fine-mesh model . . . (horizontal resolution 14km) that can 
simulate meso-scale flow systems.'' Regional climate models are driven 
by General Circulation Models (GCMs) but the report gives no mention as 
to the specific model references.
    As there are no large-scale modeling groups in Switzerland, my 
educated guess would be that their model would not be substantially 
different from those cited by the IPCC, and may likely include the 
Hadley Centre GCM. I provide an assessment of the climate models used 
in the U.S. National Assessment in my manuscript published by the 
George C. Marshall Institute and appended to my original Senate 
testimony. Many of the same criticisms of these two models hold for 
other models as well.
    As for the prediction of local impacts, this study appears to use 
nested modeling--an approach where higher resolution models are used to 
look at local fluctuations. These models are driven by the coarser 
resolution GCMs and, as a consequence, inherit their biases and errors. 
Thus, the local assessments are only as good as the large-scale forcing 
which, for GCMs, is not very accurate.
                                 ______
                                 
Responses of Dr. David R. Legates, to Additional Questions from Senator 
                                Campbell
    Question 1. In your testimony, you expressed concern over what you 
termed ``land bias''. That nearly three fourths of the Earth's surface 
is covered by water and goes largely unobserved. Therefore, much of our 
available data on global warming may not in fact be wholly accurate. 
You also mention that some countries actually sell their data to 
interested parties, also potentially tainting that information. What 
efforts are being made to correct these situations?
    Response. Clearly, it is virtually impossible to instrument the 
oceans in the same way we have instrumented land areas. We do have ship 
reports; however, they tend to be biased in a number of ways. First, 
ships, for obvious reasons, tend to avoid storms if at all possible. 
This provides a ``fair weather bias'' that affects our estimates. 
Second, most ships are moving targets (there are some reports from 
fixed-position ships) and provide air temperature estimates that are 
integrated over large areas and do not represent a single point. Third, 
ships are large metal objects that generate their own heat and have 
different characteristics than the open ocean. This problem is akin to 
the urbanization effect we see with land-based thermometers.
    Thus, our only real source of obtaining a spatially representative 
sample of global air temperatures is through remote sensing. Much of 
the work by Roy Spencer and John Christy has been based on attempting 
to compile a long-term temperature record using satellite remote 
sensing. Using their analysis, we see that satellite-derived air 
temperature has not exhibited a marked increase as suggested by land-
based thermometers. This lack of a trend has also been observed with 
radiosonde data (balloons); traditionally, weather balloons are used 
twice daily around the world to sample the vertical profile of the 
atmosphere, including air temperature.
    As for the fact that countries have been selling their data, Dr. 
Mike Hulme of the Climatic Research Unit at the University of East 
Anglia relayed this information to me. His unit has been the source of 
many of the air temperature and precipitation time-series that have 
been displayed. These countries are largely Third World, which see the 
data as a potential source of income. Efforts are ongoing to encourage 
these countries to participate in the global telecommunication of 
weather data, largely through the World Meteorological Organization. In 
some cases, financial support has been supplied. I participated in the 
first protocol that allowed the U.S. and USSR to exchange data for 
climate research (back in 1990); such efforts have now been extended to 
an international scope. However, I would conclude that global 
cooperation in this area is still lacking.

    Question 2. You mention in your testimony that perhaps 20 percent 
or less of the observed global increase in temperature may be due to 
the activities of mankind. What are other likely causes of global 
warming?
    Response. I believe my intent was to state that 20 percent or less 
of the observed global increase in temperature was due to anthropogenic 
increases in greenhouse gases. Variations in solar output are an 
obvious source of some of the changes in global temperatures we have 
seen. Dr. Sallie Ballunias probably can offer comment that is more up-
to-date on this topic. However, I also would strongly argue that much 
of the observed global increase in air temperature is due to the effect 
of urbanization. Over time, weather stations that originally were sited 
in open, rural settings have become increasingly surrounded by 
sprawling urban areas. Several researchers have documented time-series 
of air temperature for rural versus urbanized stations and have found 
that air temperature increases with urbanization, while little change 
occurs with rural observations. This effect is well documented; the 
``urban heat island'' occurs due to a decrease in evaporation and an 
increase in absorption of solar radiation that results when forests and 
grasslands are replaced by cities. While urbanization technically can 
be considered as a humaninduced effect, I strongly differentiate 
increased temperatures due to urbanization from a rise in air 
temperature resulting from increased greenhouse gases. Thus, 
urbanization, in my view, is largely responsible for most of the air 
temperature rise that we have seen in the observed, land-based air 
temperature record.
    I would further argue that land surface changes (such as 
urbanization, but also including deforestation and desertification) 
have probably a bigger effect on the Earth's climate than atmospheric 
constituents. Land surface interactions are a big component of the 
surface energy balance, although they are not well represented within 
climate models. Models are more tuned to study the radiative balance of 
the atmosphere, which is probably why the models are very sensitive to 
changes in greenhouse gases.
    Natural climatic variability is also another likely source of 
rising air temperatures. In the late 1800's, we emerged from a 
relatively cool period known as the ``Little Ice Age''. It is therefore 
not unexpected that air temperatures would rise during the last century 
after the end of a period during which colder temperatures were 
experienced for 300 to 400 years. Before then, the Medieval Warm Period 
exhibited globally warmer air temperatures. I would note that many 
civilizations thrived during this period even though they were in a 
lesser position than we are to adapt to climate change.
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 Statement of Adam Markham, Executive Director, Clean Air-Cool Planet, 
                             Portsmouth, NH
    Good morning Mr. Chairman, and members of the committee. My name is 
Adam Markham and I am the executive director of Clean Air-Cool Planet, 
a small non-profit working to achieve reductions of greenhouse gas 
emissions in the Northeast. Thank you for inviting me here today to 
talk about likely impacts of continued climatic change.
    New England is coming to end of what will almost certainly be the 
warmest winter on record, and much of the region has been in the grip 
of severe or extreme drought for many months. These individual weather 
events are not, in themselves, indicators of climate change but they 
are providing a taste of what climate change might bring. New Hampshire 
is currently experiencing the second worst drought in more than 100 
years and Maine's last 12 months were the driest on record. Lake 
Winnipesaukee is at its lowest level in a generation, wells are running 
dry, and concerns are being raised about hydroelectric power shortages, 
fish populations and forest fire risk.
    As with the rest of the country, we are experiencing a long-term 
warming trend. On average, New England has warmed by 0.7 +F 
since 1895. Winters have warmed more than summers, and the greatest 
warming has been in New Hampshire, Vermont and Rhode Island. Annual 
precipitation for the region as a whole has increased, especially in 
southern New England where the change has been more than 25 percent 
over the last century. More rain is falling in intense storms than in 
the past.
    On the other hand, there has been a significant decrease (15 
percent) in snowfall in northern New England since 1953. Snow is lying 
on the ground 7 days less than it was 50 years ago and the ice comes 
off lakes a few days earlier now than 100 years ago. Other documented 
indicators of a shorter winter include progressively earlier flowering 
of lilacs and the fact that frogs have advanced their spring calling by 
several weeks.
    The New England Regional Assessment (NERA), which was carried out 
under the auspices of the U.S. Global Change Research Program and 
coordinated by Dr. Barrett Rock of the University of New Hampshire, was 
published in September 2001. Four years in the making, the report 
reviewed some of the risks associated with continued global warming. 
The warming scenarios described in the report suggest a likely 6-10 F 
warming over the next century. In crude terms, such a change would 
result in Boston getting the climate of Richmond, VA in the best case, 
and that of Atlanta, GA in the worst case. Either way, the climate of 
New England would be irreversibly transformed with far-reaching and 
negative, economic and environmental impacts.
                              sugar maple
    Let me start by describing the threat to one of the icons of New 
England culture, and one that I know is close to Chairman Jeffords' 
heart--the sugar maple. According to all credible forest models, the 
sugar maple is one of the tree species most sensitive to warming 
temperatures. Business as usual emissions scenarios are almost certain 
to eventually drive the sugar maple northwards out of New England 
entirely. Even before that happens climate change will start to take a 
toll.
    New England and New York produce approximately 75 percent of the 
maple syrup produced in the U.S. today. U.S. maple syrup production is 
worth more than $30 million annually. For Vermont, it is a more than 
$100 million industry with over 2,000 mainly family owned sugar 
producers. Many of these families have been careful stewards of these 
forests for generations and they have a strong interest in the legacy 
that is passed to their children and grandchildren. Maple trees take 
decades to mature and new stands are planted for the benefit of future 
generations. According to NERA this heritage and industry ``may be 
irreparably altered under a changing climate''. There are indications 
that sugar production tends to be better in colder years, and it is 
established that droughts during the growing season adversely affect 
production in subsequent years. For example, sugarmakers expect to see 
impacts of the current drought, which started last summer, in 
production numbers for this current season.
    There is a very short time in the year when conditions are right 
for sugar production. Sap generally flows during late February and 
early March. Sugar bushes need a prolonged period of temperatures below 
25 +F to convert starch to sucrose and to get high sugar content in the 
sap. A freeze/thaw cycle of cold nights and warm days (above 38-40 +F) 
is required to get the sap moving. When the nights no longer freeze the 
season is over.
    According to Dr. Tim Perkins, Director of the Proctor Maple 
Research Center at the University of Vermont, sugarmakers are reporting 
that the season is starting earlier and earlier. Traditionally, in much 
of Vermont, tapping coincided with Town Meeting Day (the first Tuesday 
in March). But this is changing, and during the last decade 
approximately a quarter of Vermont's sugar production has occurred 
before Town Meeting Day. This year's warm winter triggered one of the 
earliest sugaring season starts anyone can remember.
    With such a short window of opportunity, the decision on when to 
tap the trees is critical to successful production. Tap too early and 
you risk ``drying out'' the tree too soon, but tap too late and you may 
miss some of the best sap runs. By making the beginning of the season 
more unpredictable and increasing temperature fluctuations, global 
warming will make the decision on when to tap even more difficult.
    There is little data available yet with which to predict more 
accurately the likely impacts of climate change on maple trees or its 
possible interplay with other threats to the maple industry, including 
acid rain, land-use change and pests such as the Asian longhorned 
beetle. The Proctor Maple Research Center plans to begin a vigorous 
program of research on global warming impacts in the very near future. 
High quality field data they have been collecting for a number of years 
will enable them to construct a computer model of sap flow in maple 
trees under varying conditions. This will then be used to simulate sap 
flow under various climate change scenarios to predict the effect on 
production.
                        skiing and winter sports
    Winter sports are especially vulnerable to global warming. Because 
of the strong relationship between winter skiing conditions, the number 
of customers, and subsequent successes or failures in the ski industry, 
a changing climate may have severe repercussions for New England's 
winter tourism economy. There are 80 ski resorts now operating in the 
region.
    Although economic analyses for New England have been limited, 
studies from Canada suggest that global warming could have major 
economic impacts for the ski industry there. For example, one analysis 
indicated that an increase of 3.5-3.7 +C could decrease the number of 
skier days by 50-70 percent at resorts in Southern Quebec. This could 
mean a loss of up to $1.7 billion in revenue for Quebec.
    A recent study by Brian Palm, a Dartmouth College alum and post-
graduate student at Oxford University, of the past 19 years of weather 
data for Vermont and New Hampshire showed an average of 700,000 fewer 
ski visits in the years with the worst snow conditions.
    Vermont and New Hampshire have the most ski-dependent economies in 
New England. Together, the two states receive approximately 6 million 
ski visits annually. Skiers generate some of the highest per capita 
spending of any tourists. In New Hampshire the industry generated $566 
million in visitor spending in 2000. This spending is critical to the 
state government's budget, and in 2000 it accounted for nearly $58 
million in tax revenue. The skiing industry also creates more than 10 
percent of the winter jobs in New Hampshire.
    Capital investment in the region's ski industry is highly 
significant and would be at risk from shorter winters and a warmer, 
less snowy climate. Recent single-season improvements at Sugarbush (VT) 
and Sunapee (NH) cost $28 million and $11 million respectively. Resort 
operators have increasingly had to make costly improvements to 
snowmaking technology to smooth out inconsistent winters. Vermont and 
ski areas increased the area covered by snowmaking by 15 percent in the 
last 12 years and resorts in New Hampshire spent $24.2 million to 
increase acres covered by snowmaking by 18 percent during the last 
decade. At Attitash in New Hampshire, snowmaking costs about $750,000 
per year and accounts for approximately 20 percent of total operating 
costs.
    In 2001, the November temperature for the Northeast averaged 43.6 
+F, some 5.3 +F higher than the 107-year average. This was the third 
warmest November on record. In 2001, Killington Ski Resort, the largest 
area in the east, recorded its latest opening date in more than 15 
years.
    Downhill skiing is not the only winter recreation to be affected. 
This year, some cross-country skiing trails have been devoid of snow, 
and ice-skating and snowshoeing opportunities have been unusually few 
and far between. Ice fishing has been sparse or non-existent in 
southern New England and many snowmobiling trails have been closed for 
much of the season.
                           forest ecosystems
    Climate models predict that in the longer term global warming will 
eventually transform the conifer forest of northern New England into 
the type of forest now found farther south--either the deciduous forest 
of the Mid-Atlantic States, or the mixed forests characteristic of 
southern New England.
    The conditions that currently support northern hardwood forests 
will shift up to 300 miles north during the next 100 years, causing the 
loss of these forests over much of the landscape. The distributions of 
white spruce, black spruce, red spruce, balsam fir and other species of 
cool climates will move north and these trees are likely to disappear 
from most of their current ranges in the Northeastern United States. If 
disturbances such as fire or storms increase as has been predicted by 
some scientists, this would hasten the decline and facilitate the 
northward spread of southern species like oak and hickory.
    More than 300,000 people in New England and New York are employed 
in the forestry and forest products sector. Milder winters will likely 
increase the vulnerability of commercial forests to insect pests 
including eastern spruce budworm, gypsy moth and pear thrips. Any 
economic losses are likely to disproportionately affect smaller, non-
industrial private landowners. More than 250,000 private forest 
landowners are likely to be affected in New England alone.
    Global warming will tend to favor opportunistic, fast-moving and 
adaptable species. It is likely to prove to be a boon for many pests 
and invasive species that threaten regional biodiversity. Purple 
loosestrife, garlic mustard, Tartarian honeysuckle and Morrow 
honeysuckle are some of the troublesome non-native species that are 
predicted to benefit as others decline or disappear.
    Higher summer temperatures and increased pollution from road 
traffic will likely contribute to greater ground-level ozone formation 
with the effect of reducing forest productivity and harming commercial 
tree species like red spruce and white pine. Ozone impacts are expected 
to be worst in southern New York and central and southern New England.
    Changing temperature and precipitation patterns could harm the 
multi-million dollar fall foliage industry by muting autumn colors. 
Without sugar maple the autumn experience in New England would be very 
different. Fall-foliage tourism accounts for 20-25 percent of total 
annual tourism in Vermont and Maine. NERA estimated that a 50 percent 
drop in fall foliage tourism could result in approximately 20,000 job 
losses.
    Climate change is a significant threat to the forest and alpine 
ecosystems of the most important public lands in the region, including 
Acadia National Park, the Allagash Wilderness Waterway, Baxter State 
Park, the White Mountains National Forest, and the Mount Washington 
State Park.
                            wildlife impacts
    For some animals and plants, climate effects could prove to be 
disastrous. Many species characteristic of the northern forest will be 
forced to find new habitat as climate changes. Species already living 
at the southern edges of their ranges--like martens, fishers and 
snowshoe hares--will be among the most affected. Bird species that live 
in northern spruce and spruce/fir forests, including the gray jay, 
boreal chickadee, spruce grouse and the threatened Bicknell's thrush, 
are particularly vulnerable to diminished habitat in New England.
    A modeling study published by The World Wildlife Fund and Clean 
Air-Cool Planet in 2000, shows the habitats of the Northern Forest of 
New England and upstate New York to be especially vulnerable to climate 
change. According to this study up to 44 percent of Maine's, and 35 
percent of New Hampshire's, existing terrestrial habitats are likely to 
be transformed into other ecosystem types under the most credible 
climate scenarios. In the most heavily impacted areas, the rates at 
which plant and animal species may be required to shift their ranges in 
response to global warming in the next 100 years may be as much as ten 
times faster than at the end of the last ice age.
    According to a recent report by the American Bird Conservancy and 
the National Wildlife Federation, a great many species of birds will be 
affected by climate change. Birding has become a major recreational 
activity in recent decades, with far-reaching economic consequences. In 
New England alone, in 1996, people spent more than $ 1.8 billion 
feeding and watching birds and other wildlife.
    Several species of wood warbler are expected to extend their ranges 
northwards, perhaps by hundreds of miles, while disappearing at the 
southern edges of their current ranges. Five species, including the 
bay-breasted warbler and Cape May warbler are predicted to disappear 
from New England entirely. These birds help to keep spruce budworm 
outbreaks in check by consuming millions of larvae during the breeding 
season. If they are pushed northwards many forests could become much 
more vulnerable to insect pests. A study of 35 North American warbler 
species showed that 20 percent of them have already shifted their 
ranges an average of 65 miles northwards during the last 25 years.
                             public health
    The White Mountains are within a day's drive of 77 million people 
and receive more visitors (7-8 million) every year than Yellowstone and 
Yosemite national parks combined. Recreational visitors in some of 
these areas may suffer increased health risks as a result of global 
warming. Sixty thousand hikers a year visit Mount Washington and the 
major peaks for the White Mountains. On hot summer days there are often 
high levels of ground-level ozone, particulates and acid aerosols. All 
of these pose a threat to hikers. According to NERA, there is a 
striking correlation between hot days (warmer than 90 F, sunny skies 
and high levels of ozone pollution. Because long-distance transport of 
air pollutants appears to occur at the boundary between the mixing 
layer and the stable layer of the troposphere, at around 3,200 feet, 
hiking at these elevations or higher may expose hikers to damaging 
concentrations of dangerous air pollutants not experienced lower low 
down. According to a study by Harvard Medical School, the Harvard 
School of Public Health and the Appalachian Mountain Club, prolonged 
exposure to levels of ozone often encountered on trails in the White 
Mountains can reduce lung function and is especially damaging to people 
with a history of asthma or other respiratory problems.
    Also a risk for people outdoors, even on the golf course or in 
their backyards is Lyme disease, which is already on the increase in 
New York and parts of New England. If undetected, the disease can lead 
to permanent neurological disability. Because it is passed along to 
humans by ticks, Lyme disease poses a special threat to people who 
enjoy outdoor pursuits like hiking, birding and fishing. Swedish 
research on ticks suggests that warmer winters could increase the 
incidence of the disease and push its potential range further into 
northern New England.
    Heat waves kill more people in the United States than hurricanes, 
flooding or tornadoes. Dr. Laurence Kalkstein, Associate Director of 
the Center for Climatic Research at the University of Delaware has 
suggested that heat-related deaths in the summertime could double under 
likely U.S. global warming scenarios. Northern cities are especially 
vulnerable to heat waves because people are not used to, or acclimated 
to, high temperatures and humidity. Also building design in the north 
is more oriented toward keeping heat in during the winter than letting 
it out during the summer. The elderly and low-income households in 
urban areas are at highest risk.
                    coastal communities & fisheries
    The costs of climate impacts in the coastal zone may be 
particularly large. Sea levels are currently rising at about a foot per 
century. This rate is increasing and New England coastal communities 
will likely have to deal with sea level rise of around two feet this 
century. The State of New Hampshire has calculated that this will 
massively increase the area of the Seacoast vulnerable to flooding and 
could turn 100-year storms into 10-year storms. According to the U.S. 
Environmental Protection Agency (EPA) a two-foot sea level rise would 
inundate about 10,000 square miles of coastline. Costly beach 
nourishment and shoreline armoring is already transforming the coast of 
New England. A three-foot sea level rise would result in half of our 
natural wetlands and beaches being lost and replaced with armored 
shores. Coastal development is rapidly closing off the option of 
natural retreat for many wetlands.
    Coastal marine ecosystems and fisheries are also at risk. Warmer 
temperatures are expected to increase the incidence of toxic algal 
blooms and help the spread of warm water diseases of shellfish such as 
oysters. Winter seawater temperature in Narragansett Bay have already 
warmed by more than 5 F since 1960 and winter flounder populations 
have been in decline for 25 years. The flounders migrate inshore in the 
late fall and spawn in early spring. Winter flounders are adapted for 
low water temperatures in which most fish can't survive and warm 
winters are hypothesized to be harming populations through reduced 
hatching rates and increased predation on larvae.
                solutions & leadership in the northeast
    The Northeast States have long been leaders in reducing air 
pollution. The region also is now beginning to lead the way in 
responding to global warming.
     In 2000, New York was the first state to enact a law 
promoting environmentally friendly and energy efficient building 
practices through tax incentives
     In 2001, Massachusetts Governor Jane Swift signed a new 
multi-pollutant regulation making the state the first to control 
CO2 emissions from existing power stations.
     New Hampshire was the first state to create a voluntary 
registry for greenhouse gas emissions and a bi-partisan 4-pollutant 
bill was recently passed in the House.
     The Connecticut Clean Energy Fund is at the forefront of 
efforts to support the development of commercial fuel cell 
technologies.
     Efficiency Vermont is the Nation's first public utility 
dedicated solely to achieving energy efficiency improvements.
    In August 2001, the New England Governors and Eastern Canadian 
Premiers signed a Climate Change Action Plan with the long-term goal of 
reducing greenhouse gases by 75-85 percent from current levels. The 
Governors and Premiers concluded that global warming's ``multiple 
impacts will have substantial consequences for the cost and quality of 
life of the region's citizens''. They noted that U.S. national 
CO2 emissions have been growing more than 1 percent a year 
and stated ``Given these increases in the face of doing nothing, this 
plan seeks to reverse the trend.''
    Northeast leadership is not restricted to the states, however. 
Thirty-five cities and counties in the region have joined the Cities 
for Climate Protection Program of the International Council for Local 
Environmental Initiatives. These municipalities have all passed 
resolutions pledging to reduce greenhouse gas emissions and implement 
local climate action plans. For example, Burlington Vermont has adopted 
an ambitious plan--the ``10 percent Challenge''--to reduce the city's 
greenhouse gas emissions by 10 percent from 1990 levels by 2005.
    Colleges and universities throughout the region are doing their 
part too. Tufts University has pledged to meet or beat the Kyoto 
Target. Clean Air-Cool Planet has worked with the University of New 
Hampshire to produce the most detailed greenhouse gas emissions 
inventory carried out for any college in the country--the precursor to 
a campus-wide climate plan. Similar projects are underway with the 
University of Vermont and Bates College in Maine. Students at 
Connecticut College have voted with their pocketbooks and signed the 
campus up for green electricity.
    Many businesses in the Northeast are showing the way for the 
corporate sector. IBM (NY) and Johnson and Johnson (NJ) were the first 
to set ambitious greenhouse gas reduction targets as members of the 
Climate Savers program of World Wildlife Fund and the Center for Energy 
and Climate Solutions. Pitney Bowes (CT) is a leader in developing 
corporate markets for green power and Timberland (NH) has partnered 
with Clean Air-Cool Planet and Vermont-based NativeEnergy to invest in 
new wind energy and permanently retire the CO2 credits from 
tradable renewable energy certificates (T-RECS). Other companies are 
convincingly demonstrating that common sense investments in energy 
saving can pay off handsomely.
    For example, Massachusetts-based Shaw's Supermarkets has 185 stores 
and employs nearly 30,000 people in New England. In 2000, Shaw's 
realized $3.7 million from energy savings alone. Typically, a 
supermarket would have to sell $150 million worth of groceries to make 
that much money.
    New York-based Verizon is another important leader in energy 
conservation. Its efforts are now producing $20 million a year in net 
savings. Verizon's projects range from encouraging employees to turn 
off personal computers when not in use (saving approximately $50 in 
energy costs for each PC each year), and removing more than 200,000 
unnecessary lights, to carrying out energy audits in more than 500 
buildings and developing fuel cell systems.
           need for federal action to control co2
    These stories are just the tip of the iceberg. All over New England 
and the Northeast, individuals, institutions and corporations are 
inventing, exploring and implementing innovative solutions to climate 
change. But this is not enough. John Donne famously said ``no man is an 
island; entire of itself. Every man is a piece of the continent, a part 
of the main''. No individual, no city, no State and not even a region 
as big as a middle-sized nation, as the Northeast is, can solve the 
problem of climate change on its own. As everyone knows by now, the 
United States is the world's largest single emitter of greenhouse 
gases. Without action by the United States we cannot hope to stabilize 
the world's climate. Without national legislation, regional efforts 
such as those in the Northeast will founder and ultimately fail.
    A strong national response to climate change and a modern energy 
policy are both crucial if we are to continue to grow our economy, 
strengthen the country's energy security and act as responsible 
stewards of our environment.
    Energy efficiency and alternative fuels are the real routes to 
energy security, not drilling in pristine wilderness areas. If we are 
serious about reducing our reliance on foreign oil and about competing 
in world markets we must produce more efficient automobiles. If we want 
energy security and more jobs we should aim to be producing 20 percent 
of our electricity for renewable resources--wind, solar, biomass and 
geothermal--by the year 2020.
    Federal controls on CO2 are essential and urgently 
needed. By dealing with all four pollutants at once and promoting 
energy conservation the Clean Power Act can save us tens of millions of 
dollars in comparison to three pollutant strategies that focus only on 
end of pipe solutions and ignore carbon dioxide. Local and regional 
leadership such as is commonplace in the Northeast is important and 
groundbreaking. But, there can be no substitute for coordinated 
national action, and eventually, economy-wide controls on 
CO2.
    Despite the fact that there is considerable uncertainty about the 
precise costs of impacts of climate change on New England, there is 
very little doubt that it will have a transformative effect on many of 
the attributes that make the region unique. The loss of sugar maples, 
changes in the northern forest, warmer winters, more frequent heat-
waves and destruction of coastal wetlands will radically diminish the 
New England experience and may ultimately deliver a body blow to 
elements of the region's economy.
    Thank you for inviting me to testify before you today. I would be 
happy to try to answer any questions you may have.
                                 ______
                                 
Responses by Adam Markham to Additional Questions from Senator Jeffords
    Question 1. Your testimony illustrated well the potential 
environmental and economic impacts facing New England in a warmer 
climate, and you also enlightened us about current pro-active business 
projects aimed at lowering greenhouse gas emissions. In your 
experience, what reasons have these companies given to explain their 
motivation for early action on energy conservation and climate change 
mitigation?
    Response. In my experience, the prime motivation has been a 
recognition that by seeking to reduce wasteful energy use, a company 
can invariably save significant amounts of money. Bottom-line benefits 
translate to increased shareholder value and confidence and often to 
increased competitiveness in the market. Other reasons we often hear 
include:
     Wanting to be seen as an environmentally responsible
     Certain actions, such as increased day-lighting in 
buildings help with worker productivity and employee retention
     Increasing business efficiency
     Recognition that customers want to buy from 
environmentally responsible companies
     Getting ahead of potential future legislation
     Taking advantage of available new technologies

    Question 2. The findings of the New England Regional Assessment are 
very disturbing. The assessment describes a significantly changed 
regional environment. What do people in New England think about it?
    Response. It is difficult to answer this question with more than 
anecdotal information as I know of no recent New England specific 
public opinion work on this topic. But on the evidence of newspaper 
articles, letters to the editor and many conversations with people in a 
variety of sectors, as well as national opinion polls and focus groups, 
I would say that people are generally convinced that global warming is 
happening, that it is a serious problem and that we ought to do 
something about it, sooner rather than later. In New England, there is 
growing concern about shorter winters and the potential for increased 
drought and worse snow and ice conditions. In southern New Hampshire, 
where I live, at least, it is a common topic of conversation that 
winters are warmer than they used to be and that summers appear hotter 
and drier, with worse air pollution. People are particularly worried 
about the threat to coasts, forests and public health. New Englanders 
appear to feel that there is a lack of commitment to solving this 
problem in Washington, and in common with people in many parts of the 
country they lay much of the blame on the oil and auto industries.

    Question 3. Has this year's unusual weather and the drought in the 
Northeast encouraged people to pay closer attention to climate change 
issues?
    Response. I don't think there can be any doubt that the current 
drought and a series of unusual and extreme weather events over the 
last few years have made many people think much more seriously about 
the potential consequences of climate change. Of course, no single 
weather event can be attributed to global warming, but people see a 
pattern of change that is beginning to concern them.

    Question 4. As you and all the other witnesses indicated, it is not 
safe to continue increasing greenhouse gas emissions without limit. 
What needs to be done to assure that we can avert the point of no 
return or ``dangerous levels'' of greenhouse gas concentrations?
    Response. I believe that we need to take immediate action to reduce 
greenhouse gas emissions. The current Senate 4-pollutant bill would be 
a very important step forward if passed into law. Strengthened CAFE 
standards are also an essential element of a strategy to prevent 
dangerous levels. We will eventually also need economy-wide measures to 
reduce greenhouse gases. In the near future we need to see renewable 
portfolio standards and strong appliance efficiency standards as well 
as increased incentives for the development and marketing of renewable 
energy technologies and building energy efficiency.

    Question 5. What do you think is the greatest risk, in the next 30-
50 years, of continuing to increase human-made greenhouse gas 
emissions? And, what is the most feasible way to reduce or eliminate 
that risk?
    Response. The greatest risk is that we fail to act urgently and 
responsibly to begin reducing greenhouse gas emissions. Failure to act 
will lock us into accelerating sea-level rise causing massive economic 
losses in the coastal zone and increased loss of habitat and species 
extinction. The most feasible way to reduce the risk is to regulate 
CO2 first from power stations and then economy-wide, while 
at the same time giving incentives for energy efficiency and the 
development and use of renewable technologies and alternate sources of 
energy.
                                 ______
                                 
  Responses by Adam Markham to Additional Questions from Senator Smith
    Question 1. Dr. Rowland testified that ``during the 20th Century, 
the atmospheric concentrations of a number of greenhouse gasses have 
increased, mostly because of the actions of mankind.'' Do you agree 
with that statement? Why or why not?
    Response. I do agree with that statement, based on the conclusions 
of the Third Assessment Report of the Intergovernmental Panel on 
Climate Change and the recent review by the National Academy of 
Sciences.

    Question 2. Dr. Pielke testified that ``the primary cause for . . . 
growth in impact[] is the increasing vulnerability of human and 
environmental systems to climate variability and change, not changes in 
climate, per se.'' Do you agree with this claim? Why or why not?
    Response. While it is true that human and environmental systems are 
increasingly vulnerable to climate change and variability, I do not 
believe that this is the primary cause of growth in impacts (except 
perhaps in the particular case of fast developing coastal areas). For 
example, worldwide glacier recession, melting permafrost and 
unprecedented bark beetle infestation in Alaska, earlier Northern 
hemisphere spring and changes in species distribution are entirely 
independent of human vulnerability.

    Question 3. Dr. Pielke also stated that ``the present research 
agenda is focused . . . improperly on prediction of the distant climate 
future'' and that ``instead of arguing about global warming, yes or no 
. . . we might be better served by addressing things like the present 
drought. . . .'' Do you agree with that proposition? Why or why not?
    Response. In general I do not agree with this statement. However, 
it is certainly true that we need to increase and expand our research 
efforts to understand the impacts of climate change. Improving the 
ability of computer models to simulate future potential climate 
scenarios is an essential part of this effort. I do agree that we are 
not well served arguing ``yes or no'' about global warming. There is 
clear scientific consensus that we are already experiencing human 
induced global warming.

    Question 4. Do you believe we should fully implement the Kyoto 
Protocol? Do you agree with the assertion that full implementation of 
the Kyoto Protocol would only avert the expected temperature change by 
6/100 of a degree, Celsius? Why or why not?
    Response. Yes, I believe we should fully implement the Kyoto 
Protocol. As far as I know the 6/100 of a degree figure is not within 
the generally accepted range of impacts of the Kyoto Protocol, but I 
have not specifically reviewed the paper in question. Nevertheless, it 
is generally accepted that the Kyoto Protocol targets are merely first 
steps toward reaching the levels of atmospheric greenhouse gas 
concentrations that we need to stabilize at. The Kyoto Protocol 
contains review mechanisms to allow policymakers to react to new 
scientific findings.

    Question 5. In the hearing there has been much press attention paid 
to the breakup of the Antarctic Ice Sheet, especially a 500-billion ton 
iceberg known as ``Larsen B,'' that has been attributed to climate 
change. What scientific evidence is there that climate change is the 
sole cause of this phenomenon? Is there any scientific evidence that 
anthropogenic influences bore any role in the breakup of Larsen B?
    Response. I have no expert knowledge on this question.

    Question 6. Included in the hearing record as part of my opening 
statement was a Swiss Re report titled ``Climate research does not 
remove the uncertainty; Coping with the risks of climate change'' (copy 
attached). Please explain why you agree or disagree with the following 
assertions or conclusions from that report:
    Response. ``There is not one problem but two: natural climate 
variability and the influence of human activity on the climate 
system.''
    This statement is undoubtedly true and it is highly significant 
that the insurance industry has recognized the addition of the new 
threat of human-induced climate change.
    ``. . . it is essential that new or at least wider-ranging concepts 
of protection are developed. These must take into account the fact that 
the maximum strength and frequency of extreme weather conditions at a 
given location cannot be predicted.''
    I agree that under natural climate variability and in the case of 
increased vulnerability due to global warming, it is not possible to 
accurately predict the worst case scenario for any individual weather 
event in a particular place. We can, however, prepare for the 
likelihood of hanges infrequency and intensity of extreme events in 
general and should expect to have to deal with worse impacts in the 
future. Risk minimization can no longer be assessed in the expectation 
of a continuing stable climate.
    ``Swiss Reconsiders it very dangerous (1) to put the case for a 
collapse of the climate system, as this will stir up fears which--if 
they are not confirmed--will in time turn to carefree relief, and (2) 
to play down the climate problem for reasons of short-term expediency, 
since the demand for sustainable development requires that today's 
generations take responsible measures to counter a threat of this 
kind.''
    I agree that we should not over-emphasize worst case scenarios and 
I agree strongly that short-term expediency should not lead anyone to 
ignore or play down the potential impacts of climate change. We should 
provide the best possible information to the public and policymakers 
about the full range of potential scenarios and impacts.

    Question 7. Do you believe that our vulnerability to extreme 
weather conditions is increasing? Why or why not?
    Response. Vulnerability to extreme weather seems to be increasing. 
This is likely because of changes in demographic patterns and, 
particularly, increased development pressures in sensitive ecosystems 
and coastal areas.
                                 ______
                                 
    Responses by Adam Markham to Additional Questions from Senator 
                               Voinovich
    Question 1a. Advocates of the Kyoto Protocol expect aggressive 
reductions in emissions beyond 2012. Some advocate a global 
CO2 concentration target of 550 ppm CO2 by 2100 
which will require substantial reductions in the emissions of developed 
countries (including the United States). If a concentration target of 
550 ppm by 2100 is adopted, what is your estimate of the caps on 
emissions for the United States by 2050? By 2100?
    Response. If such a target was adopted (as I believe it should be 
in order to safeguard U.S. ecosystems, communities and economic well-
being) these caps would be the subject of negotiations among the 
ratifying parties to the Kyoto Protocol. The United States has given 
notice of its intent not to participate in such negotiations, nor abide 
by their results.

    Question 1b. Are you aware of any economic analysis of the impact 
of these reductions beyond the initial Kyoto target? If so, can you 
provide this analysis.
    Response. I am not personally aware of any recent economic analysis 
of this sort.

    Question 2. Do your projections of impacts on New England depend on 
foreign models?
    Response. Some of the research results outlined in my testimony are 
based on foreign models, others are not. The New England Regional 
Assessment was carried out under the auspices of the U.S. Global Change 
Research Program and at the time of it's initiation, the best available 
models were Canadian and British. If carried out today, the best 
available models would certainly include the newest U.S. versions. 
Other studies dealing with Impacts of climate change on sugar maple 
forests, sea level rise and ecosystems outlined in the report use both 
foreign and U.S. models but rely mainly on U.S. developed climate 
models.

    Question 3. Do your projections of impacts depend on using models 
to project regional and local climate change?
    Response. Most projections of potential climate impacts rely on 
model scenarios. The computer models provide the best available tools 
for creating plausible future climate scenarios in order to undertake 
risk and sensitivity analyses. Model scenarios do not provide 
predictions of future climate, only potential scenarios, based on best 
current knowledge and analytical capability.

    Question 4. What happens if the climate effects are lower than the 
lowest scenario in the NERA study?
    Response. Presumably there would be a different set of impacts from 
those analysed in NERA, just as there would be if the climate effects 
were higher than the highest scenario. NERA assessed a middle range of 
scenarios, not the highest or lowest.

    Question 5. Please provide your most recent filings of Form 990's.
    Response. Provided separately by fax. (Copy retained in the 
committee's file.)
                                 ______
                                 
    Response by Adam Markham to an Additional Question from Senator 
                                Campbell
    Question. You have given us multiple examples of the impacts of 
climate change in New England and I am sure many of these would apply 
to the rest of the country as well. My question to you is this: if we 
don't know whether human activity is a direct cause of the global 
change in climate, how can we make any determination that a change in 
the energy policy of the United States could effectively prevent it 
from continuing? Let's assume that we can't. Wouldn't it also be of 
great value for us to find ways to reduce our vulnerability to climate 
change?
    Response. Current scientific consensus is that emissions released 
to the atmosphere as a result of human activities are increasing 
atmospheric concentrations of greenhouse gases and that this is the 
most likely cause of observed global warming during the last century. 
The primary source of anthropogenic greenhouse gases is the burning of 
fossil fuels so it stands to reason that changes in energy policy would 
impact global warming.
    I believe we should attempt to both reduce the source of the 
problem and reduce our vulnerability to its impacts.
                               __________
 Statement of Dr. Sallie Baliunas, Astrophysicist, Harvard-Smithsonian 
                        Center for Astrophysics
    Fossil fuels currently provide around 84 percent of energy consumed 
in the United States, and roughly 80 percent of the energy produced 
worldwide. Those energy resources are key to improving the human 
condition and the environment.
    Human use of fossil fuels has increased the amount of greenhouse 
gases, in particular, carbon dioxide, in the atmosphere. Carbon dioxide 
is essential to life on Earth. Moreover, the greenhouse effect is 
important to life on Earth in that the greenhouse gases help retain 
energy near the surface that would otherwise escape to space. Based on 
ideas about how climate works, the small additional energy resulting 
from the air's increased carbon dioxide content should warm the planet.
    Projections of future energy use, applied to the scientifically 
most sophisticated computer simulations of climate, have yielded wide-
ranging forecasts of future temperature increases from a continued 
increase of carbon dioxide concentration in the air. These have been 
compiled by the United Nations' Intergovernmental Panel on Climate 
Change (IPCC). The middle range forecast of their estimates of future 
warming, based on expected growth in fossil fuel use without any curbs, 
is for a 1 degree Celsius increase between now and 2050. A simulation 
counting in the effect of the as yet unimplemented Kyoto Protocol, 
negotiated in 1997 and calling for a worldwide 5 percent cut in carbon 
dioxide emissions from 1990 levels, would reduce that increase to 
0.94C--an insignificant 0.06C cut (Figure 1). That means if increased 
atmospheric concentrations of carbon dioxide are a major problem, then 
much steeper cuts than those outlined in the Kyoto Protocol are 
warranted.
    One key scientific question is: What has been the response of the 
climate thus far to the small amount of energy added by humans from 
increased greenhouse gases in the air? To prove the reliability of 
their future forecasts, computer simulations need verification by 
testing past, well-documented temperature fluctuations. New Federal 
investment in technology, especially that of space-based 
instrumentation, has helped address the issue of observed response of 
the climate to the air's increased greenhouse gas concentration. Two 
capitol tests of the reliability of the computer simulations are the 
past decades of surface temperature and lower troposphere change.
                     record of surface temperature
    In the 20th century the global average surface temperature (Figure 
2) rose about 0.5C, after a 500-year cool period called the Little Ice 
Age. The uncharacteristic cold had followed a widespread warm interval, 
called the Medieval Warm Period (ca. 800--1200 C.E.). The 20th century 
warming trend may have a human component attributable to fossil fuel 
use, which increased sharply in the 20th century. But a closer look at 
the 20th century temperature shows three distinct trends:
    First, a strong warming trend of about 0.5C began in the late 19th 
century and peaked around 1940. Next, the temperature decreased from 
1940 until the late 1970's. Recently, a third trend has emerged--a 
modest warming from the late 1970's to the present.
    Because about 80 percent of the carbon dioxide from human 
activities was added to the air after 1940, the early 20th century 
warming trend had to be largely natural. Human effects from increased 
concentrations of greenhouse gases amount to at most 0.1C per decade--
the maximum amount of the surface warming trend seen since the late 
1970's. This surface warming would suggest a temperature trend of about 
1C per century, which is less than that predicted by the computer 
simulations of the air's increased human-made greenhouse gas content. 
Accumulated over a century, civilization will readily adapt to such a 
modest warming trend. However, the recent trend in surface warming may 
not be primarily attributable to human-made greenhouse gases.
                record of lower troposphere temperature
    Computer simulations of climate in which the air's greenhouse gas 
concentrations increase owing to human activities predict detectable 
warming not only near the surface but also in the layer of air above 
the surface, the lower troposphere, which rises in altitude from 
roughly two to eight kilometers. Records from NASA's Microwave Sounder 
Units aboard satellites extend back 21 years and cover most of the 
globe (Figure 3). The satellite-derived record is validated 
independently by measurements from NOAA balloon radiosonde instruments, 
and those records extend back over 40 years (Figure 4). Those records 
show that the temperature of the lower troposphere does vary, e.g., the 
strong El Nino warming pulse of 1997-98 is obvious. However, no 
meaningful human warming trend, as forecast by the computer 
simulations, can be found.
    The radiosonde record from balloons confirms the results of the 
satellites. Although the radiosonde record lacks the dense spatial 
coverage from satellites, the radiosonde record extends back to 1957, a 
period that includes the recent rapid rise in the air's carbon dioxide 
concentration. The balloon record shows no warming trend in global 
average temperature prior to the dramatic shift in 1976-77. That 
warming, known as the Great Pacific Climate Shift of 1976--1977, is not 
attributable to human causes but is a natural, shift in the Pacific 
that occurs every 20 to 30 years, and can affect global average 
temperatures.
    When compared to the observed response of the climate system, the 
computer simulations all have forecast warming trends much steeper over 
the last several decades than measured. The forecasts exaggerate to 
some degree the warming at the surface, and profoundly in the lower 
troposphere.
    The complexity of the computer simulations of climate is one reason 
the forecasts are unreliable.\1\ The simulations must track over 5 
million parameters. To simulate climate change for a period of several 
decades is a computational task that requires 
10,000,000,000,000,000,000 degrees of freedom. To improve the 
forecasts, much better information is required, including accurate 
understanding of the two major, natural greenhouse gas effects--water 
vapor and clouds.
---------------------------------------------------------------------------
    \1\ W. Soon, S. Baliunas, S.B. Idso, K. Ya. Kondratyev and E.S. 
Posmentier, 2001, ``Modeling climatec effects of anthropogenic carbon 
dioxide emissions: unknowns and uncertainties,'' Climate Research, 
18:259-275. See attached.
---------------------------------------------------------------------------
            natural climate variability: the sun's influence
    Given the lack of an observed warming trend in the lower 
troposphere, the result is that most of the surface warming in recent 
decades cannot owe to a human-caused enhanced greenhouse effect. What 
might cause the surface warming, especially in the early 20th century 
when greenhouse gases from human activities had not significantly 
increased in concentration in the atmosphere? The 20th century 
temperature pattern shows a strong correlation to energy output of the 
sun (Figure 5). Although the causes of the changing sun's particle, 
magnetic and energy outputs are uncertain, as are the responses of the 
climate to the Sun's various changes, the correlation is pronounced. It 
explains especially well the early 20th century warming trend, which 
cannot have much human contribution.
    Based on the key temperature measurements of the last several 
decades, the actual response of the climate to the increased 
concentration of carbon dioxide and other human-made greenhouse gases 
content in the air has shown no significant man-made global warming 
trend. The magnitude of expected human change is especially constrained 
by the observed temperature trends of the lower troposphere.
    This means that the human global warming effect, if present, is 
small and slow to develop. That creates a window of time and 
opportunity to continue and improve observations and computer 
simulations of climate to better define the magnitude of human-made 
warming. Proposals like the Kyoto agreement to sharply cut greenhouse 
gas emissions are estimated in most economic studies to have enormous 
economic, social and environmental costs. The cost estimates for the 
United States alone amount to $100 billion to $400 billion per year. 
Those costs would fall disproportionately on America's and the world's 
elderly and poor.
                            figure captions
    Figure 1--Forecast of year-to-year temperature rise from years 2000 
to 2050 C.E. (thin line) assuming an increase in the air's greenhouse 
gas concentration from human activities, based on the Hadley Center's 
model (UKMO HADCM3 IS92A version). The upper line (labeled ``Without 
Kyoto'') is the linear trend fit to the model's forecast temperature 
rise, without implementation of the Kyoto Protocol. The lower line is 
the estimate of the impact on temperature with the implementation of 
the Kyoto Protocol. By the year 2050, around 0.06C global warming is 
averted by the implementation of the Kyoto Protocol.
    Figure 2--Surface temperature changes sampled worldwide and 
analyzed by Cambridge Research Unit (CRU) and NASA-Goddard Institute of 
Space Studies (GISS). The pattern of 20th century temperature change 
has three distinct phases: an early 20th-century warming, a mid-century 
cooling, and a late 20th-century warming.
    Figure 3--Monthly averaged temperatures sampled nearly globally for 
the lower troposophere (roughly 5,000 to 28,000 feet altitude) from 
Microwave Sounder Unit (MSU) instruments onboard NASA satellites. The 
large spike of warmth resulted from the temporary natural warming of 
the Pacific Ocean by the 1997--1998 El Nino event. The linear trend is 
+0.04C per decade (data are from http://wwwghcc.msfc.nasa.gov/
temperature/)
    Figure 4--The seasonal average temperature anomaly sampled 
worldwide for the lower troposphere as measured by radiosonde 
instruments carried aboard balloons. Although a linear trend of +0.09C 
per decade is present if fitted across the entire period of the record, 
that trend is affected by the presence of the abrupt warming that 
occurred in 1976-1977, owing to the action of the Pacific Decadal 
Oscillation (PDO). The trends before and after the 1976-1977 Great 
Pacific Climate Shift indicate no evidence of a significant human-made 
warming trend (source of data http://cdiac.esd.ornl.gov/ftp/trends/
temp/angell/glob.dat)
    Figure 5--Changes in the sun's magnetism (as evidenced by the 
changing length of the 22-year, or Hale Polarity Cycle, dotted line) 
and changes in Northern Hemisphere land temperature (solid line) are 
closely correlated. The sun's shorter magnetic cycles are more intense, 
suggesting periods of a brighter sun, then a fainter sun during longer 
cycles. Lags or leads between the two curves that are shorter than 20 
years are not significant, owing to the 22-year timeframe of the proxy 
for brightness change. The record of reconstructed Northern Hemisphere 
land temperature substitutes for global temperature, which is 
unavailable back to 1700 (S. Baliunas and W. Soon, 1995, Astrophysical 
Journal, 450, 896).
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 Responses by Dr. Sallie Baliunas to Additional Questions from Senator 
                                Jeffords
    Question 1. You indicated that a ``Kyoto-type cut would avert the 
temperature rise by the year 2050 by only .06 degrees Centrigrade.'' 
Using the same assumptions that brought you to that conclusion, how 
much warming would occur by 2050, if U.S. emissions continue to grow at 
the current annual rate (2 percent) until then?
    Response. By 2050 one published model (M. Parry et al., 1998, 
Nature, 395, 741) forecasts a temperature rise of approximately 1.4C 
with continued U.S. emissions growing at the current rate, and no 
emission cuts by developing nations.

    Question 2.  How much warming would be avoided by a ``Kyoto-cut'' 
in the year 2100, assuming U.S. participation in the Kyoto timeframe?
    Response. By the year 2100 the model cited above should forecast 
approximately 0.1C of warming averted if the United States implemented 
a Kyoto-type cut according to the current Kyoto Protocol timeframe.

    Question 3.  Balloon radiosonde records confirm satellite results, 
according to your testimony. However, the radiosonde record extends 
back only to 1957. Why does it make sense to use these records to 
determine the absence of a significant warming trend, when competing 
and reliable temperature recordings date back to the pre-industrial 
era--before humankind began emitting large quantities of greenhouse 
gases?
    Response. No reliable globally averaged surface temperature records 
date back to the preindustrial period. The present surface temperature 
record gotten from thermometers that sample locations worldwide reaches 
back to the mid-19th century. Some of the thermometer readings are 
prone to warming from local urbanization. That uncertainty, plus the 
sparse coverage of the surface readings--only about 20 percent of the 
surface of the Earth, with especially poor coverage of the Southern 
Hemisphere oceans are sampled in the thermometer record, introduce 
uncertainty not easily quantified in the surface record. In contrast, 
the satellite records cover more than 80 percent of the globe, and are 
validated by the independent records from balloon radiosonde 
instruments. For a technical discussion, see W. Soon et al., 1999, 
Climate Research, 13, 149.

    Question 4.  As you and all the other witnesses indicated, it is 
not safe to continue increasing greenhouse gas emissions without limit. 
What needs to be done to assure that we can avert the point of not 
return or ``dangerous levels'' of greenhouse gas concentrations?
    Response. As a rhetorical question, the statement is 
philosophically true. However, it is not possible for science to give a 
reliable, quantitative assessment of ``dangerous'' in that context.

    Question 5. What do you think is the greatest risk, in the next 30-
50 years, of continuing to increase human-made greenhouse gas 
emissions? And, what is the most feasible way to reduce or eliminate 
that risk?
    Response. According to the key measurements of the lower 
troposphere, there is little risk of catastrophic global warming risk 
in the next 30 to 50 years from the expected profile of the atmospheric 
increase in human-made greenhouse gas emissions. To reduce the 
uncertainty, an enhanced, targeted program of decisive climate 
research--both measurements and theory--should be implemented and 
supported for a decade or longer period.
                                 ______
                                 
 Responses by Dr. Sallie Baliunas to Additional Questions from Senator 
                                 Smith
    Question 1. Dr. Rowland testified that ``during the 20th century, 
the atmospheric concentrations of a number of greenhouse gases have 
increased, mostly because of the actions of mankind.'' Do you agree 
with that statement? Why or why not?
    Response. I agree that during the 20th century the air's content of 
certain greenhouse gases, most notably carbon dioxide, have increased 
owing to human activities. The key question is what has been the 
response of climate to the increased in the air's concentration of 
greenhouse gases.

    Question 2. Dr. Pielke testified that ``the primary cause for . . . 
growth in impact[] is the increasing vulnerability of human and 
environmental systems to climate variability and change, not changes in 
climate, per se.'' Do you agree with this claim? Why or why not?
    Response. I agree that vulnerability to climate change has 
increased in some, but by no means all, situations. For example, 
hurricanes are the most costly destructive natural phenomena in the 
United States. While hurricane damage and property losses have 
increased greatly in the last 100 years, loss of life has acutely 
declined. A powerful, unnamed hurricane struck Galveston in 1900, 
killing more than 8,000 people. An also powerful hurricane, Andrew, 
struck a very densely populated area of south Florida in 1991. 
Hurricane Andrew tragically killed around 50 people, yet thousands of 
lives were saved by technological advances such as sturdy buildings and 
satellite imagery that gave early hurricane strike warning. The 
insurable property damage for Hurricane Andrew hit a record tens of 
billions of dollars. Expensive development in areas of likely hurricane 
strike has made society more vulnerable to hurricanes in terms of 
property loss. On the other hand, Hoover Dam built in the 1930's has 
reduced environmental, property and human catastrophe that had occurred 
with the recurrent but unpredictable flooding of the Colorado River.

    Question 3. Dr. Pielke also stated that ``the present research 
agenda is focused . . . improperly on prediction of the distant climate 
future'' and that ``instead of arguing about global warming, yes or no 
. . . we might be better served by addressing things like the present 
drought . . .'' Do you agree with that proposition? Why or why not?
    Response. I agree that more attention should be paid to predicting, 
mitigating and adapting to weather phenomena like hurricanes, 
hailstorms, blizzards, streamflow flooding, early frosts and tornadoes. 
To the extent that research funding for those ever-present weather 
calamities needs to be obtained from study of climate simulations over 
distant horizons, that is a policy decision I am unequipped to make.

    Question 4. Do you believe we should fully implement the Kyoto 
Protocol? Do you agree with the assertion that full implementation of 
the Kyoto Protocol would only avert the expected temperature change by 
6/100 of a degree Celsius? Why or why not?
    Response. Implementing the Kyoto Protocol would make no meaningful 
difference in the averted temperature rise forecast for the next 50 or 
100 years, according to the predictions shown by, e.g., the U.N. IPCC 
TAR.

    Question 5. Since the hearing there has been much press attention 
paid to the breakup of the Anarctic Ice Sheet, especially a 500-billion 
ton iceberg know as ``Larsen B'' that has been attributed to climate 
change. What scientific evidence is there that climate change is the 
sole cause of this phenomenon? Is there any scientific evidence that 
anthropogenic influences bore any role in the breakup of Larsen B?
    Response. No reliable evidence posits the calving of the Larsen B 
iceberg to human-made global warming. The peninsula on which the Larsen 
Ice Shelf rests has warmed over the last 50 years. However, the climate 
simulations say the entire region of Antarctica should have shown a 
warming trend over the last several decades; in the last 50 years the 
majority of the Antarctic continent has cooled. The calving of the 
Larsen B iceberg must therefore be a natural phenomenon, caused in part 
by the local, natural temperature rise and also by changes in, e.g., 
sea salinity, orography, wind, and sea currents.

    Question 6a. Included in the hearing record as part of my opening 
statement was a Swiss Re report titled ``Climate research does not 
remove the uncertainty: Copying with the risks of climate change'' 
(copy attached). Please explain why you agree or disagree with the 
following assertions or conclusions from that report: A. ``There is not 
one problem but two natural climate variability and the influence of 
human activity on the climate system.''
    Response. Because natural climate variability is the backdrop 
against which human climate effects must be judged, understanding 
natural variability is prerequisite to detecting human climate effects. 
The problems are closely interrelated.

    Question 6b. ``. . . it is essential that new or at least wider-
ranging concepts of protection are developed. These must take into 
account the fact that the maximum strength and frequency of extreme 
weather conditions at a given location cannot be predicted.
    Response. The statement is tantamount to saying that models have no 
regional credibility for predicting weather events, which is 
scientifically true.

    Question 6c. Swiss Re considers it very dangerous (1) to put the 
case for a collapse of the climate system, as this will stir up fears 
which--if they are not confirmed--will in time turn to carefree relief, 
and (2) to play down the climate problem for reasons of short-term 
expediency, since the demand for sustainable development requires that 
today's generations take responsible measures to counter a threat of 
this kind.
    Response. The consequence of Swiss Re's statement is that 
technology ought to proceed in a timely and sufficiently supported way 
to understand natural climate variability, as well as adaptation and 
mitigation to dangerous weather events that have, and will continue, to 
wreck destruction on humans and the environment.

    Question 7. Do you believe that our vulnerability to extreme 
weather conditions is increasing? Why or why not?
    Response. Some developing nations have become more vulnerable to 
extreme weather events, but the events have not been demonstrated to 
owe to the air's increased content of human-produced greenhouse gases. 
The United States should continue to lead in mitigating weather 
vulnerability by committing to elevating those nations from poverty, 
starvation and lack of education.
                                 ______
                                 
 Responses by Dr. Sallie Baliunas to Additional Questions from Senator 
                               Voinovich
    Question 1a. Advocates of the Kyoto Protocol expect aggressive 
reductions in emissions beyond 2012. Some advocate a global 
CO2 concentration target of 550 ppm CO2 by 2100 
which will require substantial reductions in the emissions of developed 
countries (including the United States). If a concentration target of 
550 ppm by 2100 is adopted, what is your estimate of the caps on 
emissions for the United States by 2050? By 2100?
    Response. The United States by the year 2050 would be required to 
produce zero emissions of carbon dioxide and other human-made 
greenhouse gases. By the year 2100, U.S. emissions would have to be 
negative.

    Question 1b. Are you aware of any economic analysis of the impact 
of these reductions beyond the initial Kyoto target? If so, can you 
provide this analysis.
    Response. In my estimation, no study adequately addresses the 
enormous economic costs to the United States for such a scenario.

    Question 2a. Please provide your assessment of the validity of the 
various temperature measurements including their coverage of the globe: 
Satellite.
    Response. The satellite Microwave Sounder Unit Measurements, 
covering about 85 percent of the globe, are validated by several sets 
of independent balloon radiosonde measurements. Where the measurements 
overlap, the satellite and balloon records have a nearly perfect 
correlation--with a 99 percent correlation coefficient. The satellite 
measurements seem precise to 0.01 C.

    Question 2b. Please provide your assessment of the validity of the 
various temperature measurements including their coverage of the globe: 
Weather balloon.
    Response. The balloon radiosonde measurements are in substantial 
agreement with the satellite records where they overlap. Both therefore 
give reliable trends of the temperature of the lower troposphere 
because they are independent measurements.

    Question 2c. Please provide your assessment of the validity of the 
various temperature measurements including their coverage of the globe: 
Surface--land.
    Response. It is difficult to estimate the global surface 
temperature to within a tenth of a degree C. Land surface measurements 
over the United States and parts of Europe are the most reliable going 
back about a century. The records have been corrected as best as 
possible for, e.g., the urban heat island effect produced by increased 
population, urban mechanization, vegetation removal, albedo changes, 
etc., but the corrections are uncertain. The sea surface records are 
scarce. It is difficult to estimate the uncertainty owing to the lack 
of sampling for nearly 80 percent of the globe in the averaged surface 
temperature, where vast areas of the Southern Hemisphere oceans were 
not sampled.

    Question 2d. Please provide your assessment of the validity of the 
various temperature measurements including their coverage of the globe: 
Surface--ocean.
    Response. It is difficult to estimate the global surface 
temperature to within a tenth of a degree C. Land surface measurements 
over the United States and parts of Europe are the most reliable going 
back about a century. The records have been corrected as best as 
possible for, e.g., the urban heat island effect produced by increased 
population, urban mechanization, vegetation removal, albedo changes, 
etc., but the corrections are uncertain. The sea surface records are 
scarce. It is difficult to estimate the uncertainty owing to the lack 
of sampling for nearly 80 percent of the globe in the averaged surface 
temperature, where vast areas of the Southern Hemisphere oceans were 
not sampled.

    Question 3. Can you provide documentation that includes temperature 
proxy indications for at least the last 1,000 years covering the 
Medieval period?
    Response. A very few of the numerous articles documenting climate 
change going back at least 1,000 years include J. Esper et al., 2002, 
Science, 295, 2250; J.M. Grove, 2001, Climate Change, 48, 53; C. 
Pfister et al. 1998, Holocene, 8, 535; and W.S. Broecker, 2001, 
Science, 291, 1497.

    Question 4. What are the effects of removing black soot from the 
atmosphere? What are the benefits of using U.S. clean coal technology 
in countries like China and India in terms of removing black soot?
    Response. The effect of removing significant amounts of black soot 
from the atmosphere would be to improve substantially the health of 
humans and the environment from this pollutant. Efforts should be made 
to help severe pollution producers like China and India to prevent 
emission of soot from their coal burning facilities.

    Question 5. What are the magnitudes of the various inputs to the 
climate and what are their contributions (cooling, warming)?
    Response. This is the capitol question. The magnitudes of the 
inputs, and, critically, the responses of the climate system to those 
agents of climate forcing are inaccurately known. For example, all 
climate simulations assume water vapor in the upper troposphere 
produces a large amplification of the small warming that occurs from 
doubling the air's carbon dioxide concentration. Yet satellite 
measurements of the amount of water vapor in the upper troposphere 
suggest that that layer of air is too dry to support the presumed 
amplification mechanism. Moreover, the lower troposphere should have 
responded with a significant global warming trend over the last two 
decades--but the reliable, verified satellite temperature record shows 
little human-made warming trend. Thus, all models make an assumption 
that is unsupported by the existing evidence. As Prof. Richard Lindzen 
of MIT has said of this assumption, it is likely a ``computational 
artifact'' that serves to produce exaggerated trends of human-made 
global warming. Second to water vapor in producing the strongest 
positive feedback effect is the influence of clouds, whose properties 
and interactions with the climate system remain highly uncertain.

    Question 6. Can you document the uncertainties reflected in the NRC 
June 2001 ``Climate Change Science'' underlying report?
    Response. Several of the uncertainties have been previously 
discussed, for example, W. Soon et al., 2001, Climate Research, 18, 
259, as attached to my original testimony.

    Question 7. Please provide the documentation of how the NRC report 
(June 2001) addressed the satellite, weather balloon, and surface 
temperature measurements.
    Response. The report largely did not resolve the discrepancy 
between the satellite and surface discrepancy. For a technical 
discussion of the underlying issue, please see W. Soon et al., 1999, 
Climate Research, 13,149.

    Question 8. Given your interpretation of gradual change in climate, 
what is the recommended course of action with regard to scientific 
modeling?
    Response. First, assume that the results of the climate models, 
whose global warming trends calculated for the last two decades of 
satellite data are roughly a factor of five too high compared to the 
validated observations, are, perplexingly, correct. A delay of up to 
three decades in implementing sharp greenhouse gas emission cuts should 
produce a negligible additional warming by the year 2100 compared to 
natural fluctuations in the climate, even in the case of the current 
climate models that exaggerate the present global warming trends. And, 
if the human global climate trend is much smaller than the models 
predict, as the scientific evidence now suggests, then the window of 
opportunity for improving climate science is longer than three decades. 
In terms of action, one might consider: getting critical measurements 
meant improve understanding of natural climate variability, including 
the physics of water vapor, clouds and important sunclimate 
interactions.

    Question 9. Dr. Baliunas, when Dr. Lindzen testified before this 
committee last year he made a statement that ``no model explains any 
major feature of the climate.'' Could you explain this for me. Are our 
models capable of explaining climate phenomena?
    Response. As Prof. Lindzen correctly stated, no general circulation 
model of global climate change properly simulates any major feature of 
the climate. That includes natural phenomena like El Nino Southern 
Oscillation (ENSO), sea ice variability, decadal oscillations such as 
the North Atlantic Oscillation (NAO) and the Pacific Decadal 
Oscillation (PDO), the Quasi-Biennial Oscillation (QBO), circulation of 
energy from the equator to the polar regions, clouds, precipitation 
patterns and water vapor. The fact that no global model correctly 
accounts for any of these features of climate means that no global 
model can possibly account for all of those features. Current global 
climate simulations cannot yet make reliable forecasts, especially 100 
years into the future.
                                 ______
                                 
Response by Dr. Sallie Baliunas to an Additional Question from Senator 
                                Campbell
    Question. In your testimony, you say that it is ``impossible to 
have a verified and validated climate model'' due to the variability of 
natural systems. It would seem then that predicting climate change 
would be like predicting chaos. How accurately are you able to make 
sense of the madness?
    Response. Technically speaking, chaos is a deterministic 
mathematical tool that can yield calculated results that are widely 
separated even for only slightly different starting points in the 
calculation. The results are repeatable, but may be extremely sensitive 
to slightly different starting points. The climate system may be partly 
or wholly chaotic, but the information is not yet available to 
determine if climate is so. Some research focuses on chaos calculations 
in climate simulations. The lack of a reliable global climate forecast 
of which I spoke depends on having as an essential starting point a 
verified and validated global simulation, which does not yet exist. One 
reason why the global simulations lack validity is that the physics of 
the major, relevant factors in natural variability are simply not known 
with enough certainty at present. In that regard, it is also not useful 
to consider as a reliable forecast an average of a suite of forecasts 
from different climate simulations, each of which fails validation. 
Improving the reliability of forecasts requires significantly reducing 
the uncertainty of natural variability--the fluctuations against which 
human climate effects must be estimated.
                               __________
 Statement of Dr. Martin Whittaker, Innovest Strategic Value Advisors, 
                                  Inc.
    ``The greatest challenge facing the world at the beginning of the 
21st century is climate change . . . Not only is climate change the 
world's most pressing problem, it is also the issue where business 
could most effectively adopt a leadership role.'' Proceedings of the 
World Economic Forum Annual General Meeting, Davos, February 2000.
    Climate change is rapidly becoming a major issue for U.S. companies 
and fiduciaries. The increasingly global nature of industrial 
competition, institutional investment strategies, and legislated 
disclosure requirements mean that company directors and other 
fiduciaries in North America should see climate change as a major 
business risk--and opportunity.
    In the private sector, climate change has rapidly developed into a 
major strategic--and practical--issue for both industrial corporations 
and their investors. The competitive and financial consequences for 
individual companies can be huge: Innovest's own research has indicated 
that the discounted future costs of meeting even `softened' Kyoto 
targets correspond to 11.5 percent of total current market value for 
the most carbon-intensive U.S. electric utility to 0.2 percent in the 
least; and up to 45 percent of current share value. Increasingly severe 
climatic events have the potential to stress P&C insurers and 
reinsurers to the point of impaired profitability and even insolvency; 
indeed, insurance analysts at one major U.S. investment bank are 
already known to have lowered their earnings estimates to account for 
`what appears to be a higher-than-normal level of catastrophes' during 
early 2001.
    By the same token, recent studies give grounds for optimism that 
the right blend of market based policies, if skillfully introduced, can 
substantially reduce the direct and indirect costs of mitigation and 
perhaps even produce a net economic benefit. Indeed, several leading 
insurance, fund management and industrial companies are already poised 
with risk management programs and innovative new solutions that promote 
both GHG emissions reductions and their own bottom lines. Our research 
shows that, for a variety of reasons, businesses practicing sound 
environmental management also enjoy enhanced competitive advantage and 
superior share price performance.
    There is therefore an increasingly compelling need for corporate 
board members, pension fund trustees, and asset managers to take the 
climate change issue far more seriously than they have to date as a 
major and legitimate fiduciary responsibility.
    A number of major drivers are currently converging to propel 
climate change to a much more prominent place on the agendas of company 
directors and executives, as well as those of a growing number of 
institutional investors:
                   strengthening scientific consensus
    The most recent report by the IPCC (Intergovernmental Panel on 
Climate Change) actually strengthened warnings from its earlier work 
regarding the rate, extent and consequences of climate change. The 
report accelerated climate change time horizons and identified the 
possibility that at some unknown threshold, sudden and largely 
irreversible shifts in global climate pattern may occur. Developing 
countries are predicted to bear the brunt of future climate turbulence.
    A new report by the U.S. National Academy of Scientists released in 
March 2002 corroborated these findings, adding that exceeding the 
threshold limits could precipitate sudden and abrupt changes which are 
far more dramatic than anything that preceded them.\1\ Simulation 
modeling indicates that the cost of a single extreme hurricane could 
reach as much as $100 billion, on the same scale as the accumulated 
pollution damage in the USA since industrialization began.
---------------------------------------------------------------------------
    \1\ U.S. National Academy of Sciences, Abrupt Climate Change: 
Inevitable Surprises, March 2002.
---------------------------------------------------------------------------
    IPCC scientists also believe that North America has already 
experienced challenges posed by changing climates and changing patterns 
of regional development and will continue to do so. Varying impacts on 
ecosystems and human settlements will exacerbate differences across the 
continent in climate-sensitive resource production and vulnerability to 
extreme events.
growing recognition of the gravity of potential financial impacts from 
                            weather extremes
    Over the past 15 years alone, the word has already suffered nearly 
$1 trillion in economic losses due to ``natural'' disasters, roughly 
three-quarters of which were directly weather-related.\2\
---------------------------------------------------------------------------
    \2\ U.S. Department of Energy, U.S. Insurance Industry Perspectives 
on Global Climate Change, February 2001.
---------------------------------------------------------------------------
    Munich Re, one of the world's largest reinsurers, recently 
estimated that climate change will impose costs of several billion 
dollars each year unless urgent measures are taken to reduce greenhouse 
gas (GHG) emissions. In the year 2000 alone, global damage reached $100 
billion, mostly uninsured, and already simulation modelling shows that 
the cost a single extreme hurricane could reach $100 billion, on the 
same scale as the accumulated pollution damage in the USA since 
industrialisation began.
    These concerns have now been echoed by other leading mainstream 
financial institutions including Swiss Re, Credit Suisse and Deutsche 
Bank. The costs of continued inaction are potentially astronomical, yet 
there is growing evidence that aggressive mitigation measures need not 
cause the economic harm and dislocation initially feared by many 
conservative economic commentators.\3\
---------------------------------------------------------------------------
    \3\ See, for example, the IPCC Third Assessment Report 2001.
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          new understanding of the breadth of sectoral impacts
    ``As we are beginning to appreciate within the reinsurance 
industry, the effects of climate change can be devastating . . .'', Kaj 
Ahlman, ex-CEO, Employers Re.
    Conventional wisdom suggests that the effects of climate change 
will be limited to sectors directly associated with the energy value 
chain (including oil and gas, natural gas, pipelines and electric 
utilities on the downside, and renewable energy) and those industries 
consuming large amounts of energy (steel manufacturing, smelting and 
such like).
    Recent research makes it clear, however, that the business 
ramifications relate not just to energy-intensive industries but also 
sectors such as telecommunications and high-technology (which influence 
societal resource consumption and provide enabling technologies); 
forestry (an integral part of the sustainable energy cycle); automotive 
(the primary users of petroleum products and leaders in fuel cell 
development); electronics, electrical industries and other equipment 
suppliers (where fuel cell technologies are already creating whole new 
markets); agriculture (where industries ranging from animal farming to 
winegrowing face major potential impacts), tourism and other sectors.
                new evidence on company-specific impacts
    In addition to the massive aggregate risk exposures noted above, 
recent evidence on company-level impacts has revealed:

          a. That in some high-impact sectors such as energy and 
        electric utilities, the climate change-driven threat to 
        shareholder value could represent as much as 30 percent of the 
        total market capitalization of major companies; and
          b. That even within the same industry sector, firm-specific 
        climate risk can vary by a factor of nearly 60 times.\4\
---------------------------------------------------------------------------
    \4\ See, for example, Innovest Strategic Value Advisors, Electric 
Utilities Industry Sector Report, 2002
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          c. Companies are increasingly finding ways of benefiting from 
        proactive action on tackling greenhouse gases, either through 
        win-win energy savings activities or the development of new 
        products and services based around greater energy efficiency or 
        GHG-reducing technologies\5\.

    \5\ Innovest sector research; Pew Center on Global Climate Change, 
Corporate GHG Reduction Targets, 2001
---------------------------------------------------------------------------
    It clearly behooves fiduciaries and investors to know which 
industry sectors and companies are exposed to the greatest risks and 
opportunities, and what measures if any are being taken to identify and 
manage those risks.
          the internationalization of pension fund investment
    Ten years ago, only 3.3 percent of U.S. pension funds' equity 
investments were in non-U.S. company securities. Today, that proportion 
has more than tripled to over 11 percent.\6\ A similar 
internationalization of pension fund investing is occurring in 
virtually every OECD country. What this means for U.S. fiduciaries is 
simply this: The competitiveness of their investee companies--and 
therefore their fiduciary responsibilities--will not permit them to 
ignore or remain isolated from climate change policy and regulatory 
developments in other parts of the world.
---------------------------------------------------------------------------
    \6\ R.A.G. Monks, The New Global Investor, John Wiley, 2001
---------------------------------------------------------------------------
          legitimization by mainstream investment institutions
    Major international investment houses such as AMP Henderson and 
Friends Ivory & Sime have developed sophisticated guidelines for 
assessing companies' strategic and operational responses to the climate 
change threat. What is more, they have begun to communicate the 
importance of the issue to their clients. This initiative by a 
mainstream investors will go a considerable distance toward 
``legitimizing'' climate change to conservative investors.
    A broad coalition of global institutional investors is already 
forming to press management at the world's largest companies on 
shareholder risks associated with climate change via the `Carbon 
Disclosure Project' (CDP). The CDP is a non-aligned Special Project 
within the Philanthropic Collaborative at the Rockefeller Brothers 
Foundation with the sole purpose of providing a better understanding of 
risk and opportunities presented to investment portfolios by actions 
stemming from the perception of climate change. To date, institutions 
representing over $2 trillion in assets have already joined the 
initiative.
    In the United States, climate change-related shareholder 
resolutions are anticipated against ExxonMobil, Chevron-Texaco, and 
Occidental Petroleum during the current (2002) proxy season. Major 
institutional investors including the city of New York and the State of 
Connecticut are beginning to flex their financial muscles on the 
climate change issue.
              expanded view of fiduciary responsibilities
    Historically, fiduciary responsibilities have been interpreted 
rather narrowly in both the United States and Europe. Fiduciaries' 
principal obligation was the maximization of risk-adjusted financial 
returns for pension plan beneficiaries, investors, and shareholders. 
Since environmental performance was widely seen as injurious or at best 
irrelevant to financial returns, the prevailing ethos held that they 
were of necessity beyond the legitimate purview of fiduciaries. This 
ethos has now begun to shift dramatically: A growing body of research 
is making it clear that companies' environmental performance may well 
affect financial returns, and is therefore a wholly legitimate concern 
for fiduciaries. Legislative reforms of pension legislation in a number 
of European countries, is codifying this new ethos into law\7\.
---------------------------------------------------------------------------
    \7\ See, for example, Baker & McKenzie (Virginia L. Gibson, Bonnie 
K. Levitt, and Karine H. Cargo), ``Overview of Social Investments and 
Fiduciary Responsibility of County Employee Retirement System Board 
Members in California,'' Chicago, 2000
---------------------------------------------------------------------------
    Recent independent back-test evidence indicates that a diversified 
portfolio of more ``sustainable'' companies can be expected to out-
perform one comprised of their less efficient competitors by anywhere 
from 150 to 240 basis points or more per annum. In particularly high-
risk sectors such as chemicals and petroleum, Innovest's own research 
has revealed that this ``out-performance premium'' for top-quintile 
companies can be as great as 500 basis points or even more.
    As the chart below illustrates, depending on how much emphasis was 
given to environmental performance factors, the out-performance margin 
ranged from 180-440 basis points (1.8--4.4 percent). None of this out-
performance can be explained by traditional securities analysis; it 
appears to be pure ``eco-value''.
[GRAPHIC] [TIFF OMITTED] 

            new emphasis on intangible value and disclosure
    ``Reputation is something which, unlike a petrochemical feedstock 
plant, can disappear overnight. We are increasingly getting firms which 
are conceptual and Enron being a classic case whose value depends on 
reputation and trust. And if you breach that, that value goes away very 
rapidly.'' Alan Greenspan, Chairman of the U.S. Federal Reserve Bank, 
Speaking at the Senate Enron Inquiry on Capitol Hill, Washington DC., 
January 25, 2002.
    As recently as the mid-1980's, financial statements captured at 
least 75 percent on average of the true market value of major 
corporations; today the figure is closer to only 15 percent\8\. That 
leaves roughly 85 percent of a company's true market value which CANNOT 
be explained by traditional financial analysis The yawning disconnect 
between companies' book value (hard assets) and what they are really 
worth--their market capitalization--is at an all-time historical high.
---------------------------------------------------------------------------
    \8\ Baruch Lev, Intangibles: Management, Measurement and Reporting. 
Washington, DC. Brookings Institution, 2001
---------------------------------------------------------------------------
    This leaves institutional investors and fiduciaries with an 
enormous information deficit, as the recent implosion of Enron vividly 
demonstrated. Intangible value drivers are now the strongest 
determinants of companies' competitiveness and financial performance.
    The growing importance of intangibles to company valuations in the 
United States was underscored in a March 2002 announcement by the U.S. 
Financial Accounting Standards Board that it will be issuing binding 
disclosure requirements about companies' intangible assets within the 
next 12 months. This will clearly accelerate the integration of 
intangibles into mainstream financial analysis. Internationally, the 
growing momentum of other major ``transparency initiatives'' such as 
the Global Reporting Initiative (GRI) are certain to add climate change 
as a significant new source of business and investment risk.
                   international legislative momentum
    The European Union has already committed itself to a legally 
binding timetable for Kyoto implementation, including compulsory taxes 
on GHG emissions above prescribed limits, starting in 2005. Taxes on 
greenhouse emissions are either proposed or already in effect in 
Scandinavia, and the Canadian, Australian and Japanese governments are 
also in the process of establishing national emissions abatement plans. 
Japan, the U.K. and Canada have both signaled their intent to ratify 
the Kyoto Protocol within the coming weeks, probably before the 
forthcoming Earth Summit in South Africa. The imperatives of global 
competition will clearly impact U.S. companies regardless of any tax or 
other regulatory measures which may or may not be forthcoming in the 
United States.
                      domestic political momentum
    In response to both domestic and international pressure for a 
robust response to Kyoto, President Bush announced his new climate 
change policy on February 14, 2002. The administration's Clear Skies 
Initiative commits the United States to reduce it greenhouse gas 
intensity by 18 percent over the next 10 years, and includes 
substantial financial incentives for renewables and clean technologies. 
The President's proposed budget for fiscal year 2003 increases spending 
on climate change mitigation to $4.5 billion per year.
    On February 20, 2002, EPA Administrator Christine Whitman launched 
one of the key components of the Bush Administration's new climate 
policy, the Climate Leaders protocol. That initiative encourages 
companies to report on their emissions of the six major GHG's, using a 
reporting framework developed by the World Resources Initiative and the 
World Business Council for Sustainable Development. In concert with 
similar initiatives elsewhere, this should make a significant 
contribution to increasing the level of transparency of carbon risk 
exposures and, as a result, increase accountability for both corporate 
directors and investment fiduciaries.
    In the United States, there are a number of bipartisan bills, 
resolutions and legislative proposals currently before the 107th 
Congress, several of which, among other things, propose significantly 
increased company disclosure of carbon risks, measurement of emissions, 
and increased research and development.
 new insights into the economics of climate change mitigation measures
    The economics of climate change has been a source of considerable 
uncertainty and controversy. Several high-profile studies have 
estimated the costs of mitigation to be extraordinarily high, 
particularly in the United States. However, these estimates have 
invariably used worst-case assumptions that necessarily imply high 
costs, for example, highly limited or none existent emissions trading 
activity, a need to meet short term targets, or limited use of non-
carbon fuels.
    Recent studies give grounds for optimism that the right blend of 
policies, if skillfully introduced, can substantially reduce the direct 
and indirect costs of mitigation and perhaps even produce a net 
economic benefit\9\.
---------------------------------------------------------------------------
    \9\ For example, `Scenarios for a Clean Energy Future', Oak Ridge; 
Argonne; Pacific North West; Lawrence Berkeley; National Renewable 
Energy Labs, for U.S. Department of Energy, 2001
---------------------------------------------------------------------------
               the need to look beyond the kyoto protocol
    Effectively addressing climate change can only be achieved via the 
adoption of more sustainable development pathways that simultaneously 
attend to interdependent social, economic and environmental challenges. 
While the Kyoto Protocol is a crucial first step in managing the 
problem, focusing entirely on the agreement would encompass too narrow 
a set of interests and divert attention away from some of the more 
fundamental social, environmental, technological and economic issues at 
stake. The broader sustainability context of climate change simply must 
be appreciated if the issue is to be effectively managed.
    Taken separately, few of these trends are sudden or radically new. 
What is new, however, is their confluence at a single point in time. 
Taken together, they form a kind of ``perfect storm'' which has already 
begun to redefine the responsibilities of fiduciaries in the early 21st 
century. Together, Innovest believes that they are rapidly moving 
climate change to a position of growing prominence on both corporate 
and institutional investor's agendas.
    Providing the right blend of regulatory pressure and market 
mechanisms to allow institutions to incorporate climate-related factors 
into future underwriting, lending and asset management activities is a 
critical step. Directing institutional capital toward supporting 
organic development of new clean energy technologies in their investees 
is also crucial. The renewables and clean power technology markets are 
becoming increasingly compelling in the search for `win-win' outcomes; 
the nascent GHG, CAT bonds, weather derivatives and microfinance/
microinsurance markets also hold substantial promise for strategic 
finance and insurance companies.
    Ultimately, It is Innovest's belief that unleashing the creative 
instincts of the private sector is by far the most effective way of 
dealing with environmental pressures. Our research shows that 
businesses that practice sound environmental management also enjoy 
enhanced stakeholder and customer capital, operate with reduced costs 
and less risk, are faster to innovate and generally foster a higher 
level of management quality. More importantly, our research also shows 
that these benefits translate into sustainable competitive advantage 
and superior share price performance. This linkage between 
environmental and financial performance therefore creates a virtuous 
circle, in which proactive firms are rewarded by investors and 
encouraged to continue in their endeavors. Less proactive firms are 
also provided with a powerful incentive to adopt more positive 
responses. In the ensuing battle for best-in-sector leadership, the 
only surefire winner is the American public, who benefit from a more 
competitive private sector whose interests are better aligned with the 
broader tenets of sustainable development, with all the quality-of-life 
benefits this brings.
                innovest strategic value advisors, inc.
    Innovest Strategic Value Advisors is an internationally recognized 
investment research firm specializing in environmental finance and 
investment opportunities. Founded in 1995 with the mission of 
delivering superior investment appreciation by unlocking hidden 
shareholder value, the firm currently has over US$1-billion under 
direct sub-advisement and provides custom research and portfolio 
analysis to leading institutional investors and fund managers 
throughout the world. Innovest's current and alumni principals include 
senior executives from several of the world's foremost financial 
institutions, as well as a former G7 finance minister. The company's 
flagship product is the Eco Value 21 platform, which was developed in 
conjunction with strategic partners including PricewaterhouseCoopers 
and Morgan Stanley Asset Management. Innovest is headquartered in New 
York, with offices in London and Toronto.
                                 ______
                                 
Responses by Dr. Martin Whittaker to Additional Questions from Senator 
                                Jeffords
    Question 1. It is clear that, regardless of the remaining 
uncertainties concerning exactly when and how climate change will 
impact our world, perceptions of climate risk have grown to such an 
extent that companies here and abroad are considering changing their 
practices to improve their long-term financial stability. How have 
investors in this and other countries begun to reorganize their 
financial portfolios to favor more climate-friendly businesses?
    Response. From a traditional asset management perspective, few 
investors have taken steps to adjust investment actions due to climate 
change considerations alone. The only segment of the asset management 
universe that has adjusted portfolios on account of climate change 
issues is the socially responsible investment community (which 
constitutes anywhere between 3-8 percent of total assets under 
management in the United States). Mainstream asset managers, regardless 
of location, have not begun to adjust their portfolios, indeed, our 
research indicates that many fund managers or analysts do not even 
recognize that climate change is an issue that would prompt them to 
consider reorganizing their assets. The overriding feeling on climate 
change within the non-SRI institutional investment community is that 
the financial implications of climate change (or, more accurately, the 
manifestations of climate change on the one hand, and exposure to 
regulations limiting GHG emissions on the other) are not proven. 
Unfortunately, this belief is not based upon any rigorous financial 
analysis of potential impacts to equity or debt valuations. Were such 
analyses to be conducted, our research indicates that the financial 
community would be a willing listener.
    Rather than adjusting portfolios, there is a small but growing 
number of pension fund trustees and pension policy professionals 
(including, for example, the State of Connecticut Treasurer's 
department) that recognizes climate change as an issue of potential 
concern, and that is preparing to engage companies to urge them to 
manage the issue more proactively on account of fiduciary concerns. The 
Carbon Disclosure Project, which now has backing of over $2 trillion in 
assets under management, and includes Merrill Lynch Investment 
Management, the Credit Suisse Group, and Walden Asset Management, is an 
example of this. We expect that the engagement approach, rather than 
the asset adjustment approach, will be favored by most pension funds, 
and that this approach has the potential to exert major influence over 
corporate management strategies on the climate change issue.
    Elsewhere within the broader financial services sector, we know of 
several commercial banks that are examining whether there is a need to 
adjust credit risk calculation due to climate change factors. For 
example, in the hotel and leisure sector, there are reports that 
financing of winter resorts dependent upon snowy conditions has been 
affected; Fitch and Standard and Poor's, the credit rating agencies, 
have begun to examine exposure to potential GHG legislation at the 
company-specific level in the utilities and power sectors; and private 
equity and project finance specialists have steered more money toward 
clean, low carbon technologies on account of the market opportunities 
being created by actions (regulatory and otherwise) to lower GHG 
emissions. Finally, in the insurance industry, climate change is 
exacerbating concerns over weak economic conditions within the 
insurance industry and forcing companies such as Swiss Re to reexamine 
their business mix. The P&C business in particular continues to 
experience weak premium pricing power and increased losses, with 
catastrophic event (CAT) losses contributing to poor results. The P&C 
industry has also been plagued by excess underwriting capacity, the 
effect of which has been to depress prices, shift product mixes into 
banking and other financial services, and force firms into expanding 
into overseas markets where climate-related regional impacts may be 
more acute.
    I would be happy to elaborate with specific details on any of the 
points made above.

    Question 2. You work with companies that have started to 
internalize the risks of emitting greenhouse gases. Why are some 
companies taking this step, while others hang back? What and why should 
investors know about a company's carbon risk?
    Response. Companies that have taken action to manage climate-change 
related risks thus far have done so for one or more of the following 
reasons: (i) to comply with current or anticipated regulations 
restricting GHG emissions (notably in Europe); (ii) to realize 
efficiency gains within their operations (notably through energy 
conservation initiatives); (iii) to reinforce a positive environmental 
reputation; (iv) to act upon concerns over the effects of future 
climatic changes on their business; (v) to gain a perceived competitive 
advantage over peers in technological innovation, particularly in 
industries with long capital planning cycles (next generation 
technologies in most industrial settings often confer GHG emissions 
benefits as a side effect); (vi) in response to concerns expressed by 
shareholders.
    A key determining factor on company stance is its geographic 
location. For European firms, the primary drivers appear to be 
reputation (they operate in a marketplace more cognizant of 
environmental pressures) and regulatory requirements. Companies hang 
back in this market either because they do not feel exposed to consumer 
sentiment about climate change or because they do not anticipate being 
effected by future regulations. In the United States, primary drivers 
appear to be international competitiveness and operating excellence. 
U.S.-based multinational companies such as Exxon-Mobil have made it 
clear that they will act to curtail emissions and internalize risks in 
those areas of the world where they are required to do so, which may 
result in different strategies by business units within the same 
company. In our opinion, U.S. companies hanging back do so primarily 
because they do not perceive a need to act, either due to lack of 
regulatory compulsion or because their client base does not require 
action of them.
    At this stage, knowing what we know about potential climate effects 
and the impacts of emissions regulation, I think it's prudent for 
financial market investors--particularly those with a long-term 
investment horizon--to require more information and reliable analysis 
on how these risks might affect equity valuations or debt quality, so 
that they can then factor such risks into their own preferred 
investment style. For investment banking and project finance 
specialists, there is a more immediate need to understand how the costs 
of reducing GHG emissions might reduce rates of return and influence 
capital spending decisions (companies such as BG and Shell are already 
calculating the sensitivity of project returns to carbon price 
movements, as they would examine sensitivity to oil price fluctuations 
or interest rate movement). On the flip side, the World Bank's 
Prototype Carbon Fund experiences has shown that the generation and 
sale of carbon credits can augment returns to the point by several 
percentage points.
    In view of on-going post-Enron concerns over off-balance sheet 
risks, the possibility that climate change may well be a market risk 
capable of inflicting damage to investor returns has taken on a new 
significance. The essential point is that company competitiveness and 
profitability in a wide range of industrial sectors--automotive, 
chemicals, coal, electric power, manufacturing, oil and gas, refining, 
water, steel, tourism, food and agriculture, cement--could be seriously 
affected by climate change. Moreover, there will be substantial 
differentials in company carbon risk exposure within particular 
industry segments, differentials that are not currently being picked up 
by traditional securities analytics.

    Question 3. As you know, I'm a cosponsor of legislation to cap 
carbon dioxide emissions from power plants, S. 556. If there is no cap 
in the near future, what do you think will be the effect on carbon 
markets and companies' carbon risk management activities in the United 
States and abroad?
    Response. My chief concern is that without a cap, carbon is 
unlikely to be assigned a value, and without much of a value, the 
notion of a carbon market is unlikely to have any legs. Markets 
function on the basis that something of value is being exchanged. 
Voluntary or uncapped emissions targets, particularly when applied to 
the highest emitting sector (and the one most likely to act as buyers 
of emissions credits/offsets), will not create the conditions necessary 
for a fully functioning marketplace, with the result that emissions 
trading is unlikely to prosper except for certain multinational and 
transnational companies.
    Of course, from an environmental emissions perspective, the absence 
of a cap is unlikely to focus the mind of corporate emitters on 
mitigation activities. Under an uncapped scenario, carbon risk 
management is less likely to come down to the simple objective of 
reducing emissions, and more likely to focus on (i) internal efficiency 
initiatives, where the prospect of economic gain through enhanced 
efficiency is the chief driving force, and, (ii) in the long term, 
clean technology development, where economic gain through new product 
offerings and process innovation is foremost. These are worthy goals 
for any firm to pursue but they may not produce the emissions 
reductions required to combat climate change over the time periods 
identified by the IPCC.

    Question 4. What do you think is the greatest risk, in the next 30-
50 years, of continuing to increase human-made greenhouse gas 
emissions? And, what is the most feasible way to reduce or eliminate 
that risk?
    Response. From a global perspective, to my mind the greatest risk 
is the potential exacerbation and intensification of poverty-inducing 
conditions within the developing world. Less developed countries (LDCs) 
stand to bear the brunt of any disruptions to climate shifts and have 
less capacity to deal with those disruptions as and when they occur. 
Aside from broader moral humanitarian concerns, this may also carry an 
economic penalty for OECD countries, in the form of accelerated 
immigration from poor regions, lower productivity in basic industries 
situated in LDCs, stresses on the public purse (due to, for example, 
health costs and disaster relief) in LDCs with attendant currency woes, 
requirements for more aid and foreign direct investment from rich 
countries, and sizable opportunity costs relating to a failure to 
capture inherent entrepreneurial talents and skills of LDC populations 
struggling to cope with deteriorating domestic infrastructures.
    The most feasible way to reduce that risk is the expedited 
development, commercialization and transfer of clean power production 
and transportation technologies. Transportation and stationary power 
production are the two greatest anthropogenic sources of greenhouse gas 
emissions; they are also the two areas of civic infrastructure most in 
need of advancement within poorer countries, primarily in view of their 
catalytic role in general economic development. India and China play an 
especially important role in global GHG emissions and international 
trade, and both present clear market opportunities for U.S. business. 
The Indian electric power sector is the largest consumer of capital in 
that country, drawing over one-sixth of all Indian investments. The 
United States is the largest supplier of foreign direct investment in 
India, much of it in the power sector. As part of efforts to reduce 
dependency on coal, India has a significant program to support 
renewable power, exemplified by wind power capacity that rose from 41 
megawatts in 1992 to 1,025 megawatts in 1999, which should present U.S. 
exporters with appreciable opportunities.
    Similarly, in China, which reportedly ranks second in the world in 
energy consumption and greenhouse gas emissions, power generating 
capacity and power consumption are expected to nearly triple by 2015 
from their values in 1995, requiring some $449 billion in total costs. 
The China Daily reports that Chinese and U.S. trade ministers agreed in 
Beijing in April 2002 to set up a new consultation mechanism under 
which U.S. Trade and Development Agency (U.S. TDA) will provide funding 
for projects in China in the areas of e-commerce, renewable energy and 
solid waste treatment. According to Chinese government officials, wind 
power, solar energy, hydropower and other renewable and new energy 
resources will account for 0.7 percent of the total annual commercial 
energy used in China by the end of 2005, and 2 percent by 2015--again, 
major opportunities for U.S. clean power developers.
    All of this is to say that the renewables and clean power 
technology markets are becoming increasingly attractive for investors 
and provide a clear possibility for a `win-win' outcome involving LDCs; 
the nascent markets for greenhouse gas emissions credits, `green' power 
certificates (based on Renewable Portfolio Standards), catastrophic 
event (CAT) bonds, weather derivatives and microfinance/microinsurance 
also hold substantial promise for forward-looking finance and insurance 
companies. Indeed, commercially viable technologies exist today (such 
as combined heat and power, and cogeneration approaches) whose 
introduction could go a long way toward reducing GHG emissions in the 
short term, while more developmental clean technologies are brought to 
the market.
                                 ______
                                 
Responses by Dr. Martin Whittaker to Additional Questions from Senator 
                                 Smith
    Question 1. Dr. Rowland testified that ``during the 20th century, 
the atmospheric concentrations of a number of greenhouse gasses have 
increased, mostly because of the actions of mankind.'' Do you agree 
with that statement? Why or why not?
    Response. On matters relating to the science of climate change, 
including the buildup of GHG concentrations and the potential effects 
on global climate conditions, I take my lead from the Intergovernmental 
Panel on Climate Change, which I believe to be an authoritative source 
on the subject. To the extent that Dr. Rowland's statement reflects the 
opinion of the IPCC, yes, I agree with his statement. A brief point on 
the issue of scientific discourse: As a scientist by training I realize 
that uncertainty and debate are fundamental to the process of 
scientific and technological advancement. While it is clear that 
uncertainties remain, and that there are scientists whose opinions 
differ from those of the IPCC, it appears that the balance of 
probability has shifted toward the view that anthropogenic influences 
have accelerated the buildup of GHGs in the atmosphere, and that this 
buildup is likely to be causing changes in the Earth's climate.

    Question 2. Dr. Pielke testified that ``the primary cause for . . . 
growth in impact[] is the increasing vulnerability of human and 
environmental systems to climate variability and change, not changes in 
climate, per se.'' Do you agree with this claim? Why or why not?
    Response. As I recall, Dr. Pielke was trying to point out that the 
heightened economic impact of climate variability was due to more to 
the increased vulnerability of human systems than to climate change per 
se (in other-words, modern day society was more exposed to climate 
variability by virtue of the fact that urban centers, coastal 
developments, etc., were likely to suffer greater economic impacts from 
extreme weather events). I agree that human and environmental systems 
are more vulnerable to climate variability than was previously the 
case; the recent reports from Swiss Re, Munich Re and the Lawrence 
Berkeley National Laboratory/U.S. DOE strongly support this view. But 
the same reports also present compelling evidence that the incidence 
and severity of extreme weather conditions is also rising, implying 
that it is not just the economic consequences of climate variability 
that is worrying, but that the variability is also becoming greater.
    Ultimately, however, I am not sure that I recognize a huge 
distinction between the two points of view in terms of what it means 
for how we go about addressing the problem. If impacts are growing 
because of increasing vulnerability of human and environmental systems 
to climate variability (and if anthropogenic GHG emissions are 
increasing climate variability) then it is still prudent to adapt more 
effectively to changing climate conditions and deal with anthropogenic 
GHG emissions.

    Question 3. Dr. Pielke also stated that ``the present research 
agenda is focused . . . improperly on prediction of the distant climate 
future'' and that ``instead of arguing about global warming, yes or no 
. . . we might be better served by addressing things like the present 
drought. . .'' Do you agree with that proposition? Why or why not?
    Response. I believe that Dr. Pielke is right to stress the 
importance of dealing with more immediate climate-related problems 
(such as droughts, famines, etc.), which have tended to become 
forgotten in terms of the overall global warming debate (although not 
within broader development circles). However, given the possible causal 
connections that exist between the short-term problems he alludes to 
and the longer term issue of global warming, I don't believe that we 
can afford to dismiss the need to better understand future climate 
conditions altogether. IPCC data presented in the Third Assessment 
Report and the Special Report on Emissions Scenarios implies that one 
cannot successfully deal with one issue without tackling the other, and 
make plain the links between short- and long-term climate issues, and 
the critical importance of broader demographic, technological and 
political trends in determining future emissions scenarios. The 
integrated, interdependent nature of these broader factors, captured 
within the image of sustainable development, has been overlooked in my 
opinion within the climate change debate (which has focused more on 
Kyoto instead). I would certainly concur that less focus on esoteric 
matters of perceived scientific relevance and more urgency around 
action to improve the lives of ordinary people and the world in which 
we live is desirable.

    Question 4. Do you believe we should fully implement the Kyoto 
Protocol? Do you agree with the assertion that full implementation of 
the Kyoto Protocol would only avert the expected temperature change by 
6/100 of a degree, Celsius? Why or why not?
    Response. I believe that the Kyoto Protocol is a valuable first 
step toward reducing global GHG emissions and that it also has 
importance as an expression of collective commitment to addressing the 
climate change issue, and a point around which national efforts to can 
be coordinated and consolidated. True, as you state in the question, 
even if fully implemented, the Kyoto targets would have a negligible 
effect on atmospheric GHG concentrations and expected temperatures. 
However, I don't believe that this should be used to dismiss the Kyoto 
Protocol, rather to point out its importance as the precursor to a more 
comprehensive and ambitious emissions reduction process.
    That said, the critical questions to my mind are whether 
anthropogenic GHG emissions are causing climate variations and, if 
society believes that to be so, how can we bring about emissions 
reductions in an optimal fashion. Whether this reduction effort is 
within the terms of the Kyoto Protocol or not is, in the bigger 
picture, of secondary importance. In this sense, I concur with the 
implication of the question, i.e., that Kyoto is not necessarily the 
answer to the climate problem, and that a longer-term solution needs to 
be identified.

    Question 5. Since the hearing there has been much press attention 
paid to the breakup of the Antarctic Ice Sheet, especially a 500-
billion ton iceberg known as ``Larsen B,'' that has been attributed to 
climate change. What scientific evidence is there that climate change 
is the sole cause of this phenomenon? Is there any scientific evidence 
that anthropogenic influences bore any role in the breakup of Larsen B?
    Response. I'm afraid I do not feel qualified enough on the Larsen B 
issue to offer any insights as to the specific scientific causes. I 
would only note that the Larsen B story is the latest in a long line of 
reports of changing environmental conditions in polar regions, the 
general thrust of which is that global warming is the root cause.

    Question 6a. Included in the hearing record as part of my opening 
statement was a Swiss Re report titled ``Climate research does not 
remove the uncertainty; Coping with the risks of climate change'' (copy 
attached). Please explain why you agree or disagree with the following 
assertions or conclusions from that report: ``There is not one problem 
but two: natural climate variability and the influence of human 
activity on the climate system.''
    Response. I agree that distinguishing human-induced climate changes 
from natural variations is an important issue the resolution of which 
will clearly help to determine the extent to which efforts to curb 
climate change through limiting anthropogenic emissions will be 
successful.

    Question 6b. ``. . . it is essential that new or at least wider-
ranging concepts of protection are developed. These must take into 
account the fact that the maximum strength and frequency of extreme 
weather conditions at a given location cannot be predicted.''
    Response. By protection I assume that Swiss Re is referring to 
safeguarding the integrity of global human and environmental 
conditions.
    Swiss Re's assertion that the characteristics of extreme weather 
events at specific locations cannot be predicted with any degree of 
accuracy is most worrying to me when set against their belief that 
extreme weather events are generally increasing in frequency and 
severity (conclusions arrived at from studies of past events). If this 
is indeed the case, then yes, provisions must be made to manage extreme 
weather risks particularly in those regions where in a general sense 
the Capacity to deal with extreme weather is weakest, or the human and 
economic effects could be greatest. For example, the use of weather 
derivatives, catastrophe bonds, and other insurance tools could help 
the industry deal with such varying conditions by improving liquidity 
and widening insurance coverage. ,

    Question 6c. ``Swiss Re considers it very dangerous (1) to put the 
case for a collapse of the climate system, as this will stir up fears 
which--if they are not confirmed--will in time turn to carefree relief, 
and (2) to play down the climate problem for reasons of short-term 
expediency, since the demand for sustainable development requires that 
today's generations take responsible measures to counter a threat of 
this kind.''
    Response. I absolutely agree with this call for moderation. Indeed, 
within the financial community Innovest serves, the major barriers to 
stimulating widespread action to examining climate related risks have 
been (i) the predictions of catastrophic and unmanageable climate 
disruptions, which tend to turn off many people who might otherwise be 
sympathetic, and (ii) a disconnect between short term economic 
interests and what is perceived to be an exclusively long term climate 
change issue. Our work has focused on providing robust, reasoned, 
independent analysis of the business impacts for precisely this reason.
    To my mind, the inherent characteristics of climate change as a 
potential risk issue for ordinary people all work against taking 
action: it is rather ethereal and therefore doesn't seem `real' (you 
can't touch, feel or see it, unlike, say, asbestos); the risk is 
perceived to be long term, and is therefore instinctively discounted; 
it is an issue which affects the collective, as opposed to the 
individual, which again leads people to discount it as a threat to 
personal well-being; people are generally familiar with it, and 
therefore don't feel especially worried; and it seems to be out of any 
one person's control. Long-term, illusory, scattered and unmanageable 
risks that affect everyone are simply not regarded as matters of any 
great urgency.

    Question 7. Do you believe that our vulnerability to extreme 
weather conditions is increasing? Why or why not?
    Response. On the issue of environmental and economic vulnerability, 
I believe that the evidence presented by the IPCC (selected passages 
presented below) and other sources of similar international standing is 
sufficiently worrying to warrant action and indicates that indeed our 
vulnerability to extreme weather conditions is increasing:
     According to the IPCC, the Earth's average surface 
temperature will rise 1.4 to 5.8oC (2.5--10.4 oF) between 1990 and 
2100. Sea levels could rise between 9 and 88 cm over the same period. 
The decade of the 1990's was the hottest of the last century and is 
warmer than decade in the last 1,000 years in the Northern Hemisphere.
     According to December 2000 World Meteorological 
Organization (WMO) statistics, 2000 was the 22d consecutive year with 
global mean surface temperatures above the 1961-1990 normal. 1999 was 
the 5th warmest year in the past 140 years, bested only by 1998, 1997, 
1995 and 1990.
     Severe weather events also continued to increase in size 
and number. Record rainfall and flooding in Western Europe, severe cold 
conditions in East Asia and Russia, heat waves and drought in China, 
Central Asia and the Middle East, and mudslides and typhoons in 
Southern Africa and Latin America all reached significant proportions 
over the course of 2000.
     Recent IPCC figures for climate-related influences on 
healthcare costs, vector borne diseases, coastline erosion, crop yields 
and other metrics all point toward increasing negative impacts on Earth 
ecosystems.
                                 ______
                                 
Responses by Dr. Martin Whittaker to Additional Questions from Senator 
                               Voinovich
    Question 1a. Advocates of the Kyoto Protocol expect aggressive 
reductions in emissions beyond 2012. Some advocate a global 
CO2 concentration target of 550 ppm CO2 by 2100 
which will require substantial reductions in the emissions of developed 
countries (including the United States). If a concentration target of 
550 ppm by 2100 is adopted, what is your estimate of the caps on 
emissions for the United States by 2050? By 2100?
    Response. Innovest has not prepared forecasts of this nature and I 
would be reluctant to do so without sufficient background preparation. 
I can only refer you to the IPCC, which has recommended to UNFCCC 
signatories that atmospheric GHG concentrations should be stabilized at 
550 ppmv of CO2 equivalent (or twice pre-industrial levels), 
which would require a 60 percent cut in GHG emissions relative to 1990 
levels\1\.
---------------------------------------------------------------------------
    \1\ IPCC Climate Change 2001: Synthesis Report

    Question 1b. Are you aware of any economic analysis of the impact 
of these reductions beyond the initial Kyoto target? If so, can you 
provide this analysis.
    Response. I am not aware of any reliable analysis on this 
particular subject.

    Question 2. What economic analysis is there for the impacts of 
implementing Kyoto and reductions beyond Kyoto on the Canadian economy?
    Response. The Government of Canada does not have an official 
estimate of the economic impacts of meeting its Kyoto target. That 
said, the Federal Analysis and Modelling Group has estimated that 
impacts,on GDP could be (in the worst case) up to 3 percent between now 
and 2010; over the same period, the country's GDP is expected to grow 
30 percent. In other words, Kyoto could shave up to 3 percent off GDP 
growth over the next 8 years and result in 450,000 jobs lost. This, 
approximates to a reduction of roughly C$11 billion, or C$400 per 
capita. On the other hand, the best case scenario according to AMG is a 
`slight positive' effect on GDP and the net creation of 65,000 jobs.
    Cost estimates from other sources (academic and specialist research 
houses) tend to range from 0.2 percent to 2.5 percent GDP reduction, 
and a March 2002 Industry Canada report estimates that costs will be in 
the region of 1.5 percent of GDP, or about C$17 billion in 2010.
    In terms of direct costs relating to reducing emissions, AMG 
describes 2 approaches; in one, expenditures to reduce emissions minus 
the energy efficiency gains under a carbon `cost' scenario of C$10-25 
per tonne would result in net benefits of about C$3 billion per year. 
In the other, the additional costs to do with transactions, downtime to 
adjust business configuration and other anticipated indirect 
expenditures associated with the shift toward lower carbon fuels are 
factored in. In this approach, under the same carbon price scenarios, 
costs are estimated to be in the order of C$1.1 billion per year, or 
about C$40 per person.
    A recent popularly discussed report issued by the Canadian 
Manufacturers Exporters Association, a group opposed to Kyoto 
ratification, pegged the costs of Kyoto to the Canadian economy at 
450,000 jobs by 2010 and describes a multitude of negative consequences 
for ordinary Canadians ranging from having to drive in smaller cars and 
refit their homes with expensive energy conservation equipment to 
paying more taxes.

    Question 3. What are companies doing in other countries to mitigate 
their business risk?
    Response. As you might expect, companies' actions to mitigate 
business risks depend on their reasons for wanting to act in the first 
place. We have identified several reasons why businesses feel it 
necessary to take mitigative action.
    (a) Compliance (or Anticipated Compliance) particularly in Canada, 
Europe and Japan; A recent study among Canadian natural gas utilities 
showed Enbridge Consumers Gas as the only company to achieve a net 
greenhouse gas emissions decrease (30 percent) between 1990-7. In 2000, 
ECG introduced a program to promote energy-efficient equipment in the 
residential marketplace. Since 1996, the firm's demand-side management 
program has reduced customers' emissions by 364,000 tonnes of 
CO2 equivalent. Dupont Canada, partly in expectation of 
future emissions constraints, report that CO2 equivalents 
(including CFCs) have decreased from 160 billion lbs. in 1998 to 120 
billion lbs. 1999, and the company aims to achieve a 65 percent 
reduction in GHG by 2010 from 1990 base year.
    (b) Improved efficiency; Deutsche Telekom, for example, reports 
that it has saved over DM 8 million in energy costs and reduced carbon 
dioxide emissions simply by adjusting the output of air-conditioning 
systems. Pasquale Pistorio, President and CEO of STMicroelectronics (an 
Innovest `AAA'-ranked firm), reported returns on energy conservation 
efforts within 2 years and estimated savings of nearly $1 billion on 
energy costs between 1994 and 2010 due to use of clean energy 
alternatives and efficiency measures. And NTT, which will need roughly 
4.7-billion kWh of electricity in 2000 and is Japan's largest single 
purchaser of electric power, is pursuing an energy conservation vision 
that aims to produce savings of 100 billion yen over 10 years over a 
business-as-usual scenario, thereby reducing indirect greenhouse gas 
emissions.
    (c) Reputation; In Othello, Shakespeare's lago notes that `He that 
filches my good name . . . makes me poor indeed'. Many leading firms 
have also recognized the true value of reputation and the importance of 
climate change to this reputation. ABB, the Swedish engineering and 
power equipment firm, has already adopted product specifications around 
greenhouse gas intensity to help distinguish its products in the market 
place, and Electrolux, BP, Baxter and Suncor have associated their 
brands very closely with climate friendliness.
    (d) Voluntary Targets: The flip side of the reputation issue, many 
firms are walking the talk and demonstrating their climate credentials 
by setting themselves voluntary targets. Entergy, which is clearly not 
yet formally obliged to reduce emissions, purchased 10,000 metric tons 
of carbon dioxide allowances for under $5 per metric ton as part of its 
recently announced efforts to voluntarily cut greenhouse gas emissions 
over the next few years working with Environmental Defense. By virtue 
of this action, Entergy will be able to lock in relatively cheap 
emissions reduction credits and take significant steps toward meeting 
its voluntary targets.
    (e) Concerns over exposure to changing weather conditions; Natural 
gas companies have begun to hedge their exposure to warmer weather 
(which depresses demand for natural gas used in heating) through the 
purchase of weather derivatives. Food product firms are also 
particularly exposed on this front. Due to warm weather and severe 
storms, Central American farmers harvested their banana crop earlier 
than normal in late 1997 and early 1998, increasing production by 13 
percent. Prices fell as the fruit flooded the North American market, 
forcing down Dole's margins. In March 1998, Dole's stock price dropped 
12 percent in one day. Continued extremes in weather resulting from 
climate change could also have serious repercussions on food markets 
due to direct damage to operations. Hurricane Mitch caused massive 
damage to Honduras, in part because of mudslides exacerbated by 
deforestation in the region. Both Dole Foods and Chiquita suffered 
extensive damage to operations in that country which reduced profits 
and pushed stock prices downwards.
    (f) Competitiveness drivers and the need to innovate; In the U.K., 
Johnson Matthey's ``smart'' technologies, which contribute to climate. 
protection by facilitating smaller, lighter and more energy efficient 
products and processes, typify the kind of innovation opportunities 
that climate change is creating. In the mining industry, Inco's nickel 
hydride battery technologies, which contribute to climate protection by 
facilitating smaller, lighter and more energy efficient hybrid 
vehicles, are a prime example of how climate change concerns are 
causing established, `old-economy' companies to reexamine their 
business mix.
    I would be happy to provide more details of individual company 
activities and initiatives on climate change, drawn from Innovest's 
data base on corporate environmental positioning.
                               __________
          Statement of Jack D. Cogen, President, Natsource LLC
    Good morning, Mr. Chairman and members of the committee. Thank you 
for inviting me to testify. My name is Jack Cogen and I am the 
president of Natsource LLC, an energy environmental commodity broker 
headquartered in New York City with offices in Washington, DC, Europe, 
Japan, Canada, and Australia. My testimony will address the financial 
risk associated with climate change policy.
    At the outset, I want to acknowledge that there are legitimate 
differences of opinion as to what should be the nature, degree and 
timing of policy responses to the risk associated with climate change 
itself. However, the role of Natsource is to work with clients who 
decide it is in their best interest to evaluate the extent of their 
financial exposure under possible greenhouse gas policies. Our clients 
make the threshold decision that they are at risk financially. After 
that, the next step for them is to analyze the extent of their 
financial risk and develop strategies that make sense for mitigating 
that risk. Natsource contributes its policy and market expertise to 
helping clients assess and manage risk.
    The client base of Natsource includes multinational corporations as 
well as foreign and domestic firms. Natsource assists them in 
quantifying their financial exposure under different policies that 
might be adopted to limit greenhouse gas emissions. Our experience 
indicates that companies consider a variety of factors when they weigh 
the degree of risk they face and what to do about it. The primary 
factors are (1) the probability they will be subject to emission 
limitation policies, and (2) the potential direct and indirect cost of 
those policies to the company.
    Natsource provides analysis, strategic advice, and market 
intelligence once a company decides to undertake a comprehensive risk 
assessment. Generally, we help clients assess their financial exposure 
by identifying policies that might be adopted; assigning probabilities 
to those policies; quantifying the net emissions ``shortfall'' or 
``surplus'' the company faces under each policy; and estimating 
potential compliance costs based on the company's emissions profile, 
internal reduction opportunities, and our knowledge of various 
commodities available in the greenhouse gas emission markets. 
Multinational companies face an especially complicated risk because 
they operate across multiple jurisdictions with different policies. In 
addition, many of these companies must evaluate the effect of climate 
change policies on the market demand for their products in different 
countries.
    If potential compliance costs are substantial and the probability 
of emission limitations is significant enough, the next step for many 
companies is to develop a cost-effective risk management strategy. This 
involves assembling an optimal mix of measures for reducing or 
offsetting emissions. These include internal and external emission 
reduction projects, internal emission trading programs, and external 
trading markets.
    Companies choose to undertake emission reduction measures in spite 
of or because of policy uncertainty for a variety of reasons, including 
to reduce future compliance costs, gain experience in the greenhouse 
gas markets, maintain or enhance their environmental image, and place a 
value on internal reduction opportunities.
    Greenhouse gas markets are evolving and will continue to evolve 
over the next several years. In the future, these markets will function 
more smoothly and with lower transaction costs as greenhouse gas 
policies become clearer and markets become more liquid. Even now, more 
sophisticated financial instruments such as call options are being used 
as a hedge against risk.
    Natsource recently completed the first comprehensive analysis of 
the greenhouse gas trading market for the World Bank. The analysis 
identified approximately 60 greenhouse gas transactions involving some 
55 million tons of emissions. These numbers actually underestimate the 
total number of transactions because they do not include internal-only 
transactions and small volume transactions. Current market prices for 
greenhouse gas commodities range from less than a dollar to over $9 per 
ton of carbon dioxide equivalent, depending on the type of commodity 
and vintage.
    In conclusion, Mr. Chairman, a small but growing number of 
companies are beginning to more carefully analyze their financial risk 
under possible greenhouse gas policies. For a variety of reasons, some 
companies have decided to take steps now to reduce emissions even 
though final policy decisions, in most cases, are still pending. As a 
consequence, these companies are able to take advantage of the most 
cost-effective opportunities to reduce their financial exposure. As the 
markets for sulfur dioxide and nitrogen oxides emissions in the United 
States have shown, emission markets can provide an efficient way to 
lower the cost of reducing emissions.
    That concludes my remarks, Mr. Chairman. I would be glad to answer 
any questions you or other Members of the committee might have.
                                 ______
                                 
 Responses by Jack D. Cogen to Additional Questions from Senator Smith
    Question 1. Dr. Rowland testified that ``during the 20th century, 
the atmospheric concentrations of a number of greenhouse gases have 
increased, mostly because of the actions of mankind.'' Do you agree 
with that statement? Why or why not?
    Response. My expertise and that of Natsource lies in providing 
brokerage services and strategic risk assessment and risk management 
advice to our clients. Our expertise does not cover scientific or 
research issues associated with climate change. Consequently, I am not 
able to provide a response that would be helpful to the committee.

    Question 2. Dr. Pielke testified that ``the primary cause for . . . 
growth in impact is the increasing vulnerability of human and 
environmental systems to climate variability and change, not changes in 
climate per se.'' Do you agree with this claim? Why or why not?
    Response. My expertise and that of Natsource lies in providing 
brokerage services and strategic risk assessment and risk management 
advice to our clients. Our expertise does not cover scientific or 
research issues associated with climate change. Consequently, I am not 
able to provide a response that would be helpful to the committee.

    Question 3. Dr. Pielke also stated that ``the present research 
agenda is focused . . . improperly on prediction of the distant climate 
future'' and that ``instead of arguing about global warming, yes or no 
. . . we might be better served by addressing things like the present 
drought . . .'' Do you agree with that proposition? Why or why not?
    Response. My expertise and that of Natsource lies in providing 
brokerage services and strategic risk assessment and risk management 
advice to our clients. Our expertise does not cover scientific or 
research issues associated with climate change. Consequently, I am not 
able to provide a response that would be helpful to the committee.

    Question 4. Do you believe we should fully implement the Kyoto 
Protocol? Do you agree with the assertion that full implementation of 
the Kyoto Protocol would only avert the expected temperature change by 
6/100 of a degree, Celsius? Why or why not?
    Response. Natsource does not have a position with respect to either 
the ratification or implementation of the Kyoto Protocol. Natsource's 
expertise and the services and advice we provide our clients do not 
include assessing the climatic consequences of implementing the Kyoto 
Protocol. Therefore, I am unable to provide any opinion on possible 
temperature changes.

    Question 5. Since the hearing there has been much press attention 
paid to the breakup of the Antarctic Ice Sheet, especially a 500-
billion ton iceberg known as ``Larsen B'' that has been attributed to 
climate change. What scientific evidence is there that climate change 
is the sole cause of this phenomenon? Is there any scientific evidence 
that anthropogenic influences bore any role in the breakup of Larsen B?
    Response. My expertise and that of Natsource lies in providing 
brokerage services and strategic risk assessment and risk management 
advice to our clients. Our expertise does not cover scientific or 
research issues associated with climate change. Consequently, I am not 
able to provide a response that would be helpful to the committee.

    Question 6. Included in the hearing record as part of my opening 
statement was a Swiss Re report titled ``Climate research does not 
remove the uncertainty; Coping with the risks of climate change'' (copy 
attached). Please explain why you agree or disagree with [certain] 
assertions or conclusions from that report.
    Response. The Swiss Re report offers ideas that many people will 
find useful in the debate over climate change and others will dispute. 
Natsource's expertise does not include issues associated with science 
or research, so we are not in a position to either agree or disagree 
with the conclusions of the report. The Swiss Re report states that the 
firm ``is involved in the political debate about global climate 
protection . . .'' Natsource is not involved in the political debate 
over climate change. Rather, Natsource works with clients--many of whom 
are involved in the debate--to help them assess and manage financial 
risk due to policies to limit greenhouse gas emissions.

    Question 7. Do you, believe that our vulnerability to extreme 
weather conditions is increasing? Why or why not?
    Response. My expertise and that of Natsource lies in providing 
brokerage services and strategic risk assessment and risk management 
advice to our clients. Our expertise does not cover scientific or 
research issues associated with climate change. Consequently, I am not 
able to provide a response that would be helpful to the committee.
                                 ______
                                 
    Responses by Jack D. Cogen to Additional Questions from Senator 
                               Voinovich
    Question 1a. Advocates for the Kyoto Protocol expect aggressive 
reductions in emissions beyond 2012. Some advocate a global 
CO2 concentration target of 550 ppm CO2 by 2100 
which will require substantial reductions in the emissions of developed 
countries (including the United States). If a concentration target of 
550 ppm by 2100 is adopted, what is your estimate of the caps on 
emissions for the United States by 2050? By 2100?
    Response. Natsource's expertise does not include the ability to 
evaluate the relationship between atmospheric concentrations of 
greenhouse gases and emissions caps. Therefore, we are not able to 
provide any estimate with regard to emission caps.

    Question 1b. Are you aware of any economic analysis of the impact 
of these reductions beyond the initial Kyoto target? If so, can you 
provide this analysis?
    Response. We are aware of general analysis of this issue conducted 
by preeminent research institutes.

    Question 2. What portion of Natsource's business is dependent on 
the establishment of a trading scheme for CO2?
    Response. Natsource is engaged in brokering transactions involving 
energy-related commodities. These commodities include electricity, 
natural gas, coal and emissions. Emissions brokering is provided by 
dozens of other firms. Natsource has provided emissions brokering 
services for SO2 and NOx since the firm's establishment in 
1994. These brokerage services contribute to the liquidity of emission 
markets and, ultimately, to finding the most cost-effective strategies 
for companies to reduce emissions. Natsource became engaged in the 
emerging market for greenhouse gas emissions because clients sought our 
expertise--and the expertise of similar firms--in assessing and 
managing the risk they face because of the uncertainty of future 
greenhouse gas policies in the United States and other countries. For 
some companies, a risk management strategy for greenhouse gases 
involves taking advantage of past reduction efforts (e.g., 
sequestration) and obtaining additional reduction credits through 
various types of market transactions. These market transactions can 
involve the purchase of various types of reductions, the purchase of 
call options or the swapping of emission reductions between different 
jurisdictions, to name a few. As I mentioned in my testimony on March 
13, our clients decide they are at risk because of policies to limit 
greenhouse gas emissions and we help them to develop and implement 
strategies to mitigate their risk.
    As far as Natsource's business with respect to CO2 
trading is concerned, we have been involved in brokering a number of 
greenhouse gas transactions in the United States and in other 
countries. Many of these transactions have taken place either to comply 
in the most cost-effective way with government policies to limit 
greenhouse gas emissions, or to begin reducing emissions cost-
effectively in anticipation of expected policies to limit emissions. 
This later type of risk mitigation is similar to the purchase of 
business insurance. While Natsource has been involved in brokering 
transactions, our main focus has also been on providing strategic 
counsel on risk assessment and risk management. Currently, a very small 
portion of Natsource's business is dependent on greenhouse gas trading. 
It is unlikely that the public policy debate over climate change will 
be concluded soon. Therefore, Natsource will continue to provide 
strategic counsel to domestic and international clients.

    Question 3. Has Natsource (including any of its staff) ever been 
involved in advocating the adoption of the Kyoto Protocol?
    Response. In order to provide the highest quality strategic counsel 
to our clients, Natsource is pleased to have staff that have served in 
senior positions in the U.S. Government under different Presidents. In 
their official capacity as representatives of the U.S. Government, some 
of these staff advocated adoption of the Kyoto Protocol. However, 
Natsource neither supports nor opposes adoption of the Kyoto Protocol, 
nor do any of Natsource's staff support or oppose adoption. Natsource 
has clients with a variety of views on the Kyoto Protocol.
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                                          East-West Center,
                                      Honolulu, HI, March 28, 2002.
Hon. James Jefford,
U.S. Senate,
Washington, DC.
    Dear Senator Jeffords: Thank you for the kind invitation to share 
some thoughts on the recently concluded first U.S. National Assessment 
of the Consequences of Climate Variability and Change. I had privilege 
of coordinating the Pacific Islands regional contribution to that 
important endeavor and I am delighted to join my colleagues in the 
Northeast and the other regional programs in summarizing some of the 
insights we gained during the process. I have enclosed a copy of the 
final report of the Pacific Assessment and I hope that you and your 
staff will find it helpful in your efforts.
    The Pacific Assessment explored the consequences of climate 
variability and change for the American Flag Pacific Islands (Hawaii, 
Guam, American Samoa and the Commonwealth of the Northern Mariana 
Islands) and the U.S.-affiliated Pacific Islands that include the 
Federated States of Micronesia, the Republic of the Marshall Islands 
and Republic of Palau. The Pacific Assessment was supported through a 
grant from the National Science Foundation (NSF) with resources from 
the National Oceanic and Atmospheric Administration (NOAA), the 
National Aeronautics and Space Administration (NASA), and the U.S. 
Department of the Interior (DOI). I was the Principal Investigator and 
the East-West Center coordinated the Pacific Assessment in 
collaboration with scientific partners from the University of Hawaii, 
the University of Guam and NOAA (most notably the National Weather 
Service Pacific Region and the National Centers for Environmental 
Prediction of the National Weather Service), and the National Center 
for Atmospheric Research as well as regional organizations such as the 
Pacific Islands Development Program, the Pacific Basin Development 
Council and the South Pacific Regional Environment Programme.
    In addition to a scientific program of data analysis, research and 
modeling aimed at developing a more complete understanding of the 
regional consequences of climate variability and change, the Pacific 
Assessment focused on the establishment of a sustained, interactive 
dialog between scientists and decisionmakers designed to promote the 
use of climate information to address critical issues in the region. 
The research and dialog activities supported through the Pacific 
Assessment have identified a number of specific actions that can be 
taken to reduce climate-related vulnerability and enhance the 
resilience of Pacific Islands in the following critical areas:
     Providing access of freshwater resources;
     Protecting public health;
     Ensuring public safety and protecting community 
infrastructure;
     Sustaining agriculture and sustaining tourism as two 
particularly significant economic sectors; and
     Promoting the wise use of coastal and marine resources 
(including coral reefs and fisheries).
    More than 200 individuals representing the scientific community, 
Government Agencies, businesses, NGO's and community leaders 
contributed their insights and expertise to the Pacific Islands 
Regional Assessment process and the findings and recommendations 
reflected in the final report are already being used by each of those 
stakeholder groups throughout the region.
    Perhaps the most important recommendation to emerge from the effort 
was that the Pacific Assessment should be a continuing process of 
research and dialog with the overarching goal of nurturing the critical 
partnerships necessary to develop climate information to support 
decisionmaking. We have taken this recommendation to heart and are 
actively seeking resources to address some of the critical research and 
information gaps identified during the Pacific Assessment process 
including:
     improving our understanding of climate-related extreme 
events;
     enhancing Pacific Island efforts to reduce vulnerability 
to patterns of natural climate variability such as El Nino and, 
thereby, enhance regional capabilities to adapt to long-term climate 
change;
     improving our ability to document and model climate 
processes and consequences on local, island and regional scales;
     developing reliable projections of climate variability and 
change on various timescales; and
     enhancing our understanding of the consequences of changes 
in climate on the region's unique ecosystems and natural resources, 
including the consequences of those changes for critical economic 
sectors such as tourism, fisheries and agriculture.
    Like our colleagues in other regions, we are committed to securing 
the resources required to help establish a Pacific regional climate 
information service--an integrated scientific and decision support 
system that will support the development and application of new 
scientific insights in response to the information needs identified by 
the governments, businesses, resource managers, public interest groups 
and communities that participated in the Pacific Assessment.
    We would, of course, like to see a similar commitment on the part 
of the U.S. Global Change Research Program Agencies that supported the 
first National Assessment. While we seen promising indications of 
continued interest in Pacific Assessment activities within individual 
Agencies such as NOAA and EPA, the absence of a clear national, 
interagency commitment to sustaining this important regional assessment 
process discouraging and unfortunate.
    In welcoming the regional participants to the Pacific Assessment's 
November 2000 Workshop on Climate and Island Coastal Communities, East-
West Center President Charles Morrison offered the following thought:

          The impacts of the 1997-1998 El Nino are fresh in our minds, 
        and the latest reports of the Intergovernmental Panel on 
        Climate Change confirm what all of you already know--changes in 
        climate matter to individuals, communities, businesses and 
        governments who call islands home. Your valuable natural 
        resources, traditional ways of life, critical economic sectors, 
        community support infrastructure and, to a great extent, your 
        future depend on developing an effective response to the 
        challenges presented by climate variability and change.

    Similar statements have emerged from the Northeast and other 
regional assessments conducted as part of the first National 
Assessment. Changes in climate matter to this region, this Nation and 
the world. As the individual and collected programs initiated during 
the first National Assessment process demonstrated, the scientific 
community, governments, businesses and communities around this Nation 
and throughout the world can meet the challenges and capitalize on the 
opportunities that changes in climate present to us when we combine our 
individual expertise, insights and assets in a continuing program of 
shared learning and joint problem solving. The first National 
Assessment represented a critical step in the emergence of such a new 
climate partnership. The interest that you and your congressional 
colleagues have shown in continuing the National Assessment process is 
encouraging and I'm sure that my regional assessment colleagues join me 
in expressing our willingness to work with you and the Agencies of the 
U.S. Global Change Research Program in this important, shared endeavor.
    Thank you, again for the opportunity to share some of my thoughts 
on the National Assessment process. If you or your staff have any 
questions or would like to discuss this matter further, please do not 
hesitate to contact me.
            Alona pumehana,
                                            Eileen L. Shea,
                                       Climate Project Coordinator.


                                
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