[Senate Hearing 107-807]
[From the U.S. Government Publishing Office]
S. Hrg. 107-807
IMPLEMENTATION OF ENVIRONMENTAL TREATIES
=======================================================================
JOINT HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
AND
COMMITTEE ON
FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
ON
__________
JULY 24, 2002
__________
Printed for the use of the Committee on Environment and Public Works
and the Committee on Foreign Relations
U. S. GOVERNMENT PRINTING OFFICE
83-718 WASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
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 PETE V. DOMENICI, New Mexico
Ken Connolly, Majority Staff Director
Dave Conover, Minority Staff Director
------
COMMITTEE ON FOREIGN RELATIONS
JOSEPH R. BIDEN, Jr., Delaware, Chairman
PAUL S. SARBANES, Maryland JESSE HELMS, North Carolina
CHRISTOPHER J. DODD, Connecticut RICHARD G. LUGAR, Indiana
JOHN F. KERRY, Massachusetts CHUCK HAGEL, Nebraska
RUSSELL D. FEINGOLD, Wisconsin GORDON H. SMITH, Oregon
PAUL D. WELLSTONE, Minnesota BILL FRIST, Tennessee
BARBARA BOXER, California LINCOLN D. CHAFEE, Rhode Island
ROBERT G. TORRICELLI, New Jersey GEORGE ALLEN, Virginia
BILL NELSON, Florida SAM BROWNBACK, Kansas
JOHN D. ROCKEFELLER IV, West MICHAEL B. ENZI, Wyoming
Virginia
Antony J. Blinken, Staff Director
Patricia A. McNerney, Republican Staff Director
(ii)
C O N T E N T S
----------
Page
JULY 24, 2002
OPENING STATEMENTS
Chafee, Hon. Lincoln, U.S. Senator from the State of Rhode Island 71
Feingold, Hon. Russell D., U.S. Senator from the State of
Wisconsin...................................................... 93
Hagel, Hon. Chuck, U.S. Senator from the State of Nebraska....... 78
Jeffords, Hon. James M., U.S. Senator from the State of Vermont..1, 100
Reports:
American Way to the Kyoto Protocol....................... 24-68
Clean Energy: Jobs for America's Future.................. 3-24
Lieberman, Hon. Joseph I., U.S. Senator from the State of
Connecticut.................................................... 102
Sarbanes, Hon. Paul S., U.S. Senator from the State of Maryland.. 69
WITNESSES
Connaughton, James, Chairman, White House Council on
Environmental Quality, Washington, DC.......................... 74
Prepared statement..........................................209-288
Responses to additional questions from Senator Jeffords...... 288
Dernbach, John C., Professor, Widener University Law School...... 89
Article, Synthesis........................................... 335
Prepared statement........................................... 300
Horner, Christopher C., Senior Fellow, Competitive Enterprise
Institute...................................................... 91
Prepared statement........................................... 304
Strong, Hon. Maurice, Chairman, Earth Council Institute Canada,
Toronto, Ontario, Canada....................................... 87
Prepared statement........................................... 292
Supplemental testimony....................................... 298
Turner, Hon. John F., Assistant Secretary for the Bureau of
Oceans and International Environmental and Scientific Affairs,
U.S. Department of State, Washington, DC....................... 71
Prepared statement........................................... 103
Responses to additional questions from Senator Jeffords.....108-209
ADDITIONAL MATERIAL
Articles:
Investing in Health: Fighting Infectious Disease for
Sustainable Development.................................... 205
Modern Developments in the Treaty Process.................... 307
Synthesis, John Dernbach..................................... 335
Lists, Attendees to world environmental summits................109, 119
Policy Books, Global Climate Change...........215-246, 250-266, 266-288
Report, Working for a Sustainable World.........................125-201
Statements:
Global Climate Change, President George W. Bush............211, 246
Reisman, Jon................................................. 333
(iii)
IMPLEMENTATION OF ENVIRONMENTAL TREATIES
----------
WEDNESDAY, JULY 24, 2002
U.S. Senate,
Committee on Environment and Public Works,
Committee on Foreign Relations,
Washington, DC.
The committees met, pursuant to notice, at 10:35 a.m. in
room 406, Senate Dirksen Building, Hon. James M. Jeffords
[chairman of the Committee on Environment and Public Works],
presiding.
Present from the Committee on Environment and Public
Works:: Senators Jeffords, Chafee, and Corzine.
Present from the Committee on Foreign Relations: Senators
Sarbanes and Feingold.
OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM
THE STATE OF VERMONT
Senator Jeffords. This hearing will come to order.
I am glad to be here with my distinguished co-chair from
the Foreign Relations Committee, Senator Sarbanes, for this
joint hearing. I appreciate his willingness to explore today's
topic and the fact that he has joined me as a cosponsor of S.
556, the Clean Power Act. I would also like to applaud him for
his work to bring some truth and sanity to America's accounting
nightmare. Good luck.
The United States is an economic and military superpower,
perhaps the lone superpower. But as the old adage goes, with
great power comes great responsibility. We are able to project
great might far beyond our borders. We are also capable of
contributing to environmental and natural resource damage far
beyond our borders and far in excess of other countries.
The question is, are we acting responsibly to curb negative
impacts abroad and at home?
Are we being good global neighbors and, at a minimum,
keeping our word?
It seems that we may be keeping our literal word, given the
very broad language in many of the agreements, but, in
practical terms, it seems that we are not trying very hard to
keep up with the spirit of some of our commitments.
The time is ripe for Congress to review how the
Administration is implementing our environmental agreements and
commitments. Leaders of many countries will be meeting in
Johannesburg, South Africa, in late August at the World Summit
on Sustainable Development. The occasion is the tenth
anniversary of the United Nations Conference on Environmental
Development held in Rio. I am pleased to note that the
Secretary General of that conference, Mr. Maurice Strong, is
here today to give us an historical perspective on the event
and its lasting effect.
The conferees will be met by a very different U.S.
delegation in South Africa. The previous Bush Administration
provided extensive support to the Rio Earth Summit and brought
many new initiatives to the negotiating table. But this
Administration is likely to send a smaller and lower level
delegation and has sought to narrow the scope of its
discussions. This has apparently included an effort to keep the
global climate change off the agenda.
I am troubled by the Administration's approach to global
warming, especially in light of the Sense of Congress approved
by the Foreign Relations Committee and made part of the Senate-
approved Energy Bill in April. That resolution says the United
States should take responsible action to ensure significant and
meaningful reductions in emissions of greenhouse gases from all
sectors. But it does not appear that responsible action is
taking place and emissions continue to grow.
As my friend Senator Chafee pointed out during our
committee's markup on the Clean Power Act, the Administration's
Climate Action Report says, ``A few ecosystems such as alpine
meadows in the Rocky Mountains and some Barrier Islands are
likely to disappear entirely in some areas. Other ecosystems
are likely to experience major species shifts.''
Our treaty commitment says, ``The ultimate objective of the
Framework Convention on Climate Change is to stabilize
greenhouse gas concentrations in the atmosphere at the level
that will prevent dangerous anthropogenic interference with the
climate system. Such a level should be achieved within a
timeframe sufficient to allow ecosystems to adapt naturally to
climate change.'' Since these ecosystems are likely to
disappear entirely because of the man-made global warming and
will not able to adapt naturally, it appears that we have
entered into a zone of ``dangerous interference.''
Since these are real threats of serious or irreversible
damage, the lack of full scientific certainty about cause and
effect should not be used as an excuse for not reducing
emissions now. That is our commitment. Instead of acting to
reduce emissions, the Administration's approach guarantees that
greenhouse gas emissions will rise. According to Mr.
Connaughton's recent testimony, there is no question about
that.
This kind of inaction does not compact with our commitments
under the Framework Convention and the Sense of Congress,
common sense, or the National Environmental Policy Act, NEPA.
In 1969, NEPA became law. It was probably the first adoption of
a sustainable development philosophy by a government in the
world. To paraphrase it, it says, ``It is the continuing policy
of the Federal Government to use all practicable means and
measures to create and maintain conditions under which man and
nature can exist in productive harmony and fulfill the social,
economic, and other requirements of present and future
generations of Americans.''
Unfortunately, the Administration seems to have lost sight
of these future generations of Americans. Economic development
that does not factor in the environment of quality of life of
those future generations is not sustainable. The Administration
and other opponents of the Kyoto Protocol claim that the
actions that significantly reduce greenhouse gas emissions cost
too much now. They need to look at the long term. They also
need to look at the many studies that have been done that show
a net positive impact of reducing emissions.
I ask unanimous consent that the two studies by Tellus
Institute and a list of other studies be placed in the record.
[The referenced documents follow:]
[World Wildlife Fund, October 2001]
Clean Energy: Jobs For America's Future
a study for world wildlife fund
(By Alison Bailie, Stephen Bernow, William Dougherty, Michael Lazarus,
Sivan Kartha, Tellus Institute and Marshall Goldberg, MRG & Associates)
Acknowledgments
We wish to thank Katherine Silverthorne, Kathleen Sullivan, Brooks
Yeager and Freda Colbert of WWF for their assistance on this report. We
thank Hal Harvey, Marcus Schneider and Eric Heitz of Energy Foundation
for their help in supporting our modeling capabilities. The energy
efficiency analyses and inputs to our modeling effort for buildings,
industry and light duty vehicles were provided by ACEEE (Steve Nadel,
Howard Geller, Neal Elliott and Therese Langer) and John DeDicco of
Environmental Defense. Modifications to the NEMS model, particularly as
related to renewables in the electricity sector, were made at Tellus
with important input from Alan Nogee, Deborah Donovan and Steve Clemmer
of Union of Concerned Scientists; Laura Martin, Tom Petersik, Alan
Beamon, Zia Haq, and Jeff Jones of EIA; and other experts including
Walter Short of NREL, Jack Cadogan of ORNL, Dan Entingh of Princeton
Economic Research, Inc., Etan Gummerman, Lawrence Berkeley Labs,
Francis Wood of OnLocation, Inc., and Michael Brower. We also wish to
thank Francisco de la Chesnaye and Reid Harvey of USEPA, who provided
important data on non-CO2 gases, and Kevin Gurney, who
provided useful insights on land-based carbon. We also thank Skip
Laitner for his ongoing input and insight.
About the Tellus Institute
Founded in 1976 as a nonprofit research and policy organization,
Tellus addresses a broad range of environment and resource issues. The
Institute's staff of 50 scientists and policy analysts is active
throughout North America and the world. Internationally, Tellus works
closely with the Stockholm Environment Institute, hosting SEI's Boston
Center since 1989. The transition to a sustainable world must occur at
many levels. Tellus contributes to this goal through its work on global
scenarios, regional and national strategies, community sustainability
and industrial ecology. Projects focus on such areas as energy, water,
waste, transportation, and integrated sustainability planning. This
institutes diverse sponsors--foundations, governments, multilateral
organizations, nongovernmental organizations and business--reflect this
varied program.
executive summary
Over the past three decades national energy policy has been the
subject of intense debate and policy innovation. Americans were
buffeted by oil embargoes and price increases in the 1970's, enjoyed
low energy prices in the 1980's, and today face the consequences of
electricity deregulation, energy supplier market power and regional
price spikes. To meet these challenges the public and policymakers have
called for the expansion of policies to ensure that energy services
remain readily available and affordable, while protecting public health
and the environment. These policies, which helped to produce the low
energy prices of the 1990's, include appliance efficiency standards,
energy-saving building codes, vehicle fuel efficiency and tailpipe
emissions standards, clean air legislation, and caps on pollution from
power plants. Over the 30-year period during which these policies have
been in effect, the United States has reduced its energy per unit Gross
Domestic Product by about one-third, even though the economy grew by
160 percent.
In order to create a responsible, forward-looking energy policy,
the United States will need to examine a number of important issues.
Will the policy help meet America's energy needs? Will it enhance
national security? Will it contribute to a strong economy? Will it help
meet America's needs for a safe and healthy environment? In order to
begin to answer these questions, World Wildlife Fund commissioned the
Tellus Institute to consider the potential impacts of implementing a
broad suite of clean energy policies over the next 20 years.
Our national choices regarding the production and use of energy
have serious implications for our environment. At every step of the
process, from extraction, to refining, to transport and combustion,
fossil fuels have negative impacts on land and water-based ecosystems.
In addition to these well-known effects, it is now clear that
overreliance on fossil fuels is a major cause of climate change.
Because we consider climate change one of the greatest global threats
to biodiversity, we chose to consider a suite of policies that would
address our energy needs while reducing our dependence on fossil fuels
and decreasing emissions of greenhouse gases. We call this suite of
policies the Climate Protection Scenario.
This study analyzes the employment, macroeconomic, energy and
environmental impacts of implementing the Climate Protection Scenario.
These policies were compared with a base case based on Energy
Information Administration's Annual Energy Outlook (EIA, 2001).
Climate Protection Scenario
Buildings and Industry Sector
Building Codes
Appliance and Equipment Standards
Tax Credits
Public Benefits Fund
Research and Development
Voluntary Measures
Cogeneration for Industrial and District Energy
Electric Sector
Renewable Portfolio Standard
NOx/SO2 Cap and Trade
Carbon Cap and Trade
Transport Sector
Automobile Efficiency Standard Improvements
Promotion of Efficiency Improvements in Freight Trucks
Aircraft Efficiency Improvements
Greenhouse Gas Standards for Motor Fuels
Travel Demand Reductions and High Speed Rail
Implementing these policies would help address many of our most
pressing concerns about energy supply, the economy, employment, energy
security, and the environment. We found that they would lead to net
increases in employment over the next 20 years. They would reduce our
dependence on oil and other fossil fuels, thereby greatly increasing
our energy security. Household energy bills would decrease despite a
small increase in the price of electricity. And, we could mitigate
climate change and other air pollution problems. A more detailed
description of the benefits can be found in the findings section below.
The benefits of implementing the Climate Protection Scenario would
be spread widely across all States and all sectors of the economy--
including construction, transportation, motor vehicles, manufacturing,
services, retail trade and agriculture. However, some industries within
the energy sector would not share in the economic benefits from this
transition, as the economy's reliance on carbon-intensive fossil fuels
would decline. This suggests that while there would be widespread gains
to workers throughout the economy, it would be necessary to provide
assistance and support in order to ensure a just transition for workers
who would otherwise be displaced during the beginning of this
transition.
findings
If Congress were to implement the policies outlined in WWF's
Climate Protection Scenario, the United States could reap the following
benefits:
A net annual employment increase of over 700,000 jobs in
2010, rising to approximately 1.3 million by 2020;
An 8.5 percent decline in carbon emissions between 2000
and 2010, as opposed to the approximately 20 percent increase projected
in the base case, and a 28 percent decline between 2000 and 2020 rather
than a 36 percent increase;
Twenty percent of the electricity generation needed in
2020 would come from wind, solar, biomass and geothermal energy;
Oil consumption would decline by approximately 8 percent
between 2000 and 2020, rather than increase by about 31 percent,
thereby saving money and reducing the vulnerability of citizens and our
economy to oil price shocks;
Overall dependence on the consumption of fossil fuels
would decline more than 15 percent between 2000 and 2020, rather than
increasing by 40 percent as in the base case;
Households and businesses would accumulate savings of
over $600 billion by 2020;
GDP would be about $43.9 billion above the base case in
2020;
Energy-related emissions of air pollution would be
dramatically reduced--by 2020, emissions of sulfur dioxide would be
virtually eliminated, while nitrogen oxide emissions would be almost
halved, and emissions of fine particulates, carbon monoxide, volatile
organic compounds and mercury would be substantially reduced;
An additional $51.4 billion in wage and salary
compensation by 2020 relative to the base case;
Each State would experience a positive net job impact,
rising to about 140,000 in California by 2020; and
Electricity sales from central station power stations
would be about half of projections for 2020, owing to the policy of
promotion of more efficient equipment in homes and offices and the use
of waste heat in combined heat and power plants in buildings and
factories.
introduction
Over the past three decades national energy policy has been the
subject of intense debate and policy innovation. Americans were
buffeted by oil embargoes and price increases in the 1970's, enjoyed
low energy prices in the 1980's, and today face the consequences of
electricity deregulation, energy supplier market power and regional
price spikes. To meet these challenges the public and policymakers have
called for the expansion of policies to ensure that energy services
remain readily available and affordable, while protecting public health
and the environment. These policies, which helped to produce the low
energy prices of the 1990's, include appliance efficiency standards,
energy-saving building codes, vehicle fuel efficiency and tailpipe
emissions standards, clean air legislation and caps on pollution from
power plants. Over the 30-year period during which these policies have
been in effect, the United States has reduced its energy per unit Gross
Domestic Product by about one-third, even though the economy grew by
160 percent.
In order to create a responsible, forward-looking energy policy the
United States will need to examine a number of important issues. Will
the policy help meet America's energy needs? Will it enhance national
security? Will it contribute to a strong economy? Will it help meet
America's needs for a safe and healthy environment? In order to begin
to answer these questions, World Wildlife Fund commissioned the Tellus
Institute to consider the potential impacts of implementing a broad
suite of clean energy policies over the next 20 years.
Our national choices regarding the production and use of energy
have serious implications for our environment. At every step of the
process, from extraction, to refining, to transport and combustion,
fossil fuels have negative impacts on land and water-based ecosystems.
In addition to these well-known effects, it is now clear that
overreliance on fossil fuels is a major cause of climate change.
Because we consider climate change one of the greatest global threats
to biodiversity, we chose to consider a suite of policies that would
address our energy needs while reducing our dependence on fossil fuels
and decreasing emissions of greenhouse gases. We call this suite of
policies the Climate Protection Scenario.
This study analyzes the employment, macroeconomic, energy and
environmental impacts of implementing the Climate Protection Scenario.
These policies were compared with a base case based on Energy
Information Administration's Annual Energy Outlook (EIA, 2001).
Climate Protection Scenario
Buildings and Industry Sector
Building Codes
Appliance and Equipment Standards
Tax Credits
Public Benefits Fund
Research and Development
Voluntary Measures
Cogeneration for Industrial and District Energy
Electric Sector
Renewable Portfolio Standard
NOx/SO2 Cap and Trade
Carbon Cap and Trade
Transport Sector
Automobile Efficiency Standard Improvements
Promotion of Efficiency Improvements in Freight Trucks
Aircraft Efficiency Improvements
Greenhouse Gas Standards for Motor Fuels
Travel Demand Reductions and High Speed Rail
A detailed description of the policies can be found in Annex A.
By implementing this suite of policies we can bring together the
various strands connecting our energy, environment, climate, and
economic policies into a coherent and harmonious strategy. The expected
employment, energy and economic, and environmental impacts are
discussed in separate sections below. A detailed description of the
methodologies applied can be found in Annex B.
i. employment and macroeconomic impacts
The study finds that implementation of the Climate Protection
Scenario could lead to a net annual employment increase of over 700,000
jobs by 2010, increasing to about 1.3 million by 2020, while increasing
overall national GDP and incomes. These benefits are spread widely
across all sectors of the economy--including construction,
transportation, motor vehicles, manufacturing, services, retail trade
and agriculture. The benefits derive from using our energy resources
more efficiently and cost-effectively, commercializing cleaner
technologies, and recycling the revenues of an electric sector carbon
cap and permit trade system to households and businesses. Each State
would enjoy net increases in employment; incomes and economic output as
benefits are likely to be spread widely across the country.
As the economy's reliance on carbon-intensive fossil fuels
declines, some industries within the energy sector would not share in
the economic benefits from this transition. This suggests that while
there would be widespread gains to workers throughout the economy, it
would be necessary to provide assistance and support that ensured a
just transition for workers who would otherwise be displaced during the
beginning of this transition. One source of financial resources for
this assistance could be a portion of the revenues derived from the
government auction of carbon permits. At the same time, energy
suppliers could offset some potential employment losses by moving
aggressively into the energy efficiency and renewable energy businesses
and assisting their work forces in transitioning to these new fields.
For example, with electric sector restructuring, some existing
utilities and suppliers could shift toward providing energy-efficiency
services and alternative energy. Similarly, natural gas and oil
suppliers could shift toward providing alternative fuels such as those
derived from biomass, wind, and solar resources.
National Impacts
Estimation of the macroeconomic impacts of the climate protection
policies was based on the incremental investments and savings required
to implement the policies found in the July 2001 study. The analysis
tracks expenditures on more efficient lighting, high efficiency motors,
more efficient automobiles and many other energy-using technologies
that reduce consumption of high carbon fuels. These expenditures create
incomes and jobs for the manufacturers and workers who produce the
equipment and for the industries and workers who supply and service
those producers. They also reduce the energy bills of offices, firms
and households who utilize the more efficient technologies. The savings
on energy bills will create additional income and jobs in the
industries and services in which these new savings are spent.
The set of policies analyzed here gives rise to large energy
savings, positive job impacts and new opportunities that far exceed the
losses that would occur in the traditional energy supply sectors. The
analyses also take account of recycling back to households and business
the revenues derived from government auction of carbon permits to
electricity suppliers.
Figures 1a, 1b and 1c show the positive macroeconomic impacts of
the Climate Protection Scenario--overall increases above base case in
jobs, in incomes per household (a benefit in addition to household
energy bill savings) and in GDP. By the year 2020, there would be an
additional $400 per household increase in annual wage and salary
earnings ($51.4 billion total), while about 1.3 million net new jobs
would be created, relative to the base case. At the same time, GDP is
projected to be about $43.9 billion above the base case in 2020. Major
contributions to increases in annual wage and salary earnings arise
from purchases of energy efficient equipment and the spending of net
energy bill savings by businesses and households. While these increases
are significant, the impacts are relatively small in comparison to
overall economic activity. For instance, increasing the nation's GDP by
$43.9 billion in 2020 represents only 0.4 percent of the $11.8 trillion
(1998$) projected GDP for that year.
Table 1a shows that by 2010 there could be a net job increase of
almost 750,000 jobs, with a net increase in annual wage and salary
compensation of about $220 per household ($26 billion total) and a $23
billion net increase in GDP. Table 1b reveals that by 2020 these
figures could grow to a net job increase of slightly more than 1.3
million jobs, a net increase in annual wage and salary compensation of
about $400 per household ($51 billion total) and a net increase in GDP
of $44 billion.
Table 1a: Macroeconomic Impacts of Policy Scenario by Sector, 2010
------------------------------------------------------------------------
Net Change in Wage
---------------------------------------
Net Change and Salary
--------------------------- Net Change
Compensation in GDP
In Jobs (Million (Million
1998$) 1998$)
------------------------------------------------------------------------
Agriculture..................... 18,600 $160 $530
Other Mining.................... 6,900 $420 $880
Coal Mining..................... (10,100) ($990) ($2,090)
Oil/Gas Mining.................. (26,900) ($2,280) ($9,040)
Construction.................... 353,200 $10,440 $14,990
Food Processing................. 2,700 $110 $210
Other Manufacturing............. 52,500 $3,980 $6,020
Pulp and Paper Mills............ 2,800 $240 $390
Oil Refining.................... (2,600) ($260) ($780)
Stone, Glass, and Clay.......... 14,100 $750 $1,260
Primary Metals.................. 11,800 $940 $1,360
Metal Durables.................. 30,400 $2,140 $3,520
Motor Vehicles.................. 36,500 $2,810 $4,610
Transportation, Communication, 21,500 $1,100 $2,240
and Utilities..................
Electric Utilities.............. (18,400) ($1,900) ($10,070)
Natural Gas Utilities........... (16,700) ($1,520) ($5,510)
Wholesale Trade................. 5,600 $350 $640
Retail Trade.................... 14,400 $290 $510
Finance......................... 31,600 $2,380 $4,890
Insurance/Real Estate........... (5,900) ($160) ($1,110)
Services........................ 191,900 $5,730 $8,080
Education....................... 3,800 $140 $140
Government...................... 27,200 $1,180 $1,550
Total....................... 744,900 $26,050 $23,220
------------------------------------------------------------------------
Table 1b: Macroeconomic Impacts of Policy Scenario by Sector, 2020
------------------------------------------------------------------------
Net Change in Wage
---------------------------------------
Net Change and Salary
--------------------------- Net Change
Compensation in GDP
In Jobs (Million (Million
1998$) 1998$)
------------------------------------------------------------------------
Agriculture..................... 63,100 $620 $2,120
Other Mining.................... 11,200 $870 $1,830
Coal Mining..................... (23,900) ($2,340) ($4,940)
Oil/Gas Mining.................. (61,400) ($5,210) ($20,600)
Construction.................... 340,300 $10,460 $15,030
Food Processing................. 16,100 $750 $1,380
Other Manufacturing............. 77,900 $9,360 $14,160
Pulp and Paper Mills............ 5,000 $570 $950
Oil Refining.................... (6,300) ($650) ($1,910)
Stone, Glass, and Clay.......... 24,800 $1,630 $2,750
Primary Metals.................. 18,600 $2,190 $3,180
Metal Durables.................. 42,000 $4,670 $7,670
Motor Vehicles.................. 54,300 $5,090 $8,350
Transportation, Communication, 50,500 $3,320 $6,750
and Utilities..................
Electric Utilities.............. (35,100) ($5,180) ($27,540)
Natural Gas Utilities........... (26,200) ($3,080) ($11,180)
Wholesale Trade................. 12,400 $1,030 $1,890
Retail Trade.................... 190,300 $4,410 $7,680
Finance......................... 42,100 $4,570 $9,410
Insurance/Real Estate........... 11,900 $350 $2,420
Services........................ 394,600 $13,080 $18,460
Education....................... 33,200 $1,330 $1,340
Government...................... 78,900 $3,550 $4,660
Total....................... 1,314,300 $51,390 $43,860
------------------------------------------------------------------------
State-By-State Employment Impacts
The preceding analysis suggests that implementing the Climate
Protection Scenario policies would result in substantial net employment
gains at the national level. Yet, estimates of State-level impacts
provide important additional insight into the benefits of such a policy
initiative.
The detailed distribution of the national employment impacts across
the States is difficult to predict. However, it is likely that the
large net benefits found in tables 1a and 1b will be rather widely and
evenly distributed across the States, largely owing to the widespread
effects of respending the energy savings. The results of our indicative
analysis of the State-level employment are given in table 2.
Table 2: Job Impacts by State
----------------------------------------------------------------------------------------------------------------
State Net Job Gain 2010 Net Job Gain 2020
----------------------------------------------------------------------------------------------------------------
01...................................... Alabama......................... 13,100 22,600
02...................................... Alaska.......................... 2,800 5,000
04...................................... Arizona......................... 11,200 19,900
05...................................... Arkansas........................ 7,500 13,200
06...................................... California...................... 77,400 141,400
08...................................... Colorado........................ 10,000 17,700
09...................................... Connecticut..................... 7,800 14,100
10...................................... Delaware........................ 2,200 3,800
11...................................... District of Columbia............ 1,600 3,500
12...................................... Florida......................... 37,000 66,800
13...................................... Georgia......................... 21,300 38,300
15...................................... Hawaii.......................... 2,700 5,000
16...................................... Idaho........................... 3,500 6,200
17...................................... Illinois........................ 31,900 56,400
18...................................... Indiana......................... 20,900 36,000
19...................................... Iowa............................ 8,300 14,700
20...................................... Kansas.......................... 7,100 12,500
21...................................... Kentucky........................ 11,500 19,300
22...................................... Louisiana....................... 19,200 32,900
23...................................... Maine........................... 3,700 6,600
24...................................... Maryland........................ 12,500 22,000
25...................................... Massachusetts................... 14,500 26,700
26...................................... Michigan........................ 29,800 51,000
27...................................... Minnesota....................... 13,400 24,000
28...................................... Mississippi..................... 7,200 12,600
29...................................... Missouri........................ 15,100 26,600
30...................................... Montana......................... 2,300 4,000
31...................................... Nebraska........................ 4,700 8,500
32...................................... Nevada.......................... 5,300 9,100
33...................................... New Hampshire................... 2,800 5,000
34...................................... New Jersey...................... 20,200 36,200
35...................................... New Mexico...................... 4,200 7,100
36...................................... New York........................ 38,000 68,200
37...................................... North Carolina.................. 22,400 38,900
38...................................... North Dakota.................... 1,900 3,300
39...................................... Ohio............................ 34,600 59,900
40...................................... Oklahoma........................ 8,200 13,700
41...................................... Oregon.......................... 8,600 15,600
42...................................... Pennsylvania.................... 31,600 55,500
44...................................... Rhode Island.................... 2,100 3,900
45...................................... South Carolina.................. 11,500 20,000
46...................................... South Dakota.................... 2,000 3,500
47...................................... Tennessee....................... 17,100 29,800
48...................................... Texas........................... 71,500 123,400
49...................................... Utah............................ 5,700 10,300
50...................................... Vermont......................... 1,600 2,800
51...................................... Virginia........................ 18,500 32,100
53...................................... Washington...................... 16,600 29,700
54...................................... West Virginia................... 3,800 6,000
55...................................... Wisconsin....................... 14,900 26,300
56...................................... Wyoming......................... 1,700 2,600
Total........................... 744,900 1,314,300
----------------------------------------------------------------------------------------------------------------
Some of these State-level employment impacts are associated with
the direct expenditures made for more efficient equipment and renewable
technologies and fuels. Although manufacturers and venders of relevant
products and services may not be uniformly spread across the States,
they are rather widely dispersed. For example, manufacturers of
advanced power plants, including gas turbines, natural gas combined
cycle systems, combined heat and power units and fuel cells are located
in many regions of the country. Manufacture of more efficient and
alternative-fuel automobiles is likely to continue to be located
largely with current manufacturers. Petroleum companies with experience
in industrial chemistry can play a role in providing cellulosic ethanol
or other synthetic fuels. Biomass fuels for transport and power
generation will come from States that could provide biomass feedstock.
In some States, farms could become sites for wind electric generators
and derive income from these facilities.
While these energy-related purchases can stimulate local economic
activity and jobs, the major drivers of the overall national employment
increases are the net energy-bill savings to households and businesses,
which tend to be spent on myriad other purchases across the economy.
This spending occurs broadly across all sectors, with much of it local.
In those States that supply fossil fuels, losses to these industries
and related businesses would be more than offset by gains in other
sectors of those State's economies, owing to the expenditures on more
efficient equipment and cleaner energy resources and re-spending of
energy bill savings. Thus, the national job increases--in construction,
services, education, finance, government, miscellaneous manufacturing,
agriculture and other sectors--would likely be widespread throughout
the country.
While this analysis indicates that there would be overall
employment benefits at the State as well as the national level, some
industries could face near-term losses before they could adapt to new
energy markets or before the benefits of the energy efficiency measures
were fully realized. Some of the savings realized from implementing the
policies could be used for assistance in a just transition for affected
workers and communities.
States such as Texas, which are large energy producers and have
relatively low energy prices compared with the national average, still
enjoy large benefits. As table 2 indicates, the State of Texas, which
currently leads the Nation in total energy consumed and is second only
to California in total energy expenditures, could expect to have a net
gain of about 120,000 jobs in 2020 if these national energy policies
were adopted.
ii. energy impacts
In this section we analyze expected impacts of the Climate
Protection Scenario policy package on energy consumption, energy
prices, and household and business energy budgets.
Figure 2a shows how the Climate Protection Scenario policies affect
our dependence on the consumption of fossil fuels, which declines by
more than 15 percent between 2000 and 2020, rather than increasing by
40 percent as in the base case. Oil consumption itself declines by
about 8 percent between 2000 and 2020 instead of increasing by 32
percent, largely from improved efficiency in vehicles and other
transportation modes, thereby saving money and reducing vulnerability
of citizens and our economy to oil price shocks. While most of this
reduced fossil fuel dependence results from policies that induce energy
efficiency, figure 2a also shows that the policy case increases the use
of renewable energy, which roughly doubles from current levels instead
of remaining essentially constant.
Figure 2b shows how electricity sales from central station power
stations would be less than half of projections for 2020, owing to the
policy of promoting more efficient equipment in homes and offices and
using waste heat in combined heat and power plants in buildings and
factories. Electricity sales would decline by 33 percent from 2000 to
2020 rather than increase by 45 percent. By 2020, electricity purchases
by residential, commercial and industrial consumers would be 55 percent
below business as usual and 20 percent of the remaining generation
would come from wind, solar, biomass and geothermal energy.
Figures 3a and 3b show how the policies affect natural gas prices
and the costs to households for electricity. Natural gas prices would
decline to about 25 percent lower than the base case by 2020. All
sectors would enjoy declines in their electricity bills, owing to
greater efficiency, even though prices per unit of power would increase
in moving to cleaner generation. By 2020 residential consumers would
pay about $24 less per month.
Figures 4a and 4b show that net savings to households and business
would be substantial, reaching more than $600 billion combined by 2020.
iii. environmental impacts
Virtually every step in the process of supplying energy from fossil
fuels damages the environment. Drilling, mining and pipeline
installation can disrupt whole ecosystems. Transportation of fossil
fuels results in spills, threatening wildlife and human communities
that depend on the natural environment. Fossil fuel combustion emits
pollutants that cause global warming, acid rain and smog. Smog and
other air pollutants can exacerbate lung disease and cause crop, forest
and property damage. Acid rain acidifies the soil and water, killing
plants, fish and animals that depend on them. The impacts of global
warming pose the greatest global threat to biodiversity.
These environmental threats could be mitigated by a proactive
effort to direct our energy supply system away from its current
dependence on fossil fuels and toward increased energy efficiency and
renewable energy technologies. However, current U.S. policies point in
the opposite direction. The fossil fuel and nuclear industries continue
to benefit from both direct and indirect subsidies from taxpayers,
citizens and the environment, while cleaner energy resources and more
efficient technologies are required to prove themselves in a not truly
competitive marketplace. Despite the proven economic and environmental
track record of energy efficiency, renewables, and pollution
limitations, the administration's energy plan and the House of
Representative's energy legislation continue to promote fossil fuels at
the expense of the environment and the economy.
The policies in the Climate Protection Scenario begin to reduce our
dependence on fossil fuels and would thereby dramatically change the
trajectory of U.S. carbon emissions from their current rapidly rising
path to a downward trajectory needed for long-term climate
stabilization. Figure 5 shows that between 2000 and 2010, carbon
emissions would decline by 8.5 percent rather than increase by the 20
percent projected in the base case. The July 2001 study shows that the
Kyoto Protocol target could be met by implementing these cost-effective
policies, reducing non-energy related greenhouse gases and utilizing
international trading mechanisms. Under the Climate Protection
Scenario, by 2020 carbon emissions would be 47 percent below business
as usual and 19 percent below 1990 levels.
At the same time, the proposed policies would virtually eliminate
emissions of SO2 and reduce NOx emissions by almost 30
percent, as shown in figures 6a and 6b below. In addition, the proposed
policies would substantially reduce emissions of fine particulates,
carbon monoxide, volatile organic compounds and mercury.
ANNEX A
policies
This study examines a broad set of national policies that would
increase energy efficiency, accelerate the adoption of renewable energy
technologies, and shift to less use of carbon-intensive fossil fuels.
The policies address major areas of energy use in the buildings,
industrial, transport, and electrical sectors. Analyses of the
investment costs and energy savings of policies to promote energy
efficiency and cogeneration in the residential, commercial, and
industrial sectors were taken primarily from the American Council for
an Energy Efficient Economy (1999; 2001).
Below we group these policies into the particular sector where they
take effect, and describe the key assumptions made concerning the
technological impacts of the individual policies. Unless otherwise
indicated, each of the policies is assumed to start in 2003.
As explained further in the methodology discussion in the next
section, we adapted the Energy Information Administration's 2001
Reference Case Forecast (EIA 2001) to create a slightly revised ``base
case.'' Our policies and assumptions build on those included in this
base case forecast (i.e., we avoid taking credit for emissions
reductions, costs, or savings already included in the EIA 2001
Reference Case). When taken together, the policies described in this
section represent a Climate Protection Scenario that the United States
could pursue to achieve significant carbon reductions.
Policies in the Buildings and Industrial Sectors
Carbon emissions from fuel combustion in the buildings (including
both residential and commercial) sector account for about 10 percent of
U.S. greenhouse gas emissions, while emissions from the industrial
sector account for another 20 percent. When emissions associated with
the electricity consumed are counted, these levels reach over 35
percent for buildings and 30 percent for industry. We analyzed a set of
policies that include new building codes, new appliance standards, tax
incentives for the purchase of high efficiency products, a national
public benefits fund, expanded research and development, voluntary
agreements, and support for combined heat and power.
Building Codes
For this policy, we assume that DOE enforces the commercial
building code requirement in the Energy Policy Act of 1992 (EPAct) and
that States comply. We also assume that relevant States upgrade their
residential energy code to either the 1995 or 1998 Model Energy Code,
voluntarily or following adoption of a new Federal requirement.
Furthermore, we assume that the model energy codes are significantly
improved during the next decade, and that all States adopt mandatory
codes that go beyond current ``good practice'' by 2010. To quantify the
impact of these changes, we assume a 20 percent energy savings in
heating and cooling in buildings in half of new homes and commercial
buildings.
New Appliance and Equipment Efficiency Standards
For this policy, we assume that the government upgrades existing
standards or introduces new standards for key appliances and equipment
types: distribution transformers, commercial air conditioning systems,
residential heating systems, commercial refrigerators, exit signs,
traffic lights, torchiere lighting fixtures, ice makers, and standby
power consumption for consumer electronics. We also assume higher
energy efficiency standards for residential central air conditioning
and heat pumps than was recently allowed by the Bush Administration.
These are measures that can be taken in the near term, based on cost-
effective available technologies.
Tax Incentives
This policy provides initial tax incentives for a number of
products. For consumer appliances, we assumed a tax incentive of $50 to
$100 per unit. For new homes that are at least 30 percent more
efficient than the Model Energy Code, we assumed an incentive of up to
$2,000 per home; for commercial buildings with at least 50 percent
reduction in heating and cooling costs relative to applicable building
codes, we applied an incentive of $2.25 per square foot. For building
equipment such as efficient furnaces, fuel cell power systems, gas-
fired heat pumps, and electric heat pump water heaters, we assumed a 20
percent investment tax credit. Each of these incentives would be
introduced with a sunset clause, terminating them or phasing them out
in approximately 5 years, to avoid their becoming permanent subsidies.
National Public Benefits Fund
Electric utilities have historically funded programs to encourage
more efficient energy-using equipment, assist low-income families with
home weatherization, commercialize renewables, and undertake research
and development (R&D). Such programs have typically achieved
electricity bill savings for households and businesses that are roughly
twice the program costs (Nadel and Kushler, 2000). Despite these
successes, electric industry restructuring, deregulation, and
increasing price competition have caused utilities to reduce these
``public benefit'' expenditures over the past several years. In order
to preserve such programs, 15 States have instituted public benefits
funds that are financed by a small surcharge on all power delivered to
consumers.
This study's policy package includes a national-level public
benefits fund (PBF) fashioned after the proposal introduced by Sen.
Jeffords (S. 1333). The PBF would levy a surcharge of 0.2 cents per
kilowatt-hour on all electricity sold, costing the typical residential
consumer about $1 per month. This Federal fund would provide matching
funds for States for approved public benefits expenditures. In this
study, the PBF is allocated to several different programs directed at
improvements in lighting, air conditioning, motors, and other cost-
effective energy efficiency improvements in electricity-using
equipment.
Expand Federal Funding for Research and Development in Energy Efficient
Technologies
Federal R&D funding for energy efficiency has been a spectacularly
cost-effective investment. The DOE has estimated that the energy
savings from 20 of its energy efficiency R&D programs has been roughly
$30 billion so far--more than three times the Federal appropriation for
the entire energy efficiency and renewables R&D budget throughout the
1990's (EERE, 2000).
Tremendous opportunities exist for further progress in material-
processing technologies, manufacturing processing, electric motors,
windows, building shells, lighting, heating/cooling systems, and super-
insulation, for example. EPA's Energy Star programs have complemented
and amplified the impact of Federal R&D, by labeling and certifying to
increase consumer awareness of energy efficiency opportunities. R&D
efforts should be increased and EPA should be allocated the funds to
broaden the scope of its Energy Star program, expanding to other
products (refrigerators, motors) and building sectors (hotels,
retailers), and the vast market of existing buildings that could be
retrofitted. In this study, we assume that increased funding to expand
research and development efforts in industry (e.g., motors), buildings
(e.g., advanced heating/cooling), and transport (e.g., more fuel-
efficient cars and trucks) will lead to more energy-savings products
becoming commercially available.
Industrial Energy Efficiency through Intensity Targets
There is great potential for cost-effective efficiency improvements
in both energy-intensive and non-energy intensive industries (Elliott
1994). For example, an in-depth analysis of 49 specific energy-
efficient technologies for the iron and steel industry found a total
cost-effective energy savings potential of 18 percent (Worrell, Martin,
and Price 1999). In this study, we assume Federal initiatives to
motivate and assist industry to identify and exploit energy efficiency
opportunities. Government agencies would provide technical and
financial assistance, and expand R&D and demonstration programs. In
addition to these carrots, government may need to brandish a stick in
order to induce a large fraction of industries to make serious energy
efficiency commitments. If industry does not respond to the Federal
initiatives at a level sufficient to meet progressive energy efficiency
targets, a mandatory, binding energy intensity standard should be
triggered to ensure the targets are attained.
Support for Co-generation
Cogeneration (or, combined heat and power--CHP) is a super-
efficient means of coproducing two energy-intensive products that are
usually produced separately--heat and electricity. The thermal energy
produced in cogeneration also can be used for (building and process)
cooling or to provide mechanical power. While CHP already provides
about 9 percent of all electricity in the United States, there are
considerable barriers to its wider cost-effective implementation
(Elliott and Spurr, 1999). In this study, we assume the adoption of
policies to establish a standard permitting process, uniform tax
treatment, accurate environmental standards, and fair access to the
grid to sell or purchase electricity. Such measures would help to
unleash a significant portion of the enormous potential for CHP. In
this study, we assumed 50 GW of new CHP capacity by 2010, and an
additional 95 GW between 2011 and 2020. With electricity demand reduced
by the various energy efficiency policies adopted in this study,
cogenerated electricity reaches 8 percent of total remaining
electricity requirements in 2010 and 36 percent in 2020.
Policies in the Electric Sector
A major goal of U.S. energy and climate policy will be to
dramatically reduce carbon and other pollutant emissions from the
electric sector, which is responsible for more than one-third of all
U.S. greenhouse gas emissions. We analyzed a set of policies in the
electric sector that include standards and mechanisms to help overcome
existing market barriers to investments in technologies that can reduce
emissions. Three major policies--a renewable portfolio standard, a cap
on pollutant emissions, and a carbon cap and trade system--were
analyzed as described below.
Renewable Portfolio Standard
A Renewable Portfolio Standard (RPS) is a flexible, market-oriented
policy for progressively increasing the use of renewable energy
resources and technologies for electricity production. An RPS sets a
minimum requirement for the fraction of total electricity generation to
be met by renewable electricity in each year, and requires each
supplier of electricity to meet the minimum either by producing that
fraction in its mix or by acquiring credits from suppliers that exceed
the minimum. The market determines the portfolio of technologies and
geographic distribution of facilities that meet the national target at
least cost. This is achieved by a trading system that awards credits to
generators for producing renewable electricity and allows them to sell
or purchase these credits. Thirteen States--Arizona, Connecticut,
Hawaii, Iowa, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New
Mexico, Pennsylvania, Texas, and Wisconsin--already have Renewable
Portfolio Standards. Senator Jeffords has introduced a bill (S. 1333)
that would establish a national RPS.
The RPS provides strong incentives for suppliers to design and site
the lowest cost, highest value and most reliable renewable electricity
projects. It also provides assurance and stability to renewable
technology vendors, by guaranteeing markets for renewable power and
allowing them to capture the financial and administrative advantages
that come with planning in a more stable market environment. Yet it
still maintains a competitive environment that encourages developers to
innovate. Finally, by accelerating the deployment of renewable
technologies and resources, the RPS also accelerates the learning and
economies of scale that will allow renewable resources and technologies
to become increasingly competitive with conventional technologies. This
is particularly important, as the demands of climate stabilization in
coming decades will require more renewable energy than we can deploy in
the next two decades.
In this study, we have applied an RPS that starts at a 2 percent
requirement in 2002, grows to 10 percent in 2010, and to 20 percent in
2020, after all efficiency policies are included. Wind, solar,
geothermal, biomass, and landfill gas are eligible renewable sources of
electricity, but environmental concerns exclude municipal solid waste
(owing to concerns about toxic emissions from waste-burning plants) and
large-scale hydro (which raises environmental concerns and need not be
treated as an emerging renewable resource as it already supplies nearly
10 percent of the nation's electricity supply). We also assume a
subsidy to grid-connected solar photovoltaic electricity generation, in
order to introduce a small amount of this technology into the
generation mix. The purpose of this is to induce technology learning,
performance improvement and scale economies to help achieve increased
technology diversity and another zero emissions option for the longer
term. The level is kept small so that cost and price impacts are
minimal.
Tightening of SO2 and NOx Emission Regulations
The Clean Air Act Amendments currently require minimal to modest
emissions reductions through 2010 and no reductions after that. Yet,
despite the improvements brought about by the Clean Air Act and its
amendments, recent studies have confirmed that SO2 and NOx
continue to damage lake and forest ecosystems, decrease agricultural
productivity and harm public health through its impact on urban air
quality (Clean Air Task Force, 2000.)
In this study, we assume a tightened SO2 cap-and-trade
system that reduces sulfur dioxide emissions to roughly 40 percent of
current levels by 2010 and to one-third of current levels by 2020. We
also impose a cap-and-trade system on NOx emissions in the summertime,
when NOx contributes more severely to photochemical smog. This system
expands the current cap-and-trade program, which calls on 19 States to
meet a target in 2003 that then remains constant and includes all
States with a cap that is set first in 2003 but decreases in 2010,
relative to 1999 levels. The cap results in a 45 percent reduction from
current annual electric sector NOx emissions by 2010 and 83 percent by
2020.
Carbon Cap-And-Trade Permit System
This study assumes that a cap-and-trade system for carbon dioxide
emissions is introduced in the electric sector. The cap is set to
achieve progressively more stringent targets over time, starting in
2003 at 2 percent below current levels, increasing to 12 percent below
current levels by 2010 and 30 percent below by 2020. A progressively
more stringent target reduces demand for coal, and hence both
combustion-related air pollution and mining-related pollution of
streams and degradation of landscapes and terrestrial habitats.
In the SO2, NOx, and CO2 trading systems,
permits are distributed through an open auction, and the resulting
revenues can be returned to households (e.g., through a tax reduction
or as a rebate back to households). Recent analyses suggest that an
auction is the most economically efficient way to distribute permits,
as it would meet emissions caps at lower cost than allocations based on
issuing grandfathered allowances or equal per kWh allowances (Burtraw,
et al. 2001). Implementing such auctions for the electric sector also
could set the stage for an economy-wide approach to carbon reduction in
future years based on auctioning. In this study, the price of auctioned
carbon permits reaches $100 per metric ton carbon.
With a cap-and-trade system in place for CO2, SOx and
NOx, this scenario reduces multiple emissions from power plants in a
manner similar to proposals currently under consideration in Congress.
The reductions in these three pollutants are as deep as those imposed
in four pollutant bills, and are achieved within a comparable
timeframe. (The Department of Energy's NEMS model unfortunately does
not explicitly track mercury, making it impossible to compare the
results of this study to the mercury requirement in S. 556 and H.R.
1256.)
Policies in the Transport Sector
Another goal of U.S. energy and climate policy will be to reduce
oil use, carbon emissions and pollution from the transport sector,
which is responsible for about one-third of all U.S. greenhouse gas
emissions. We analyzed a set of policies in the transportation sector
that include improved efficiency (light duty vehicles, heavy duty
trucks and aircraft), a full fuel-cycle GHG standard for motor fuels,
measures to reduce road travel, and high speed rail.
Strengthened Fuel Economy Standards
Today's cars are governed by fuel economy standards that were set
in the mid-1970's. The efficiency gains made in meeting those standards
have been entirely overwhelmed by increases in population and driving,
as well as the trend toward gas-guzzling SUVs. When the fuel economy
standards were implemented, light trucks only accounted for about 20
percent of personal vehicle sales. Light trucks now account for nearly
50 percent of new vehicle sales; this has brought down the overall fuel
economy of the light duty vehicle fleet, which now stands at its lowest
average fuel economy since 1981. If the fuel economy of new vehicles
had held at the levels for vehicles sold in 1981, rather than tipping
downward, American vehicle owners would be importing half a million
fewer barrels of oil each day.
In this study, we introduce a strengthened Corporate Average Fuel
Economy (CAFE) standard for cars and light trucks, along with
complementary market incentive programs. Specifically, fuel economy
standards for new cars and light trucks rise from EIA's projected 25.2
mpg for 2001 to 36.5 mpg in 2010, continuing to 50.5 mpg by 2020. This
increase in vehicle fuel economy would save by 2020 approximately twice
as much oil as could be pumped from an Arctic National Wildlife Refuge
oil field over its entire 50-year lifespan (USGS, 2001). Based on
assessments of near-term technologies for conventional vehicles, and
advanced vehicle technologies for the longer-term, we estimate that the
2010 CAFE target can be met with an incremental cost of approximately
$855 per vehicle, and the 2020 CAFE target with an incremental cost of
$1,900. \1\ To put these costs in perspective, the fuel savings at the
gasoline pump for these more efficient vehicles would be two to three
times these incremental costs over the vehicle's lifetime. \2\
---------------------------------------------------------------------------
\1\Assuming a mean value at a market price of oil of $20/barrel.
\2\ Assuming a retail price of gasoline of $1.50/gallon, a 10-year
life of the vehicle, and 12,000 miles per year.
---------------------------------------------------------------------------
Improving Efficiency of Freight Transport
We also assume policies to improve fuel economy for heavy-duty
freight trucks, which account for approximately 16 percent of all
transport energy consumption. Improvements such as advanced diesel
engines, drag reduction, rolling resistance, load reduction strategies,
and low friction drivetrains would increase the fuel economy, and thus
decrease the oil requirements, of freight trucks. Many of these
technologies are available today while others, such as advanced diesel
and turbine engines, have been demonstrated technically but are not yet
commercially available.
To accelerate the improvement in heavy duty truck efficiency, we
have assumed expanded R&D for heavy duty diesel technology, vehicle
labeling and promotion, financial incentives to stimulate the
introduction of new technologies, efficiency standards for medium-and
heavy-duty trucks, and fuel taxes and user-fees calibrated to eliminate
the existing subsidies for freight trucking. Together, it is estimated
that these policies could bring about a fuel economy improvement of 6
percent by 2010, and 23 percent by 2020, relative to today's trucks.
Improving Efficiency of Air Travel
Air travel is the fastest growing mode of travel, and far more
energy intensive than vehicle travel. One passenger mile of air travel
today requires about 1.7 times as much fuel as vehicle travel. \3\ We
assume policies to improve the efficiency of air travel, including R&D
for efficient aircraft technologies, fuel consumption standards, and a
revamping of policies that subsidize air travel through public
investments.
---------------------------------------------------------------------------
\3\ Assuming typical vehicle load factors of 0.33 for autos and
0.6 for aircraft.
---------------------------------------------------------------------------
We assume that air travel efficiency improves by 23 percent by
2010, and 53 percent by 2020, owing to a combination of aircraft
efficiency improvements (advanced engine types, lightweight composite
materials, and advanced aerodynamics), increased load factor, and
acceleration of air traffic management improvements (Lee et al., 2001;
OTA, 1994; Interlaboratory Working Group, 2000). This is in contrast to
the base case in which efficiency increases by 9 percent by 2010 and 15
percent by 2020. While we assume that air travel can reach 82 seat-
miles per gallon by 2020 from its current 51, it is technologically
possible that far greater efficiencies approaching 150 seat-miles per
gallon could be achieved, if not in that time period then over the
longer term (Alliance to Save Energy et al., 1991).
Greenhouse Gas Standards for Motor Fuels
Transportation in the United States relies overwhelmingly on
petroleum-based fuels, making it a major source of greenhouse gas (GHG)
emissions. We introduce here a full fuel-cycle GHG standard for motor
fuels, similar in concept to the Renewable Portfolio Standard for the
electric sector.
The policy assumed in this study requires a 3 percent reduction in
the average national GHG emission factor of fuels used in light duty
vehicles in 2010, increasing to a 7 percent reduction by 2020. Expanded
R&D, market creation programs, and financial incentives would
complement this policy. Such a program would stimulate the production
of low-GHG fuels such as cellulosic ethanol and biomass-or solar-based
hydrogen.
For this study, we assume that most of the low-GHG fuel is provided
as cellulosic ethanol, which can be produced from woody matter from
agricultural residues, forest and mill wastes, urban wood wastes, and
short rotation woody crops (Walsh et al., 1997; Walsh et al., 1999). As
cellulosic ethanol can be coproduced along with electricity, we assume
that electricity output reaches 10 percent of ethanol output by 2010
and 40 percent by 2020 (Lynd, 1997). We assume that the price of
cellulosic ethanol falls to $1.40 per gallon of gasoline equivalent by
2010 owing to the accelerated development of the production technology,
and remains at that price thereafter (Interlaboratory Working Group,
2000).
Improving Alternative Modes to Reduce Vehicle Miles Traveled
The amount of travel in cars and light duty trucks continues to
grow due to increasing population and low vehicle occupancy. Between
1999 and 2020, the rate of growth in vehicle miles traveled is
projected to increase in the base case by about 2 percent per year. The
overall efficiency of the passenger transportation system can be
significantly improved through measures that contain the growth in
vehicle miles traveled through land-use and infrastructure investments
and pricing reforms to remove implicit subsidies for cars, which are
very energy intensive. We assume that these measures will primarily
affect urban passenger transportation and result in a shift to higher
occupancy vehicles, including carpooling, vanpooling, public
transportation, and telecommuting. We consider that the level of
reductions of vehicle miles traveled that can be achieved by these
measures relative to the base case are 8 percent by 2010 and 11 percent
by 2020.
High Speed Rail
High speed rail offers an attractive alternative to intercity
vehicle travel and short distance air travel. In both energy cost and
travel time, high-speed rail could compete with air travel for trips of
roughly 600 miles or less, which account for about one-third of
domestic air passenger miles traveled. Investments in rail facilities
for key intercity routes (such as the Northeast corridor between
Washington and Boston, the east coast of Florida between Miami and
Tampa, and the route linking Los Angeles and San Francisco) could
provide an attractive alternative and reduce air travel in some of the
busiest flight corridors (USDOT, 1997). High-speed rail can achieve
practical operating speeds of up to 200 mph. Prominent examples include
the French TGV, the Japanese Shinkansen and the German Intercity
Express. An emerging advanced transport technology is the MAGLEV system
in which magnetic forces lift and guide a vehicle over a specially
designed guideway. Both Germany and Japan are active developers of this
technology.
In this analysis we have taken the USDOT's recent estimates of the
potential high speed rail ridership which, based on projected mode
shifts from air and automobile travel in several major corridors of the
United States, reaches about 2 billion passenger miles by 2020 (USDOT,
1997). While this level of high speed rail ridership provides
relatively small energy and carbon benefits by 2020, it can be viewed
as the first phase of a longer-term transition to far greater ridership
and more advanced, faster and efficient electric and MAGLEV systems in
the ensuing decades.
ANNEX B
methodology: economic impacts analysis
The overall energy and economic analysis starts with a business-as-
usual energy-economic forecast based on the U.S. Department of Energy,
Energy Information Administration's Annual Energy Outlook for 2001.
This base case reflects a continuation of existing energy consumption
and technology trends and policies, and presumes no efforts are taken
to reduce greenhouse gas emissions.
Employment impacts from the policy scenarios were computed as net
incremental impacts in specified future years. They are derived from
the changes in expenditures on energy:
. . . operating costs and fuel costs--brought about by investments in
energy efficiency and renewable technologies in each sector. The
net impacts of these changes on the nation's economy were computed
from the following: 1) the net changes in employment; 2) the net
changes in wage and salary compensation, measured in millions of
1998 dollars; and 3) the net changes in Gross Domestic Product
(GDP), also measured in millions of 1998 dollars.
The analysis used data derived from IMPLAN (IMpact Analysis for
PLANning), a widely used input-output (I-O) model that analyzes
interactions between different sectors of the economy. IMPLAN was used
to track the changes in each sector's demand and spending patterns, as
caused by shifts in fuel consumption and energy technology investments
owing to the policies, and the shifts induced in other sectors' levels
of output (and the inputs required).
The results of these interactions are captured through appropriate
sectoral multipliers (jobs, income, and GDP per dollar of output). For
each benchmark year (2010 and 2020), each change in a sector's spending
pattern is matched to an appropriate sectoral multiplier. The
analytical approach used here is similar to that in Geller, DeCicco and
Laitner (1992); Laitner, Bernow and DeCicco (1998); Goldberg et al.
(1998); and Bernow et al. (1999). These reports offer a more in-depth
discussion of methodological issues.
Input-output models were initially developed to trace supply
linkages in the economy. Thus, the impacts generated from the policy
scenario depend on the structure of the economy. For example, I-O
models can show how increasing purchases of more efficient lighting
equipment, more efficient cars, high efficiency motors, modular
combined heat and power plants, or biomass energy not only directly
benefit their respective producers, but also benefit those industries
that provide inputs to the manufacturers. I-O models also can be used
to show the benefits from indirect economic activity that occur as a
result of these transactions (e.g., banking and accounting services)
and the re-spending of energy bill savings throughout the economy.
Therefore, spending patterns for energy have an effect on total
employment, income (i.e., wage and salary compensation), and GDP.
For each sector of the economy, multipliers were used to compute
the impacts of the incremental expenditures. These multipliers
identified the employment or economic activity generated from a given
level of spending in each sector. Changes in expenditures were matched
with appropriate multipliers. For instance, employment multipliers show
the number of jobs that are directly and indirectly supported for each
one million dollars of expenditure in a specific sector.
For this analysis, a job is defined as sufficient wages to employ
one person full-time for 1 year. The employment multipliers for key
sectors of the economy are listed in table A.1, below.
The analysis in this study includes several modifications made to
the methodology of merely matching expenditures and multipliers. First,
an assumption was made that 85 percent of the efficiency investments
would be spent within the United States. While local contractors and
dealers traditionally carry out upgrades of energy efficiency, this
analysis recognizes that foreign suppliers and contractors may also be
involved.
Second, we made an adjustment in the employment impacts to account
for future changes in labor productivity in specific sectors. Utilizing
data from the Bureau of Labor Statistics Economic and Employment
Projections 1988, 1998, and 2008, we developed productivity trends for
our analysis. These trends suggest that productivity rates are expected
to vary widely among sectors. Annual productivity gains are forecast to
range from 0.4 percent annually in the construction sector (which will
experience a large influx of employment as those sectors become more
important to the economy) to 7.4 percent annual productivity gain in
oil and gas mining. These factors are given in table A.2, below.
Third, we assumed that 80 percent of the investment upgrades would
be financed by bank loans carrying an average 10 percent real interest
rate over a 5-year period. No parameters were established to account
for changes labor participation rates or for changes in interest rates
as less capital-intensive technologies (i.e., efficiency investments)
are substituted for conventional supply strategies. Although the higher
cost premiums associated with the efficiency investments might be
expected to increase the level of borrowing in the short term, and
therefore, interest rates, this could be offset somewhat by avoided
investments in new power plant capacity, exploratory well drilling, and
new pipelines. Similarly, while a demand for labor may tend to increase
the overall level of wages (and potentially lessen economic activity),
the employment benefits from the scenario are relatively small compared
with the national level of unemployment.
Fourth, for the residential and commercial sectors, it was assumed
that program and marketing expenditures would be required to help
promote market penetration of efficiency improvements due to the
dispersed nature of the decisionmakers and the need for greater efforts
toward market transformation. This was set at 15 percent of the
efficiency investments for those sectors. No program or marketing
expense was included for the industrial sector or transportation
sector. We assume market penetration is naturally occurring in the
industrial sector as decisionmakers adopt cost-effective and more
efficient processes and older, less efficient equipment is replaced
with newer, higher efficiency models. In the transportation sector
efficiency improvements are assumed to be a part of all new vehicle
purchases.
Finally, the analysis took account of the fact that the electric
sector carbon cap-and-trade system would involve government auctioning
of carbon allowances to electricity suppliers. This was modeled by (1)
assuming purchases of the requisite allowances by utilities from the
government; (2) payments for the corresponding higher costs of
electricity by households and businesses; and (3) a return of the
revenues collected by the government to households and businesses.
These results should be taken as indicative, as there are always
limits to such a modeling exercise. The analyses do not account for
feedback through final demand reductions, input substitution owing to
price changes, feedback from inflation, and the constraints on labor
and money supplies. They also assume that available labor, plant and
materials are not fully utilized. Thus, for example, they assume that
there is unemployment in those existing or potential skill areas, for
which demand could be induced by policies that shift expenditures to
nonenergy commodities. This is contrary to many other economic models,
which in effect assume that there is full employment, and that the
shift in expenditures from energy to other commodities would not create
new jobs. Their view would be that the shift in expenditures would
provide largely counter-recessionary jobs, but not many sustained job
increases. Yet, it is well known that there is structural as well as
business-cycle unemployment. Moreover, economic activity in some
sectors such as construction (which enjoys the largest amount of
induced jobs in our analysis) where job entry is impeded by cyclical
and unstable demand and expectations, could experience sustained
increases if a sustained path of increased final demands were
established as they are in our policy scenarios.
In addition, while the models used for the energy analyses capture
some policy-induced technology innovation, this is limited primarily to
the electric sector. The I-O analysis also does not include the
potential productivity benefits that could stem from the investments in
new and more efficient equipment, and associated changes in
organization, know-how and inter-industry interactions. Industrial
investments that improve energy efficiency could be accompanied by
improved product quality, lower capital and operating costs, increased
employee productivity, easier and less costly environmental compliance,
and entry into niche markets (see, e. g., Elliott et al. 1997; Laitner
1995; OTA 1994; Porter and Van Linde 1995). Even under full employment,
energy policies that improve the efficiency of the economy could
increase incomes per worker. Finally, such job-inducing policies could
help counteract recessionary business cycles. It would be valuable to
develop tools and refine the analyses to account for some of these
factors and obtain a more detailed characterization of the results.
For the State-by-State employment impacts, we developed indicative
estimates of the distribution of the approximately 1.3 million net
national jobs gained by 2020 across the 50 States and the District of
Columbia. Absent a more detailed analysis of each individual State or
region, we allocated the national job impacts by weighting the key
variables to create an overall State-by-State assessment. This estimate
reflects the significant energy and economic differences across the
States. The key variables used in this assessment were differences in
energy prices; the level of energy consumed for each dollar of economic
activity in the State; the number of energy-related jobs as a percent
of total State employment; and the number of State jobs as a percent of
national employment. The results are presented in table 2, which shows
a positive net job impact in each State, ranging up to a high of about
140,000 in California by 2020.
Table A.1
Employment Multipliers for Select Economic Sectors
------------------------------------------------------------------------
Sector Multiplier
------------------------------------------------------------------------
Agriculture................................................ 27.3
Coal Mining................................................ 9.9
Oil/Gas Mining............................................. 8.2
Other Mining............................................... 10.4
Construction............................................... 18.1
Food Processing............................................ 16.9
Pulp and Paper Mills....................................... 11.6
Oil Refining............................................... 6.9
Stone, Glass, and Clay..................................... 13.2
Primary Metals............................................. 12.8
Metal Durables............................................. 13.1
Motor Vehicles............................................. 10.6
Other Manufacturing........................................ 13.3
Transportation, Communication, and Utilities............... 13.9
Electric Utilities......................................... 5.2
Natural Gas Utilities...................................... 6.6
Wholesale Trade............................................ 13.4
Retail Trade............................................... 29.2
Finance.................................................... 10.7
Insurance/Real Estate...................................... 8.1
Services................................................... 22.9
Education.................................................. 28.9
Government................................................. 18.0
------------------------------------------------------------------------
Table A.2
Labor Productivity Rates for Select Economic Sectors Employment
Multipliers for Select Economic Sectors
------------------------------------------------------------------------
Sector Rate
------------------------------------------------------------------------
Agriculture................................................ 1.6 percent
Coal Mining................................................ 5.2 percent
Oil/Gas Mining............................................. 7.4 percent
Other Mining............................................... 2.4 percent
Construction............................................... 0.4 percent
Food Processing............................................ 1.0 percent
Pulp and Paper Mills....................................... 3.0 percent
Oil Refining............................................... 3.3 percent
Stone, Glass, and Clay..................................... 2.2 percent
Primary Metals............................................. 4.0 percent
Metal Durables............................................. 4.7 percent
Motor Vehicles............................................. 2.0 percent
Other Manufacturing........................................ 4.7 percent
Transportation, Communication, and Other Utilities......... 2.5 percent
Electric Utilities......................................... 2.5 percent
Natural Gas Utilities...................................... 1.5 percent
Wholesale Trade............................................ 3.0 percent
Retail Trade............................................... 1.4 percent
Finance.................................................... 3.7 percent
Insurance/Real Estate...................................... 0.8 percent
Services................................................... 1.1 percent
Education.................................................. 1.0 percent
Government................................................. 0.4 percent
------------------------------------------------------------------------
v. bibliography
ACEEE, 1999. Meeting America's Kyoto Protocol Targets. H. Geller, S.
Bernow and W. Dougherty. Washington, DC.: American Council
for an Energy-Efficient Economy.
Alliance to Save Energy, American Council for an Energy-Efficient
Economy, Natural Resources Defense Council, and Union of
Concerned Scientists, 1991. America's Energy Choices:
Investing in a Strong Economy and Clean Environment. In
collaboration with Tellus Institute. Cambridge, Mass.:
Union of Concerned Scientists.
Alliance to Save Energy, American Council for an Energy-Efficient
Economy, Natural Resources Defense Council, Tellus
Institute and Union of Concerned Scientists, 1997.
Energy Innovations: A Prosperous Path to a Clean Environment,
Washington, DC. Arthur, W. Brian, 1994. Increasing Returns
and Path Dependence in the Economy. Ann Arbor: The
University of Michigan Press.
Azar, Christian, 1996. ``Technological Change and the Long-Run Cost of
Reducing CO2 Emissions,'' Center for the
Management of Environmental Resources (ENSEAD),
Fontainebleau, France. Working Papers.
Bailie, A., S. Bernow, W. Dougherty, M. Lazarus and S. Kartha, 2001.
The American Way to the Kyoto Protocol. A Tellus Institute
study for World Wildlife Fund. Washington, DC.: World
Wildlife Fund.
Bernow, S. K. Cory, W. Dougherty, M. Duckworth, S.Kartha and M. Ruth,
1999. America's Global Warming Solutions. Washington, DC.:
World Wildlife Fund.
Bernow, S., M. Lazarus and S. Kartha, 2001. Coal: America's Past . . .
America's Future? Prepared by Tellus Institute for World
Wildlife Fund. Washington, DC.: World Wildlife Fund.
Bernow, S., M. Lazarus and S. Kartha, 2001. Powering America: Myths vs
Facts in the U.S. Energy and Global Warming Debates.
Prepared by Tellus Institute for World Wildlife Fund.
Washington, DC.: World Wildlife Fund.
Breslow, M., J. Stutz and F. Ackerman, 1993. Creating Jobs for the
90's: Exposing the Myths about Oil Drilling in the Arctic
National Wildlife Refuge. Boston: Tellus Institute.
Brown, Marilyn, M. D. Levine, J. P. Romm, A. H. Rosenfeld and J. G.
Koomey, 1998. ``Engineering-Economic Studies of Energy
Technologies to Reduce Greenhouse Gas Emissions:
Opportunities and Challenges.'' Annual Review of Energy and
the Environment.
Bureau of Labor Statistics (BLS), 2001. Economic and Employment
Projections 1988, 1998, and 2008. See BLS website at
www.bls.gov/asp/oep/nioem/empiohm.asp.
Burtraw, D., K. Palmer, R. Barvikar and A. Paul, 2001. The Effect of
Allowance Allocation on the Costs of Carbon Emissions
Trading. Discussions Paper 01-30. Washington, DC.:
Resources for the Future.
Clean Air Task Force, 2000. Death, Disease, & Dirty Power: Mortality
and Health Damages Due to Air Pollution from Power Plants,
October 2000.
Cowan, Robin, and D. Kline, 1996. ``The Implications of Potential
`Lock-In' in Markets for Renewable Energy.'' Presented at
the International Symposium on Energy and Environmental
Management and Technology, Newport Beach, Calif. December
5-6, 1996.
DeCanio, Stephen, 1998. ``The Efficiency Paradox: Bureaucratic and
Organizational Barriers to Profitable Energy-Saving
Investments.'' Energy Policy. April.
EERE, 2000. Scenarios for a Clean Energy Future. Prepared by the
Interlaboratory Working Group on Energy-Efficient and
Clean-Energy Technologies. Washington, DC.: U.S. Department
of Energy, Office of Energy Efficiency and Renewable
Energy.
Energy Information Administration [EIA], 2001. Annual Energy Outlook.
Washington, DC.: U.S. Department of Energy.
EIA, 2001. Annual Energy Outlook 2001 with Projections to 2020.
Washington, DC.: U.S. Department of Energy.
Elliott, N., S. Laitner and M. Pye, 1997. Considerations in the
Estimation of Costs and Benefits of Industrial Energy
Efficiency Projects. Washington, DC.: American Council for
an Energy-Efficient Economy.
Elliott, N. and M. Pye, 1998. ``Investing in Industrial Innovation: A
Response to Climate Change.'' Energy Policy. April.
Elliott, R. N., 1994. Electricity Consumption and the Potential for
Energy Savings in the Manufacturing Sector. Washington,
DC.: American Council for an Energy-Efficient Economy.
Elliott, R. N. and M. Spurr, 1999. Combining Heat and Power: Capturing
Wasted Energy. Washington, DC.:American Council for an
Energy-Efficient Economy.
Geller, H., J. DeCicco and S. Laitner, 1992. Energy Efficiency and Job
Creation. Washington, DC.: American Council for an Energy-
Efficient Economy.
Geller, H., J. DeCicco, S. Laitner, and C. Dyson, 1994. ``Twenty Years
After the Embargo: U.S. Oil Import Dependence and How it
Can Be Reduced'', Energy Policy, Vol. 22, No. 6 (1994), pp
471-485.
Goldberg, M., M. Kushler, S. Nadel, N. Elliot, and M. Thomas, 1998.
Energy Efficiency and Economic Development in Illinois.
Washington D.C.: American Council for an EnergyEfficient
Economy.
Greene, D., 2000. Costs of Oil Dependence: A 2000 Update. ORNL/TM-2000/
152. Oak Ridge, Tenn.: Oak Ridge National Laboratory.
Interlaboratory Working Group, 2000. Scenarios for a Clean Energy
Future. Argonne National Laboratory, the National Renewable
Energy Laboratory, Lawrence Berkeley National Laboratory,
Oak Ridge National Laboratory and Pacific Northwest
National Laboratory. Commissioned by DOE Office of Energy
Efficiency and Renewable Energy. http://www.ornl.gov/ORNL/
Energy--Eff/CEF.htm
Koomey, J.G., R. C. Richey, S. Laitner, R. Markel, and C. Marnay, 1998.
Technology and Greenhouse Gas Emissions: An Integrated
Scenario Analysis Using the LBNL NEMS Model, LBNL-42054 and
EPA 430-R-98-021. Lawrence Berkeley National Laboratory,
Berkeley Calif. and U.S. Environmental Protection Agency,
Office of Atmospheric Programs, Washington, DC.
Krause, F., Baer, P., DeCanio, S., 2001. ``Cutting Carbon Emissions at
a Profit: Opportunities for the U.S.,'' International
Project for Sustainable Energy Paths, El Cerrito,
California, April. www.ipsep.org
Laitner, S., 1995. Energy Efficiency as a Productivity Strategy for the
United States. Alexandria, Va.: Economic Research
Associates.
Laitner, Skip, S. Bernow and J. DeCicco, 1998. ``Employment and Other
Macroeconomic Benefits of an Innovation-Led Climate
Strategy for the United States,'' Energy Policy. April.
Laitner, S., S. J. DeCanio, and I. Peters, 2000. ``Incorporating
Behavioral, Social, And Organizational Phenomena In The
Assessment Of Climate Change Mitigation Options.'' For the
IPCC Expert Meeting on Conceptual Frameworks for Mitigation
Assessment From the Perspective of Social Science.
Karlsruhe, Germany. March 21-22, 2000.
Lee, J. J., S. P. Lukachko, L. A. Waitz and A. Schaefer, 2001.
``Historical and Future Trends in Aircraft Performance,
Cost and Emissions,'' forthcoming in Annual Review of
Energy and the Environment, Vol 26. November 2001.
Lynd., L. 1997. ``Cellulosic Ethanol Technology in Relation to
Environmental Goals and Policy Formulation,'' in J. DeCicco
and M. DeLucchi, eds., Transportation, Energy and
Environment: How Far Can Technology Take Us? Washington,
DC.: American Council for an Energy-Efficient Economy.
Nadel, Steven and Marty Kushler. 2000. ``Public Benefit Funds: A Key
Strategy for Advancing Energy Efficiency,'' The Electricity
Journal. October 2000, pp. 74-84.
Nadel, S. and H. Geller, 2001. Smart Energy Policies: Saving Money and
Reducing Pollutant Emissions though Greater Energy
Efficiency. American Council for and Energy-Efficient
Economy, with Tellus Institute. Report No. E012.
Washington, DC.
Office of Technology Assessment, 1994. Saving Energy in U.S.
Transportation, OTA-ETI-589, Washington, DC.
Porter, Michael E. and C. van Linde, 1995. ``Toward a New Conception of
the Environment Competitiveness Relationship,'' Journal of
Economic Perspectives. Vol. 9, No. 4, Pages 97118. Fall.
Repetto, 1997. The Costs of Climate Protection: A Guide for the
Perplexed. Washington, DC.: World Resources Institute.
Repetto, R., 2001. Yes Virginia, There is a Double Dividend. Denver,
Colo.: Institute for Policy Research and Community
Development Policy, University of Colorado at Denver.
USDOT 1997 U.S. Department of Transportation, 1997. High-Speed Ground
Transportation for America. Washington, DC.: Federal
Railroad Administration.
U.S. Geological Survey, 2001. Arctic National Wildlife Refuge, 1002
Area, Petroleum Assessment, 1998, Including Economic
Analysis. Fact Sheet FS-028-01, April. (See also U.S.
Geological Survey, 1999. The Oil and Gas Resource Potential
of the Arctic National Wildlife Refuge 1002 Area, Alaska.
USGS Open File Report 98-34.)
Walsh, M., B. Perlack, D. Becker, A. Turhollow and R. Graham, 1997.
Evolution of the Fuel Ethanol Industry: Feedstock
Availability and Price. Biofuels Feedstock Development
Program. Oak Ridge, Tenn.: Oak Ridge National Laboratory.
Walsh, M., R. Perlack, D. Becker, A. Turhollow, D. Ugarte, R. Graham,
S. Slinsky and D. Ray, 1999. Biomass Feedstock Availability
in the United States: Draft. Oak Ridge, Tenn.: Oak Ridge
National Laboratory.
Worrell, E., N. Martin and L. Price, 1999. Energy Efficiency and Carbon
Dioxide Reduction Opportunities in the U.S. Iron and Steel
Industry. LBNL-41724. Berkeley, Calif.: Lawrence Berkeley
National Laboratory.
WEFA, 1990. The Economic Impact of ANWR Development. Prepared by the
WEFA Group for the American Petroleum Institute. Bala
Cynwd, Penn.
______
[From the Tellus Institute and Stockholm Environment Institute--Boston
Center, July 2001]
The American Way to the Kyoto Protocol: An Economic Analysis to Reduce
Carbon Pollution
a study for: world wildlife fund
(By Alison Bailie, Stephen Bernow, William Dougherty, Michael Lazarus,
Sivan Kartha)
Acknowledgements
We wish to thank Jennifer Morgan, Katherine Silverthorne and Freda
Colbert of WWF for their assistance on this report. We thank Hal
Harvey, Marcus Schneider and Eric Heitz of Energy Foundation for their
help in supporting our modeling capabilities. The energy efficiency
analyses and inputs to our modeling effort for buildings, industry and
light duty vehicles were provided by ACEEE (Steve Nadel, Howard Geller,
Neal Elliott and Therese Langer) and John DeDicco of Environmental
Defense. Modifications to the NEMS model, particularly as related to
renewables in the electricity sector, were made at Tellus with
important input from Alan Nogee, Deborah Donovan and Steve Clemmer of
Union of Concerned Scientists, Laura Martin, Tom Petersik, Alan Beamon,
Zia Haq, and Jeff Jones of EIA, and other experts including Walter
Short of NREL, Jack Cadogan of ORNL, Dan Entingh of Princeton Economic
Research, Inc., Etan Gummerman, Lawrence Berkeley Labs, Francis Wood of
OnLocation, Inc., and Michael Brower. We also wish to thank Francisco
de la Chesnaye and Reid Harvey of USEPA, who provided important data on
non-CO2 gases, and Kevin Gurney, who provided useful
insights on land-based carbon.
1. Executive Summary
This report presents a study of policies and measures that could
dramatically reduce U.S. greenhouse gas emissions over the next two
decades. It examines a broad set of national policies to increase
energy efficiency, accelerate the adoption of renewable energy
technologies, and shift energy use to less carbon-intensive fuels. The
policies address major areas of energy use in residential and
commercial buildings, industrial facilities, transportation, and power
generation.
This portfolio of policies and measures would allow the United
States to meet its obligations under the Kyoto Protocol Together when
combined with steps to reduce the emissions of non-CO2
greenhouse gases and land-based CO2 emissions, and the
acquisition of a limited amount of allowances internationally. This
package would bring overall economic benefits to the United States,
since lower fuel and electricity bills would more than pay the costs of
technology innovation and program implementation. In 2010, the annual
savings would exceed costs by $50 billion, and by 2020 by approximately
$135 billion.
Currently, the Bush Administration is promoting an energy strategy
based on augmenting fossil fuel supplies. This strategy does not help
the United States shift away from diminishing fossil fuel supplies, it
does not enhance U.S. energy security, and it does not reduce the
environmental impacts of energy use. America needs an energy policy
that takes us forward into the 21st Century by making climate change
mitigation an integrated part of the plan.
Far from being the economically crippling burden that the Bush
Administration alleges, ratifying the Kyoto Protocol and ambitiously
reducing greenhouse gas emissions could initiate a national
technological and economic renaissance for cleaner energy, industrial
processes and products in the coming decades. In the United States, we
therefore face an important challenge. We can embrace the challenge of
climate change as an opportunity to usher in this renaissance,
providing world markets with the advanced technologies needed to
sustain this century's economic growth. Or we can be followers, leaving
other more forward-looking countries to assume the global leadership in
charting a sustainable path and capturing the energy markets of the
future.
Policies and measures
The climate protection strategy adopts policies and measures that
are broadly targeted across the four main economic sectors: buildings,
electricity generation, transportation, and industry. The policies
considered for residential and commercial buildings include
strengthened codes for building energy consumption, new appliance
efficiency standards, tax incentives and a national public benefits
fund to support investments in high efficiency products, and expanded
research and development into energy efficient technologies. For the
electric sector, policies included a market-oriented ``renewable
portfolio standard'', a cap on pollutant emissions (for sulfur and
nitrogen), and a carbon emissions permit auction. In the transport
sector, policies are adopted to improve the fuel economy of passenger
vehicles, freight trucks, and aircraft through research, incentives,
and a strengthened vehicle fuel efficiency standards. Policies are also
modeled to set a fuel-cycle greenhouse gas standard for motor fuels,
reduce road travel through land use and infrastructure investments and
pricing reforms, and increase access to high speed rail as an
alternative to short distance air travel. In the industry sector,
policies are adopted to exploit more of the vast potential for
cogeneration of heat and power, and to improve energy efficiencies at
industrial facilities through technical assistance, financial
incentives, expanded research, and demonstration programs to encourage
cost-effective emissions reductions.
Results
Energy use in buildings, industries, transportation, and
electricity generation was modeled for this study using the U.S.
Department of Energy's National Energy Modeling System (NEMS). The NEMS
model version, data and assumptions employed in this study were those
of EIA's Annual Energy Outlook (EIA 2001), which also formed the basis
for the Base Case. We refined the NEMS model with advice from EIA,
based on their ongoing model improvements, and drawing on expert advice
from colleagues at the Union of Concerned Scientists, the National
Laboratories and elsewhere.
Table ES. 1 Summary of results.
----------------------------------------------------------------------------------------------------------------
2010 2020
1990\1\ 2010 Base Climate 2020 Base Climate
Case Protection Case Protection
----------------------------------------------------------------------------------------------------------------
End-use Energy (Quads)......................... 63.9 86.0 76.4 97.2 72.6
Primary Energy (Quads)......................... 84.6 114.1 101.2 127.0 89.4
Renewable Energy (Quads)
NON-HYDRO.................................. 3.5 5.0 10.4 5.5 11.0
Hydro...................................... 3.0 3.1 3.1 3.1 3.1
Net GHG Emissions (MtCe/yr).................... 1,648 2,204 1,533 -- ----
Energy Carbon.............................. 1,338 1,808 1,372 2,042 1,087
Land-based Carbon.......................... -- -- -58 -- ----
Non-CO2 Gases.............................. 310 397 279 -- ----
International Trade........................ -- -- -60 -- ----
Net Savings\2\
Cumulative present value (billion $)....... -- -- $105 -- $576
Levelized annual (billion $/year).......... -- -- $113 -- $49
Levelized annual per household ($/year).... -- -- $113 -- $375
----------------------------------------------------------------------------------------------------------------
\1\ Under Kyoto, the base year for three of the non-CO2 GHGs (HFCs, PFCs, SF6) is 1995, not 1990, and the 1995
levels for these emissions are reported here.
\2\ Savings are in 1999 $. The 2010 savings include $2.3 billion costs per year ($9 billion cumulative through
2010) of non-energy related measures needed to meet the Kyoto target. Costs are not included in 2020 since
these measures policies do not extend past 2010.
Table ES. 1 provides summary results on overall energy and
greenhouse gas impacts and economic impacts of the policy set for the
Base Case and Climate Protection Case for 2010 and 2020. The policies
cause reductions below in primary energy consumption that reach 11
percent by 2010 and 30 percent in 2020, relative to the Base Case in
those years, through increased efficiency and greater adoption of
cogeneration of heat and power (CHP). Relative to today's levels, use
of non-hydro renewable energy roughly triples by 2010 in the Climate
Protection Case, whereas in the Base Case it increases by less than 50
percent. Given the entire set of policies, non-hydro renewable energy
doubles relative to the Base Case in 2010, accounting for about 10
percent of total primary energy supplies in 2010. When the electric
sector RPS is combined with the strong energy efficiency policies of
this study, the absolute amount of renewables does not increase
substantially between 2010 and 2020 because the percentage targets in
the electric sector have already been met. A more aggressive renewables
policy for the 2010-2020 period could be considered (ACEEE, 1999).
The reductions in energy-related carbon emissions are even more
dramatic than the reductions in energy consumption, because of the
shift toward lower-carbon fuels and renewable energy. Since 1990,
carbon emissions have risen by over 15 percent, and in the Base Case
would continue to rise a total of 35 percent by 2010, in stark contrast
to the 7 percent emissions reduction that the United States negotiated
at Kyoto. In the Climate Protection case, the United States promptly
begins to reduce energy-related carbon emissions, and by 2010 emissions
are only 2.5 percent above 1990 levels, and by 2020, emissions are well
below 1990 levels. Relative to the Base case, the 2010 reductions \3\
amount to 436 MtC/yr.
---------------------------------------------------------------------------
\3\Throughout this report we refer to U.S. emissions target for
the year 2010 to mean the average of the 5 year period from 2008 to
2012.
---------------------------------------------------------------------------
Energy-related carbon emissions are the predominant source of U.S.
greenhouse gas emissions for the foreseeable future, and their
reduction is the central challenge for protecting the climate. However,
because the United States has made only minimal efforts to reduce
emissions since it ratified the United Nations Framework Convention on
Climate Change, it may not be able to meet it's Kyoto obligation with
net economic benefits based solely on reductions in energy-related
carbon dioxide emissions. Therefore, in order to meet the Kyoto target,
the Climate Protection case also considers policies and measures for
reducing greenhouse gases other than energy-related carbon dioxide.
In the Climate Protection case, land-based activities, such as
forestry, changes in land-use, and agriculture, yield another 58 MtC/yr
of reductions. (This figure corresponds to the upper limit for the use
of land-based activities in the current negotiating text proposed by
the current President of the U.N. climate talks Jan Pronk.) Methane
emissions are also reduced, through measures aimed at landfills,
natural gas production and distribution systems, mines, and livestock
husbandry. The potent fluorine-containing greenhouse gases can be
reduced by substituting with non-greenhouse substitutes, implementing
alternative cleaning processes in the semiconductor industry, reducing
leaks, and investing in more efficient gas-using equipment. In total,
the Climate Protection case adopts reductions of these other greenhouse
gases equivalent to 118 MtC/yr by 2010.
All together the reduction measures for energy-related carbon (436
MtC/yr), land-based carbon (58 MtC/yr), and non-carbon gases (118 MtCe/
yr) amount to 612 MtCe/yr of reductions in 2010. Through these
measures, the United States is able to accomplish the vast majority of
its emissions reduction obligation under the Kyoto Protocol through
domestic actions. This leaves the United States slightly shy of its
Kyoto target, with only 60 MtC/yr worth of emissions allowances to
procure from other countries though the ``flexibility mechanisms'' of
the Kyoto Protocol--(Emissions Trading, Joint Implementation, and the
Clean Development Mechanism). The Climate Protection case assumes that
the United States will take steps to ensure that allowances procured
through these flexibility mechanisms reflect legitimate mitigation
activity. In particular, we assume that United States restrains its use
of so-called ``hot air'' allowances, i.e, allowances sold by countries
that received Kyoto Protocol targets well above their current
emissions.
In addition to greenhouse gas emission reductions, the set of
policies in the Climate Protection case also reduce criteria air
pollutants that harm human health, cause acid rain and smog, and
adversely affect agriculture, forests, water resources, and buildings.
Implementing the policies would significantly reduce energy-related
emissions as summarized in Table ES. 2. Sulfur oxide emissions would
decrease the most--by half in 2010 and by nearly 75 percent in 2020.
The other pollutants are reduced between 7 and 16 percent by 2010, and
between 17 and 29 percent by 2020, relative to Base case levels in
those years.
Table ES. 2: Impact of policies on air pollutant emissions
----------------------------------------------------------------------------------------------------------------
2010 2020
1900 2010 Base Climate 2020 Base Climate
Case Protection Case Protection
----------------------------------------------------------------------------------------------------------------
CO............................................. 65.1 69.8 63.8 71.8 59.8
NOx............................................ 21.9 16.5 13.9 16.9 12.0
SO2............................................ 19.3 12.8 6.2 12.7 3.3
VOC............................................ 7.7 5.5 5.1 5.9 4.9
PM10........................................... 1.7 1.5 1.3 1.6 1.3
----------------------------------------------------------------------------------------------------------------
The complete Climate Protection package--including measures to
reduce energy-related, land-related, and non-carbon greenhouse gas
emissions, as well as modest purchases of allowances--provides a net
economic benefit to the United States. It also positively affects
public health, by reducing emissions of the key air quality-reducing
pollutants, including sulfur dioxide, nitrogen oxides, carbon monoxide,
particulates, and volatile organic compounds. By dramatically reducing
energy consumption, the Climate Protection strategy reduces our
dependence on insecure energy supplies, while enhancing the standing of
the United States as a supplier of innovative and environmentally
superior technologies and practices.
2. Introduction
The earth's atmosphere now contains more carbon dioxide than at
anytime over the past several hundred millennia. This precipitous rise
in the major greenhouse gas, due to the combustion of fossil fuels
since the dawn of the industrial age and the clearing of forests, has
warmed the globe and produced climatic changes. What further changes
will occur over the coming decades depends on how society chooses to
respond to the threat of a dangerously disrupted climate. A concerted
global effort to shift to energy-efficient technologies, carbon-free
sources of energy and sustainable land-use practices, could keep future
climate change to relatively modest levels. If, on the other hand,
nations continue to grow and consume without limiting GHG emissions,
future climate change could be catastrophic.
Dramatic climate change could unleash a range of dangerous
physical, ecological, economic and social disruptions that would
seriously undermine the natural environment and human societies for
generations to come. Fortunately, a variety of effective policies,
which have already been demonstrated, would mobilize current and new
technologies, practices and resources to meet the challenge of climate
protection. Strong and sustained action to reduce the risk of climate
change could also reap additional benefits, such as reducing other air
pollutants and saving money, plus help to usher in a new technological
and institutional renaissance consistent with the goals of sustainable
development. Here we focus on the U.S., which emits almost one-fourth
of global carbon dioxide emissions. As a Nation, we have both the
responsibility and the capability to take the lead in climate
protection, and can directly benefit from actions taken. Recently,
however, the Bush Administration has gravely disappointed the
international community, proposing an energy strategy that is devoid of
significant steps to protect the climate.
This report presents a study of policies and measures through which
the United States could dramatically reduce its greenhouse gas
emissions over the next two decades, while spurring technological
innovation, reducing pollution, and improving energy security. The
study is the latest in a series to which Tellus Institute has
contributed, dating back to 1990, which have shown the economic and
environmental benefits of energy efficiency and renewable energy
resources. It updates and refines America's Global Warming Solutions
(1999), which found that annual carbon emissions could be reduced to 14
percent below 1990 levels by 2010, with net economic benefits and
reductions in air pollution.
Unfortunately, since that study, and indeed over the past decade
since the Framework Convention on Climate Change was ratified by the
U.S., the promise of these technologies and resources has gone largely
unfulfilled, and little has been done to stem the tide of rapidly
growing energy use and carbon emissions. This delay and paucity of
action has rendered even more difficult the goal of reaching our Kyoto
Protocol emissions target of 7 percent below 1990 levels by 2010.
Nonetheless, the present study shows the substantial carbon reduction
and other benefits that could still be achieved by 2010 with sensible
policies and measures, even with this delayed start, and even greater
benefits over the following decade. The policy and technological
momentum established through 2020 would set the stage for the further
reductions needed over the longer term to ensure climate stabilization.
The Risk of Climate Change
The world's community of climate scientists has reached the
consensus that human activities are disrupting the Earth's climate
(WGI, SPM, 2001; NAS, 2001; Int'l Academies of Science, 2001). Global
emissions of CO2 have steadily risen since the dawn of the
industrial age, and now amount to about 6 billion tons of carbon
released annually from fossil fuel combustion and 1 billion tons
annually from land-use changes (mainly burning and decomposition of
forest biomass). Without concerted efforts to curb emissions,
atmospheric carbon dioxide levels would be driven inexorably higher by
a growing global population pursuing a conventional approach to
economic development.
While it is impossible to predict with precision how much carbon
dioxide we will be emitting in the future, in a business-as-usual
scenario annual emissions would roughly triple by the end of the
century. By that time, the atmospheric concentration of carbon dioxide
would have risen to three times pre-industrial levels (IPCC WGI, 2001).
The climatic impacts of these rising emissions could be dramatic.
Across a range of different plausible emissions futures explored by the
IPCC, global average temperatures are calculated to rise between 3 to
10 degrees Fahrenheit (1.5 to 6 degrees Centigrade), with even greater
increases in some regions (IPCC 2001). Such temperature changes would
reflect a profound transformation of the Earth's climate system, of the
natural systems that depend upon it and, potentially, of the human
societies that caused the changes.
The potential consequences of such climate change are myriad and
far-reaching. Sea level could rise between 3.5 to 35 inches (9--88
centimeters) (IPCC WGI, 2001), with severe implications for coastal and
island ecosystems and their human communities. Hundreds of millions of
people in the United States and abroad live in coastal regions that
would be inundated by a 17 inch (44 cm) rise in sea level. Most of
these regions are in developing countries that can scarcely afford to
expend resources on building dikes and resettling communities. Climate
disruption would also entail more frequent, prolonged, and intense
extreme weather events, including storms and droughts, the timing,
conditions and character of which would remain unpredictable.
Under the stresses courted by continuing current energy practices,
climate and ecological systems could undergo very large and
irreversible changes, such as a shift in the major ocean currents.
Global warming itself could increase the rate of greenhouse gas
accumulation, uncontrollably accelerating global warming and its
impacts. For example, a thawing of the arctic tundra could release
methane at rates far beyond today's anthropogenic rates, and a warming
of the oceans could shift them from a net sink to a net source of
carbon dioxide.
Moreover, large and irreversible changes could occur very rapidly.
Recent scientific evidence from pre-historic ice cores shows that major
climate changes have occurred on the time scale of about a decade
(Schneider 1998; Severinghaus et al. 1998). Rapid change could cause
additional ecological and social disruptions, limiting our ability to
adapt. This could render belated attempts to mitigate climate change
more hurried, more costly, less effective, or too late. Consequently,
early and sustained action, across many fronts, is needed to effect the
technological, institutional and economic transitions to protect global
climate and the ecological and social systems that depend on climate
stability.
Protecting the Climate
The carbon dioxide already released by human activities will linger
in the atmosphere for a hundred years or so. This carbon has already
changed the climate, and will continue to do so as long as it remains
in the atmosphere. But the degree of climate change to which we're
already committed pales in comparison to the disruption that humankind
would wreak if it continues to recklessly emit more carbon.
An aggressive strategy to curb emissions might limit warming to
less than 2 degrees F over the next century (on top of the 1.0 degrees
C that has already occurred over the past century). A temperature
increase of about 0.2 degrees F per decade would still exceed natural
variability, but would occur gradually enough to allow many, though not
all, ecosystems to adapt (Rijsberman and Swart, 1990). To be sure, this
goal would not entirely eliminate the risks of disruptive climate
change. Warming in some areas would significantly exceed 2 degrees F,
the rising sea level would inundate some coastal areas, and changing
rainfall patterns could make some regions more prone to drought or
floods. A more ambitious stabilization target might well be warranted,
but we suggest this goal as an illustration of what might be an
environmentally acceptable and practically achievable climate
protection trajectory.
To achieve this goal, CO2 concentrations would have to
be stabilized at approximately 450 ppm, which is about 60 percent above
pre-industrial concentrations. This would require keeping total global
carbon emissions within a budget of 500 billion tons of carbon over the
course of the 21st century, whereas a business-as-usual trajectory
would have us emitting about 1,400 billion tons. Annual global carbon
emissions from fossil fuels would have to be at least halved by the end
of the century, from today's 6 billion tons/yr to less than 3 billion
tons/yr, and deforestation would need to be halted, in contrast to a
business-as-usual trajectory which grows to 20 billion tons/yr. With a
growing global population, this implies a decrease in the annual per
capita emissions from today's 1 ton to about 0.25 tons, whereas the
business-as-usual per capita emissions grow to almost 2 tons. Figure
2.1, which shows these two radically different emissions trajectories,
conveys the ambitiousness of this target.
Figure 2.1: Global carbon emissions from fossil fuel combustion (1890-
2100)--Business-as-usual trajectory (IPCC IS92a scenario) and
trajectory for climate stabilization at 450 ppm
The industrialized countries are responsible for about two-thirds
of global annual carbon, at more than 3 tons per-capita, with the
United States at 5.5 tons per capita, while on average developing
countries emit only 0.5 tons per capita. Even if emissions in the
developing countries were to vanish instantly, implying a nightmarish
devolution of their economies, the industrialized world would still
need to almost halve its emissions in order to protect the climate.
Figure 2.2: Carbon emissions for stabilization of GHG concentrations at
450 ppm, broken out by developing and industrialized countries
Figure 2.2 shows the global carbon trajectory for stabilization at
450 ppm, as shown in Figure 2.1, broken out into emission paths for
both the industrialized and developing countries. In this illustrative
allocation, emissions converge to equal per capita emissions (?0.25 tC
per capita) by the end of the 21st century. Clearly, it is essential
that the industrialized countries begin early and continue steadily to
decrease their emissions on a trajectory to meet these climate
protection requirements. Industrialized countries on the whole would
have to roughly reduce their per capita emissions ten-fold, and the
United States in particular would have to reduce by more than a factor
of twenty.
Emissions from the developing countries could grow in the near
term, as they undergo economic development and transition toward
advanced, efficient and low-carbon technologies, and then decline
rapidly during the latter half of the century. Ultimately, the
developing countries would need to halve their per capita emissions
relative to today's levels, notwithstanding the considerable economic
growth that they are expected to realize over this century. This would
involve economic development predicated upon use of energy technologies
and energy resources that would entail a ``leap-frogging'' over the
fossil-based economic development that has occurred in the
industrialized countries directly to cleaner energy sources. Such a
transition would require concerted technology and institutional
cooperation, with associated financial assistance, among developing and
industrialized countries.
Stabilization and equalization would thus be served by a dual
technological transition in which the industrialized countries can take
the lead, by demonstrating their commitment to addressing a problem for
which it bears primary responsibility, and fostering the first wave of
technological innovation from which both developing and industrialized
countries could benefit.
The Kyoto Protocol
Although only a first small step, the Kyoto Protocol offers a
pivotal opportunity to shift away from the climate-disrupting path down
which the world is now headed, and onto a climate-protecting path. It
is well understood that the Kyoto Protocol is the basis for future
emissions reductions as well. If it enters into force, the Kyoto
Protocol will legally bind industrialized countries that ratify it to
specific GHG reduction targets, to be attained during the during the 5
year ``budget period'' from 2008 to 2012. For the United States, the
target is 7 percent less than the 1990 emission levels. The limit is 6
percent for Japan, 0 percent for Russia, and an average of 8 percent
for the European Union countries. Across all industrialized countries,
the emissions budget is 5 percent below 1990 emissions rate, whereas
the business-as-usual emissions rate is projected to increase by
approximately 20 percent by 2010.
The Kyoto Protocol offers a number of options to lower the cost of
meeting their targets. Many of these so-called ``flexibility
mechanisms'' were included at the request of the United States in
Kyoto. They allow countries to carry out projects that reduce carbon
emissions (or enhance carbon absorption) from biological stocks such as
forests and possibly agricultural land, or can reduce emissions of GHGs
other than carbon. \4\ Countries can also undertake GHG mitigation
projects in other countries \5\ and acquire credits for the resulting
reductions, or can simply purchase excess carbon allowances from
countries that surpass their targets. \6\
---------------------------------------------------------------------------
\4\The GHGs that are covered by the Kyoto Protocol include carbon
dioxide (CO2), methane (CH4), nitrous oxide (N2O),
hydrofluorocarbons (HFCs), perflourocarbons (PFCs), and sulfur
hexaflouride (SF6).
\5\''Joint Implementation'' (JI) is the relevant mechanism if the
host country is an industrialized country with a target, and ``Clean
Development Mechanism'' (CDM) if the host country is a developing
country.
\6\Purchase of allowances is known as ``Emissions Trading''.
---------------------------------------------------------------------------
However, these flexibility mechanisms should be implemented with
caution, lest they undermine effectiveness of the Kyoto Protocol. Given
its modest reduction targets relative to the much deeper reductions
ultimately needed for climate protection, the main purpose of the
Protocol is to reduce greenhouse gas emissions by launching a global
transition in technologies and infrastructure for energy production and
use. The first budget period should end with a decisive shift away from
conventional energy investments, real progress in institutional
learning and technological innovation, and momentum to deepen and
expand these changes over the longer term. An over-reliance on the
flexibility mechanisms may permit too slow a start, and too weak a
signal, to motivate this fundamental transition.
Excessive use of the flexibility mechanisms could undermine the
needed transition in several ways. First, the emissions trading system
is in danger of being severely diluted by cheap carbon allowances from
the Russian Federation and Ukraine, whose negotiated targets are far
above the emission levels they will reach by 2010 even without
reduction efforts. Second, inadequate rules for credits from project-
based mechanisms could generate ``free-rider'' credits that reflect
inflated estimates of their mitigation value, thereby undermining the
Protocol's targets. Third, mitigation activities that rely on
biological sequestration strain our current technical ability to
reliably measure carbon changes, are based on uncertain science, and
take pressure off of fossil fuel reduction. Perhaps more importantly,
institutions are not yet in place to ensure that such projects do not
harm biodiversity and human communities.
The attraction and rhetoric of solutions that lie outside the
borders of the industrialized countries is misguided at this time. To
be sure, there are important opportunities to help developing countries
advance along a sustainable, low carbon path. But unfettered use
overseas options, justified by lower short-term costs for the
industrialized countries, would be a head-in-the-sand approach to the
long-term responsibility of climate protection. The quantity of such
offsets should be limited and their quality guaranteed. Procedures
should be established to help ensure that the various flexibility
mechanisms help protect the climate and advance sustainable
development. These include consistency with local ecological, cultural,
economic conditions and constraints, guaranteed public participation in
project design, certification and review, strong ecological and social
criteria, human and institutional capacity-building goals, strong and
equitable relationships for technology cooperation, and acceptable
procedures for monitoring, verification and accreditation of offset
actions and transactions. Until then it is premature to rely on the CDM
for more than a very small part of the required emissions reductions.
If the United States relies too heavily on the flexibility
mechanisms, it could forego opportunities to reap the co-benefits of
decreasing carbon emissions at home. These include the reduced health
and ecological damages resulting from decreased emissions of mercury,
fine particulates and other pollutants, and the improvements in
technologies, skills and productivity accompanying deployment and use
of more advanced technologies and practices. It could also find itself
in a poorer position to meet the stricter emissions reduction
commitments expected for subsequent budget periods. The Nation could
become a follower rather than a leader in advanced technologies in
domestic and world markets. Thus, it could miss the opportunity
provided by the Kyoto Protocol for a national technological and
economic ``renaissance'' with cleaner energy, processes and products in
the coming decades.
3. Policies
This study examines a broad set of national policies that would
increase energy efficiency, accelerate the adoption of renewable energy
technologies, and shift to less carbon-intensive fossil fuels. This
policy package contrasts sharply with the Bush Administration's energy
strategy, which heavily focuses on fossil fuels and lacks any
significant effort to protect the climate. The policies address major
areas of energy use in the buildings, industrial, transport, and
electrical sectors. Analyses of the investment costs and energy savings
of policies to promote energy efficiency and co-generation in the
residential, commercial, and industrial sectors were taken primarily
from the American Council for an Energy Efficient Economy (1999; 2001).
Below we group these policies into the particular sector where they
take effect, and describe the key assumptions made concerning the
technological impacts of the individual policies. Unless otherwise
indicated, each of the policies is assumed to start in 2003.
As explained further in the methodology discussion in the next
section, we adapted the Energy Information Administration's 2001
Reference Case Forecast (EIA 2001) to create a slightly revised ``base
case.'' Our policies and assumptions build on those included in this
base case forecast (i.e., we avoid taking credit for emissions
reductions, costs, or savings already included in the EIA 2001
Reference Case). When taken together, the policies described in this
section represent a Climate Protection Scenario that the United States
could pursue to achieve significant carbon reductions.
3.1. Policies in the Buildings and Industrial Sectors
Carbon emissions from fuel combustion in the buildings (including
both residential and commercial) sector account for about 10 percent of
U.S. greenhouse gas emissions, while emissions from the industrial
sector account for another 20 percent. When emissions associated with
the electricity consumed are counted, these levels reaches over 35
percent for buildings and 30 percent for industry. We analyzed a set of
policies that include new building codes, new appliance standards, tax
incentives for the purchase of high efficiency products, a national
public benefits fund, expanded research and development, voluntary
agreements and support for combined heat and power.
Building codes
Building energy codes require all new residential and commercial
buildings to be built to a minimum level of energy efficiency that is
cost-effective and technically feasible. ``Good practice'' residential
energy codes, defined as the 1992 (or a more recent) version of the
Model Energy Code (now known as the International Energy Conservation
Code), have been adopted by 32 States (BCAP 1999). ``Good practice''
commercial energy codes, defined as the ASHRAE 90.1 model standard,
have been adopted by 29 States (BCAP 1999). However, the Energy Policy
Act of 1992 (EPAct) requires all States to adopt a commercial building
code that meets or exceeds ASHRAE 90.1, and requires all States to
consider upgrading their residential code to meet or exceed the 1992
Model Energy Code.
This policy assumes that DOE enforces the commercial building code
requirement in EPAct and that States comply. We also assume that
relevant States upgrade their residential energy code to either the
1995 or 1998 Model Energy Code either voluntarily or through the
adoption of a new Federal requirement. Furthermore, we assume that the
model energy codes are significantly improved during the next decade
and that all States adopt mandatory codes that go beyond current ``good
practice'' by 2010. To quantify the impact of these changes, we assume
a 20 percent energy savings in heating and cooling in buildings in half
of new homes and commercial buildings.
New Appliance and Equipment Efficiency Standards
The track record for electricity efficiency standards is
impressive, starting with the National Appliance Energy Conservation
Act of 1987 and continuing through the various updates that were
enacted in early 2001 for washers, water heaters, and central air
conditioners. These standards have removed the most inefficient models
from the market, while still leaving consumers with a diversity of
products. An analysis of Department of Energy figures by the American
Council for an Energy Efficient Economy, estimates nearly 8 percent of
annual electricity consumption will be saved in 2020 due to standards
already enacted (Geller et al. 2001). However, many appliance
efficiency standards haven't kept pace with either legal updating
requirements or technological advances. The Department of Energy is
many years behind its legal obligation to regularly upgrade standards
for certain appliances to the ``maximum level of energy efficiency that
is technically feasible and economically justified.''
In this study, we assume that the government upgrades existing
standards or introduces new standards for several key appliances and
equipment types: distribution transformers, commercial air conditioning
systems, residential heating systems, commercial refrigerators, exit
signs, traffic lights, torchiere lighting fixtures, ice makers, and
standby power consumption for consumer electronics. We also assume the
higher energy efficiency standards for residential central air
conditioning and heat pumps than was allowed by the Bush
Administration. These are all measures that can be taken in the near
term, based on technologies that are available and costeffective.
Tax incentives
A wide range of advanced energy-efficient products have been proven
and commercialized, but have not yet become firmly established in the
marketplace. A major reason for this is that conventional technologies
get ``locked-in''; they benefit from economies of scale, consumer
awareness and familiarity, and already existing infrastructure that
make them more able to attract consumers, while alternatives are
overlooked though they could be financially viable once mass-produced
and widely demonstrated. Initial, temporary tax incentives can help
usher advanced alternatives into the market place, which--once
established--can proceed to gain significant market share without
further subsidy.
In this study, we consider initial tax incentives for a number of
products. For consumer appliances, we considered a tax incentive of $50
to $100 per unit. For new homes that are at least 30 percent more
efficient that the Model Energy Code, we considered an incentive of up
to $2,000 per home; for commercial buildings with at least 50 percent
reduction in heating and cooling costs relative to applicable building
codes, we applied an incentive equal to $2.25 per square foot.
Regarding building equipment such as efficient furnaces, fuel cell
power systems, gas-fired heat pumps, and electric heat pump water
heaters, we considered a 20 percent investment tax credit. Each of
these incentives would be introduced with a sunset clause, terminating
them or phasing them out in approximately 5 years, so as to avoid their
becoming permanent subsidies. Versions of all of the tax incentives
considered here have already been introduced into bills before the
Senate and/or House. \7\
---------------------------------------------------------------------------
\7\The bills include those introduced by Senators Murkowski and
Lott (S. 389); Bingaman and Daschle (S. 596), Smith (S. 207), Hatch (S.
760), and Representative Nussle (H.R. 1316).
---------------------------------------------------------------------------
National Public Benefits Fund
Electric utilities have historically funded programs to encourage
more efficient energy-using equipment, assist low-income families with
home weatherization, commercialize renewables, and undertake research
and development (R&D). Such programs have typically achieved
electricity bill savings for households and businesses that are roughly
twice the program costs (Nadel and Kushler, 2000). Despite the proven
effectiveness of such technologies and programs, increasing price
competition and restructuring have caused utilities to reduce these
``public benefit'' expenditures over the past several years. In order
to preserve such programs, 15 States have instituted public benefits
funds that are financed by a small surcharge on all power delivered to
consumers.
This study's policy package includes a national level public
benefits fund (PBF) fashioned after the proposal introduced by Sen.
Jeffords (S. 1369) and Rep. Pallone (H. 2569) in the the 106th
Congress. The PBF would levy a surcharge of 0.2 cents per kilowatt-hour
on all electricity sold, costing the typical residential consumer about
$1 per month. This Federal fund would provide matching funds for States
for approved public benefits expenditures. In this study, the PBF is
allocated to several different programs directed at improvements in
lighting, air conditioning, motors, and other cost-effective energy
efficiency improvements in electricity-using equipment.
Expand Federal funding for Research and Development in Energy Efficient
Technologies
Federal R&D funding for energy efficiency has been a spectacularly
cost-effective investment. The DOE has estimated that the energy
savings from 20 of its energy efficiency R&D programs has been roughly
$30 billion so far--more than three times the Federal appropriation for
the entire energy efficiency and renewables R&D budget throughout the
1990's (EERE, 2000). At a time when energy issues are in the forefront
of the national debates, such R&D efforts should be increased and
should be thought of as a remedy for the real energy crises engendered
by continued fossil fuel dependence--climate change, environmental
damage, and diminishing fossil fuel supplies.
Tremendous opportunities exist for further progress in material-
processing technologies, manufacturing processing, electric motors,
windows, building shells, lighting, heating/cooling systems, and super-
insulation, for example. The EPA's Energy Star programs have also saved
large amounts of energy, building on the achievements of R&D efforts
and ushering efficient products into the marketplace. By certifying and
labeling efficient lighting, office equipment, homes and offices,
Energy Star has helped foster a market transformation toward much more
efficient products and buildings. Currently, roughly 80 percent of
personal computers, 95 percent of monitors, 99 percent of printers, and
65 percent of copiers sold are Energy Star certified (EPA, 2001; Brown
et al, 2001). In light of these successes, EPA should be allocated the
funds to broaden the scope of its Energy Star program, expanding to
other products (refrigerators, motors) and building sectors (hotels,
retailers), and the vast market of existing buildings that could be
retrofitted. In this study, we assume that increased funding to expand
research and development efforts in industry (e.g., motors) buildings
(e.g., advanced heating/cooling), and transport (e.g., more fuel
efficient cars and trucks) will lead to more energy-savings products
becoming commercially available.
Industrial Energy Efficiency through Intensity Targets
There is remarkable quantity of untapped, cost-effective energy
efficiency potential in today's industrial facilities (Elliott 1994),
and some corporate managers have shown impressive initiative in moving
to realize that potential. In 1995, Johnson and Johnson set a goal of
reducing its energy costs 10 percent by 2000 through adoption of ``best
practices'' in its 96 U.S. facilities. Building on this work, in 2000
Johnson & Johnson pledged to reduce global warming gases by 7 percent
below 1990 levels by the year 2010, with an interim goal of 4 percent
below 1990 levels by 2005.
In 1998, British Petroleum announced it would voluntarily reduce
its carbon emissions to 10 percent below 1990 levels by 2010,
representing almost a 40 percent reduction from projected emissions
levels in 2010 given ``business-as-usual'' emissions growth (Romm
1999). And in September 1999, DuPont announced it would reduce its GHG
emissions worldwide by 65 percent relative to 1990 levels, while
holding total energy flat and increasing renewable energy resources to
10 percent of total energy inputs, by 2010. DuPont appears to be on
track for achieving earlier commitments to reduce energy intensity 15
percent and total GHG emissions 50 percent, relative to 1990 levels, by
2000 (Romm 1999). Companies as diverse as Alcoa, Kodak, Polaroid, IBM
and Royal Dutch Shell also find it cost-effective to establish
worldwide greenhouse gas reduction targets. The practices these
companies are developing make them better prepared for an economy that
places a value on carbon reductions.
There is substantial potential for cost-effective efficiency
improvement in both energy-intensive and non-energy intensive
industries (Elliott 1994). For example, an in-depth analysis of 49
specific energy efficiency technologies for the iron and steel industry
found a total cost-effective energy savings potential of 18 percent
(Worrell, Martin, and Price 1999).
We consider in this study Federal initiatives to motivate and
assist industry to identify and exploit energy efficiency
opportunities. Government agencies can support industry by providing
technical and financial assistance, and by expanding Federal R&D and
demonstration programs.
In addition to these carrots, government may need to brandish a
stick in order to induce a large fraction of industries to make serious
energy efficiency commitments. If industry does not respond to the
Federal initiatives at a level sufficient to meet certain energy
efficiency targets, a mandatory, binding energy intensity standard
should be triggered to ensure the required targets are attained.
Support for Cogeneration
Cogeneration (or, combined heat and power--CHP) is a super-
efficient means of co-producing two energy-intensive products that are
usually produced separately--heat and power. The technical and
economical value of CHP has been widely demonstrated, and some European
countries rely heavily on CHP for producing power and providing heat to
industries, businesses, and households. The thermal energy produced in
co-generation can also be used for (building and process) cooling or to
provide mechanical power.
While CHP already provides about 9 percent of all electricity in
the United States, there are considerable barriers to its wider cost-
effective implementation (Elliott and Spurr, 1999). Environmental
standards should be refined to recognize the greater overall efficiency
of CHP systems, for example by assessing facility emissions on the
basis of fuel input, rather than useful energy output. Non-uniform tax
standards discourage CHP implementation in certain facilities.
Moreover, utility practices are generally highly hostile to prospective
CHP operators, through discriminatory pricing and burdensome technical
requirements and costs for connecting to the grid.
In this study, we consider the impact of introducing policies that
would establish a standard permitting process, uniform tax treatment,
accurate environmental standards, and fair access to electricity
consumers through the grid. Such measures would help to unleash a
significant portion of the enormous potential for CHP. In this study we
assumed 50 GW of new CHP capacity by 2010, and an additional 95 GW
between 2011 and 2020. With electricity demand reduced by the various
energy efficiency policies adopted in this study, co-generated
electricity reaches 8 percent percent of total remaining electricity
requirements in 2010 and 36 percent percent in 2020.
3.2. Policies in the Electric Sector
A major goal of U.S. energy and climate policy will be to
dramatically reduce carbon and other pollutant emissions from the
electric sector, which is responsible for more than one-third of all
U.S. greenhouse gas emissions. We analyzed a set of policies in the
electric sector that include standards and mechanisms to help overcome
existing market barriers to investments in technologies that can reduce
emissions. Three major policies--a renewable portfolio standard, a cap
on pollutant emissions, and a carbon cap and trade system--were
considered as described below.
Renewable Portfolio Standard
A Renewable Portfolio Standard (RPS) is a flexible, market-oriented
policy for accelerating the introduction of renewable resources and
technologies into the electric sector. An RPS sets a schedule for
establishing a minimum amount of renewable electricity as a fraction of
total generation, and requires each generator that sells electricity to
meet the minimum either by producing that amount of renewable
electricity in its mix or acquiring credits from generators that exceed
the minimum. The market determines the portfolio of technologies and
geographic distribution of facilities that meet the target at least
cost. This is achieved by a trading system that awards credits to
generators for producing renewable electricity and allows them to sell
or purchase these credits. Thirteen States--Arizona, Connecticut,
Hawaii, Iowa, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New
Mexico, Pennsylvania, Texas, and Wisconsin--already have RPSs, and
Senator Jeffords introduced a bill in the 106th Congress (S. 1369) to
establish a national RPS.
The RPS provides strong incentives for suppliers to design the
lowest cost, most reliable renewable electricity projects, and to
identify niche applications and consumers where the projects will have
the greatest value. It also provides assurance and stability to
renewable technology vendors, by guaranteeing markets for renewable
power, allowing them to capture the financial and administrative
advantages that come with planning in a more stable market environment.
Yet it still maintains a competitive environment that encourages
developers to innovate. Finally, by accelerating the deployment of
renewable technologies and resources, the RPS also accelerates the
learning and economies of scale that allow renewables to become
increasingly competitive with conventional technologies. This is
particularly important, as the demands of climate stabilization in
coming decades will require more renewable energy than we can deploy in
the next two decades.
In this study, we have applied an RPS that starts at a 2 percent
requirement in 2002, grows to 10 percent in 2010, and to 20 percent in
2020, after all efficiency policies are included. Wind, solar,
geothermal, biomass, and landfill gas are eligible renewable sources of
electricity, but environmental concerns exclude municipal solid waste
(owing to concerns about toxic emissions from waste-burning plants) and
large-scale hydro (which also raises environmental concern and need not
be treated as an emerging energy technology as it already supplies
nearly 10 percent of the nation's electricity supply).
As a modest addition to the RPS we provide a subsidy to grid-
connected solar photovoltaic electricity generation. The purpose of
this subsidy is to introduce a small amount of this technology so that
it can play a role in the generation mix, seeking to induce technology
learning, performance improvement and scale economies, and ultimately
increased fuel diversity and another zero emissions option for the
longer term. The level is kept small so that costs and price impacts
are minimal.
Tightening of SO2 and NOx Emission Regulations
Acid rain and urban air pollution remain serious problems in the
United States. The 1990 Clean Air Act Amendments attempted to address
these problems, by introducing a cap-and-trade system to roughly halve
the electric sector's SO2 emissions by 2000, and imposing
technology-specific standards for NOx emissions. Compliance with the
SO2 standard proved markedly cheaper than initially
expected; initial estimates were mostly based on investments in
``scrubbers'' but the discovery of large low-sulfur coal reserves in
the Wyoming basins and a sharp decline in the cost of rail transport
resulted in lower costs.
Despite the improvements brought about by the Clean Air Act and its
Amendments, recent studies have confirmed that SO2 and NOx
continue to harm lake and forest ecosystems, decrease agricultural
productivity and affect public health through its damaging affects on
urban air quality (Clean Air Task Force, 2000). The Clean Air Act only
calls for minimal reductions in the cap by 2010 and no reductions after
that.
In this study, we tighten the SO2 cap so as to reduce
sulfur emissions to roughly 40 percent of current levels by 2010 and
one third of current levels by 2020. We also impose a cap-and-trade
system on NOx emissions in the summertime, when NOx contributes more
severely to photochemical smog. This system expands the current cap and
trade program, which calls on 19 States to meet a target in 2003 that
then remains constant, to include all States with a cap that is set
first in 2003 but decreases in 2010, relative to 1999 levels. The cap
results in a 25 percent reduction of annual NOx emissions by 2003, and
a 50 percent reduction by 2010.
Carbon Cap-And-Trade Permit System
This study introduces a cap-and-trade system for carbon in the
electric sector; with the cap set to achieve progressively more
stringent targets over time, starting in 2003 at 2 percent below
current levels, increasing to 12 percent below current by 2010 and 30
percent below by 2020. Restricting carbon emissions from electricity
generation has important co-benefits, including reduced emissions of
SO2 and NOx, as discussed above, fine particulate matter,
which is a known cause of respiratory ailments, and mercury, which is a
powerful nervous system toxin and already contaminates over 50,000
lakes and streams in the United States. A progressively more stringent
target also reduces demand for coal, and hence mining-related pollution
of streams and degradation of landscapes and terrestrial habitats.
In the SO2, NOx, and CO2 trading systems,
permits are distributed through an open auction, and the resulting
revenues can be returned to households (e.g., through a tax reduction
or as a rebate back to households). Recent analyses suggest that an
auction is the most economically efficient way to distribute permits,
meeting emissions caps at lower cost than allocations based on
grandfather allowances or equal per kWh allowances (Burtraw, et al.
2001). Implementing such auctions for the electric sector will also
clear the way for an economy-wide approach in future years based on
auctioning. In this study, the price of auctioned carbon permits
reaches $100 per metric ton carbon.
While not specifically targeted by the trading programs, the
operators of the 850 old ``grandfathered'' coal plants built before the
Clean Air Act of 1970, which emit 3-5 times as much pollution per unit
of power generated than newer coal power plants, will likely retire
these plants rather than face the cost of purchase the large amount of
credits necessary to keep them running. When the Clean Air Act was
adopted, it was expected that these dirty power plants would eventually
be retired. However, utilities are continuing to operate these plants
beyond their design life, and have in fact increased their output over
the last decade. By subjecting these old plants to the same
requirements as newer facilities, as has been done or is being
considered in several States including Massachusetts and Texas,
operators would be obliged to modernize the old plants or to retire
them in favor of cleaner electric generation alternatives.
With a cap and trade system in place for CO2, SOx and
NOx, this scenario reduces multiple emissions from power plants, in a
manner similar to that adopted in the Four Pollutant Bill currently
before the House (H.R., 1256) and the Senate (S. 556). The reductions
in these three pollutants are as deep as those imposed in the Four
Pollutant bills, and are achieved within a comparable timeframe. (The
Department of Energy's NEMS model unfortunately does not explicitly
track mercury, making it impossible to compare the results of this
study to the mercury requirement in the Four Pollutant Bill. \8\)
---------------------------------------------------------------------------
\8\On December 15, 2000, the EPA announced that mercury emissions
need to be reduced, and that regulations will be issued by 2004.
---------------------------------------------------------------------------
3.3. Policies in the Transport Sector
Another goal of U.S. energy and climate policy will be to reduce
carbon emissions from the transport sector, which is responsible for
about one-third of all U.S. greenhouse gas emissions. We analyzed a set
of policies in the transportation sector that include improved
efficiency (light duty vehicles, heavy duty trucks and aircraft), a
full fuel-cycle GHG standard for motor fuels, measures to reduce road
travel, and high speed rail.
Strengthened CAFE Standards
Today's cars are governed by fuel economy standards that were set
in the mid-1970's. The efficiency gains made in meeting those standards
have been entirely wiped out by increases in population and driving, as
well as the trend toward gas-guzzling SUVs. When the fuel economy
standards were implemented, light duty trucks only accounted for about
20 percent of vehicle sales. Light trucks now account for nearly 50
percent of new vehicle sales; this has brought down the overall fuel
economy of the light duty vehicle fleet, which now stands at its lowest
average fuel economy since 1981. If the fuel economy of new vehicles
had held at 1981 levels rather than tipping downward, American vehicle
owners would be importing half a million fewer barrels of oil each day.
We introduce in this study a strengthened Corporate Average Fuel
Economy standard for cars and light trucks, along with complementary
market incentive programs. Specifically, fuel economy standards for new
cars and light trucks rise from EIA's projected 25.2 mpg for 2001 to
36.5 mpg in 2010, continuing to 50.5 mpg by 2020. This increase in
vehicle fuel economy would save by 2020 approximately twice as much oil
as could be pumped from Arctic National Wildlife Refuge oil field over
its entire 50-year lifespan (USGS, 2001). \9\ Based on assessments of
near-term technologies for conventional vehicles, and advanced vehicle
technologies for the longer-term, we estimate that the 2010 CAFE target
can be met with an incremental vehicle cost of approximately $855, and
the 2020 CAFE target with an incremental cost of $1,900. To put these
incremental costs in perspective, they are two to three times less than
the fuel savings at the gasoline pump over the vehicle's lifetime. \10\
---------------------------------------------------------------------------
\9\Assuming a mean value at a market price of oil of $20/barrel.
\10\Assuming a retail price of gasoline of $1.50/gallon, a 10-year
life of the vehicle, and 12,000 miles per year.
---------------------------------------------------------------------------
Improving Efficiency of Freight Transport
We also consider policies to improve fuel economy for heavy duty
truck freight transport, which accounts for approximately 16 percent of
all transport energy consumption. A variety of improvements such as
advanced diesel engines, drag reduction, rolling resistance, load
reduction strategies, and low friction drivetrains offer opportunities
to increase the fuel economy of freight trucks. Many of these
technologies are available today while other technologies like advanced
diesel and turbine engines have been technically demonstrated but are
not yet commercially available.
To accelerate the improvement in heavy duty truck efficiency, we
have considered measures that expand R&D for heavy duty diesel
technology, vehicle labeling and promotion, financial incentives to
stimulate the introduction of new technologies, efficiency standards
for medium- and heavy-duty trucks, and fuel taxes and user-fees
calibrated to eliminate the existing subsidies for freight trucking.
Together, it is estimated that these policies could bring about a fuel
economy improvement of 6 percent by 2010, and 23 percent by 2020,
relative to today's trucks.
Improving Efficiency of Air Travel
Air travel is the quickest growing mode of travel, and far more
energy intensive than vehicle travel. One passenger mile of air travel
today requires about 1.7 times as much fuel as vehicle travel. \11\ We
consider here policies for improving the efficiency of air travel,
including R&D in efficient aircraft technologies, fuel consumption
standards, and a revamping of policies that subsidize air travel
through public investments.
---------------------------------------------------------------------------
\11\Assuming typical load factors of 0.33 for autos and 0.6 for
air.
---------------------------------------------------------------------------
We assume that air travel efficiency improves by 23 percent by
2010, and 53 percent by 2020. This is in contrast to the Base Case
where efficiency increases by 9 percent by 2010 and 15 percent by 2020,
owing to a combination of aircraft efficiency improvements (advanced
engine types, lightweight composite materials, and advanced
aerodynamics), increased load factor, and acceleration of air traffic
management improvements (Lee et el, 2001; OTA, 1994; Interlaboratory
Working Group, 2000). While we assume that air travel can reach 82
seat-miles per gallon by 2020 from its current 51, it is
technologically possible that far greater efficiencies approaching 150
seatmiles/gal could be achieved, if not in that time period then over
the longer term. (Alliance to Save Energy et al, 1991).
Greenhouse Gas Standards for Motor Fuels
Transportation in the United States relies overwhelmingly on
petroleum-based fuels, making it a major source of GHG emissions. We
introduce here a full fuel-cycle GHG standard for motor fuels, similar
in concept to the RPS for the electric sector. The standard is a cap on
the average GHG emissions from gasoline, and would be made
progressively more stringent over time. Fuel suppliers would have the
flexibility to meet the standard on their own or by buying tradable
credits from other producers of renewable or low-GHG fuel.
The policy adopted in this study requires a 3 percent reduction in
the average national GHG emission factor of fuels used in light duty
vehicles in 2010, increasing to a 7 percent reduction by 2020. The
policy would be complemented by expanded R&D, market creation programs,
and financial incentives. Such a program would stimulate the production
of low-GHG fuels such as cellulosic ethanol and biomass-or solar-based
hydrogen.
For this modeling study, we assume that most of the low-GHG fuel is
provided as cellulosic ethanol, which can be produced from agricultural
residues, forest and mill wastes, urban wood wastes, and short rotation
woody crops (Walsh et al 1998; Walsh, 1999). As cellulosic ethanol can
be co-produced along with electricity, in this study we assume that
electricity output reaches 10 percent of ethanol output by 2010 and 40
percent by 2020 (Lynd, 1997). Due to the accelerated development of the
production technology for cellulosic ethanol, we estimate that the
price falls to $1.4 per gallon of gasoline equivalent by 2010 and
remains at that price thereafter (Interlaboratory Working Group, 2000).
Improving Alternative Modes to reduce Vehicle Miles Traveled
The amount of travel in cars and light duty trucks continues to
grow due to increasing population and low vehicle occupancy. Between
1999 and 2020, the rate of growth in vehicle miles traveled is
projected to increase in the Base Case by about 2 percent per year. The
overall efficiency of the passenger transportation system can be
significantly improved through measures that contain the growth in
vehicle miles traveled through land-use and infrastructure investments
and pricing reforms to remove implicit subsidies for cars, which are
very energy intensive.
We assume that these measures will primarily affect urban passenger
transportation and result in a shift to higher occupancy vehicles,
including carpooling, vanpooling, public transportation, and
telecommuting. We consider that the level of reductions of vehicle
miles traveled that can be achieved by these measures relative to the
Base Case are 8 percent by 2010 and 11 percent by 2020.
High Speed Rail
High speed rail offers an attractive alternative to intercity
vehicle travel and short distance air travel. In both energy cost and
travel time, high speed rail may be competitive with air travel for
trips of roughly 600 miles or less, which account for about one-third
of domestic air passenger miles traveled. Investments in rail
facilities for key inter-city routes (such as the Northeast corridor
between Washington and Boston, the East cost of Florida between Miami
and Tampa, and the route linking Los Angeles and San Francisco) could
provide an acceptable alternative and reduce air travel in some of the
busiest flight corridors (USDOT, 1997).
High speed rail can achieve practical operating speeds of up to 200
mph. Prominent examples include the French TGV, the Japanese
Shinkansen, and the German Intercity Express. An emerging advanced
transport technology is the maglev system in which magnetic forces lift
and guide a vehicle over a specially designed guideway. Both Germany
and Japan are active developers of this technology.
In this analysis we have taken the DOT's recent estimates of the
potential high speed rail ridership which, based on projected mode
shifts from air and automobile travel in several major corridors of the
United States, reaches about 2 billion passenger miles by 2020 (DOT,
1997). While this level of HRS ridership provides relatively small
energy and carbon benefits by 2020, it can be viewed as the first phase
of a longer-term transition to far greater ridership and more advanced,
faster and efficient electric and MAGLEV systems in the ensuing
decades.
4. Methods and Assumptions
The modeling for this study was based primarily on the National
Energy Modeling System (NEMS) of the U.S. Department of Energy, Energy
Information Administration (DOE/EIA) (EIA, 2001). The NEMS model
version, data and assumptions employed in this study were those of
EIA's Annual Energy Outlook (EIA 2001), which also formed the basis for
the Base Case. We refined the NEMS model with advice from EIA, based on
their ongoing model improvements, and drawing on expert advice from
colleagues at ACEEE and the Union of Concerned Scientists, the National
Laboratories and elsewhere. \12\
---------------------------------------------------------------------------
\12\More detailed discussions of the approach taken for sectoral
policy analyses upon which this study was based can be found in Energy
Innovations (EI 1997), the Energy Policy, Special Issue on Climate
Strategy for the United States (1998), and Bernow et al. (1998 and
1999).
---------------------------------------------------------------------------
The NEMS model takes account of the interactions between
electricity supply and demand (aggregated residential, commercial and
industrial), taking account of the mix of competitive and still
regulated pricing in the United States. It accounts for the feedback
effects between electricity market and power plant construction
decisions, as well as the links between fuel demands, supplies and
prices.
Our use of NEMS for this project focused on the Electricity Market
Module (EMM), complemented by the Oil and Gas Supply Module (OGSM). The
EMM starts with the detailed fleet of existing power plants in the 13
electric sector regions of the U.S, and also represents power imports
from neighboring Canadian regions. It makes dispatch, construction,
interregional purchase and retirement decisions based upon the regional
electricity demands and the cost and performance characteristics of
existing and new electric supply options, adhering to national
pollutant caps and any State-level RPS requirements. It also takes
account of cost reductions of new power plants with increased units in
operation (learning and scale economies). The OGSM tracks changes in
prices of natural gas and petroleum fuels based on changes in their
demand.
Analyses of the costs and demand impacts of policies to promote
energy efficiency and cogeneration in the residential, commercial, and
industrial sectors were taken primarily from American Council for an
Energy Efficient Economy (ACEEE, 1999; ACEEE, 2001). The electric
generation, fuel, emissions and monetary savings from these policies
were obtained using NEMS, to take account of all of the interactive and
feedback effects described above. NEMS was used also to obtain the
interactive effects of the policies affecting electricity demand and
those, such as renewable, carbon and emission standards, which affect
the electricity supply mix.
For example, we used information from ACEEE to lower the fuel and
electricity demand within NEMS based on policies in the demand sectors.
We ran NEMS to determine the new mix of electricity generation (based
on changes in both electricity demand and the electricity sector
policies). This resulted in decreased demand for oil and gas, leading
to lower prices. NEMS iterates internally between energy supply and
demand to seek a consistent solution.
Analyses of the policy impacts in the transportation sector took
account of vehicle stock turnover, fuel-efficiencies and travel
indices, and were benchmarked to the structure, data and baseline
projections of the AEO2001. Following assumptions for light
duty vehicle efficiency in ACEEE (2001) and other sources (DeCicco,
Ross and An, 2001), we accounted for both autonomous and policy-induced
vehicle efficiency improvement, shifts between transport modes, and
changes in demand for transport services.
5. Results
Carbon dioxide emissions in the United States have been rising over
the past decade, and now exceed by more than 15 percent the 1990
emission rate of 1338 MtC/yr (EIA, 2001b). The U.S. Department of
Energy (EIA, 2001a) business-as-usual scenario projects that these
emissions will to continue to rise to 1808 MtC/yr in 2010--a 35 percent
increase above 1990 levels. This is in stark contrast to the emissions
limit that the United States negotiated at Kyoto--a 7 percent decrease
below 1990 levels.
5.1. Overview of Results
Table 5.1 provides summary results on overall energy and carbon
impacts, pollutant emissions impacts, and economic impacts for the Base
and Climate Protection cases for 2010 and 2020. The portfolio of
carbon-reducing policies and measures composed for this Climate
Protection scenario brings the United States a long way toward meeting
its Kyoto target, reducing carbon emissions from today's level to 1372
MtC/yr by 2010--but still 2.5 percent above 1990 levels. Reductions
continue beyond 2010, and national emissions are reduced to 1087 MtC/yr
in 2020, well below 1990 levels.
Table 5.1 Summary of results.
----------------------------------------------------------------------------------------------------------------
2010 2020
1990\13\ 2010 Base Climate 2020 Base Climate
Case Protection Case Protection
----------------------------------------------------------------------------------------------------------------
End-use Energy (Quads)......................... 63.9 86.0 76.4 97.2 72.6
Primary Energy (Quads)......................... 84.6 114.1 101.2 127.0 89.4
Renewable Energy (Quads)
Non-Hydro.................................. 3.5 5.0 10.4 5.5 11.0
Hydro...................................... 3.0 3.1 3.1 3.1 3.1
Net GHG Emissions (MtCe/yr).................... 1,648 2,204 1,533 -- ----
Energy Carbon.............................. 1,338 1,808 1,372 2,042 1,087
Land-based Carbon.......................... -- -- -58 -- ----
Non-CO2 Gases.............................. 310 397 279 -- ----
International Trade........................ -- -- -60 -- ----
Net Savings\14\................................
Cumulative present value (billion $) -- -- $105 -- $576
Levelized annual (billion $/year).......... -- -- $13 -- $49
Levelized annual per household ($/year).... -- -- $113 -- $375
----------------------------------------------------------------------------------------------------------------
\13\ Under Kyoto, the base year for three of the non-CO2 GHGs (HFCs, PFCs, SF6) is 1995, not 1990, and the 1995
levels for these emissions are reported here.
\14\ Savings are in 1999 $. The 2010 savings include $2.3 billion costs per year ($9 billion cumulative through
2010) of non-energy related measures needed to meet the Kyoto target. Costs are not included in 2020 since
these measures policies do not extend past 2010.
Overall, the national policies and measures were estimated to
achieve an 11 percent reduction in primary energy use by 2010, and a
nearly 30 percent reduction by 2020, while maintaining the same level
of energy services to consumers. The use of renewable energy is doubled
in 2010 relative to the Base case and remains roughly at that level
through 2020.\15\ The policies would also produce reductions in air
pollutant emissions owing to reduced fossil fuel consumption and
greater use of renewable energy. This is most evident for
SO2 for which 2010 levels in the Climate Protection case are
almost half of Base case levels, due in great part to the effect of the
more stringent cap in the electric sector.
---------------------------------------------------------------------------
\15\This takes account of the percentage levels required by the
Jeffords Bill for the electric sector (10 percent renewables by 2010,
and 20 percent by 2020). However, when this RPS is combined with the
strong energy efficiency policies of this study, the absolute amount of
renewables in the electric sector does not increase substantially
between 2010 and 2020 because the percentage targets have already been
met. A more aggressive renewables policy for the 2010-2020 period could
be considered (ACEEE, 1999).
---------------------------------------------------------------------------
The analysis showed that national savings in energy bills would
exceed the net incremental investments in more efficient technologies
and expenditures for low carbon fuels. By 2010, the average savings
exceed the additional costs of new equipment by $13 billion per year,
or nearly $113 per household.
5.2. Sectoral Impacts
Figures 5.1a and 5.1b compare the carbon trajectories for the Base
and Climate Protection scenarios, and shows the carbon reductions
obtained by the policies to reduce energy-related carbon emissions.
Carbon emissions reductions can be reported by where they are emitted
(i.e., by source, 5.1a) or by the sectors to which the policies are
directed (i.e., by policy, 5.1b).
Thus, for example: the refinery emissions reductions owing to
decreased transportation oil use are attributed to the transport
policies, while the refinery emissions reductions owing to decreased
industrial oil use are attributed to the industrial policies; the
electric generation emissions reductions and emissions increased onsite
fuel use, owing to increased CHP are attributed to the industrial
policies.
The first graph, Figure 5.1a, shows the emissions reductions in the
sectors of their origin, that is, in which the combustion of fossil
fuels occurs. Thus, it shows emissions from onsite fossil fuel
combustion in buildings, industry, transportation and electricity
production. The largest reductions arise in the electric sector, owing
to the enduse energy efficiency policies that reduce demand, plus the
emissions and renewables policies for power supply that change the
generation mix for electricity generation. Figure 5.1b shows the
reductions from the various sectoral policies.
Table 5.2 summarizes the cost of saved carbon for each policy for
2010 and 2020. These costs were computed by summing the incremental
annualized capital costs, administrative costs, incremental O&M and
fuel costs, and subtracting O&M and fuel cost savings. A 5-percent
discount rate was used for both costs and carbon emissions. \16\
Overall, the cost of saved carbon for the Climate Protection policy
package results in net savings of $115/tC in 2010, and $576/tC in 2010.
The net savings for the demand policies more than offset the
incremental costs of saved carbon for the electric supply policies.
Details regarding the impact of the policies within the sectors are
summarized in the following sections.
---------------------------------------------------------------------------
\16\Carbon emissions are discounted based on the presumption that
they will have a commodity value within some form of tradable permits
regime.
---------------------------------------------------------------------------
Building and Industrial Sectors
The efficiency improvements in residential and commercial
buildings, induced through enhanced building codes, strengthened
standards for appliances and equipment, tax incentives, as well as
policies to encourage CHP, leads to a decrease in net electricity usage
of 19 percent by 2010 and nearly 50 percent by 2020. Despite the
additional natural gas required to fuel CHP in buildings, onsite fuel
use declines by 3 percent in 2010 and 10 percent in 2020, relative to
the Base case. The net impact is a decline in carbon emissions by
nearly one-third in 2010, and two-thirds by 2020, relative to the Base
case.
Industrial energy efficiency measures undertaken largely through
voluntary measures and tax incentives, cause the industrial sector to
reduce it's direct energy consumption by 9 percent in 2010 and 14
percent in 2020 in the Climate Protection case relative to the Base
case. In addition, largely because of the aggressive introduction of
cogeneration, net electricity consumption is lower dramatically, by 30
percent in 2010 and 70 percent in 2020. The combined impact of these is
that carbon emissions due to the industrial sector are lower by 26
percent in 2010 and 46 percent in 2020, relative to the Base case.
Table 5.2. Carbon reductions, net costs, and cost per saved carbon in 2010 and 2020
----------------------------------------------------------------------------------------------------------------
2010 2020
---------------------------------------------------------------------
Cumulative Cumulative
Net Cost Cost of Net Cost Cost of
Carbon (present saved Carbon (present saved
Savings MtC/ value) carbon Savings MtC/ value) carbon
yr billion (1999)$ yr billion (1999)$
(1999)$ per tC (1999)$ per tC
----------------------------------------------------------------------------------------------------------------
Buildings & Industry Sectors
Appliance standards................... 29 -$24 -$315 45 -$84 -$256
Building Codes........................ 7 -$5 -$353 13 -$23 -$244
Voluntary measures.................... 61 -$50 -$229 78 -$112 -$179
Research and design................... 21 -$18 -$257 37 -$53 -$186
Public Benefits Fund.................. 50 -$29 -$224 73 -$101 -$187
Tax Credits........................... 4 -$4 -$292 7 -$8 -$152
CHP and DES........................... 21 -$53 -$611 33 -$151 -$554,
Subtotal.......................... 193 -$183 -$301 285 -$533 -$121
Electric Sector
RPS
NOx/SO2 Cap and Trade
Carbon trading see below .......... ........ see below
Subtotal.......................... 147 $140 $258 180 $258 $188
Transport Sector
Travel Reductions..................... 29 -$50 -$496 37 -$126 -$495
LDV efficiency improvements........... 38 -$19 -$270 136 -$149 -$296
HDV efficiency improvements........... 8 -$3 -$179 33 -$22 -$214
Aircraft efficiency improvements...... 10 -$3 -$106 28 -$14 -$129
Greenhouse Gas Standards.............. 11 $4 $136 22 $11 $99,
Subtotal.......................... 95 -$71 -$283 255 -$301 -$279,
TOTAL............................. 436 -$114 -$82 721 -$576 -$124
----------------------------------------------------------------------------------------------------------------
Across both sectors, the policies result in combined fuel and
electricity savings of 9.6 quads in 2010 and 24.6 quads by 2020. The
cumulative investment in efficiency measures to achieve these savings
is $80 billion by 2010 and $365 billion by 2020 (discounted 1999$).
Electric Sector
The policies in the buildings and industrial sectors lead to major
reductions in the total amount of electricity required from the
nation's power stations. This impact is illustrated in Figure 5.2a and
shows that energy efficiency measures entirely displace growth in
electricity demand after 2005. Relative to today's level, electricity
demand declines 15 percent by 2010 and 35 percent by 2020.
In addition to this reduced demand for electricity, the mix of
fuels used to generate electricity changes dramatically, as shown in
Figure 5.2b. The electric sector policies shift the generation mix away
from a heavy reliance on coal, and avoid the rapid buildup of natural
gas generation, by relying much more on renewable energy and,
especially, cogeneration. Cogeneration grows from roughly 300 TWh today
to 660 TWh in 2010, and 1260 in 2020, whereas in the Base case
cogeneration increases modestly to 380 TWh in 2010 and 440 TWh in 2020.
Non-hydro renewable energy consumption increases almost five times by
2010 over the Base case, and remains roughly at this level through
2020.
While effective at reducing carbon emissions, the electric sector
policies do so at a net economic cost, increasing the average unit cost
of electricity by about 2 cents / kWh in 2010. This effect diminishes
over time as the electric sector is able to respond to the new policies
and electricity demand reductions lead to fewer new power plants; by
2020, the electricity price is only about 1 cent / kWh higher than the
base case. This price increase primarily reflects the fact that
continued operation of existing coal plants, and construction and
operation of new ones, remain economically attractive in the emerging
price competitive restructured industry. In part, this is because the
use of coal for electricity generation doesn't include environmental
externalities.
By 2010, a total of 4.3 quads of fossil fuel reductions are
achieved at power stations, and 6.5 quads by 2020. The cumulative
investment to achieve these savings and greater utilization of
renewable energy is $166 billion by 2010 and $333 billion by 2020
(discounted 1999$). Although the costs per unit of electricity
increase, measures for demand-side efficiency lead to an overall
decrease in endusers' electricity bills, and in the overall costs of
electricity services.
Transportation
The vehicle efficiency and transportation demand management
initiatives in the Climate Protection case result in energy savings of
4.6 quads in 2010, and 12.6 quads by 2020 (12 percent in 2010 and 28
percent in 2020, respectively, relative to the Base case). Carbon
emissions fall slightly more relative to the base case (13 percent in
2010 and 31 percent in 2020) due to the small shift to less carbon-
intensive fuels (specifically, cellulosic ethanol). By 2010, ethanol is
contributing about 2 percent of transport fuel demand, and 4 percent in
2020. As in other biomass-intensive industries, this enables the co-
production of electricity, thereby increasing the carbon benefits of
this measure to the extent that it displaces fossil-fuel derived
electricity. Reduced fuel production also adds to the carbon benefits,
because it reduces emissions from refineries.
The cumulative investment to achieve these savings and greater
utilization of renewable energy is $52 billion by 2010 and $213 billion
by 2020 (discounted 1999$). The transport efficiency measures result in
net savings, because fuel cost savings offset the slight increase in
investment costs. These net savings more than offset the cost of the
transportation fuel carbon content standard--which is the only net-cost
transportation policy considered here. The overall net economic benefit
achieved by the entire set of transportation policies provides an
opportunity to pursue the carbon content standard, which begins a
process of progressive technological improvement that is a critical
element of obtaining the much deeper carbon emissions reductions in the
transport sector needed later.
5.3. Air Pollution Reductions
A variety of air pollutants, associated with the use of fossil
fuels, can cause or exacerbate health problems and damage the
environment. Reducing use of fossil fuels would reap important local
health benefits by lowering the amount of air pollutants inhaled.
Recent scientific findings confirm that pollutants such as fine
particulates, carbon monoxide, ozone (formed by a mix of volatile
organic compounds and nitrogen oxides in presence of sunlight) can lead
to health damages, including premature death. Research shows that small
children and the elderly are particularly at risk from these emissions
(Dockery et al., 1993; Schwartz and Dockery, 1992).
The policies would reduce national, regional and local pollution,
owing to reduced fossil fuel use, providing important environmental
benefits and health benefits, especially for small children and the
elderly. Table 5.3 summarizes the impacts of the policies on criteria
air pollutant emissions. Sulfur-dioxide emissions are about 52 percent
lower in 2010 than the Base case, and about 68 percent below 1990
levels. Nitrogen oxides are 16 percent lower in 2010, and about 37
percent below 1990 levels. Particulates are about 13 percent lower in
2010, and about 24 percent below 1990 levels. Carbon monoxide emissions
are about 9 percent lower in 2010, and about 2 percent below 1990
levels. Finally, volatile organic compounds are about 7 percent lower
in 2010, and about 33 percent below 1990 levels.
Table 5.3: Impact of policies on air pollutant emissions
----------------------------------------------------------------------------------------------------------------
2010 2020
2010 Base Climate 2020 Base Climate
Case Protection Case Protection
----------------------------------------------------------------------------------------------------------------
CO............................................. 65.1 69.8 63.8 71.8 59.8
NOx............................................ 21.9 16.5 13.9 16.9 12.0
SO2............................................ 19.3 12.8 6.2 12.7 3.3
VOC............................................ 7.7 5.5 5.1 5.9 4.9
PM10........................................... 1.7 1.5 1.3 1.6 1.3
----------------------------------------------------------------------------------------------------------------
Figure 5.3 shows the impacts of the Climate Protection policies
over time. The large reductions in particulates emissions arise from
the substantial decrease in coal generation in the policy cases.
Sulfur-dioxide decreases in the baseline projections arising from the
cap/trade provisions of the 1990 Clean Air Act Amendments, are
augmented by the policies. Similarly, baseline declines in nitrogen
oxides, volatile organic compounds and carbon monoxide, which arise
from tailpipe emissions standards as new cars enter the fleet, are
augmented by the policies that affect vehicle travel patterns.
The reductions in nitrogen, sulfur, and carbon are similar to those
introduced in the Four Pollutant Bill currently before the House and
the Senate. The Climate Protection scenario achieves the required
levels of reduction a few years earlier (for carbon) or later (for
nitrogen and sulfur) than the Four Pollutant Bill's 2007 target date,
with substantially deeper reductions continuing thereafter.
5.4. Economic Impacts
The portfolio of policies and measures considered here is a very
aggressive package that goes a long way toward meeting the U.S. Kyoto
Protocol obligation and continues to reduce emissions beyond the
initial target period. Despite the ambitiousness of this package and
the impressive carbon impacts, it would bring net economic benefits to
the United States.
Figure 5.4 shows the benefits and costs at similar levels up to
2010 but benefits significantly outpacing costs in later years,
reflecting in part the longer term benefits of reduced costs as new
technologies are commercialized and as the system adjusts to the new
policies. The costs derive from additional investments in more
efficient lighting, high efficiency motors, more efficient automobiles,
and other technologies that reduce the reliance on high carbon fuels.
The savings derive from the avoided fuel costs. Both the additional
investment and the net savings create additional income and jobs in the
industries and services (and their suppliers) in which these funds are
spent.
Figures 5.5 (demand side policies) and 5.6 (supply side policies)
provide additional details regarding the costs effectiveness of the
policies in 2010 and 2020. These figure indicate the allocation of
costs and benefits between equipment investments and fuel savings and
between demand and supply sectors. The policies in the demand sector,
where large savings exist for energy efficiency measures, are very
cost-effective, and yield substantial net benefits. Fuel and O&M
savings are over 3 times the investment costs the in 2010 and about two
and half times in 2020, yielding cumulative discounted net benefits of
$259 billion and $844 billion, respectively, in those years.
On the other hand, the supply sector policies are not cost-
effective on their own and result in net costs. These costs, in
capital, fuel, and O&M, are due to moving from coal generation to
cleaner fuels like renewables and natural gas. The result is that
cumulative discounted net costs for electric sector policies reach of
$144 billion in 2010 and $268 billion in 2020.
When all policies are combined, the cumulative savings exceed the
costs by $114 billion in 2010, and by 2020 the net benefits amount to
approximately $576 billion. While the savings estimated here are
significant, they are relatively small in comparison to overall
economic activity. For instance, the annual net savings in 2010 of $48
billion is a small fraction of the $13.2 trillion projected GDP in that
year.
6. Achieving Kyoto
The foregoing analysis addressed policies to curb emissions of
carbon dioxide from energy use in the U.S. Energy-related
CO2 emissions are the predominant source of U.S. greenhouse
gas emissions for the foreseeable future, and their reduction is the
central and ultimate challenge for protecting the climate. However,
because of its delayed and weak emissions mitigation policies
heretofore, and delayed ratification of the Kyoto Protocol, the United
States may not be able to rely solely on energy sector policies and
technologies to meet its Kyoto obligation of emissions 7 percent
reduction below 1990 levels with no net economic cost. As our analysis
has shown, such efforts, if aggressively pursued, would slow our growth
in energy sector CO2 emissions from a projected 35 percent
to 2.5 percent above 1990 levels by 2010 and still achieve a small net
economic benefit. This would be a major accomplishment, but would still
leave us 128 MtC/yr short of achieving a target of 1244 MtC/yr by 2010,
if the Kyoto target were confined only to the domestic energy sector. A
tighter carbon cap for the electric sector could increase domestic
energy-related emission reductions to meet the Kyoto requirement, but
this would incur incremental costs that could eliminate the net benefit
and lead to a modest overall net cost.
Of course, there is more to the Kyoto agreement. The Kyoto targets
cover six gases--methane (CH4), nitrous oxide (N2O), perfluorocarbons
(PFCs), hydrofluorocarbons (HFCs), sulfur hexafluoride (SF6) and carbon
dioxide (CO2) . The use of these gases is currently growing,
due to the ongoing substitution of ozone depleting substances (ODS)
with HFCs, and to a lesser extent, to growth in CH4 emissions from
livestock and coal and natural gas systems, in N20 from fertilizer use,
and in PFC emissions from semiconductor manufacture (EPA, 2000).
The U.S. commitment requires emissions of all six gases, in
aggregate, to be reduced to 7 percent below their baseline levels. \17\
When all of the six ``Kyoto gases'' are considered, baseyear emissions
amount to 1680 MtCe/yr, making the--7 percent Kyoto reduction target
equal to 1533 MtCe/yr, as shown in the third column of Figure 6.1. The
projected 2010 emissions for all six gases is 2204 MtCe/yr (first
column), thus the total required reduction is expected to be 672 MtCe/
yr. The energy-CO2 policies described in the previous
sections yield 436 MtCe/yr in reductions by 2010 (second column),
leaving the United States with 236 MtCe/yr additional reductions to
achieve from other policies and measures.
---------------------------------------------------------------------------
\17\These gases can be controlled interchangeably, using 100 year
Global Warming Potentials (GWP), so long as the total carbon-
equivalents (Ce) are reduced to 93 percent of their baseline levels. In
contrast to the main three gases (CO2, CH4, and N2O), which
have a 1990 base year, the high GWP gases have a base year of 1995.
The Kyoto agreement provides us with several options for obtaining
the additional 236 MtCe/yr of reductions. Two of these options involve
domestic reductions: the control of non-CO2 gases (``multi-
gas control'') and the use of ``sinks'' or biotic sequestration,
through the land use, land use change and forestry options allowed
under the Protocol. The other options involve obtaining credits and
allowances from international sources. Under the Kyoto Protocol,
countries can purchase credits and allowances through the Clean
Development Mechanism (CDM), Joint Implementation, or Emissions Trading
(ET) to offset domestic emissions exceeding our 7 percent reduction
target. This section examines how we might meet the Kyoto target
through the use of these options, and what the costs and other
implications might be.
6.1. Domestic options Article 3.3/3.4 and Sinks
GHG emissions and removals from land use and land use change and
forestry (LULUCF) are a subject of great controversy and scientific
uncertainty. The Kyoto Protocol treats LULUCF activities in two
principal categories: afforestation, reforestation, and deforestation
under Article 3.3, and ``additional human-induced activities'' such as
forest and cropland management under Article 3.4. Different
interpretations of these two articles can have widely varying impacts
on the U.S. reduction commitment. \18\ For instance, the U.S. estimate
of business-as-usual forest uptake during the first commitment period
is 288 MtCe/yr. If fully credited as an Article 3.4 activity, this
uptake could provide credit equal to more than 40 percent of the U.S.
reduction requirement, with no actual mitigation effort. However, the
vast majority of countries do not interpret the Protocol as allowing
credit for business-as-usual offsets, and therefore believe they should
be excluded.
---------------------------------------------------------------------------
\18\For instance, different accounting methods and rules have been
considered regarding: a) what constitutes a forest; b) which biotic
pools and lands are counted; c) which activities are considered
eligible for crediting under Article 3.4; and d) uncertainties in
measuring above and below ground carbon stocks.
---------------------------------------------------------------------------
The starting point of our LULUCF analysis is the assumed adoption
of the ``consolidated negotiating text'' of Jan Pronk, President [of
COP6], as issued on June 18, 2001. \19\ The so-called ``Pronk text''
reflects an attempted compromise among various parties on a number of
contentious issues. The most relevant here is the proposal for Articles
3.3 and 3.4. \20\ In short, the Pronk text would cap total U.S.
crediting from Article 3.4 activities and afforestation and
reforestation projects in the CDM and JI at roughly 58 MtCe/yr. \21\
Domestic forest management activities would be subject to an 85 percent
discount. Thus, if one assumes the U.S. estimate above, the Pronk rules
would result in 42 MtCe/yr of essentially zero-cost credit for forest
management activities that are expected to occur anyway. \22\ In
addition, agricultural management (e.g. no-till agriculture, grazing
land management, revegetation) would be allowed under a net-net
accounting approach that would allow the United States to count another
expected 10 MtCe/yr of business-as-usual, i.e. zero-cost, credit toward
the cap. In sum, the Pronk proposal translates to 52 MtCe/yr of
``free'' carbon removals, and another 6 MtCe/yr that could be accrued
through new domestic forest or agricultural management activities. \23\
Based on a recent summary of LULUCF cost estimates, we assume that this
relatively small amount of offsets could be purchased for $10/tCe. \24\
A total of 58 MtCe/yr of LULUCF credit would therefore be available to
help meet the reduction requirement of 236 MtCe/yr remaining after
having adopted the energy-related CO2 policies described
above.
---------------------------------------------------------------------------
\19\See ``Consolidated negotiating text proposed by the
President'', as revised June 18, 2001, FCCC/CP/2001/2/Rev.1, http://
www.unfccc.int/resource/docs/cop6secpart/02r01.pdf
\20\Our assumption of Pronk conditions is a matter of ``what if''
analysis, rather than a tacit approval. The Pronk text may be
insufficient in a number of ways, but the analysis and critique of the
Pronk text is not the focus of this report.
\21\The Pronk text would prohibit first commitment period
crediting of CDM projects that avoid deforestation.
\22\This figure is drawn from the Annex Table 1 of the April 9
draft of the Pronk text, which adopts Pronk adopts the accounting
approach for Article 3.3. activities suggested by the IPCC Special
Report of LULUCF. This approach yields an Article 3.3 debit of 7 MtCe/
yr from net afforestation, reforestation, and deforestation activity,
which under the Pronk approach could be offset fully by undiscounted
forest management activities. Thus the 42 MtCe/yr estimate is based on
85 percent x (288--7) MtCe/yr.
\23\The Pronk proposal also allows this cap to be filled through
afforestation and deforestation activities in the CDM.
\24\Missfeldt and Haites (2001) use a central estimate of 50 MtCe/
year at $7.50/tCe for CDM afforestation and reforestation projects.
They also assume the availability of 150 MtCe/year at $15/tCe for
Article 3.4 sinks in Annex B countries. Note however that the Pronk 85
percent discount on forest management projects would, in principle,
increase their cost accordingly (by 1/.15 or 6.7 times). However, given
the relatively small quantity (6 MtCe) that could be purchased, lower
cost opportunities in cropland management or the CDM should more than
suffice.
---------------------------------------------------------------------------
Multi-gas control
Multi-gas control is a fundamental aspect of the Protocol, and its
potential for lowering the overall cost of achieving Kyoto targets has
been the subject of several prominent studies (Reilly et al, 1999 and
2000). Table 6.1 shows baseline and projected emission levels for the
non-CO2 gases. \25\
---------------------------------------------------------------------------
\25\USEPA (1999, 2000) expects voluntary Climate Change Action
Plan (CCAP) activities to reduce 2010 methane and high GWP gas
emissions by about 10 percent and 15 percent, respectively, reductions
that are not included in their 2010 projections shown in Table 1.
Instead these reductions are embodied in both their and our cost
curves.
Table 6.1. Baseline and Projected Emissions for non-CO2 Kyoto Gases (MtCe/yr)
----------------------------------------------------------------------------------------------------------------
7
Base percent
Gas Year Below Projected Reductions Sources
(1990/ Base 2010 Required \1\
95) Year
----------------------------------------------------------------------------------------------------------------
Methane.................................. 170 158 186 28 (EPA 1999)
Nitrous Oxide............................ 111 103 121 18 (Reilly et al 1999b; EPA
2001a)
High GWP Gases (HFC, PFC, SF6)........... 29 27 90 63 (EPA 2000)
Total................................ 310 288 397 109
----------------------------------------------------------------------------------------------------------------
\1\ These are the reductions that would be needed if each gas were independently required to be 7 percent below
its base year level.
Methane emissions are expected to grow by only 10 percent from 1990
to 2010, largely because of increased natural gas leakage and venting
(due to increased consumption), enteric fermentation and anaerobic
decomposition of manure (due to increased livestock and dairy
production). Methane from landfills, which accounted for 37 percent of
total methane emissions in 1990, are expected to decline slightly as a
consequence of the Landfill Rule of the Clean Air Act (EPA, 1999),
which requires all large landfills to collect and burn landfill gases.
Several measures could reduce methane emissions well below
projected levels. USEPA estimates that capturing the methane from
landfills not covered by the Landfill Rule, and using it to generate
electricity, is economically attractive at enough sites to reduce
projected landfill emissions by 21 percent (USEPA, 1999). At a cost of
$30/tCe, the number of economically attractive sites increases
sufficiently that 41 percent of landfill emissions can be reduced.
Similarly, USEPA has constructed methane reduction cost curves for
reducing leaks and venting in natural gas systems, recovering methane
from underground mines, using anaerobic digesters to capture methane
from manure. and reducing enteric fermentation by changing how
livestock are fed and managed.
We have used a similar USEPA study to estimate the emissions
reductions available for the high GWP gases (USEPA, 2000). Table 1
shows that the high-GWP gases, while only a small fraction of baseline
emissions (first column), are expected to rise so rapidly that they
will account for majority of net growth in non-CO2 emissions
relative to the 7 percent reduction target (last column). In many
applications, other gases can be substituted for HFCs and PFCs, new
industrial process can implemented, leaks can be reduced, and more
efficient gas-using equipment can be installed. For instance, minor
repairs of air conditioning and refrigeration equipment could save an
estimated 6.5 MtCe/yr in HFC emissions by 2010 at cost of about $2/tCe.
New cleaning processes for semiconductor manufacture could reduce PFC
emissions by 8.6 MtCe/yr by 2010 at an estimated cost of about $17/tCe.
In all, USEPA identified 37 measures for reducing high GWP gases, a
list which is likely to be far from exhaustive given the limited
experience with and data on abatement methods for these gases.
The major source of nitrous oxide in the United States is the
application of nitrogen fertilizers, which results in about 70 percent
of current emissions. Given the tendency of farmers to apply excess
fertilizer to ensure good yields, effective strategies for N2O
abatement from cropping practices has thus far been elusive. Thus,
aside from measures to reduce N2O from adipic and nitric acid
production (amounting to less than one MtCe/yr), and from mobile
sources as a result of transportation policies (see below), we have not
included a full analysis of N2O reduction opportunities (USEPA, 2001).
Relying largely on recent USEPA abatement studies (1999, 2000,
2001b), we developed the cost curve for reducing non-CO2
gases depicted in Figure 2 below. \26\ In addition to what is covered
in the USEPA studies, we assumed that:
---------------------------------------------------------------------------
\26\The result is a cost curve that is similar and more up-to-date
than that used in widely cited multiple gas studies (Reilly et al,
1999a; Reilly et al, 1999b; EERE, 2000).
---------------------------------------------------------------------------
Only 75 percent of the 2010 technical potential found in
the USEPA studies would actually be achieved, and that policies and
programs needed to promote these measures would add a transaction cost
of $5/tCe.
The savings in 2010 fossil fuel use resulting from the
policies and measures implemented in the energy sector will yield
corresponding benefits for several categories of non-CO2
emissions. In particular, we assumed that a) reduced oil use in the
transport sector (down 14 percent) will lead to a proportional decrease
in N2O emissions from mobile sources \27\; b) reduced natural gas
demand (down 13 percent) will result in proportionately fewer methane
emissions from leaks and venting; and c) reduced coal production (down
49 percent) will lead to decreased underground mining and its
associated emissions. \28\
---------------------------------------------------------------------------
\27\A similar assumption is used by European Commission (1998).
Approximately 15 percent of N2O emissions are a byproduct of fuel
combustion, largely by vehicles equipped with catalytic converters
(USEPA, 2001a).
\28\We assume that coal production is a proportional to coal use
(i.e. we ignore net imports/exports). USEPA expects that the marginal
methane emissions rate will increase with production as an increasing
fraction is expected to come from deeper underground mines (USEPA,
1999).
---------------------------------------------------------------------------
Figure 6.2 shows that domestic options, taken together, are
insufficient to reaching the Kyoto target. The line on the left is the
``supply curve'' of non-CO2 abatement options, and the line
on the right is the reduction requirement after both energy-related and
Article 3.3/3.4 sinks are accounted for. Under current conditions (only
9 years left until 2010), the supply of remaining domestic options
appears insufficient to satisfy demand. This gap ranges from 107 MtCe/
yr at $10/tCe to 60 MtCe/yr at $100/tCe as shown. Therefore, to meet
our Kyoto obligations, we are now in a situation of looking to the
international market to fill this gap.
6.2 International options
The Kyoto Protocol creates are two principal types of greenhouse
gas offsets in the international market: the purchase of surplus
allowances from countries that are below their Kyoto targets and the
creation of carbon credits through project-based mechanisms, CDM and
JI.
Emissions allowance trading/hot air
The combination of emission targets based on circa 1990 emissions
and the subsequent restructuring and decline of many economies in
transition (EITs) means that these countries could have a large pool of
excess emissions allowances, typically referred to as ``hot air''.
Estimates of available hot air during the first commitment period range
from under 100 MtCe/yr to nearly 500 MtCe/yr, largely from Russia and
Ukraine. \29\ This source of offsets could fulfill a significant
fraction of the U.S. demand for additional reductions at very low cost
(depending upon the level of competing demands of other Annex 1 parties
for these allowances). \30\ We assume however, that relevant actors in
government and/or private sector charged with meeting emissions
obligations will effectively limit the use of hot air. Relying heavily
or entirely on hot air would be poor climate policy; as hot air
supplants legitimate mitigation activity. It is also bad public
relations; hot air has a stigma arising from years of negotiations
controversy. Therefore, we assume that hot air will constitute no more
than 50 percent of all international trading, and we assume a maximum
availability of 200 MtCe/yr, based on a recent analysis (Victor et al,
2001).
---------------------------------------------------------------------------
\29\A range of 100-350 MtCe/yr is cited in Vrolijk and Grubb,
2000. Missfeldt and Haites, 2001 use a base estimate of approximately
240 MtCe/yr, with high estimate of 480 MtCe/yr. For this analysis, we
assume the availability of 200 MtCe/yr, based on a recent analysis by
Victor et al (2001).
\30\Since these credits are a form of windfall credits, it has
been suggested that these economies could help protect the
environmental integrity of the agreement by dedicating the income from
``hot air'' sales to energy projects that will bring about additional
emissions reductions.
---------------------------------------------------------------------------
CDM and JI
CDM and JI projects, can be an important part of a comprehensive
climate policy, providing they truly contribute to sustainable
development in the host countries and create genuine, additional GHG
benefits. It is reasonable to expect that the U.S. Government and other
stakeholders will want to develop the CDM and JI market in order to
involve developing countries, engage in technology transfer, develop
competitive advantages, and prepare for future commitment periods.
With the rules yet to be established on critical issues like
additionality and baselines for CDM \31\,and with a limited
understanding of CDM/JI markets and transaction costs at high volumes
of activity, cost and volume estimates for CDM and JI remain highly
speculative. As with all GHG mitigation analysis exercises, both
bottom-up and top-down methods can be used to develop such estimates.
We have examined the data and literature for both approaches in coming
up with a rough, aggregate cost curve for CDM and JI.
---------------------------------------------------------------------------
\31\CDM projects are required to be ``additional'' emissions
reductions but rules have not been agreed to which would determine what
is additional. In addition, credits will be given based on reductions
in comparison to a baseline. A methodology for establishing baselines
is also the subject of ongoing negotiations.
---------------------------------------------------------------------------
A bottom-up CDM/JI cost assessments can examine emerging project-
based GHG trading markets--private broker transactions, the Prototype
Carbon Fund (PCF), the Dutch ERUPT program, GEF activity, and so on--to
get a sense of current ``real-world'' prices and transaction costs.
However, the size of this market remains very small in comparison with
the total flows that are likely once CDM and JI are underway. \32\ The
type of activities being undertaken today, such as the first PCF
project, a landfill gas capture effort in Latvia, could well represent
``lowhanging fruit'' that would be unable to supply the several
hundreds MtCe/yr of CDM and JI activity that are expected under some
Kyoto compliance scenarios (Missfeldt and Haites, 2001; Grubb and
Vrolijk, 2000).
---------------------------------------------------------------------------
\32\For instance, anecdotal evidence suggests that the current
international GHG emission credit market is at about $25 million in
transactions per year. In addition the PCF and ERUPT have committed
another $225 million over the next few years. This figure compares with
the $10-20 billion/year market (about 400-500 MtCe/year at $20-40/tCe)
that some analysts project under CDM alone (Missfeldt and Haites,
2001).
---------------------------------------------------------------------------
To get a better sense of the costs of projects available at higher
volumes, these ``early project'' estimates can be combined with non-
Annex B ``country studies''--the many national GHG abatement studies
performed with support from UNEP, UNDP, U.S. Country Studies, and other
bilateral and national programs. A study by the Dutch Energy Foundation
(ECN, et al., 1999) provides a good example of such an analysis.
Extrapolating from GEF projects along with 25 country studies, this
study found that 440 MtCe/yr of non-Annex 1 reductions could be
available at less than $22/tCe.
However, the uncertainty related to these bottom-up studies is
fundamentally quite high. National studies typically exclude a
significant number of abatement options due to sheer lack of data,
resources, or necessity. At the same time, abatement costing studies
may understate transaction and barrier removal costs, especially those
specific to CDM and JI projects. For instance, transaction costs for
project preparation, baselines, certification, and monitoring and
evaluation could also change from current levels, once the CDM and JI
markets take off and clear rules are established. Finally, the ultimate
approach adopted for deciding on project additionality and baselines
could have a major impact on the size and shape of the market.
Similarly, the possibility of limited crediting lifetimes, or
discounting of carbon reductions in future projects years, as proposed
by some, could increase the effective cost per tCe. In a recent
analysis, Bernow et al. (2000) illustrated how different approaches to
standardizing baselines could lead to differences in additional power
sector activity (tCe) of a factor of 4. These types of considerations
are rarely included in CDM/JI analyses, either bottom-up or top-down.
Many climate policy assessments rely on CDM and JI cost curves
developed by a handful of ``top-down'' modelers. Ellerman and Decaux
(1998) applied the MIT-EPPA computable general equilibrium model to
develop parameterized cost curves for five non-Annex 1 regions, which
have since been widely used (Reilly et al, 1999; Haites, 2000; Krause
et al, 2001; Missfeldt and Haites, 2001; Grutter, 2001). Applications
of the ABARE-GTEM model have been used in a similar manner (Vrolijk and
Grubb, 2000; Grutter, 2001; EMF, 1999). While compared with bottom-up
studies, the EPPA and GTEM model runs provide more comprehensive
assessments of reduction potential and cost from an economy-wide
perspective, they do a poorer job of reflecting the dynamics of
project-based investments.
It turns out that the GTEM, EPPA, and bottom-up ECN studies, do
yield rather similar results. At $20/tCe, the total CDM potential under
the GTEM run is 470 MtCe/yr, while under EPPA it is 480 MtCe/yr, and as
noted above, and for ECN et al (1999), the figure is closer to 440
MtCe/yr. \33\ Given the small differences, we adopt the GTEM results,
since they provide a fuller CDM curve, include multiple gases, and
provide a cost curve for JI investments as well.
---------------------------------------------------------------------------
\33\The EPPA and GTEM figures are drawn from the CERT model
described in Grutter, 2001. The EPPA scenario used here includes only
CO2, while the GTEM scenario includes all gases. All of
these studies exclude sinks, which is largely consistent with the
implications of the Pronk proposal.
---------------------------------------------------------------------------
6.3 Combining the options
There are two ways to combine the available options to meet our
Kyoto target. We can prioritize which options to rely on more heavily,
based on their strategic advantages and co-benefits, as we have done
for energy/CO2 policies. Or we can simply seek lowest-cost
solution for the near term. A long-term climate policy perspective
argues for the former approach. For example, rules and criteria for JI,
and especially CDM, should be designed so that additionality,
sustainability, and technology transfer are maximized. Ideally, our
cost curves for CDM and JI would reflect only investments that are
consistent with those criteria. However, our current ability to reflect
such criteria in quantitative estimates of CDM and JI potential is
limited. \34\
---------------------------------------------------------------------------
\34\We did briefly examine the potential contribution of a CDM
fast track for renewables and efficiency, as embodied in the Pronk
text. Applying the power sector CDM model developed by Bernow et al
(2001), we found that a carbon price of $20/tCe would induce only 3
MtCe/yr of new renewable energy project activity by 2010. At a price of
$100/tCe, this amount rises to 18 MtCe/yr. Given that a large technical
potential for energy efficiency projects exists at low or negative cost
per tCe, fast track efficiency projects (under 5 MW useful energy
equivalents according to Pronk text) could significantly increase the
amount available at lower costs.
---------------------------------------------------------------------------
It is possible to model priority investment in the domestic
reductions of non-CO2 gases by implementing some measures
that are higher cost than the global market clearing carbon price. Just
as energy/CO2 measures like a Renewable Portfolio Standard
can be justified by the technological progress, long-term cost
reductions, other co-benefits that they induce, so too can some non-
CO2 measures. While we have not attempted to evaluate
specific policies for nonCO2 gases as we have for
CO2, we have picked a point on the non-CO2 cost
curve, $100/tCe, to reflect an emphasis on domestic action. At $100/
tCe, domestic non-CO2 measures can deliver 118 MtCe/yr of
reductions, still about 60 MtCe/yr short of the Kyoto goal, to which we
must turn to the international market.
To model the global emissions trading market, we used the CDM/JI
cost curves, and hot air assumptions described above, together with
assumptions regarding the demand for credits and allowances from all
Annex B parties. \35\ This model yields market-clearing prices and
quantities for each of the three principal flexible mechanisms: CDM,
JI, and ET/hot air. \36\ The results are shown in Table 6.2.
---------------------------------------------------------------------------
\35\For the estimated demand for CDM, JI, and ET/hot air from
other Annex 1 parties, we used a combination of EPPA and GTEM cost
curves.35 (Reilly et al, 1999b, and Ellerman and Decaux, 1998; Vrolijk
and Grubb, 2000; Grutter, 2001).
\36\Our approach is similar to that used in a few other recent
studies (Grutter, 2001; Haites, 2000; Missfeldt and Haites, 2001;
Krause et al, 2001; Vrolijk and Grubb, 2000).
---------------------------------------------------------------------------
The first row of the table shows that 93 MtCe/yr are available at
net savings or no net cost, over half from the non-additional or
``anyways'' forest management and other Article 3.4 sinks activities
implicit in the Pronk text. Another 77 MtCe/yr of non-CO2
gas savings are available as we climb the cost curve from $0-100/tC
(second row). The net result is that nearly $1.8 billion per year is
invested in technologies and practices to reduce non-CO2 GHG
emissions by 118 MtCe/yr in 2010. Another $60 million per year is
directed toward the 6 MtCe/yr of expected additional sinks projects
allowed under the Pronk proposal. The third row shows that of the 60
MtCe/yr of international trading, half comes from CDM projects, and
much of the rest from hot air. The model we use estimates a market-
clearing price of about $8/tCe for this 60 MtC/yr of purchased credits
and allowance, amounting to a total annual cost of less than $500
million. \37\
---------------------------------------------------------------------------
\37\The market clearing price is lower here than in other similar
studies, due in large part to a much lower U.S. demand for
international trade, which results from of our aggressive pursuit of
domestic abatement options and the fact that we assume that domestic
policies and investments should be done as a matter of sound energy and
environmental policy (i.e. they are price-inelastic).
Table 6.2: Reductions available in 2010 up from various sources (in MtCe)
----------------------------------------------------------------------------------------------------------------
Domestic Options International Trade
--------------------------------------------------
Non-CO2 Hot air Total
gases Sinks CDM JI (ET)
----------------------------------------------------------------------------------------------------------------
Amount available at < or = $0/tCe (MtCe)............ 41 52 ........ ........ ........ 93
Amount available at $0-$100 (MtCe).................. 77 6 ........ ........ ........ 83
Amount available at $8 (MtCe)....................... ........ ........ 30 6 25 60
Annual costs ($Million)............................. $1,783 $60 $235 $48 $196 $2,322
----------------------------------------------------------------------------------------------------------------
In summary, of the 672 MtCe/yr in total reductions needed to reach
Kyoto by 2010, nearly 65 percent comes from energy sector
CO2 reduction policies, 18 percent from domestic non-
CO2 gas abatement, 9 percent from domestic sinks, and 9
percent from the international market. The net economic benefits
deriving from the energy-related carbon reductions reach nearly $50
billion/yr in 2010. The total annual cost for the 35 percent of 2010
reductions coming those last three options--non-CO2 control,
sinks, and international trading--is estimated at approximately $2.3
billion, making the total package a positive economic portfolio by a
large margin. Had we taken the other approach noted at the beginning of
the section--aiming for the lowest near-term compliance cost--we would
rely more heavily on international trading. We modeled this scenario,
and found that it would nearly double the amount of international
trading, and lower the overall annual cost to $0.9 billion, and reduce
the amount of non-CO2 control by over 40 percent. This
additional benefit is minor in comparison to the economic and
environmental benefits of the entire policy portfolio.
7. Conclusions
This study shows that the United States can achieve its carbon
reduction target under the Kyoto Protocol--7 percent below 1990 levels
for the first budget period of the Protocol. Relying on national
policies and measures for greenhouse gas reductions, and accessing the
flexibility mechanisms of the Kyoto Protocol for a small portion of its
total reductions, the United States would enjoy net economic savings as
a result of this Climate Protection package. In order to achieve these
reductions, policies should be implemented as soon as possible to
accelerate the shift away from carbon-intensive fossil fuels and toward
energy efficient equipment and renewable sources of energy. Such action
would lead to carbon emission reductions of about 24 percent by 2010
relative to the Base Case, bringing emissions to about 2.5 percent
above 1990 levels. Furthermore, emissions of other pollutants would
also be reduced, thus improving local air quality and public health.
Adopting these policies at the national level through legislation
will not only help America meet its Kyoto targets but will also lead to
economic savings for consumers, as households and businesses would
enjoy annual energy bill reductions in excess of their investments.
These net annual savings would increase over time, reaching nearly $113
per household in 2010 and $375 in 2020. The cumulative net savings
would be about $114 billion (present value 1999$) through 2010 and $576
through 2020.
Greenhouse emissions in the United States are now about 15 percent
higher than they were in 1990. Together with the looming proximity of
the first budget period, and a realistic start date no earlier than
2003 for the implementation of the national policies, reductions in
energy-related carbon would have to be augmented by other greenhouse
gas reduction options in order to reach the Kyoto target. In total, the
Climate Protection case in 2010 includes 436 Mtc/yr energy-related
carbon reductions, 58 MtC/yr domestic land-based carbon reductions, 118
MtC/yr reductions in domestic non-carbon greenhouse gases, and 60 MtC/
yr in allowances purchased through the ``flexibility mechanisms'' of
the Kyoto Protocol.
While implementing this set of policies and additional non-energy
related measures is an ambitious undertaking, it represents an
important transitional strategy to meet the long-term requirements of
climate protection. It builds the technological and institutional
foundation for much deeper long-term emission reductions needed for
climate protection. Such actions would stimulate innovation and
invention here in the United States while positioning the United States
as a responsible international leader in meeting the global challenge
of climate change.
8. List of References
BCAP, 1999. Status of State Energy Codes. Washington, DC.: Building
Codes Assistance Project, Sept./Oct.
Bernow, S., S. Kartha, M. Lazarus and T. Page, 2000. Free-Riders and
the Clean Development Mechanism. WWF. Gland, Switzerland.
Brown, Rich, Carrie Webber, and Jon Koomey, 2000. ``Status and Future
Directions of the ENERGY STAR Program,'' In Proceedings of
the 2000 ACEEE Summer Study on Energy Efficiency in
Buildings, 6.33-43. Washington, DC.: American Council for
an EnergyEfficient Economy.
Clean Air Task Force, 2000. Death, Disease, & Dirty Power: Mortality
and Health Damages due to Air Pollution from Power Plants,
October.
DeCicco, John, Feng An, and Marc Ross, 2001. Technical Options for
Improving the Fuel Economy of U.S. Cars and Light Trucks by
2010-2015, Washington, DC.: American Council for an Energy-
Efficient Economy.
Dockery, D., Pope, C., Xu, X., Spengler, J., Ware, J., Fay, M., Ferris,
B., and Speizer, F., 1993. An Association between Air
Pollution and Mortality in Six U.S., Cities, The New
England Journal of Medicine 329 (24): 1753-9.
ECN, SEI-B, and AED, 1999. Potential and Cost of Clean Development
Mechansim Options in the Energy Sector. Inventory of
options in the non-Annex I Countries to reduce GHG
emissions. ECN, The Netherlands.
EERE, 2000. Scenarios for a Clean Energy Future, Prepared by the
Interlaboratory Working Group on Energy-Efficient and
Clean-Energy Technologies, Washington, DC.: U.S. Department
of Energy, Office of Energy Efficiency and Renewable
Energy.
EIA, 2001a. Annual Energy Outlook 2001 with Projections to 2020. U.S.
Department of Energy, Washington D.C.
EIA, 2001b. U.S. Carbon Dioxide Emissions from Energy Sources, 2000
Flash Estimate. U.S. Department of Energy. http://
www.eia.doe.gov/oiaf/1605/flash/sld001.htm
Ellerman, A.D. and A. Decaux, 1998. Analysis of Post-Kyoto Emissions
Trading Using Marginal Abatement Curves, MIT Joint Program
on the Science and Policy of Global Change Report No. 40,
October, Cambridge, MA.
EMF 1999. ``The costs of the Kyoto Protocol: A multi-model
evaluation.'' 16th Energy Modeling Forum, The Energy
Journal, Special Issue.
EPA, 2001. ``The Power of Partnerships, Climate Protection Partnerships
Division, Achievements for 2000-In Brief.'' Washington,
DC.: U.S. Environmental Protection Agency.
European Commission, 1998. Options to Reduce Nitrous Oxide Emissions
(Final Report): A report produced for DGXI by AEA
Technology Environment, November. http://www.europa.eu.int/
comm/environment/enveco/climate--change/nitrous--oxide--
emissions.pdf
Grutter, J. 2001. World Market for GHG Emission Reductions: An analysis
of the World Market for GHG abatement, factors and trends
that influence it based on the CERT model. Prepared for the
World Bank's National AIJ/JI/CDM Strategy Studies Program,
March, 2001.
Harvey, R. and F. de la Chesnaye, 2000. ``The Potential for Cost-
Effective Reductions of NonCarbon Dioxide Greenhouse Gas
Emissions in the United States'' in J. van Ham, A. Baede,
L. Meyer, R. Ybema, Eds., Second International Symposium on
Non-CO2 Greenhouse Gases (Kluwer Academic Pub.,
Dordrecht, the Netherlands, 2000).
IPCC 2001. Climate Change 2000, Economic and Social Dimensions of
Climate Change, Contribution of Working Group III to the
Third Assessment Report of the Intergovernmental Panel on
Climate Change, Cambridge/New York.
Krause, F., Baer, P., DeCanio, S. 2001. Cutting Carbon Emissions at a
Profit: Opportunities for the U.S., International Project
For Sustainable Energy Paths, El Cerrito, California,
April. www.ipsep.org
Mark, Jason, 1999. Greener SUVs: A Blueprint for Cleaner, More
Efficient Light Trucks, Cambridge, Mass.: Union of
Concerned Scientists.
Missfeldt, F., and E. Haites. forthcoming 2001, The Potential
Contribution of Sinks to Meeting Kyoto Protocol
Commitments.
Nadel, Steven and Marty Kushler. 2000. ``Public Benefit Funds: A Key
Strategy for Advancing Energy Efficiency.'' The Electricity
Journal. Oct., pp. 74-84.
Reilly, J., M. Mayer, and J. Harnisch. 2000. Multiple Gas Control Under
the Kyoto Agreement, MIT Joint Program on the Science and
Policy of Global Change Report No. 58. March.
Reilly, J. et al, 1999a. Multi-Gas Assessment of the Kyoto Protocol,
Nature 401, pp. 549-555 (October 7, 1999).
Reilly, J., R.G. Prinn, J. Harnisch, J. Fitzmaurice, H.D. Jacoby, D.
Kicklighter, P.H. Stone, A.P. Sokolov, and C. Wang, 1999b.
Multi-Gas Assessment of the Kyoto Protocol, Report No. 45,
MIT Joint Program on the Science and Policy of Global
Change, Boston, MA, January 1999. (at http://web.mit.edu/
globalchange/www/rpt45.html)
Schwartz, J. and Dockery, D., 1992. Increased Mortality in Philadelphia
Associated with Daily Air Pollution Concentrations,
American Review of Respiratory Disease 145: 600-604.
USEPA, 1999. U.S. Methane Emissions 1990--2020: Inventories,
Projections, and Opportunities for Reductions, U.S.
Environmental Protection Agency, Office of Air and
Radiation, September. http://www.epa.gov/ghginfo.
USEPA, 2000. Estimates of U.S. Emissions of High-Global Warming
Potential Gases and the Costs of Reductions, Review Draft,
Reid Harvey, U.S. Environmental Protection Agency, Office
of Air and Radiation, March. http://www.epa.gov/ghginfo.
USEPA, 2001a. Draft Inventory of U.S. Greenhouse Gas Emissions and
Sinks: 1990--1999. EPA, Washington, DC, September, 2001.
USEPA, 2001b. Draft U.S. Nitrous Oxide Emissions 1990-2020:
Inventories, Projections, and Opportunities for Reductions.
EPA, Washington, DC, September, 2001.
USEPA, 2001c. Draft Addendum to the U.S. Methane Emissions 1990-2020:
Inventories, Projections, and Opportunities for Reductions
Report. EPA, Washington, DC, October, 2001.
Victor, David G., Nakicenovic, Nebojsa, and Victor, Nadejda, 2001,
``The Kyoto Protocol Emission Allocations: Windfall
Surpluses for Russia and Ukraine,'' Climatic Change 49
(3):263-277, May 2001
Vrolijk, C., Grubb, M. 2000. Quantifying Kyoto: How will COP-6
decisions affect the market? Report of a workshop organized
by the Royal Institute of International Affairs, UK, in
association with: Institute for Global Environmental
Strategies, Japan; World Bank National Strategies Studies
Program on JI and CDM; National Institute of Public Health
and the Environment, Netherlands; Erik Haites, Canada; and
Mike Toman, U.S. on 30-31 August 2000, Chatham House,
London.
Appendix 1: Energy and Carbon Summaries
Appendix 2. Modeling Global Carbon Markets
We first construct an aggregate Annex 1 demand curve for
international emissions reductions from CDM, JI, and ET/hot air. This
demand curve represents how short, at a given price, Annex 1 countries
are from meeting their Kyoto target using only domestic options (energy
sector CO2, non-CO2 gas, and Article 3.3/
3.4options). We can then compare this demand curve with the supply
curve for CDM, JI, and ET/hot air (based on the assumptions described
above) to find the market-clearing price. Our approach is similar to
that used in a few other recent studies (Grutter, 2001; Haites, 2000;
Missfeldt and Haites, 2001; Krause et al, 2001; Vrolijk and Grubb,
2000).
To create the Annex 1 demand curve, we combine a U.S. demand
curve--the ``additional required reductions'' line in Figure 6.2 minus
the cost curve or amount available from non-CO2 measures at
a given price--with estimated demand for CDM, JI, and ET/hot air from
other Annex 1 parties, excluding EITs. We estimate the non-US demand
using a combination of EPPA and GTEM cost curves. \38\ There is a
resulting asymmetry in this approach, since the non-US cost curves we
use do not embody the aggressive pursuit of domestic energy sector
reductions found in our analysis for the United States. As a result the
total demand for and use of international trading, as well as the
resulting market clearing price, is significantly higher than it would
be were we to have looked at a similarly aggressive approach in all
Annex 1 countries. The result is shown in the figure at right.
---------------------------------------------------------------------------
\38\The first scenario is based on EPPA cost curves (Reilly et al,
2000 and Ellerman and Decaux, 1998) and RIIA 1990 emission estimates
(Vrolijk and Grubb, 2000), and yields an estimated 2010 demand from
Annex II countries of 507 MtC. The second scenario uses GTEM results
and assumed 1990 emissions reported via personal communication from the
model developers, and yields an estimated 2010 demand from Annex II
countries of 344 MtC. As found in Grutter (2001).
__________
A Partial Listing of Studies Showing a Positive Economic Benefit from
an Innovation-Led Climate Strategy
Barrett, James P., J. Andrew Hoerner, Steve Bernow, and Bill Dougherty,
2002. Clean Energy and Jobs: A Comprehensive Approach to
Climate Change and Energy Policy, Center for a Sustainable
Economy, Washington, DC.
Bernow, Stephen, Karlynn Cory, William Dougherty, Max Duckworth, Sivan
Kartha, Michael Ruth, 1999. America's Global Warming
Solutions, Washington, DC: World Wildlife Fund.
Energy Innovations, 1997. Energy Innovations: A Prosperous Path to a
Clean Environment. Washington, DC: Alliance to Save Energy,
American Council for an Energy-Efficient Economy, Natural
Resources Defense Council, Tellus Institute, and Union of
Concerned Scientists.
Geller, Howard, Stephen Bernow, and William Dougherty, 1999. Meeting
America's Kyoto Protocol Target: Policies and Impacts,
Washington, DC: American Council for an Energy-Efficient
Economy, November.
Hanson, Donald, and Skip Laitner, 2000. ``An Economic Growth Model of
Investment, Energy Savings, and CO2 Reductions:
An Integrated Analysis of Policies that Increase
Investments in Advanced Efficient/Low-Carbon
Technologies,'' by Proceedings of the 93rd Air & Waste
Management Association Annual Meeting, Salt Lake City, June
18-22, 2000.
Interlaboratory Working Group on Energy-Efficient and Clean-Energy
Technologies, 2000. Scenarios for a Clean Energy Future,
prepared for Office of Energy Efficiency and Renewable
Energy, U.S. Department of Energy.
Koomey, Jonathan G., R. Cooper Richey, Skip Laitner, Robert J. Markel,
and Chris Marnay, 2001. ``Technology and greenhouse gas
emissions: An integrated scenario analysis using the LBNL-
NEMS model,''. In Richard Howarth and Darwin Hall, editors,
Beyond a Doubling: Issues in the Long-term Economics of
Climate Change, Elsevier Publishing.
Laitner, John A. ``Skip'', Stephen Bernow and John DeCicco, 1998.
``Employment and Other Macroeconomic Benefits of an
Innovation-Led Climate Strategy for the United States,''
Energy Policy. Volume 26, Number 5, pages 425-432. April.
Laitner, Skip, Kathleen Hogan, and Donald Hanson, 1999. ``Technology
and Greenhouse Gas Emissions: An Integrated Analysis of
Policies that Increase Investments in Cost Effective
Energy-Efficient Technologies,'' Proceedings of the
Electric Utilities Environment Conference, Tucson, AZ,
January.
Laitner, John A. ``Skip'', 1997. ``WYMIWYG (What You Measure is What
You Get): The Benefits of Technology Investment as a
Climate Change Policy,'' a paper given to the 18th Annual
North American Conference of the USAEE/IAEE, San Francisco,
CA. September 7-10.
Peters, Irene, Stephen Bernow, Rachel Cleetus, John A. (``Skip'')
Laitner, Aleksandr Rudkevich, and Michael Ruth, 2001. ``A
Pragmatic CGE Model for Assessing the Influence of Model
Structure and Assumptions in Climate Change Policy
Analysis,'' in Lawrence A. Kreiser, editor, Critical Issues
in International Environmental Taxation, CCH Incorporated,
Chicago, IL..
Sanstad, Alan H., Stephen J. DeCanio, and Gale A. Boyd, 2000.
``Estimating Bounds on the Economy-Wide Effects of the CEF
Policy Scenarios,'' Energy Policy 29 (2001) 1299- 1311.
Tellus Institute, 1997. Policies and Measures to Reduce CO2
Emissions in the United States: An Analysis of Options for
2005 and 2010. Boston, MA: Tellus Institute.
Senator Jeffords. There is no question that we must be
concerned with threats of today, like the thousands of people
dying prematurely every year from power plant pollution. But we
cannot let the press of quarterly reports or the hunt for
short-term profits prevent us from acting to reduce the threats
of tomorrow. That is especially true in the case of terrorism
or global warming where we have been presented with credible
information about the threats.
As some of my colleagues know, I have a special interest in
the U.N. Convention to Combat Desertification and pressed hard
for its ratification. Senator Helms was instrumental in moving
that treaty and I want to thank him for his work and that of
his staff in helping me and others get that agreement approved.
That treaty addressed land degradation in some of the most
impoverished areas of the world. It is designed to encourage
participatory democracy and stakeholder involvement. I look
forward to seeing the implementation of that treaty.
I have an interest in ratifying and implementing the
Convention on Persistent Organic Pollutants. I have introduced
legislation maintaining the spirit of that treaty, and I hope
we will be able to get that moving as soon as the U.S. can
participate in the ``Conference of Parties'' and the review
committee.
There seems to be a general good news regarding chemicals
that harm the ozone layer. From all indications, the Montreal
Protocol has been a success, though I gather there are some
additional amendments coming soon. I will be interested to
learn how our efforts have reduced that ozone hole.
There is less clear news on the status of the Convention of
Biologic Diversity, which was signed in 1993 but which has been
not sent to the Senate for confirmation and ratification.
I would also appreciate hearing an update from our
witnesses on the progress made toward the implementation of the
Basel Convention regarding the International Transportation of
Hazardous Waste.
Finally, I would note something that is a little different
between international agreements and our more conventional
environmental laws. They often seem to be missing performance
criteria or include very weak commitments. Unfortunately, in
the case of climate change, even when commitments are minimal,
such as reporting on the policies and measures we have adopted
and achieved in 1990 levels, we have failed. So I would urge
our negotiators to push for more specific environmental laws
using targets and timetables. That will make it easier for the
Senate to know whether the treaties we have ratified are
succeeding. Also, I believe the result will be better for the
environment and sustainable development.
I want to thank you for being with us here today. I now
turn to my good co-chairman friend, Senator Sarbanes.
OPENING STATEMENT OF HON. PAUL S. SARBANES, U.S. SENATOR FROM
THE STATE OF MARYLAND
Senator Sarbanes. Thank you very much, Senator Jeffords. I
am very pleased to join my colleague, Senator Jeffords, in this
joint hearing between the Environment and Public Works
Committee and the Senate Foreign Relations Committee on the
very important issue of the review of the implementation of
environmental treaties.
Senator Jeffords, as we all well know, has been a very
strong advocate of the need to protect our environment across
the range of issues. I certainly want at the very outset to
thank him for his leadership. The country, not just the
country, in a sense the world, and I am going to make reference
to this later, these environmental issues know no national
boundaries, and we are all extremely grateful to him.
I also want to thank him for suggesting this idea of a
joint hearing undertaken by the two committees. Joint hearings
can I think provide a useful opportunity to examine issues that
cut across committee jurisdiction, and I think they also serve
to encourage Members of Congress as well as the Administration
and private sector to think about the wider implications of the
issues with which we are wrestling. That is obviously one of
our purposes here today.
Treaties are often negotiated over many months, indeed,
even longer, and in many cases in a very painstaking way. So
when they come into force many people heave a sigh of relief
that the process has been completed. Of course, we review the
treaties in the Foreign Relations Committee and we try to
carefully examine them, and then once we ratify them we think
well that is over and done with. But the fact of the matter is
that once the treaty is ratified, the process has only begun.
And what really matters, in addition to adopting the treaty to
begin with, is how governments, including our own, actually
implement the treaties.
This hearing will examine a number of environmental
treaties that the United States has ratified. Just to mention a
few, the United Nations Framework Convention on Climate Change,
the Montreal Protocol on Substances that Deplete the Ozone
Layer, the Convention on International Trade in Endangered
Species of Wild Flora and Fauna, the North American Agreement
on Environmental Cooperation, and the U.N. Convention to Combat
Desertification, which Senator Jeffords made reference to. I do
not think that treaty would ever have been approved but for his
efforts.
We will ask witnesses from the Administration and private
sector specialists for their appraisal of our Government's
implementation of these various treaties. For example:
Are we living up to our commitments under these treaties?
Are we providing sufficient resources, both financial and
technical, to help developing countries meet their commitments
under these treaties?
What are the success stories?
Where are we falling short, and what can be done to ensure
that we do a better job?
What are the international ramifications of a failure on
our part to meet our commitments under these treaties?
I look forward to hearing our witnesses address some of
these important questions.
The protection of the environment is something that I think
we have come to understand is a matter of the first priority,
hopefully here in the Congress, certainly across the country.
In fact, I am inclined to think that the country is often ahead
of the Congress and ahead of the Administration on this very
important issue. Not only do we have an obligation to ensure
that our Government is honoring its environmental commitments,
but we should encourage our Government to play a leading role
in assisting others around the world to help them meet their
commitments. We constantly brag that we are first, and we ought
to be first in this regard, as well as in other respects.
Environmental problems, as we all know, have no boundaries.
An environmental problem halfway around the globe can have
adverse consequences for our own families here in the United
States. Similarly, an environmental problem here in this
country can affect the lives of millions of people overseas.
The Chernobyl nuclear accident, to take but one example, had
consequences far, far beyond the boundaries of where the event
occurred.
So I think this is an important joint effort here by the
two committees and I want to again thank Senator Jeffords for
suggesting this. I look forward to hearing from the witnesses.
Mr. Chairman, I ought to say at the outset, because of my
involvement in the other bill to which you made reference, I do
not know that I am going to be able to stay through the morning
but I certainly wanted to be here at the outset. I may have to
leave, maybe I can get back. But this is certainly a very
important initiative and I thank you for it.
Senator Jeffords. Thank you for being here. Your presence
makes this a much more rewarding situation for the hearing, but
I do understand that you have got a few little problems you are
dealing with.
Senator Chafee.
OPENING STATEMENT OF HON. LINCOLN CHAFEE, U.S. SENATOR FROM THE
STATE OF RHODE ISLAND
Senator Chafee. Thank you very much, Senator Jeffords, for
holding the hearing. As Senator Sarbanes said, certainly the
world is looking at us as to how we are going to act on these
treaties and are we going to be a responsible member of the
global community on these environmental issues which have such
immense ramifications for future generations.
We hold a certain place in the world after the fall of the
Berlin Wall and are kind of at the top of the heap. With that
comes enormous responsibility. We have to exercise it on these
treaties that have been negotiated over many, many months. It
is my thought that we have the responsibility to protect our
world for future generations. And whether it is global warming
or desertification or the health of our fisheries, the onus is
on us. Everybody is looking at us to see, are we going to be a
leader? Are we going to be a country that all around the world
people look at and say they are doing the right thing, they are
protecting these valuable resources? That not only are they
consuming resources at an enormous rate in the United States of
America, but they are looking ahead and trying to do the right
thing for many, many generations.
So thank you again, Mr. Chairman, for holding this hearing
today.
Senator Jeffords. Thank you, Senator Chafee. It is a
pleasure to have you with us.
Now on our first panel the first witness is John F. Turner,
the Assistant Secretary for the Bureau of Oceans and
International Environmental and Scientific Affairs, U.S.
Department of State, Washington, DC, and the other member of
our panel is Mr. James Connaughton, Chair of the White House
Council on Environmental Quality, Washington, DC.
Welcome. It is a pleasure to have you with us.
Mr. Turner, please proceed.
STATEMENT OF HON. JOHN F. TURNER, ASSISTANT SECRETARY FOR THE
BUREAU OF OCEANS AND INTERNATIONAL ENVIRONMENTAL AND SCIENTIFIC
AFFAIRS, U.S. DEPARTMENT OF STATE
Mr. Turner. Chairman Jeffords, Chairman Sarbanes, Senator
Chafee, I appreciate this opportunity to appear before you
today with my colleague, Jim Connaughton, to review the U.S.
implementation of some important environmental treaties
initiatives.
I believe the United States has a strong record on global
environmental issues. And as one who has been involved in
conservation most of my career, I want to pause and thank each
one of you for the dedication and commitment, leadership you
have given to domestic and international environmental affairs.
But I am proud of the leadership our country has shown to
spearhead the negotiation agreements and their subsequent
implementation on issues ranging from ozone depletion to
stemming illegal trade in endangered species. As an example of
this continuing leadership, the President just recently
submitted to the Senate an important treaty between the United
States and Russia that would strengthen the conservation of our
shared polar bear resources.
The State Department plays an important role in
negotiating, coordinating, and monitoring the implementation of
environmental agreements and then working through the
interagency and international processes to ensure U.S.
interests are served. Often, however, as you realize, other
agencies within our Government are actually responsible for
implementation of some of these treaties.
In addition to my written statement submitted for the
record, I would just like to briefly describe our efforts
related to five agreements the United States currently is
implementing.
First, the Montreal Protocol. As you are aware, during the
1980's, indeed, the United States led a global effort to
negotiate an agreement to phaseout the production and
consumption of substances that deplete the ozone layer and
threaten human health with the deliberating effects of skin
cancer and cataracts. Over the last 15 years, the
implementation of the Protocol and its subsequent amendments
have yielded remarkable progress in protecting the
stratospheric ozone layer by phasing out much of the
consumption and use of ozone depleting substances on a global
scale. The protocol does include a multilateral fund to provide
financial and technical assistance to developing countries to
assist them in meeting their own obligations under the treaty.
As the largest contributor to the fund, the United States has
made available over $350 million to the fund since the
beginning.
The second treaty I would like to discuss is the Convention
on International Trade in Endangered Species of Wild Fauna and
Flora, known as CITES. CITES conservation goals are to restrict
international trade in endangered species, and assist countries
toward a sustainable management of species through
international trade.
CITES Parties regulate wildlife trade through controls and
regulations on species listed in three distinct appendices. In
addition, each Party must appoint a CITES management authority
and scientific authority. Of course, for the United States it
is the Fish and Wildlife Service at the Department of Interior
that provides us with the management authority and scientific
authority for CITES. That agency also plays a major law
enforcement role in its implementation.
With regard to implementation, the U.S. implements CITES
primarily through regulations developed under the Endangered
Species Act and also under the Lacey Act. The United States is
proud of its record in implementing CITES. We are at the
forefront of CITES Parties in fulfilling these obligations.
Third, I would like to just briefly touch on the U.N.
Framework Convention on Climate Change, which I know you are
very interested in. The Framework Convention creates a broad
global framework for addressing the challenge of climate
change. My colleague, Jim Connaughton, will discuss the overall
approach of this Administration to address this serious global
challenge. Let me just briefly refer to a portion of this
strategy where I believe the United States is demonstrating
superb leadership.
In the two major announcements of President Bush on our
policy regarding global climate change, he committed us to
intensifying efforts with other nations to address the
challenge of climate change. Toward this end, the United States
has initiated a series of bilateral climate change
relationships with important partners, including, and I would
like to mention them, Australia, Central America, the European
Union, Canada, China, India, Italy, and Japan. We have
discussions underway on additional relationships with Brazil,
Mexico, Korea, the Russian Federation, South Africa, and the
Ukraine. Including the U.S.' participation, these relationships
would represent 78 percent of the total greenhouse gas
emissions from the combustion of fossil fuels around the world.
Fourth, let me just mention the North American Agreement on
Environmental Cooperation, commonly referred to as the NAFTA
environmental side agreement. This serves as an important
framework for cooperation among the three North American
governments on a wide range of environmental efforts. Among
other things, the NAFTA side agreement established the
Commission on Environmental Cooperation, the CEC, which
coordinates such cooperation.
This agreement has promoted strong cooperation among the
three countries on a number of important environmental issues,
achieved primarily through the implementation of the CEC work
program funded at the level of $9 million annually where each
party contributes equally. These include the promotion of
enforcement and compliance with environmental laws, protecting
children's environmental health, protecting animal species that
migrate throughout North America, and minimizing the use of
persistent toxic chemicals such as DDT.
Fifth, and last, Mr. Chairman, let me just touch on the
U.N. Convention to Combat Desertification, CCD. Indeed, I would
like to thank you, Senator Jeffords, for your leadership in the
ratification of this important global measure. As you are
aware, this Convention arose out of the 1992 Earth Summit. The
purpose of the Convention is to combat desertification and
mitigate the effects of drought on arid and semi-arid lands
through effective local, national, regional, and global action.
The Convention's central objective is to promote the
sustainable use of dry lands worldwide, but especially in
Africa, and to make more efficient use of aid resources,
thereby helping to solve Africa's and other affected regions'
chronic hunger problems and availability of fresh water. Many
of the principles used in the U.S. over the past 70 years have
been incorporated in the language of the CCD.
In conclusion, let me observe that while significant
progress in protecting the environment has been made, we are
all aware that enormous challenges lie ahead. And as you have
noted, Chairman Jeffords, the upcoming World Summit on
Sustainability in Johannesburg, South Africa, provides the
United States with a unique opportunity to take stock of our
past accomplishments and to build on them in helping to advance
economic and social environmental stewardship.
We have learned a great deal since Rio. WSSD gives the
United States a chance again to demonstrate its leadership, to
create a new paradigm that stresses sound economic policy,
national capacity for good governance, anti-corruption,
transparency, the role of science, poverty reduction, and sound
environmental stewardship. Working with our international
friends and allies, the Bush Administration is committed to the
success of the Johannesburg Conference to ensure we all work
together to build a positive legacy of natural resources
sustainability for current and future generations of the global
citizenry.
Thank you Chairmen. I would be happy to respond to any
questions you may have later on.
Senator Jeffords. Thank you very much.
Now we will hear from Mr. Connaughton, Chairman of the
White House Council on Environmental Quality. Please proceed.
STATEMENT OF HON. JAMES CONNAUGHTON, CHAIR, WHITE HOUSE COUNCIL
ON ENVIRONMENTAL QUALITY
Mr. Connaughton. Thank you Chairman Jeffords, Chairman
Sarbanes, Senator Chafee. I want to note at the outset, Mr.
Chairman, your reference to NEPA. Certainly, I share your view
that NEPA was the original sustainable development statute. And
the fact that it has been adopted by I think more than 50
countries worldwide and the legacy that that articulation of
what sustainable development is about is sort of a test case
for the beginnings of American leadership in this area.
Of particular note in that statute, and I think we had
talked about this a little bit during my confirmation hearing,
is the concept of man and nature living together in productive
harmony. That is an important concept. And this hearing today,
actually bringing together the Senate Environment and Public
Works Committee and the Foreign Relations Committee, I think is
a key important next step as we get various committees of
jurisdiction looking across their lines, as we must, consistent
with your statement, to figure out how to better integrate our
environmental and our social objectives into our other policies
and into other activities. That is really what was behind the
spirit of NEPA. And I think that is why today's hearing is so
important and useful, because it then turns, Chairman Sarbanes,
on what you referenced, that the largest questions before us
are the questions of implementation: are we implementing at the
domestic level and equally, and perhaps today even more
importantly, at the international level; and where are the
important places where we can make meaningful progress on
implementing these documents that were so hard worked over. So
I look forward to our discussion today.
What I want to do is briefly spend some time talking about
where we are with implementation of the U.N. Framework
Convention on Climate Change and then throw in just a little
aside on the world summit, my own view with respect to the
upcoming World Summit on Sustainable Development.
With respect to climate change, President Bush has
committed the Nation to ambitious, yet realistic, goals that
are based on a set of six principles that largely derive from
the framework that we have set out in that Convention. First
is, consistency with the long-term goal of stabilizing
atmospheric concentration of greenhouse gases at a level that
would prevent dangerous interference with the climate system.
This, of course, refers to the fundamental long-term obligation
under the Convention, to which the President has reaffirmed our
Government's strong commitment. Second is that we should
proceed with measured actions as we learn more from the science
and build on it. Third is the concept of flexibility, to adjust
to new information and take advantage of new technology. Fourth
is ensuring continued economic growth and prosperity without
which we actually cannot make the kinds of investments that we
will need to over the near-to mid-term to achieve our
greenhouse gases emission reduction goals. We need to pursue
market-based incentives that will spur technological
innovation. And finally, and very importantly, is the concept
of global participation along the lines that my good colleague
John Turner just described. We need to find ways to engage the
developing countries in a constructive path, on a path whereby
they, too, can make meaningful progress together with their
international partners.
The President has set a goal, a near-term goal, which is
committing the Nation to an immediate goal of reducing
America's greenhouse gas emissions relative to the size of our
economy by 18 percent in the next 10 years. This goal is
comparable to the kinds of emission reductions that countries
participating in the Kyoto Protocol expected to achieve. We
believe that this way of articulating progress is a means by
which we can open a dialog with developing countries because it
is consistent with their need for economic growth, but to do it
in the kind of efficient and more productive way that we
ourselves continue to demonstrate leadership on in the United
States of America.
Importantly, it will set us on a path to slow the growth of
our emissions. Our emissions are growing. Emissions around the
world are growing. A key first step in making meaningful
progress on climate change is to, in fact, slow that growth
significantly and, as science justifies, to stop the growth in
emissions, and then reverse that growth. This will require a
sustained commitment and significant investment and effort from
our Nation's farmers, small businesses, workers, industries,
and, most important, individual citizens. In recent time, the
largest growth in emissions have resulted from the actions of
individual citizens in their homes, in their transport, in
their commercial activities. We need to be working on
incentives and education and other methods, we have a whole
series of programs, by which to engage the American citizens of
the whole toward this effort.
The President's policy recognizes that meaningful progress
depends on the development and deployment of new technology.
That is key. We all recognize that. There is a large
international consensus on that. We need to advance the science
further because there are key gaps in our knowledge that can
help us make smart policy choices in the near-and mid-term. We
need to develop and promote energy efficiency, conservation,
and sequestration technologies and practices in addition to
building on international cooperation.
What I would like to do is just quickly run through the
various components, and I will just take a minute to do that.
The President's fiscal year budget calls for a $700 million
increase in our Federal effort in regard to climate change.
That will support a $4.5 billion program of research on climate
science and energy technology and create significant new
incentives that will help advance those technologies and deploy
them. That is unmatched in the world. We are committed to a
program of up to $7.1 billion over the next 10 years that is
dedicated to technology development and the incentives to
deploy that technology. That, too, is unmatched in the world.
Senator Jeffords, you were a strong supporter of a strong
conservation title in the Farm Bill, as was the Bush
Administration. That will unleash up to $49 billion, a
significant portion of which is going to enable and incentivize
our farmers on their working lands and our ranchers on their
working lands to engage in the kind of sequestration activities
and smarter land management that we would like to see while not
putting them off their property. We far outmatch anything along
those lines in the rest of the world.
That said, I want to note that we have the upcoming World
Summit on Sustainable Development coming up in Johannesburg. We
have a real opportunity to forge the kinds of partnerships that
will in fact implement the rich tapestry and body of
international norms and international treaties and laws that we
have all committed to over the last couple of decades. We are
looking forward to really setting off a dialog around which we
can in fact make meaningful progress on each of those
commitments and come up with real partnerships that can
demonstrate measurable success. So, again, we look forward to
talking to you about that today. Thank you.
Senator Jeffords. Thank you both.
Senator Corzine, do you have a brief statement you would
like to make?
Senator Corzine. I will have one for the record, but thank
you. I appreciate your holding the hearing.
Senator Jeffords. Thank you.
Mr. Turner, President Bush attended the Earth Summit in
1992. I understand that more than 100 heads-of-state plan to
attend the World Summit in Johannesburg. Will the President
lead the United States delegation to the World Summit?
Mr. Turner. Senator, there is obviously considerable
interest around the world as to who will head the U.S.
delegation. All I can tell you is that decision has not been
made yet. I can tell you that the commitment to make the World
Summit a success has captured the interest of the White House,
the National Security Council, cabinet members, and the
agencies. So we are committed to see that we have a dynamic and
bold agenda as we go to Johannesburg. But the decision on who
would lead the delegation has not yet been made.
Senator Jeffords. I just hope the President can because I
think it would be very, very helpful to the world.
Mr. Connaughton, in preparation for the Earth Summit of
1992, CEQ held a series of regional public conferences around
the United States and compiled extensive documentation based on
the concerns presented at these public meetings. What
comparable effort has CEQ undertaken in preparation for the
World Summit?
Mr. Connaughton. I will speak to the process point and then
turn to the substance point. We are jointly working with the
State Department and have coordinated a fairly extensive
interagency process to ensure that as we get to the World
Summit we actually have broad agency participation in that
effort. That is the immediate process and we have been working
on that.
In terms of the outreach, the first Rio Summit actually was
critical in setting the agenda and setting the numerous areas
in which we needed to make meaningful progress. Whether it is
reducing the number of people without access to safe drinking
water, whether it is reducing the number of people without
access to clean, reliable, affordable energy sources, issues
such as biodiversity and the like, all of those have unfolded
in the last 10 years through quite extensive both national and
international dialog. So where we are today is very different
from where we were 10 years ago, and where we are today is with
this very complete agenda, whether it is Agenda 21, or whether
it is the Millennium Goals. We have this very rich agenda. If
anything, the level of outreach on an agency-by-agency basis,
and certainly with the State Department through our
international fora, we have more fora engaged in the subject of
sustainable development than anyone might have in fact imagined
in 1990.
Our effort, and certainly CEQ's push, what we are trying to
emphasize is can we in fact forge the kind of partnerships with
respect to these commitments that have now developed and that
we have held ourselves to, can we forge the kind of real
concrete partnerships where 2 years from now, 3 years from now,
5 years from now we can actually say that with respect to our
commitment, for example, on access to safe drinking water we
have real plans toward making meaningful progress on each of
those goals. And so that is where my office has come in and
will stay diligent on that, because also I think it is
important to emphasize with the World Summit, just as Rio was
not the end of the conversation, it was actually the beginning
of the conversation, we would like to see this World Summit be
the beginning of a very new and hard emphasis on really
implementing our goals toward lifting the world out of poverty
and assuring for them the kind of quality of life that we enjoy
here in America.
Senator Jeffords. Mr. Connaughton, the Framework Convention
commits the United States and all the Parties to reporting
detailed information on its policies and measures ``with the
aim of returning individually or jointly to their 1990 levels
of these man-made emissions of greenhouse gases.'' Which of the
programs outlined in the Administration's Climate Action Report
aims to return our emissions to the 1990 levels, and by when?
Mr. Connaughton. The Action Report, which, as you know,
Senator, goes on at great length, outlines more than 60 Federal
programs and mentions numerous activities at the State and
local level, all of which are oriented toward mitigating
greenhouse gas emissions. In addition, we have an extensive
program of research and development and technology deployment,
not just on the pure technology side, for example, in
sequestration and how we can capture carbon, but also in the
land management side of things in terms of how we can better
utilize our natural resources and the acreage that we have in
the United States toward meeting our Nation's agricultural and
wood products and other needs.
That set of programs covers every sector of the economy. It
includes a range of mandatory measures, a range of voluntary
measures, a range of incentive-based measures. And, again, when
you sort of line it up program for program, it is a level of
effort that far outpaces much of what the rest of the world is
currently doing.
In terms of a timeline of when, we cannot set one. I think
the non-binding aim of the Framework Convention was not met by
the United States or by most of the rest of the developed
nations of the world. I think we need to set ourselves on a
realistic course, consistent with economic growth, by which we
can all make meaningful progress toward that long-term goal of
stabilization of greenhouse gases in the atmosphere.
Senator Jeffords. I am sorry, but the question is, which
ones aim at 1990?
Mr. Connaughton. The entire package aims at reducing the
growth in our greenhouse gas emissions, Senator. There is no
particular silver bullet program by which we could achieve that
goal.
Senator Jeffords. Senator Chafee.
Senator Chafee. Thank you, Senator Jeffords. I have a
little bit of business. Senator Hagel, a member of the Foreign
Relations Committee, asked me to submit for the record his
opening statement.
Senator Jeffords. It will be accepted, without objection.
[The prepared statement of Senator Hagel follows:]
Statement of Hon. Chuck Hagel, U.S. Senator from the State of Nebraska
Mr. Chairman--Thank you for holding this hearing. This is an
opportunity for the Administration to discuss the progress that has
been made on these five environmental treaties, all of which have been
ratified by the U.S. Senate.
Of course, much of the talk today is also likely to focus on a
treaty that was signed by President Clinton but never submitted to the
Senate, the Kyoto Protocol.
I would like to remind my colleagues of a bit of Senate history on
this issue.
Tomorrow will mark the 5-year point since the Senate voted
unanimously to provide President Clinton and Vice President Gore with
clear advice regarding the Kyoto Protocol. It is unfortunate that the
Clinton Administration ignored the Senate's 95-0 vote on S.Res. 98, or
the Byrd-Hagel Resolution, but the conditions outlined in that
resolution remain the guideposts for U.S. international climate change
policy.
I would also remind my colleagues, and this frequently gets
forgotten in the discussion, perhaps even more significant than the 95-
0 vote was that the Byrd-Hagel Resolution had 65 bipartisan cosponsors.
As we know, the Byrd-Hagel Resolution was very clear. It called on
the President not to sign the Kyoto Protocol, or any other
international climate change agreement, unless two minimum conditions
were met.
First, S. Res. 98 directed the President not to sign any treaty``.
. . unless the protocol or agreement also mandates new specific
scheduled commitments to limit or reduce greenhouse gas emissions for
Developing Country Parties within the same compliance period.'' The
message was simple. Yet as we know, the Kyoto Protocol does not include
a single developing nation. These are the very nations, such and China
and India, that will soon lead the world in manmade greenhouse
emissions. Any treaty that exempts them from participation is folly.
Second, the Resolution stated the President should not sign any
treaty that``. . . would result in serious harm to the economy of the
United States.'' The Kyoto Protocol would have legally bound the United
States to reduce our greenhouse gas emissions to 7 percent below 1990
levels by the years 2008 to 2012. As President Bush stated in February,
this would have cost the U.S. economy $400 billion and resulted in the
loss of 4.9 million jobs.
The Clinton Administration never submitted it to the Senate for
debate and consideration. I suspect it is because they knew what is
still true today--if put to a vote in the Senate, the Kyoto Protocol
would face resounding defeat.
Other nations are also reconsidering their early ardent advocacy
for the Kyoto Protocol. Japan has ratified the treaty, but has no
enforceable plan to meet its obligations. The same is true for the
European Union. Australia has joined the United States in saying it
will not ratify the protocol. Canada and Russia have not made final
commitments to ratification.
The Kyoto Protocol is collapsing under the weight of the reality of
its economic consequences.
Does that mean the United States should turn its back on
international efforts to address potential climate change? No, that
would be irresponsible.
In his February 14 announcement of the Administration's climate
change policies, President Bush stated, ``I intend to work with
nations, especially the poor and developing nations, to show the world
that there is a better approach, that we can build our future
prosperity along a cleaner and better path.''
he Administration has backed up the President's words with funding
and tangible international cooperation. I'm sure the witnesses here
today will expand on these efforts and I look forward to their
testimony.
Next month, nations will gather for the World Summit on Sustainable
Development in Johannesburg, South Africa. We should stay focused on
science, programs and resources that enhance international cooperation
to produce tangible environmental benefits for all nations. Not worn-
out debates over dead treaties.
Thank you, Mr. Chairman.
Senator Chafee. Thank you. Mr. Turner, to follow up on the
Summit in Johannesburg, what are the goals that we will be
setting out for us as we attend this summit? What do we hope to
accomplish?
Mr. Turner. Senator, I think we are committed to success.
And then you are asked the question, how will we measure
success? I think we will measure success by getting some
commitments to concrete actions by the world community to make
a difference in places around the world. By that, I think the
United States is advancing themes based on the need for good
governance, the need to increase the total flow of resources to
eradicate poverty and lift the quality of people's lives. We
need concrete commitments. In fact, the United States is
working on deliverables in the following areas. The three most
important seem to be: Access to energy. We have great
opportunities in providing clean energy technology. It is
inexcusable that we have almost 2 billion people today without
access to fresh water. So I think water will be a priority.
Third, the problem of HIV/AIDS and other infectious diseases.
So, health, fresh water, and energy would be the top three
areas for deliverables. We are also working on packages in
forestry, oceans and fishery biodiversity, food security, and
education. We feel this package helps invest in people, it
helps build a platform which will not only help economic growth
but environmental sustainability.
So I think our opportunity is to get beyond lofty rhetoric,
the negotiation of text, and get into real partnership
commitments. We have an ongoing dialog with other countries,
both developed and developing, trying to forge these
partnerships, a dialog with the nonprofit community both
domestically and internationally, and business groups to see if
for the first time we can build on a continuum offered us by
the Doha Conference on Trade, the Monterrey Conference, to
increase the total flow of resources to impoverished areas of
the world. Johannesburg is an opportunity to bring this all
together with real concrete commitments. The United States, I
have to say, is really leading that international effort right
now to forge those commitments.
Senator Chafee. Very good goals to have for the conference.
I support them and wish you good luck at building consensus
with other nations around the world. Certainly health and fresh
water and curtailing the spread of infectious diseases are a
good place to start and help build an economy. So I will
certainly be supportive of those efforts.
Mr. Connaughton, in your statement you talk about measured
actions as we learn more from science. I am curious as to when
does the science finally convince the Administration to take
action. Where is the Administration on global warming in
relation to the science? Is it a little apprehensive of it at
this point, or beginning to come to the point of this is an
issue that needs aggressive action?
Mr. Connaughton. Where we are with the science is there is
a significant scientific enterprise that has produced a number
of projections that are sufficient to give us cause for action.
The issue is are we calibrating our action to the current state
of the science. I believe the President's plan does precisely
that in terms of taking us to the next step of slowing the
growth in emissions and yet not taking us so far down the road,
given the uncertainties of the science, that we are actually
having significant detrimental effects on jobs, the American
workers, which is important, and it is not just American
workers, but it is the kinds of effects that you would see with
quite restrictive actions in other countries of the world.
So when is the science done? We have had a couple of
decades of scientific enterprise. We are looking at many more
decades, funded with the U.S. carrying the largest share of
that funding, in which we have to stay on top of this. Our
research effort in climate change, again, it is unmatched in
the world and it far outpaces our research in many other areas
of more immediate consequence to people in the United States of
America. But it is important enough to stay up with the
science.
What we are trying to do, though, is we are trying to get a
more focused management program to some of that spending, not
all of it, but some of that spending so it can actually begin
to answer some of the more difficult questions that help us
design programs that would be meaningful. We need to know more
about some of the effects of, for example, the effects of
aerosols, the effects of clouds, the effects of changes and
adaptations to climate. We need to know more about that in
order then to develop the kinds of policies that do not lead us
to significant economic mistakes. Because, of course, if we put
our economy further into reverse, we actually will not get the
kinds of investments we need to make the progress toward that
next generation of capital that we need to deploy to get new
capital stock, to get the new cars everybody wants, to get more
efficient manufacturing, and, importantly, more efficient homes
and more efficient commercial enterprises, because that is
where the real growth is.
Senator Chafee. Thank you very much.
Senator Jeffords. Senator Corzine.
Senator Corzine. Thank you, Mr. Chairman. I would like to
take a little bit of what you just said, Mr. Connaughton, and
ask whether you think that some of the capital investment that
I think we all think is important for generating economic
growth is somewhat inhibited because there is an uncertainty
and a conflict between what we sense are requirements of our
international obligations and both the political debate that we
have in America about climate change and the uncertainty that
seems to revolve around what certainly I read in our
international requirements. For instance, I would cite under
Article 3.3 of the Convention, talking about the Framework
Convention on Climate Change, ``Parties should take
precautionary measures to anticipate, prevent, or minimize the
causes of climate change and mitigate its adverse effects where
there are threats of serious or irreversible damage. Lack of
full scientific certainty should not be used as a reason for
postponing such measures.''
Sometimes it does not feel that our policies are taking
into account what we have as mandates, at least in some sense,
from our international conventions. I would think as an
investor in dealing with some of these needs that people might
be confused, particularly as they see increasing evidence
published that some of these considerations, particularly with
regard to carbon, are a serious problem.
How is the United States resolving this sort of dilemma of
debate that exists in the context of what our international
obligations are? Not only yourself, but Mr. Turner as well, I
would like to hear your comments on that.
Mr. Connaughton. First, I think that the President's
announcement on February 14 was a key next step in providing
further clarity that you describe, Senator, in terms of making
clear at least what this Administration's expectation is on the
greenhouse gas side of the equation in terms of a realistic but
still ambitious goal for further efficiency and productivity in
our economy. That is our expectation.
The second component of that, which has to do with perhaps
the investment uncertainty you describe, is we look very
closely at the approach that certainly Senator Chafee
championed, that numerous members of the Senate championed,
toward not just getting our information flows better in terms
of improving our registry of reductions in the various sectors,
but also to create a credible crediting system by which those
who do make investments today have some high level of assurance
that those investments will be recognized in whatever a future
policy could hold, whether it is an incentive-based policy,
whether it is a market-based policy, which we would emphasize
as the better path forward, or through even additional
mandatory programs that might come to the fore in terms of
where we are falling short of real action.
Senator Corzine. Is the White House supporting the
Brownback-Corzine amendment on registry of carbon dioxide
emissions?
Mr. Connaughton. We do not support that because we do not
think there is a need for at this time a mandatory reporting
element. We think enhancing the registry is a great idea. I
would think creating----
Senator Corzine. As you know, it is not mandatory for the
first 5 years as long as we meet some kind of reduction
standards, and would not become mandatory if people met those
standards.
Mr. Connaughton. I am aware of that and that is our point
of departure.
Mr. Turner. Senator, I want to respond and just offer some
reflections of a trip I just returned from. China was my first
trip and a real learning experience, where we completed some
high level dialog with China on a diverse array of
environmental issues, and then I was able to travel through
China. China, to me, was a great reflection on the broader
approach and its justification that the United States is taking
in engaging countries like China and India and others that will
represent a significant amount of emissions.
I was impressed in going to China that that is a country on
the move economically. To improve the lives of their citizens,
their energy consumption is going to go up exponentially. Their
technology and science is extremely poor, and they are the
first to admit that. The emission of greenhouse gas is
significant. They are making a significant effort but the
utilization is not good and not efficient. So there is an
excellent opportunity for the United States to take science, to
take technology and partnership with them.
I went to one of the poorest regions in China where they
have some significant desertification and erosion, over-
grazing, dust issues. They admit it, as our science admits it,
that the dust is now coming all the way across the United
States from the Mongolian-Tibetan plains of China.
We have been accused of being isolated on global climate. I
submit the absolute opposite is true. The United States in fact
is leading the effort to engage the developing world in this
dialog and approach to collective strategies on climate. That
impact has significant opportunities to address this serious
issue. We need to do much more in our international efforts,
but the United States is really leading, trying to get the
attention of the President's commitment to engage other nations
in this whole effort on climate.
Senator Jeffords. What did you mean by trying to get the
President's attention?
Mr. Turner. No, excuse me, Mr. Chairman. I mean in trying
to follow through on the President's appropriate commitment of
the United States. Part of our strategy is to work with other
nations, engage other nations in approaches to the serious
issue of climate. As you know, Mr. Chairman, the Senate voted,
and the President concurred, that one of the failings of the
Kyoto process was we were leaving out too many countries,
members of the world community that not only today emit a lot
of greenhouse gases, but the potential for significant
increases in the future based on old technology really has
frightening ramifications for where we go in climate. So I am
proud of what we are doing to engage other countries,
especially the developing countries.
Senator Jeffords. I am very interested in this. I was in
China and I started an organization dealing with more efficient
use of energy. They sent some men over who looked at China's
incredible need. To just improve the technology, they could
reduce their emissions immensely. What does the United States
intend to do to try to get these countries to be more efficient
in their use and to reduce greenhouse gas emissions?
Mr. Turner. Senator, obviously, in our discussion with
other countries, their needs and interests are different. But
it is a spectrum going from providing science and technology,
which seems to be the biggest need, to, as Mr. Connaughton
referred to, the need for more information; i.e., climate
research. We have committed to a global climate research
system. And, again, the United States is leading that effort to
answer many of the legitimate questions that we still have out
on climate change, and we are partnering with other countries
in setting up global monitoring stations. I visited a very
remote one we put up in China. So science and technology,
global research, looking at opportunities to comment together
and work on global policy.
Japan, as an example, we have three working groups on
research, science and technology, and how together we can go
out and help developing countries, and then looking at future
markets, which is business opportunities for both countries. In
India, for an example, Mr. Chairman, India, it is astounding to
me that we have 600,000 women dying each year from indoor air
pollution from the use of pre-industrial fuel use, poorly
ventilated stoves. So India's need for new types of energy for
basic heating and so forth, that is unique to India.
So each country has unique opportunities for the United
States to take its research, its technology, engage the private
sector, engage the nonprofit community, engage the academic
community. There are so many significant needs out there in the
world that I think it will be an opportunity for the United
States to contribute significantly to where we go in the coming
decades on climate change.
Mr. Connaughton. Senator, if I might add.
Senator Jeffords. Yes.
Mr. Connaughton. The Monterrey consensus by which we are
trying to create harder criteria for countries we think can be
successful is also important to this overall enterprise. We
need to create the kind of economic, social, and political
environment in some of the developing world in some of these
larger developing countries by which we can actually get the
kind of long-term investment that we enjoy in the United
States, which, as you know, tends to deliver the better
technologies. If you are in an unstable environment, if you are
in an environment where capital is not protected, if you are
not engaged in the international trade world by which you have
to become competitive on efficiency and productivity grounds,
you just will not get those kinds of investments that will turn
things around faster.
So I do not want to leave off the other programs that do
not necessarily obviously have the effect that we are
discussing in terms of the environmental dimensions of that.
But from an environmental perspective and also from a
greenhouse gas perspective, those agendas are really critical
toward making real progress on a much shorter time line in some
of these countries toward environmental protection. And it
opens the door for the kinds of very rich dialogs we have going
on right now, but it will open the door for even more
consequential dialog as we are able to share technical
capacity, share regulatory mechanisms, the ones that work, the
ones that do not work, and maybe help them leapfrog through
some of our lessons as we now get to a more streamlined, more
market-based system of addressing some of our issues.
Senator Jeffords. A question for both of you. What are the
top three U.S. substantive priorities for the Summit of clear
sustainable development outcomes? What do you think the Summit
will achieve in terms of real sustainable development results
at home and abroad?
Mr. Turner. Mr. Chairman, I think I would answer that in a
couple of ways. The top three sectoral areas that we have
opportunities to make commitments in are I think, as I
mentioned, in the area of fresh water, health, and the
availability of energy. A more thematic approach, I think it is
an opportunity to implement the realization that taking care of
the environment starts with taking care of people, the
opportunity for the United States to reduce poverty around the
world. And third, I think we have an opportunity to change the
way we have traditionally done assistance around the world, and
not just economic assistance for developing nations, but to in
fact incorporate a new theme where we help countries help
themselves with better ruling capacity, help them invest in
their own people, help them encourage entrepreneurship and
involvement of the private sector.
So I think we have an opportunity to build a new paradigm
of partnerships out around the world.
Senator Jeffords. Mr. Connaughton, why do you believe that
the more environmentally sound EPA straw proposal on
multipollutant legislation was rejected by the White House?
Mr. Connaughton. That was an initial straw proposal that
then went through extensive analysis, economic analysis,
feasibility analysis, toward what we think is a quite strong
proposal, a 70 percent reduction in the three criteria
pollutants, sulfur dioxide, nitrogen oxide, and mercury, but is
also one that is attainable. We can go quite far, Senator, as
you know, but we can do it in a way that keeps us within the
realm of not having an impact on consumers, making
unprecedented strides in terms of the environmental protections
that that would deliver and do it on a timeline by which the
economic community can actually make investments toward these
leapfrogging efforts and give them the long-term certainty with
their investments where they can actually do some significant
capital planning. So there were a number of factors that came
into our policy that led us to a different place, but not a
markedly different place.
I would also note, and I want to emphasize because it comes
up frequently, the issue of coal. Coal represents 50 percent of
electricity generation today. Coal is affordable, it is
reliable, and it is here, it is domestically secure. But what
we need to do is we need much cleaner coal-fired generation.
The way you do that is to create the right kind of incentives,
and we have got a lot of money on the table toward clean coal
technologies as part of our climate policy as well as part of
our air policy, but you also then need to create the kind of
timelines so that the plants can turn over in a way that makes
sense to business investors so that they will actually invest
in the application of these technologies. As you know, Senator,
it is quite exciting the technologies that are potentially
available. If we create the right timeframe, make the levels
economically reasonable, we think we can spur the investment
toward the application of those technologies, the broad
application, which then preserves a role for coal even as we
continue with a more diversified energy system.
We need more nuclear, we need more natural gas, we have to
look to solar wind and some of these other renewable
technologies in which we have quite a strong commitment. But we
should not lose sight of the incentive we have, not just for
the United States, because if we can advance coal technologies
in the United States, then we can take them to places like
China where they are not going to be creating massive wind
farms to address their energy needs. And they are putting in a
lot of baseload capacity. It would be really helpful for us to
take our success here and take it international.
So a whole lot of factors went into it and we really did
try to look at this holistically and consistent with our
overall energy and economic goals. We think we hit the right
balance.
Senator Jeffords. Mr. Turner, is the U.S. prepared to agree
to seek higher appropriations in the outyears to replenish the
global environmental facility GEF in order to leverage other
donors?
Mr. Turner. Mr. Chairman, as you are aware, the President
committed us to I believe $178 million on the GEF, realizing
this is an important outreach especially in developing
countries. So for the first time we recommended catching up
with our arrears and adding in $70 million for the first time.
Currently, the third replenishment negotiations are under
way and we plan to participate in those in a dialog with the
world community to see where the world wants to go next. The
focus of the GEF is extremely important to the United States.
But I am pleased that we made a significant increase in our
request to the Congress on the GEF. The consideration of the
next round is under review.
Senator Jeffords. I am pleased to hear that. It seems like
this would be necessary to fully implement the Convention to
Combat Desertification and the Stockholm Convention on
Persistent Organic Pollutants and the prior informed consent
Convention. So I appreciate that information.
For both of you. The Senate-passed Sense of Congress on
Climate Change, Section 1001 of the Energy Policy Act of 2002,
says the U.S. should take responsible actions to ensure
significant and meaningful reductions in emissions of
greenhouse gases from all sectors, and take part in
international negotiations that lead to U.S. participation in a
fully binding climate change treaty. Is the U.S. presenting
anything at the World Summit in terms of clear targets and
timetables for addressing climate change and reducing emissions
consistent with this?
Mr. Connaughton. With respect to the World Summit, first
off, climate change will be discussed but it is not an agenda
for action because just a few short weeks later the Conference
of the Parties will be meeting again. And so there is a
separate international meeting to continue to carry out the
discussions under the Framework Convention and under the Kyoto
Protocol.
With respect the first point, I think the answer to that is
yes, we are moving forward with the kind of international
bilateral and multilateral process that Assistant Secretary
Turner outlined for you to, in fact, re-engage, since we are
not participating in the Kyoto Protocol, engage outside of that
particular forum to come up with common strategies, again, not
just domestically but with our international partners,
including other countries who may or may not become part of the
Kyoto Protocol. So we are not waiting for decisions on that to
take the kind of action that that resolution urged.
We remain guided by the precursor resolution that we need
to have an approach that does not significantly impact the
economy, and also an approach that does engage developing
countries, which were the two key pieces that were missing. So
we remain guided by that as well. And we are looking forward to
seeing significant progress. I would note that the President's
commitment of an 18 percent reduction in greenhouse gas
intensity, that alone in 2010 would result in 100 million
metric tons avoided from business as usual, which is quite a
consequential amount of tons of carbon avoided. We think that
also is consistent with the spirit of the Senate resolution.
Senator Jeffords. As you both know, I have deep concerns
over the way we are handling the results of pollution from our
power companies. Have you been involved in any of the decisions
related to the release of the New Source Review documents to
the Congress or in discussions of adopting a new policy and
providing less information to Congress? That is kind of a
little nasty question.
Mr. Connaughton. First of all, yes, the New Source Review
policy was the--EPA was directed under the National Energy
Plan, in consultation with the Department of Energy, to prepare
the report on the impacts of the New Source Review program on
electricity supply. So that was a joint exercise between the
two agencies in which the various White House offices, as part
of our interagency process, we were apprised of its progress
and where that was heading.
In terms of the recommendations that came from EPA, there
too, consistent with other processes, EPA kept us informed of
where that was going. We had extensive interagency
conversations about the various recommendations that EPA was
considering. The end product was produced by EPA and then was
received back into the interagency process to see what it
meant.
When EPA's regulatory proposals to implement the
recommendations are complete, those will come over to the
Office of Management and Budget and, consistent with our
traditional processes, those will receive interagency review as
well, as do all other significant regulations, and we expect to
be a part of the review of the regulations at that time.
In response to your final point, the dig on information, we
understand you had information requested out to EPA and they
got some information to you and others not to you on quite the
timeframe you expected. But it is my understanding that the
large body of that has made it up to the committee. And so
while I suppose we could talk about timelines for getting it to
you, it is my understanding it has made its way to you. So, if
there is more to discuss on that, I would be happy to do what I
can and talk to EPA.
Senator Jeffords. I cannot tell you how disturbing it is
with that particular issue, which is a life-saving issue, as
you well know, that we have had such troubles in that regard.
So I appreciate that.
There are other Senators who could not be here today
because of their busy schedules, and thus they will have the
opportunity to submit questions to you to be responded to in
writing. So I just want to let you know that. I also want to
thank you very much for being here today and candidly
participating in our question and answer period.
Mr. Turner. Mr. Chairman, thank you for your time, and
Chairman Sarbanes, and your interest in giving the
Administration the opportunity to discuss a very important
subject matter, and that is the implementation of our
international obligations. So thank you, Mr. Chairman.
Mr. Connaughton. Thank you, Mr. Chairman.
Senator Jeffords. Thank you both.
We will now move on to our next panel. Our first witness is
the Honorable Maurice Strong. He is a native of Canada and
resides in Buckhorn, Ontario. Mr. Strong has long-standing ties
with the private and public sectors and has served in an
impressive array of business, government, and nongovernmental
organizations. Currently, Mr. Strong is a Special Advisor to
the Secretary General of the United Nations, President of the
Council for the University for Peace, a Senior Advisor to the
President of the World Bank, and Chairman of the Earth Council.
Mr. Strong was the Secretary General of the 1992 United Nations
Conference on Environment and Development, and the 1972 United
Nations Conference on the Human Environment, and subsequently
became the Executive Director of the United Nations
Environmental Program.
Mr. Strong, thank you for traveling all the way from Canada
to be here with us today. Let me introduce the other two on the
panel and then we will start with you for a statement.
The second member of the panel is Mr. John Dernbach. He is
a professor of law at Widener University Law School. He is
editing a book, ``Stumbling Toward Sustainability,'' that
assesses progress the U.S. has made on the sustainable
development in the past 10 years and recommends the next steps.
Welcome. We look forward to hearing from you.
Also, we have Christopher Horner, who serves as a Senior
Fellow at the Competitive Enterprise Institute, and as Counsel
of the Cooler Heads Coalition. That sounds like what we need.
Please proceed, Mr. Strong.
STATEMENT OF HON. MAURICE STRONG, CHAIRMAN, EARTH COUNCIL
INSTITUTE CANADA, TORONTO, ONTARIO, CANADA
Mr. Strong. Distinguished Chairman, Senator Jeffords,
Senator Feingold, ladies and gentleman. First let me
congratulate you, Senator Jeffords, on your leadership on these
issues and say what a privilege it is for me to have the
opportunity of testifying before these two important committees
of the U.S. Senate as you consider issues which are at the
center of my own life interests and concerns. It is
particularly encouraging to know that you are addressing these
issues at a time when the position of the United States of
America in respect to these issues has never been more
important to the human future.
The United States has been at the center of the movement to
develop since the first Stockholm Conference first put these
issues on the international agenda an international regime of
cooperation and of institution-building to deal with the
dilemma which Stockholm revealed. The fact that through our
economic life we are impinging on the resource environmental
and life systems on which the future of all life on earth and,
indeed, our economic welfare also depend.
And as we move toward the World Summit on Sustainable
Development in Johannesburg that will meet next month, these
issues have special importance. Because if we fail at that
conference to re-ignite the momentum that we achieved at Rio de
Janeiro 10 years ago, I do not know when that momentum is
likely to be rejuvenated. So I am deeply encouraged by these
hearings and pleased and grateful at the opportunity you have
provided to hear some views. Those views are primarily
reflected, Mr. Chairman, in my written presentation. I have to
say, I got your invitation when I was down in Central America,
so I had to do it rather hurriedly. But I do hope they will
help to amplify some of the comments I will now make briefly.
The recent retreat by the United States from much of its
long stand role as the leading driver of these issues, as
particularly evidenced by its withdrawal from the Kyoto
Protocol of the Climate Change Convention, threatens the
progress that has been made in collaborative management of our
environmental problems in the past thirty years and the
prospects for further progress that is so essential for our
future. And let me say, Senator, I probably have spent as much
time in my life in the United States as I have in my home
country. I think I have paid more taxes here than I have in my
home country.
Senator Jeffords. We appreciate that very much.
Mr. Strong. So I come here as a friend and admirer of all
things American. My comments are expressions of my concern, not
to be taken as criticism, but expressions of concern that I
believe reflect the concerns of many Americans and people
throughout the world concerning the nature of the U.S. position
on these issues. They have indeed cast a cloud over prospects
for the World Summit on Sustainable Development which will
convene next month in Johannesburg.
What the United States does or fails to do matters,
Chairman, as you so well know, and that is why you have
convened these hearings. It matters immensely. Not only in
substance, but in example. As the most powerful nation in the
world, indeed you are a nation that gives a signal to others.
Therefore, any withdrawal of your commitment to international
negotiating processes and to the agreements that have been
reached over so many years really does undermine the very
fabric of international cooperation and the international legal
system, which the United States itself and the whole world owes
it a great debt of gratitude, Senator, for its leadership in
these past thirty years in developing that framework. It is
still far from perfect. We cannot allow it to slip back.
So I am really encouraged by these hearings that you are
focusing now on the whole process by which the United States,
yes, and others, have performed under existing commitments and
decisions of past conferences. There is a whole spectrum I do
not need to elaborate. There are agreements reached at
conferences and ratified by fora such as the General Assembly
of the United Nations.
In Rio we made considerable progress. Yes, we did not do
everything that we had hoped for. But we did make very
significant progress. And the United States and others really
signed on to some very important agreements: the agreement on
climate change, the Convention on Climate Change, the Framework
Convention; the Convention on Biodiversity, both of which has
now been ratified by the United States; the Convention to
Combat Desertification, which you, Senator Jeffords, have taken
such an important leadership role in. And so we very much hope
now that there will be a renewal in that leadership.
I was pleased to hear Administration officials here, who I
know, presenting the case for continued strong support for so
many of these issues, but frankly not all of the ones where
U.S. leadership is important.
I see my time has lapsed, so I would be delighted to expand
on any of these concerns in the question period. And again
thank you, Senator Jeffords.
Senator Jeffords. Thank you very much.
Next is Professor John Dernbach. He is a Professor of law
at Widener University Law School. He is editing a book,
``Stumbling Through Sustainability,'' that assesses progress
that the U.S. has made on sustainable development in the past
10 years and recommends next steps. Welcome, Professor.
STATEMENT OF JOHN C. DERNBACH, PROFESSOR, WIDENER UNIVERSITY
LAW SCHOOL
Mr. Dernbach. Thank you, Chairman Jeffords, Senator
Feingold. It is a delight to be here. I appreciate the
opportunity to discuss U.S. adherence to its sustainable
development commitments, particularly those made at the Earth
Summit in 1992. As you mentioned, I am the editor of a 32-
chapter book on U.S. sustainable development efforts in this
past 10 years. The book is being published this week by the
Environmental Law Institute here in Washington. The book's 42
contributors come from universities and law schools,
nongovernmental organizations, the private sector, and State
Government. They are respected experts in their fields.
What I would like to do is briefly review some of the
book's findings and then share some of its basic
recommendations in a little greater detail.
The U.S. has, unquestionably, begun to take some steps
toward sustainable development, largely because of our
environmental and conservation laws. Yet, on balance, the
United States is now far from being a sustainable society, and
in many ways is farther away than it was at the time of the
Earth Summit in 1992.
International leadership begins at home. With 5 percent of
the world's population, the United States was in 1992
responsible for about 24 percent of the world's energy
consumption and almost 30 percent of the world's raw materials
consumption. Since the Earth Summit, materials use has
increased 10 percent, primary energy consumption has increased
21 percent, and energy-related carbon dioxide emissions have
increased by 13 percent. Over and over, the books contributors
found increases in materials and energy efficiency, and in the
effectiveness of pollution controls for individual sources,
were outweighed by increases in consumption and increases in
pollution related to the manner in which things were made.
Despite a significant increase in municipal waste recycling in
the past decade, for example, U.S. generation and disposal of
municipal solid waste per capita have been growing since 1996.
According to Harvard biologist Edward O. Wilson, ``four
more planet Earths'' would be needed for ``every person in the
world to reach present U.S. levels of consumption with existing
technology.'' Yet the U.S. standard of living, equated with
high levels of consumption and the ``good life,'' is widely
envied and emulated throughout the world.
In this and in many other ways, though not all ways, the
United States has not exercised the kind of leadership
necessary for sustainable development. My sense is that we are
often unwilling to face such issues because we do not feel like
we have the tools. The book provides an issue-by-issue roadmap
for sustainable development in the United States and ways that
would enhance prosperity and protect and restore our
environment.
For starters, the Federal Government should adopt and
implement a national strategy for sustainable development, with
specific goals and priorities, to harness all sectors of
society to achieve our economic, social, environmental, and
security goals. The strategy would lead to a stronger, more
prosperous America with higher quality of life because we would
be pursuing these goals in ways that support each other in
greater and greater degrees over time, rather than undermine
each other. The strategy could be modeled on that of the
European Union or States such as Oregon and New Jersey, and
specifically address climate change, biodiversity,
international trade, and other major issues. The President
could get the process started with an appropriate Executive
Order to Federal agencies under the Government Performance and
Results Act and the National Environmental Policy Act. An
executive-level entity would be needed to coordinate and assist
in the implementation of the strategy. A counterpart entity in
Congress would also be helpful. A set of indicators to measure
progress in achieving goals would make the strategy more
effective and meaningful.
In addition, the United States needs to recognize that its
substantial consumption levels, coupled with domestic
population growth, have serious environmental, social, and
economic impacts. Americans also need to understand that human
well-being can be maintained and enhanced by more efficient and
effective use of materials and energy and by less polluting
means of production. There are a variety of legal and policy
tools available to deal with this, including a number of policy
and legal tools that have been applied at the State level,
including renewable energy portfolio standards, Senator, as you
know, and smart growth legislation. Northern European countries
are also experimenting with a shift in taxes on materials and
energy, on one hand, they are shifting some of the tax to there
from labor and income, on the other hand. And there is some
very interesting research on that.
The U.S. needs to take a stronger and more constructive
role internationally, not only on terrorism but on the broad
range of issues related to sustainable development. Congress
should repeal or modify laws, policies, and subsidies that
encourage unsustainable development. Protection of natural
resources and the environment must focus more holistically on
the resources to be protected, and on understanding those
resources. Finally, transportation, public health, and other
social infrastructure and institutions should be designed and
operated to further economic, environmental, and security goals
at the same time.
We know what we need to do, and we also know why. The
challenge I think is to deliver on what we know. Thank you.
Senator Jeffords. Thank you very much.
Our next witness is Christopher Horner. He serves as Senior
Fellow at the Competitive Enterprise Institute, and is counsel
to the Cooler Heads Coalition. We need you. Welcome.
STATEMENT OF CHRISTOPHER C. HORNER, SENIOR FELLOW, COMPETITIVE
ENTERPRISE INSTITUTE
Mr. Horner. Thank you, Mr. Chairman, Senator Feingold, for
your interest. I appreciate the opportunity to testify before
this joint panel on what is a very important topic. The scope
of the hearing is broad, as evidenced by the Administration's
testimony regarding all of its efforts and all of the treaties
we have committed to. So I am going to limit my testimony to
the propriety or impropriety of the U.S. implementing or, more
accurately, amending the Rio Treaty, the U.N. Framework
Convention on Climate Change, by adopting or ratifying the
Kyoto Protocol.
For whatever specific reasons, be they economic growth,
failure to foresee the energy requirements of the new economy,
or other, the U.S., like many nations, failed to meet its Rio
targets, the specific numerical target of 1990 greenhouse gas
emission levels, although not our funding targets and other
efforts we did implement successfully. Now some advocates
assert, because the U.S. has not met its Rio goal, we must
commit to even greater, that is, more unrealistic, mandatory
reductions, that is, Kyoto. Attempting instead to comply with
the initial treaty seems the more appropriate response, for
several reasons.
Rio went into force in March 1994. President Clinton did
not request, nor did Congress enact, independent legislation
implementing Rio, which was not an inherently self-implementing
treaty. Authority and precedent make clear that responsibility
for proposing such programs lies with the White House. If our
non-binding Rio obligations in fact bound the U.S. to achieve
specific reductions, contrary to contemporary Senate and
Executive assertions of U.S. intentions, then the Executive
interpretation of Rio Article 4 specifically throughout the
1990's was actually incorrect, and is responsible. The pending
question is apparently, does the U.S. respond by attempting to
meet such Rio promises, or by making further, even deeper,
binding promises?
Skipping specific pursuit of the U.S.' Rio promises, in
favor of Kyoto's binding commitments even greater than those we
have failed to attain, seems highly illogical. Compounding this
of course is that precisely 5 years ago tomorrow, happy
anniversary, the Senate unanimously spoke to what it recognized
was an unacceptable drift away from the U.S.' Rio stance
adamantly opposed to binding commitments. The Senate, seeing
what was developing, asserted its ``advice'' pursuant to
Article II, Section 2 of the Constitution, passing Byrd-Hagel
S. Res. 98 unanimously.
Subsequent to and despite this advice, U.S. negotiators
clearly disregarded both major Byrd-Hagel recommendations:
Kyoto did not require developing countries to share our
commitments, and even the Clinton White House economic advisors
have recanted their refutations of the Kyoto cost estimates.
Since then, nothing has emerged to indicate that Kyoto does
not still violate both key Byrd-Hagel conditions, and it is
likely that very few Senators, though new members have arrived,
have amended their position against a treating causing
``serious economic harm.'' However, Clinton Administration
officials did admit that they began working on the plan for
binding commitments within 1 year after Rio went into effect.
Kyoto, too, is clearly intended to be a similar step in a
``treaty hopping'' campaign; even the models on which it is
based predict an undetectable climatic impact, at a cost to the
U.S. of up to $400 billion annually, according to EIA, yet
maybe 1/30th of what its proponents seek. Rio and Kyoto offer
differing commitments but purport ``the same ultimate
objective.'' The U.N. IPCC has said that this means reducing
greenhouse gas emissions by as much as 60 to 80 percent, which
of course wildly exceeds Kyoto's specified ambitions.
As such, the U.S. should require, prior to and as part of
ratifying any further agreements, express acknowledgement not
only of the actual ``ultimate goal,'' but that it is committed
to its practical requirements, in this case up to ``30
Kyotos.'' In this case, to a degree, I agree with Professor
Dernbach, which is we need to set out specifically where we are
going and what this requires. Now, I do not agree entirely with
the Professor's testimony, but in concept, if this is where we
are going, we need to expressly set it out in advance, now
given that knowledge has changed, the interpretation of the
ultimate goal has changed.
Such treaty hopping agendas illustrate the importance of
Senate treaty ``reservations,'' or the Senate's second bite at
the ``advice'' apple. This comes of course during the
``consent'' function, which function the U.S. negotiators
unfortunately eviscerated. After agreeing to terms incompatible
with Byrd-Hagel, the Administration also accepted Kyoto's
prohibition on reservations, or the Senate's ability to specify
the specific understandings or conditions of the U.S.
commitment. This despite the Senate having also forewarned the
Administration about this in advance of Kyoto.
In summation, President Bush ought to match his assertions
of having ``reject'' Kyoto with the requisite submission to the
U.N. to that effect, as was done regarding the International
Criminal Court. In the absence of that, the White House must at
minimum assist resolution of the ambiguous U.S. role in Kyoto--
we sent that letter to the U.N. for a reason. Signatures carry
responsibilities--by requesting the Senate disapprove of the
treaty. In the absence of that, the Senate should recognize
that there is no reverse equivalent of the ``presentment
clause'' regarding treaties. Only protocol, not any
constitutional prohibition, impedes Senate consideration of a
signed treaty. Certainly given the imperative rhetoric
surrounding Kyoto, if President Bush insists on continuing the
U.S.' ambiguous role, the Senate should take matters into its
own hands and decide the fate of the treaty.
That resolution should by definition, for the process
problems I identified, be rejection of Kyoto. Otherwise, by
accepting this double indignity of ignoring advice and
prohibiting reservations, this body would condone Executive
circumvention of the Senate's constitutional treaty role. Thank
you.
Senator Jeffords. Thank you for that advice. I appreciate
it.
Senator Feingold.
OPENING STATEMENT OF HON. RUSSELL D. FEINGOLD, U.S. SENATOR
FROM THE STATE OF WISCONSIN
Senator Feingold. Thank you very much, Mr. Chairman. I am
pleased to be here today. I think the idea of having the
Foreign Relations and Environment and Public Works Committees
come together to conduct oversight of the implementation of
U.S. commitments under the environmental treaties that the
Senate has ratified is both a good idea and it is long over-
due. So I think you, as I frequently feel toward this Chairman.
The United States was among the principal architects of
each of the agreements we are examining today. U.S. negotiators
worked hard to develop and craft these agreements and ensure
our Government and our interests were well-represented. The
Senate then ratified these agreements with the view that
desertification, ozone depletion, global climate change, trade
in endangered species, and sustainable development through
trade were important national and global issues. I am
concerned, given our history and leadership, about the growing
perception internationally that the United States is backing
away from our international environmental commitments. I am
pleased that the Administration testified on this. I am eager
to hear more because I suspect that much of the ongoing
diplomatic effort on these agreements may be under-reported in
the press.
Nonetheless, I believe that there is a serious perception
problem, and one that needs remedied. It is my view that unless
the United States exercises leadership for sustainable
development in all relevant international forums, it will
continue to miss many opportunities to improve environmental
and social conditions worldwide, and it will perpetuate a
perception that the United States does not keep its sustainable
development commitments.
As the Ranking Member of the Subcommittee on Africa of the
Foreign Relations Committee--excuse me, as the Chairman of the
subcommittee, thanks to Senator Jeffords----
[Laughter.]
Senator Feingold. I used to be the Ranking Member. That is
why I said I thank him a lot. But I have had the opportunity to
see first-hand how valuable the provisions of these agreements
are to the people of Africa, where nearly one-quarter of dry
lands are moderately or severely desertified, ozone level
changes only exacerbate that problem, and endangered species
contribute significantly both culturally and economically to
many African states.
These issues cut across borders and affect entire regions.
One of the primary benefits, in my view, of U.S. participation
in these agreements is the opportunity to take advantage of
multilateral coordination to address these problems.
So I thank you, Mr. Chairman. And if you would permit, I
have just a couple of questions.
Senator Jeffords. Please proceed.
Senator Feingold. Let me first say that I was pleased to
come here because of the importance of the hearing. But I am
particularly thrilled because Professor Dernbach is a friend of
mine who I have not seen in about thirty years. We debated
against each other in high school. He is one of the smartest
guys I have ever met. I think we each won some, is that fair to
say, John?
Mr. Dernbach. Something like that, yes.
Senator Feingold. I have admired his work on environmental
issues from afar. He is a wonderful choice to have before the
Committee, and a native of our great State of Wisconsin.
Let me ask a question first of Mr. Strong. You mentioned in
your statement a concern that I share, as I have just
indicated, that the perception that the United States' efforts
on environmental issues is dwindling and that it is affecting
our bilateral relationship. Would you share for the record the
effects you have observed with our closest neighbor, Canada.
Mr. Strong. Yes. Thanks, Senator. I do not of course speak
for Canada, but I have less reticence to express my concerns
about the Canadian position that I do here in this Senate about
the U.S. position. I have to say that your sum of the retreat,
what I have called retreat from leadership, and of course it is
not an across-the-board retreat on every issue, has spilled
over to Canada.
We have a very serious national controversy now about
whether Canada should or should not ratify the Kyoto Protocol.
That is probably the most significant single impact. Of course
the decision of the United States has immense influence, and
there are immense constituencies in the industry in which I
used to be, the energy industry, there is quite strong
resistance, though not across-the-board resistance. Our Prime
Minister has committed his government to ratify, but the
provinces in Canada have significant rights and some of them,
particularly Alberta and even Ontario, where I live, have come
out against that. So they have not made their decision. But
there is no question that on this issue and so many others,
what the U.S. does influences Canada.
And to just add to that, there is significant public
concern about the current U.S. position on some of these
issues. The polls in Canada show, as I believe they do here in
the United States, a higher degree of public concern than is
expressed yet at the top political levels.
So, yes, what the U.S. says and does matters in Canada. But
it also I have to say, as one who spends a lot of my time
outside of this continent, it matters everywhere.
Senator Feingold. Professor Dernbach, I think you would
agree that U.S. concern over cost of compliance contributes
significantly to the current difficulties with the Kyoto
Protocol. I believe you looked at this issue in some detail.
Would you share with the committee some of the economically
beneficial actions we have taken to implement our commitments
under the Framework Convention on Climate Change, and just
highlight briefly some opportunities for further meeting our
current commitments at low-cost, even if the U.S. Government
does not actually ratify Kyoto.
Mr. Dernbach. A lot of the positive things that have been
done on climate change in the last 10 years have occurred at
the State level. There is actually a fairly large number of
legal and policy tools that have been employed at the State
level--tax credits metering, which would allow somebody with a
big windmill to sell their excess electricity back to the grid;
renewable energy portfolio standards that require electricity
providers to scale-up the amount of renewable energy that they
provide on a fairly steady basis. There are many, many of those
kinds of tools out there that are being used.
What is particularly interesting about State use of those
tools is the justifications the States use, justifications that
you do not hear in the national climate debate. Let me share
what I mean by that.
At the State level, there is a lot of conversation about
creating jobs, developing technology, protecting poor people
from the adverse effects of fossil fuel price fluctuations,
reducing other pollutants, and strengthening the economic base
of the State. Climate change is almost incidental in a lot of
those discussions, even though reducing greenhouse gases is
surely one of the results.
I think that what that suggests is that if we look hard at
the various types of things that States have been doing,
looking at the effects of those, you could fashion I think a
fairly potent, fairly effective, fairly economically beneficial
package of legislation to deal with climate change at the
Federal level that would create jobs, develop technology,
enhance our export markets, would attract capital investment,
would drive down costs of renewable energy and make electricity
a lot more affordable for other folks, among many, many other
things.
So, in sum, the experience of the States on climate change
suggests a very different way of thinking about both the
benefits and the costs of climate change than a lot of the
conversation that I hear at the national level.
Senator Feingold. Thank you, Professor Dernbach. It is good
to see you again. And thank you very much, Mr. Chairman, for
your generous amount of time.
Senator Jeffords. Thank you for coming. We appreciate your
presence here. It is important.
Let me now turn to some questions. Mr. Strong, what do you
see as the major differences between preparations for Rio and
Johannesburg, and what has impeded the current process?
Mr. Strong. Mr. Chairman, part of the difference of course
is the change of political climate. The preoccupation of the
United States and other countries with the war against
terrorism, the economic implications of the downturn, I think
this has all created a more difficult climate. Also, I think
there has been perhaps a less extensive involvement of the
various constituencies, the civil society constituencies, et.
cetera. And most of all, I would say the cloud cast over the
Summit by the recent actions of the United States that have
been reported here both internationally and domestically which
signal a significant backing away, should I say, of the kind of
leadership that the world community has looked to the United
States for for so much of the thirty years since Stockholm put
the issue on the agenda.
There is a response to that. For the first time, as you
know, Senator, some of the traditional friends of the United
States which have always followed its leadership in the past,
even when they were a little uncomfortable about it, are not
necessarily now following its leadership on these issues. As
you know, the European Union and Japan, despite controversies,
have ratified the Kyoto Protocol. We still have not got enough
to make that 55 percent. I hope my own country will weigh in on
that. The position of Russia is still not certain. But this has
cast a cloud.
Now it is true that the United States, as the
Administration officials have said, are doing some very good
work in some very good areas. But on the more fundamental
issues that literally affect the future of our civilization and
of our economies, there is a huge concern that Johannesburg
will actually see some slippage from the performance under the
commitments reached at Rio and before.
So I see Johannesburg as a very, very important milestone,
not, Senator, because conferences solve everything, but because
they provide the gathering point where you can either breakdown
in your attempt to move forward or you can actually move
forward. At the moment, the signs are very, very disconcerting.
I believe that if we lose the opportunity of Johannesburg to
move ahead on these issues that literally we will face threats
to our security and our economy over time even greater than
those that we face from the horrendous terrorist acts.
May I mention one other thing, sir. In my statement, I
would like just to call your attention to a couple of specific
suggestions that I will not elaborate here. But my conviction
is that the reason for slippage fundamentally in our
commitments is motivation. That is why I am spending so much of
my time on the motivational issues. What are they? One is the
economic motivation, the whole system of fiscal measures,
taxes, policies, regulations by which governments incent the
behavior of corporations and industries. And in all countries,
including this, they are heavily skewed to continue to incent
unsustainable behavior. I believe it is quite possible for
those measures to meet their primary objectives without having
the same consequences. And I think if this body could even
initiate a review of that whole system, in a sense do an
environmental performance review on fiscal tax subsidy
policies, et. cetera.
The second motivational aspect is moral and ethical. That
becomes very, very important and it is deeply important for
America which is based on values. A distinguished American,
David Rockefeller, headed the group that has drafted the Earth
Charter, a statement of basic moral and ethical principles
designed to guide the conduct of nations and peoples toward the
earth and toward each other. That we hope the U.S. will
support. It does not have to agree to it in a formal manner,
but we hope that the United States delegation will recognize
it. Your Conference of Mayors and many U.S. organizations
representing literally several millions of Americans have
endorsed this. We would like to see, sir, America recognize
this because, again, our moral and ethical values are at the
root of the way in which we set our priorities and the way in
which we respond to this challenge.
This country's history and its example has been based on
its commitment to moral and ethical values. Therefore, I am
hopeful and encouraged that you are going to rise to that. And
this hearing certainly underscores and reinforces that, sir. I
am sorry I took a little long to respond to your question, but
I do feel strongly, as I know you do, about these issues.
Senator Jeffords. Very excellent statement. I am taking it
under careful advisement. Thank you.
Mr. Horner?
Mr. Horner. I would like to distinguish Rio and
Johannesburg and possibly break new ground for me and praise
the Administration for what they are doing in preparation for
Johannesburg. First, with Rio we had a cue of treaties that had
been developed over years that were to be culminated in Rio. We
do not really face that now. We face, as the Administration
witnesses testified, talking more about details, actual
implementation, the state of implementation, next steps. And I
do applaud what the Administration is trying to do regarding
good governance, saying in essence capacity-building, which is
a term used in the environmental treaty context quite a bit, we
will pay countries to be ready to receive what they will
receive under the treaties. We are trying to build capacity for
good governance through economic and judicial reforms,
openness, to say are you ready to take this environmental and
general foreign aid and not have it go down the rat hole, for
which I applaud them.
Now they did get off track with handling environmental
issues very poorly, including again recently, May-June, and
with that submission their efforts at focusing on known
problems that purportedly would be worse under, for example,
climate change. They redirected the focus back to climate
change, but they were doing very well in advancing it toward
safe drinking water, the world's number one environmental
threat, which purportedly would be worse. But for a cost of a
year of Kyoto you could make significant advances in that.
AIDS, infectious diseases, they need to get the dialog back
where it was.
They have made progress. The focus on good governance,
capacity-building for receiving this aid so we can have actual
environmental improvement for environmental aid, it is the
right direction. I just hope they stay focused.
Senator Jeffords. Thank you.
Mr. Dernbach, what is your prognosis for the World Summit?
And what follow-up activities are needed?
Mr. Dernbach. My hope for the World Summit is that we come
out of it with specific targets and timetables, not just for
the social issues, as important as the social issues are, but
also for environmental issues. And what I mean by targets and
timetables are the kinds of things that have been suggested by
a great many organizations including the OECD, which is to say
by a certain date we achieve a certain result, either
internationally or regionally or nationally. Without targets
and timetables, you have goals with no deadline that are in
some basic way as a result not goals at all. So that is what I
would hope would come out of the World Summit.
But beyond that, and I think this is the important message
from the book, is that what we do for sustainable development
is not just what we agree to or do not agree to in
Johannesburg, it is what we do at home. That is why the book is
overwhelmingly directed at the United States and actions that
decisionmakers in the United States ought to be making at the
national level, State level, the local level, corporation
decisionmakers, deans in colleges and universities, businesses
and others. And that is what I hope will really come out of
Johannesburg, that it will provide a kind of lift, if you will,
to the Rio process, engage people on the importance of
reconciling our environmental goals with our social, economic,
and security goals.
Senator Jeffords. Mr. Horner?
Mr. Horner. I just want to get back to leadership I guess,
in following on Professor Dernbach's comments. We need to
recognize that for all intents and purposes the Bush position,
despite bad-mouthing Kyoto, is indistinguishable from the
Clinton-Gore position on Kyoto. For twenty-five months after
signing the treaty for which it was open for ratification, they
never sent it to the Senate. My thesis in my testimony is that
is not necessary. But they did not do it. President Bush will
not send it apparently. Neither would withdraw from it. One
bad-mouths it, one talks a good game about killing it, though
not really doing it. One talked a good game about pursuing it,
though not really doing it. The position is indistinguishable.
Leadership, of course, does not mean abandoning your own
perspective, and the U.S. certainly has its own perspective on
this, in large part it is because it would be the most greatly
impacted by the treaty. So I think the Administration and the
U.S. as a whole deserves to maintain its own perspective
without others claiming that it has abandoned leadership by not
doing what everybody else has done.
Senator Jeffords. Mr. Strong, comments?
Mr. Strong. I would like also, Mr. Chairman, to see some
other initiatives. Energy was one of the issues that our
friends from the Administration highlighted. It is at the heart
of so many issues. I come from the energy industry myself and
so I feel very deeply about that. One of the particular
initiatives that I believe the United States could put on the
table that would totally in line with I believe the general
approach of this Administration is to call for the creation of
a consultant group on clean energy, modeled very much on the
consultant group on international agriculture research which
did so much in the last quarter century so to relieve the
prospect of an eminent food shortage in the world. And it is
not even an incorporated entity. It is a mechanism that brings
private and public interests together around the table to
determine priorities for research and development, particularly
in the developing world, and how to mobilize the funds to
permit the developing countries, in particular, to afford the
best available technologies. And it is not a new organization,
but it is a very effective mechanism. I believe it would be
entirely feasible for the United States to champion the
establishment of such a thing.
I think you mentioned, Mr. Chairman, about the importance
of the global environment facility, of closing that gap that
must be closed, that must be closed almost immediately to
permit the replenishment to take place. That would also give
prospects and morale for Johannesburg a boost.
And then, finally, one initiative that I believe could
emanate from this Senate, and that is we understand that you
are to receive a report from the General Accounting Office soon
setting out the U.S., and I am not sure if it covers others,
performance under existing agreements. This could provide I
suggest, Mr. Chairman, the basis for establishment of a regular
monitoring process with reports coming out each year or 2
years, very much like the State Department reports on human
rights and one or two other things, which would highlight the
performance of the United States and others in respect of the
commitments that they have already put in place. It would be a
fairly easy thing to do based on the report of the General
Accounting Office, which I think is on its way. It is just one
modest suggestion, sir, of how in a practical way there are
still a lot of things that you could do working toward those
larger issues.
Most of all, sir, I am concerned that it really give people
a new sense that their leaders really are responding to this
challenge, that there is real movement, that there is a new
spirit of international cooperation, and international faith in
the United States as the leader of that cooperation.
Senator Jeffords. Any final comments?
Mr. Horner. I would like to say in the spirit of that,
although the State Department offers me a tortured definition
of the term ``Parties to Kyoto,'' the United States can let
other ratifying Parties have what they claim to want. If the
U.S. withdraws, we have 55 percent because 55 percent of X is
now 55 percent of a much smaller number. It takes a very
difficult interpretation of the Kyoto Protocol to read
otherwise. If that is what they want, if some people truly
believe that will help save the Planet, while we have not
arrived at that position, we ought to withdraw and let them
have what they want. If the other sides offer the
interpretation of, well, we cannot have this go into effect
against us yet, that would be interesting, but it would also
likely bring negotiations back to a sane plane.
I hope we all remember when these negotiations fell apart.
They were in the Hague in 2000. The U.S. elections had occurred
but had not been decided. Pause, wait for comment. Some members
of the Foreign Relations Committee were there. I saw Senator
Kerry. The EU refused to take yes for an answer because they
saw desperation in our eyes. They changed the definition of
``sinks'' from ``sinks shall be used'' to ``but not really,''
and then ``but not really if you are the U.S. but certainly if
you are Russia,'' giving them millions of more dollars but
making it very difficult for us to at least initially even
comply. They fell apart in November 2000 and they have not
recovered since.
I believe if this is something the Administration really
wants to negotiate, that is, a Byrd-Hagel compliant binding
agreement, the place to start is by withdrawing from Kyoto,
have the other Parties decide if they want it to go into effect
against themselves, or interpret it otherwise and say we are
going to now start renegotiating with you but this time in a
little better faith. Because what happened in the Hague really
defies a good faith explanation.
Senator Jeffords. Mr. Dernbach?
Mr. Dernbach. I want to thank you, Mr. Chairman, for
holding this hearing. I think this is an incredibly important
issue. There is a lot more at stake here than the
environmental, and there is a lot more at stake here than any
specific environmental issue.
If we have learned anything in the last couple of decades,
it is that the environment is connected to everything else that
we care about--peace and security, economic development,
national governance, and social well-being. We now face an
enormous problem of environmental degradation around the world
and a growing gap between the rich and the poor. The problems
are quite real and they are not going to go away. Put a little
different way, poverty and environmental degradation are deeply
destabilizing because they stifle or reduce opportunities and
quality of life for many, many people.
The next fifty years global population is projected to
increase by 3 billion. The global economy is likely to grow by
four or five times. As difficult as things now are, as
challenging as the domestic and international situation now is,
environmental degradation and the gap between the rich and the
poor are likely to get worse and greater if we continue with
business as usual. The question that I would leave is whether
that should be our legacy for our children and our
grandchildren.
There are things that we can do. We know we can do them. We
ought to know that we need to do them. And I want to
congratulate you again for holding a hearing to focus on these
questions. Thank you so much.
Senator Jeffords. Thank all of you for your really
excellent presentations. I was listening very strongly and I
just feel concerned, as you do, that we must change our ways if
we are going to be the leader that this Nation should and must
be as we move into the future.
And I want to especially thank all of those that are
attending here who have been very, very entertaining in the
sense of looking very interested, and I believe you all are. If
I asked a show of hands, how many agree with the last
presentations that were made here?
[No response.]
Senator Jeffords. Nobody?
[Laughter.]
Senator Jeffords. I just wanted to check on you.
Thank you everyone. It has been a very interesting and
enlightening morning. We were pleased to have you all here.
The hearing is adjourned.
[Whereupon, at 12:35 p.m., the committees were adjourned,
to reconvene at the call of their respective Chairs.]
[Additional material submitted for the record follows:]
Statement of Hon. James M. Jeffords, U.S. Senator from the State of
Vermont
I'm glad to be here with my distinguished co-chair from the Foreign
Relations Committee for this joint hearing. I appreciate his
willingness to explore today's topic, and the fact that he has joined
me as a sponsor of S. 556, the Clean Power Act. I would also like to
applaud him for his work to bring some truth and sanity to America's
accounting nightmare.
The United States is an economic and military superpower, perhaps
the lone superpower. But, as the old adage goes, with great power comes
great responsibility. We are able to project great might far beyond our
borders. We are also capable of contributing to environmental and
natural resource damage far beyond our borders and far in excess of
other countries. The question is, are we acting responsibly to curb
negative impacts abroad and at home?
Are we being good global neighbors and, at a minimum, keeping our
word? It seems that we may be keeping our literal word, given the very
broad language in many of the agreements. But in practical terms, it
seems that we're not trying very hard to keep up with the spirit of
some of our commitments.
The time is ripe for Congress to review how the Administration is
implementing our environmental agreements and commitments. Leaders of
many countries will be meeting in Johannesburg, South Africa, in late
August at the World Summit on Sustainable Development. The occasion is
the 10th anniversary of the United Nations Conference on Environment
and Development held in Rio.
I'm pleased to note that the Secretary General of that Conference,
Mr. Maurice Strong, is here today to give us some historical
perspective on that event and its lasting effect.
The conferees will be met by a very different U.S. delegation in
South Africa. The previous Bush Administration provided extensive
support for the Rio Earth Summit and brought many new initiatives to
the negotiating table.
But this Administration is likely to send a smaller and lower-level
delegation and has sought to narrow the scope of the discussions. This
has apparently included an effort to keep global climate change off of
the agenda.
I am troubled by the Administration's approach to global warming,
especially in light of the Sense of Congress approved by the Foreign
Relations Committee and made part of the Senate approved energy bill in
April. That Resolution says the United States should take responsible
action to ensure significant and meaningful reductions in emissions of
greenhouse gases from all sectors.
But it doesn't appear that responsible action is taking place and
emissions continue growing. As my friend Senator Chafee pointed out
during our Committee's markup of the Clean Power Act, the
Administration's Climate Action Report says, ``A few ecosystems, such
as alpine meadows in the Rocky Mountains and some barrier islands, are
likely to disappear entirely in some areas. Other ecosystems . . . are
likely to experience major species shifts . . .''
Our treaty commitment says, ``The ultimate objective of the
Framework Convention on Climate Change is to stabilize greenhouse gas
concentrations in the atmosphere at a level that will prevent dangerous
anthropogenic interference with the climate system. Such a level should
be achieved within a time-frame sufficient to allow ecosystems to adapt
naturally to climate change. . . .''
Since these ecosystems are likely to disappear entirely because of
manmade global warming and will not be able to adapt naturally, it
appears that we have entered the zone of ``dangerous interference.''
Since these are real threats of serious or irreversible damage, the
lack of full scientific certainty about cause and effect shouldn't be
used as an excuse for not reducing emissions now. That is also our
commitment.
Instead of acting to reduce emissions, the Administration's
approach guarantees that greenhouse gas emissions will rise. According
to Mr. Connaughton's recent testimony, there is``. . . no question
about that.''
This kind of inaction doesn't comport with our commitments under
the Framework Convention, the Sense of Congress, common sense or the
National Environmental Policy Act (or NEPA). In 1969, NEPA became law.
It was probably the first adoption of a sustainable development
philosophy by a government in the world. To paraphrase, it says:``. . .
it is the continuing policy of the Federal Government . . . to use all
practicable means and measures . . . to create and maintain conditions
under which man and nature can exist in productive harmony, and fulfill
the social, economic, and other requirements of present and future
generations of Americans.''
Unfortunately, the Administration seems to have lost sight of those
future generations of Americans. Economic development that does not
factor in the environment or quality of life of those future
generations is not sustainable.
The Administration and other opponents of the Kyoto Protocol claim
that actions to significantly reduce greenhouse gas emissions cost too
much now. They need to look at the long term. They also need to look at
the many studies that have been done that show a net positive impact of
reducing emissions.
I ask unanimous consent that two such studies by the Tellus
Institute and a list of other studies be placed in the record.
There is no question that we must be concerned with the threats of
today, like the thousands of people dying prematurely every year from
power plant pollution. But, we can't let the press of quarterly reports
or the hunt for short term profits prevent us from acting to reduce the
threats of tomorrow. That's especially true in the case of terrorism or
global warming, where we have been presented with credible information
about the threat.
As some of my colleagues know, I have a special interest in the
U.N. Convention to Combat Desertification and pressed hard for its
ratification. Senator Helms was instrumental in moving that treaty and
I want to thank him for his and his staff's efforts in helping me and
others get that agreement approved. This treaty addresses land
degradation in some of the very impoverished parts of the world. It is
designed to encourage participatory democracy and stakeholder
involvement. I look forward to seeing how implementation is going.
I also have an interest in ratifying and implementing the
Convention on Persistent Organic Pollutants. I have introduced
legislation maintaining the spirit of that treaty. I hope we'll be able
to get that moving soon so the U.S. can participate in the Conference
of Parties and the Review Committee.
There seems to be generally good news regarding chemicals that harm
the ozone layer. From all indications, the Montreal Protocol has been a
success, though I gather there are some additional amendments coming
soon. I'll be interested to learn how our efforts have reduced the
ozone hole.
There is less clear news on the status of the Convention on
Biological Diversity, which was signed in 1993 but has not been sent to
the Senate for ratification. I would also appreciate hearing an update
from our witnesses on the progress toward implementation of the Basel
Convention regarding the international transportation of hazardous
waste.
Finally, I would note something that is a little different between
international agreements and our more conventional environmental laws.
They often seem to be missing performance criteria or include very weak
commitments.
Unfortunately, in the case of climate change, even when commitments
are minimal, such as reporting on the policies and measures we have
adopted to achieve 1990 levels, we have failed.
So, I would urge our negotiators to push for more specific
environmental goals, using targets and timetables. That will make it
easier for the Senate to know whether the treaties we have ratified are
succeeding. Also, I believe the result will be better for the
environment and sustainable development.
Thank you.
__________
Statement of Hon. Joseph I. Lieberman, U.S. Senator from the State of
Connecticut
Thank you, Mr. Chairman, for calling this hearing today on an
essential topic--our nation's implementation of our international
commitments on the environment. I regret that I am unable to attend
today, but I must preside over the markup of the homeland security bill
in the Governmental Affairs Committee.
Ten years ago, the world took a dramatic step toward a sustainable
future when it convened the Earth Summit in Rio De Janeiro during the
tenure of the first President Bush. The Summit resulted in several of
our most critical environmental agreements, including the Conventions
on Climate Change and Biodiversity.
Unfortunately, as we prepare for the next ``Earth Summit'' a decade
later, this Bush Administration does not appear to have taken as
aggressive an approach to our global commitment to environmental
protection as its predecessor did. In fact, we appear to be going to
the summit in Johannesburg with little more than a plan to delay
enforceable action on the planet's critical needs.
The most visible--and most integral--of the Rio agreements for our
sustainable future may be the U.N. Framework Convention on Climate
Change. As is well-known by now, however, this Administration has
abdicated our nation's leadership on the issue, withdrawing from the
Kyoto Protocol and offering no alternative path forward. That's
disturbing enough. But now we also appear ready to distract the world's
attention from addressing this problem.
As I understand it, the United States has affirmatively stated to
the world community that President Bush will not attend the conference
in Johannesburg next month if the climate change treaty is discussed.
It is one thing to ignore this pressing problem domestically, as
President Bush's business-as-usual proposal is essentially doing. But
it is entirely another to ask the rest of the world to put it aside as
well.
Luckily, in lieu of executive leadership, we have other branches
and levels of government that can act, and are acting. The Environment
Committee recently passed the Clean Power Act, legislation limiting the
release of greenhouse gases from power plants. Governor Gray Davis of
California just this week signed legislation limiting greenhouse gas
emissions from motor vehicles. And many other proposals are in the
works. The world understands we need to move ahead on this issue, the
States understand we need to move ahead on this issue, and American
citizens understand we need to move ahead on this issue. It is time for
the President to understand.
I therefore call on him to attend the Johannesburg summit and take
the climate change issue on, head on. Perhaps, when he does, he will
see the light.
__________
Statement of John F. Turner, Assistant Secretary of State for Oceans
and International Environmental and Scientific Affairs, U.S. Department
of State
Introduction
Chairmen Jeffords and Sarbanes, and other members of the
Environment and Public Works Committee and the Foreign Relations
Committee, I appreciate the opportunity to appear before you today to
review U.S. implementation of environmental treaties. The United States
has a strong record on global environmental issues. We are a leader in
addressing environmental challenges on the international level, having
spearheaded efforts to negotiate environmental agreements on issues
ranging from ozone depletion to stemming illegal trade in endangered
species. Just a few weeks ago, the President submitted to the Senate an
important treaty between the United States and Russia that would
strengthen the conservation of our shared polar bear population through
a coordinated sustainable harvest management program.
In the case of toxic chemicals, the Administration submitted to
Congress this spring, the Stockholm Convention on Persistent Organic
Pollutants (POPs) and additional legislation that would allow the
United States to implement this agreement, in addition to a regional
agreement POPs agreement and a treaty on Prior Informed Consent. These
multilateral agreements affirm the U.S. commitment to cooperate with
other countries on global health and environmental challenges. My
distinguished colleague, Jim Connaughton, just discussed the enormous
challenges we face addressing climate change and how the Bush
Administration intends to tackle the problem while ensuring our economy
continues to grow.
These treaties are just a few examples of environmental agreements
that serve as noteworthy tools in our foreign policy arsenal. The
Department of State plays an important role in monitoring the
implementation of these agreements and working inter-agency and
international processes to ensure U.S. interests are served. For
illustrative purposes, we would like to describe our efforts related to
the following five agreements we have ratified and currently are
implementing--the Montreal Protocol on Substances that Deplete the
Ozone Layer; the Convention on International Trade in Endangered
Species (CITES); the U.N. Framework Convention on Climate Change; the
North American Agreement on Environmental Cooperation; and the U.N.
Convention to Combat Desertification.
The Montreal Protocol on Substances that Deplete the Ozone Layer
During the 1980's, the United States led a global effort to
negotiate an agreement to phaseout the production and consumption of
substances that deplete the ozone layer. Scientific evidence showed
that strong steps were needed to protect human health from the
debilitating effects of ozone depletion, such as increased incidence of
skin cancer and cataracts. These global efforts resulted in the
adoption of the Montreal Protocol on Substances that Deplete the Ozone
Layer in September 1987, which was ratified by the United States in
1988, and has now been ratified by 182 other countries.
Over the last 15 years, implementation of the Montreal Protocol and
its subsequent amendments has yielded remarkable progress in protecting
the stratospheric ozone layer by phasing out the consumption and use of
ozone depleting substances on a global scale. The United States has met
its obligations under the Montreal Protocol by phasing out
chlorofluorocarbons (CFCs), halons, carbon tetrachloride, and methyl
chloroform.
Although the State Department is the lead agency responsible for
coordinating our participation in the Protocol, the Environmental
Protection Agency (EPA) is the principal entity responsible for
domestic implementation of the Protocol, under authority provided by
the Clean Air Act. (The Clean Air Act specifically authorizes EPA to
take steps necessary to ensure that our domestic regulations are
consistent with our obligations under the Protocol.) Additionally, the
Department of Justice and EPA have played an important role by
identifying and prosecuting individuals engaged in illegal smuggling of
ozone-depleting substances, making the United States a world leader in
these law enforcement activities.
The Protocol also includes provisions to establish a Multilateral
Fund to provide financial and technical assistance to developing
country Parties to assist them in meeting their obligations under the
Protocol. As the largest contributor to the Multilateral Fund, the
United States has made available over $340 million to the Fund since
its inception.
Convention on International Trade in Endangered Species of Wild Fauna
and Flora (CITES)
CITES, called by some the Washington Convention, concluded on March
3, 1973 in Washington, DC. and entered into force on July 1, 1975. As
of July 1st of this year, 158 Parties have adopted the Convention.
CITES conservation goals are to: monitor international trade in
endangered species; maintain those species in an ecological balance;
and assist countries toward a sustainable use of species through
international trade. The contracting Parties to CITES recognize that
international cooperation is essential for the protection of wild flora
and fauna.
CITES Parties regulate wildlife trade through controls and
regulations on species listed in three appendices. Appendix I lists
species threatened by extinction which are or may be affected by trade.
Trade in Appendix I species is allowed only in exceptional, non-
commercial circumstances and only with permits from both the exporting
and importing country. Appendix II species include species which, while
not now threatened with extinction, may become so unless trade in such
specimens is subject to strict regulation. Export permits are required
from the country of export, and both exporting and importing countries
must monitor the use of those permits. Trade in Appendix III species
requires a certificate of origin and an export permit based on a
finding of legal acquisition and satisfaction of preparation and
shipping conditions. Listing or de-listing of species in Appendix I or
II requires consideration by the Conference of the Parties of species
proposals submitted by Parties. To succeed, such proposals must gain a
two-thirds majority in a vote of the Parties. Individual Parties can
list species under their jurisdiction in Appendix III for the purpose
of preventing or restricting exploitation or if they deem a need for
cooperation in controlling the trade. A Party may take a reservation to
the listing of a species on Appendix I or II within 90 days of the vote
and anytime after the addition of a species to Appendix III. As the
trade impact or other threats to a species increase or decrease,
species may be shifted between, added to, or removed from these
Appendices.
CITES also regulates international trade through a system of import
and export permits that are required before specimens leave a country.
Each Party must appoint a CITES Management Authority and a CITES
Scientific Authority. The Fish and Wildlife Service, Department of the
Interior, is the Management Authority and Scientific Authority for
CITES for the United States and also plays the major law enforcement
role. The Management Authority is responsible for issuing permits and
implementation of the trade controls of the convention, as well as
maintaining records of trade in specimens in the Appendices. The
Scientific Authority is responsible for making scientific findings on
whether trade will be detrimental to the survival of a species and for
monitoring the export permits granted against the actual level of trade
for a species. CITES also requires law enforcement capability to
enforce the CITES provisions and penalize illegal trade.
With respect to implementation, the U.S. implements CITES primarily
through regulations developed under the Endangered Species Act as well
as enforces it through other existing laws such as the Lacey Act. The
United States ensures compliance through extensive regulatory systems;
Washington based policy, scientific and permitting offices; and
enforcement personnel at designated CITES ports. These are administered
by the Fish and Wildlife Service, Department of Interior and/or the
Animal and Plant Health Inspection Service, Department of Agriculture.
The United States is proud of its record in implementing its CITES
obligations. We are at the forefront of CITES parties in fulfilling
these obligations. CITES studies have recognized these accomplishments.
For example, one determined that the United States has effective
national legislation implementing CITES obligations, and another found
that the United States was effectively controlling the trade in tigers
and tiger parts. A strong and professional staff at the Fish and
Wildlife Service, together with good coordination with the State
Department, the Animal and Plant Health Inspection Service and other
agencies, have made this notable success possible.
UN Framework Convention on Climate Change (UNFCCC)
Negotiations that led to the U.N. Framework Convention on Climate
Change (UNFCCC) began in Chantilly, Virginia, in February 1991 at the
invitation of President George H.W. Bush. The negotiations concluded on
May 9, 1992, in New York where the convention was adopted. It was
subsequently opened for signature at the June 1992 U.N. Conference on
Environment and Development (UNCED). The UNFCCC entered into force on
March 21, 1994, after ratification by 50 Parties. The United States
ratified the UNFCCC on October 15, 1992, becoming the first
industrialized Nation and the fourth Nation overall to do so. As of
July 2002, the UNFCCC has 186 Parties.
The UNFCCC creates a broad global framework for addressing the
challenge of climate change. It establishes an objective, commitments
for different groups of countries, and a set of institutions to enable
governments to consider and adopt appropriate actions and to monitor
the Convention's implementation. The Convention groups countries into
two annexes. Annex I lists most members of the Organization for
Economic Cooperation and Development (OECD) plus the states of Central
and Eastern Europe as well as several states of the Former Soviet
Union. Prior to the year 2000, Annex I Parties were to adopt policies
and measures aimed at returning their greenhouse gas emissions to 1990
levels. Annex II lists a smaller subset of Annex I Parties who agreed
to provide financial resources to assist developing countries in
implementing their Convention commitments.
The ultimate objective of the Convention is to achieve
stabilization of greenhouse gas concentrations in the atmosphere at a
level that would prevent dangerous anthropogenic [human-induced]
interference with the climate system. The Convention's objective
further provides that: ``Such a level should be achieved within a time-
frame sufficient to allow ecosystems to adapt naturally to climate
change, to ensure that food production is not threatened and to enable
economic development to proceed in a sustainable manner.''
All Parties to the Convention are committed to respond to climate
change and to cooperate in various ways toward this end. In particular,
each Party is required to prepare and submit a national inventory of
its emissions by sources and removals by sinks (forests and other
natural systems that remove greenhouse gases from the atmosphere) of
greenhouse gases. Each party is also required to prepare a national
communication describing the steps it is taking to implement the
Convention. The United States submitted its Third National
Communication (the U.S. Climate Action Report) to the Convention's
secretariat in May 2002.
In addition, the Convention requires that all Parties:
Formulate national or regional programs containing
measures to mitigate climate change;
Promote the development and diffusion of technologies
that control, reduce or prevent greenhouse gas emissions;
Promote sustainable management and conservation of sinks
and reservoirs of greenhouse gases;
Cooperate in preparing for adaptation to the impacts of
climate change;
Take climate change considerations into account to
minimize adverse effects of steps taken to mitigate or adapt to climate
change on the economy, on public health, and on the quality of the
environment by carefully considering climate change actions;
Promote and cooperate in research, systematic observation
and the development of data archives related to the climate system so
as to further understanding and reduce uncertainties about the causes,
effects, magnitude and timing of climate change and the consequences of
response strategies;
Promote and cooperate in the full, open and prompt
exchange of scientific and other information related to the climate
system and the consequences of response strategies, and
Promote and cooperate in education, training and public
awareness related to climate change.
Annex I Parties have more extensive requirements under the
Convention to report on the steps they are taking to address climate
change and, as noted, prior to the year 2000 they were to aim to return
their emissions of greenhouse gases to 1990 levels. Annex II Parties
have certain additional requirements under the Convention. They agreed
to provide financial assistance to developing country Parties to help
them meet their Convention commitments, and they agreed to assist
developing country Parties that are particularly vulnerable to the
adverse effects of climate change in meeting the costs of adaptation to
those adverse effects. Annex II Parties also agreed to assist other
Parties, particularly developing country Parties, with technology
transfer and access to environmentally sound technologies and know-how.
The Global Environment Facility serves as an operating entity of
the Convention's financial mechanism. All Annex II Parties contribute
to the Global Environment Facility, including the United States. In
addition, however, developed country Parties may also provide financial
resources related to the implementation of the Convention through
bilateral, regional and other multilateral channels. The U.S. Climate
Action Report contains detailed information both with respect to U.S.
contributions to the GEF as well as with respect to the other means
through which the United States is meeting its obligations under the
Convention.
The work of the Convention takes place in two subsidiary bodies--
the Subsidiary Body for Scientific and Technological Advice and the
Subsidiary Body for Implementation--which meet normally twice a year to
prepare for an annual meeting of the Conference of the Parties, the
supreme body under the Convention. The subsidiary bodies held their
most recent session from June 3-14 in Bonn, Germany, the seat of the
Convention's secretariat. The 8th Conference of the Parties will take
place from October 23 to November 1, 2002, in New Delhi.
Negotiations to strengthen the commitments of Annex I Parties began
in 1995, following a decision--the so-called ``Berlin Mandate''--taken
at the first session of the Conference of the Parties. In July 1997,
the Senate adopted the Byrd-Hagel Resolution by a vote of 95-0 urging
the administration to sign no agreement that would harm the U.S.
economy or that did not contain specific scheduled quantified
commitments for developing countries. In December 1997, Parties to the
Convention adopted the Kyoto Protocol at their third session. The
United States signed the Kyoto Protocol on November 12, 1998. The
previous administration never subsequently sent the Protocol to the
Senate for advice and consent, maintaining that the Kyoto Protocol was
a ``work in progress'' and that key developing countries would need to
agree to ``meaningful participation'' for the United States to ratify
it.
After taking office in 2001, President Bush announced that the
United States would not ratify the Kyoto Protocol because it would harm
the U.S. economy and it contained no commitments for 80 percent of the
world. At the same time, the President indicated that each Nation must
decide whether to ratify the Kyoto Protocol based on an assessment of
its national interest and that the United States would not interfere
with the decisions of other nations in this regard. As of July 2002, 74
nations and one regional economic integration organization (the
European Union) had ratified or acceded to the Kyoto Protocol.
Collectively, these countries represent 36 percent of the 1990 carbon
dioxide emissions of the Convention's Annex I Parties. Under its terms,
the Kyoto Protocol will enter into force once 55 Parties to the
Convention, incorporating Parties included in Annex I which accounted
for at least 55 percent of the total carbon dioxide emissions for 1990
of the Parties included in Annex I, have deposited their instruments of
ratification, acceptance, approval or accession.
President Bush has made two major announcements of U.S. policy
regarding global climate change--on June 11, 2001, and on February 14,
2002. Both of these announcements call for intensified efforts with
other nations to address the challenge of climate change. Toward this
end, the United States has initiated a series of bilateral climate
change relationships with important partners, including: Australia,
Central America (CONCAUSA), the European Union, Canada, China, India,
Italy and Japan. Discussions toward additional climate change
relationships have begun or are contemplated also with: Brazil, Mexico,
the Republic of Korea, the Russian Federation, South Africa and
Ukraine.
These bilateral climate change relationships range from those
devoted largely to undertaking cooperative science and technology
projects to those that may focus more on the exchange of information
and views related to climate change policy. Along this continuum--from
S&T projects at one end to policy at the other--each relationship
usually involves a particular mix of the two. In the case of Japan, for
example, we have three working groups focused on: (1) S&T cooperation;
(2) developing countries; and (3) market mechanisms.
Both with our continued, active participation under the UNFCCC and
in our bilateral relationships that complement and enhance our
multilateral cooperation, we are seeking to build relationships that
will enable us and others to address the long term challenge of climate
change on a balanced and measured basis, consistent with the need to
ensure the continued economic prosperity for our citizens and our
Nation.
North American Agreement on Environmental Cooperation
The North American Agreement on Environmental Cooperation (NAAEC),
commonly referred to as the NAFTA environmental side agreement, serves
as an important framework for cooperation among the three North
American governments on a wide range of environmental affairs. Among
other things, the NAAEC established the Commission on Environmental
Cooperation (CEC), which coordinates such cooperation. The United
States remains committed to the agreement, which has been in force
since 1994, and to the North American environmental cooperation that
takes place under it.
The Commission established by the agreement is composed of a
Council, a Secretariat and a Joint Public Advisory Committee. The
Council is the governing body, and is composed of representatives of
the governments. The three environment ministers represent their
governments on the Council. The EPA Administrator is the designated
U.S. representative on the Council and EPA has lead responsibility for
managing the interagency process that develops U.S. positions and
guides our participation in the CEC. The Department of State works
closely with EPA and maintains responsibility on all questions
regarding the interpretation of the agreement. We play an active role
in implementation of the NAAEC and in developing work through the CEC.
The NAAEC is notable for a high degree of citizen participation. A
trilateral Joint Public Advisory Committee (JPAC) participates in CEC
deliberations, including direct interaction with the Council. The
governments each appoint five members to the JPAC, who represent a wide
array of stakeholders from industry, academia, and nongovernmental
organizations. Each country also maintains governmental and/or non-
governmental domestic advisory bodies. The structure of the CEC has
produced fluid communication among our countries that has enhanced
significantly our broader relationships.
The NAAEC also contains a public submission process in which
citizens may submit claims to the Secretariat regarding the failure of
a government to enforce its environmental laws and the Council may
direct the development and release of a ``factual record'' concerning
the claim in response.
The NAAEC has promoted strong cooperation among the three countries
on a number of important environmental issues, achieved primarily
through implementation of the CEC work program funded at US$9 million
annually with equal contributions by the Parties. These include
promotion of enforcement of and compliance with environmental laws,
protecting children's environmental health, protecting animal species
that migrate throughout North America, and minimizing the use of
certain persistent toxic chemicals such as DDT. Trilateral cooperation
under the NAAEC has provided an impetus for the development of certain
types of environmental legislation, particularly the new mandatory
Pollutant Release and Transfer Register in Mexico.
The United States has fully complied with our obligations under the
NAAEC. Unlike some other environmental agreements that call for very
specific actions or the achievement of specific targets in a designated
timeframe, the NAAEC sets up a general framework for cooperation, which
is then developed and implemented over time through the CEC. This has
proven to be an effective framework for promoting environmental
cooperation within North America.
The U.N. Convention to Combat Desertification
The U.N. Convention to Combat Desertification (UNCCD) arose out of
the 1992 Earth Summit in Rio de Janeiro at which African countries
argued that the U.N. Framework Convention on Climate Change and the
Convention on Biological Diversity did not address their major
concern--desertification. Desertification--the degradation of dry
lands--is not limited to Africa: it affects millions of people
inhabiting one quarter of the world's land area from the American west,
to the Aral Sea in Russia, to Argentina and the islands of the
Caribbean, Indonesia and the Mediterranean.
The United States played a key role in negotiating the UNCCD--a
role which is a natural outgrowth of the United States' experience
during the Dust Bowl of the 1930's and our long-standing concern about
desertification in developing countries, particularly in Africa.
Negotiations on the CCD concluded in June 1994 and the Convention
entered into force in December 1996.
The purpose of the Convention is to combat desertification and
mitigate the effects of drought on arid, semi-arid, and dry sub-humid
lands through effective local, national, regional and global action,
particularly in Africa. The Convention's central objective is to
promote the sustainable use of drylands worldwide, but especially in
Africa, and to make more efficient use of aid resources, thereby
helping to solve Africa's and other affected regions' chronic hunger
problems. The CCD employs a unique grass-roots approach, emphasizing a
``bottom-up'' approach with strong local participation in
decisionmaking.
Under the Convention, the United States, with approximately 40
percent of our landmass considered arid, semi-arid or dry sub-humid and
therefore susceptible to the processes of desertification, is an
affected Party. As an affected Party, the United States is required to
have strategies to address desertification. Given our extensive system
of land management strategies, practices and programs, no changes were
or are required in our domestic policies or programs for the U.S. to
meet this obligation under the Convention. (The Convention acknowledges
that Parties may implement their obligations through ``existing or
prospective'' arrangements). Many of the principles used successfully
in the U.S. over the past 70 years have been incorporated in the
language of the Convention. All Parties are required to submit reports
to the Secretariat of the CCD on activities undertaken in support of
the CCD, on a timetable determined by the Conference of the Parties.
The first U.S. Report on Activities Undertaken in Support of the U.N.
Convention to Combat Desertification was officially submitted July 3,
2002.
The United States is also required to provide support for
developing country efforts to combat desertification, including by
providing financial resources, although the Convention does not impose
a specific amount or timing with respect to this requirement.
The U.S. Agency for International Development (USAID) is the lead
U. S. government agency implementing the CCD overseas. The Department
of the Interior (Bureau of Land Management) and the Department of
Agriculture also carry out program activities in support of the
implementation of the Convention. Bilaterally and regionally, the
United States works with affected developing country Parties, local and
international non-governmental organizations, and multilateral
development banks on anti-desertification program activities, including
education, community development, and capacity building, with the goal
of empowering local people to combat desertification by identifying
needs and solving problems themselves. An important aspect of CCD
implementation is the dissemination of technology and scientific and
technical information. The U.S. has made and will continue to make an
important contribution in this area, given our 70 years of experience
combating desertification in the American West.
Looking Ahead
While significant progress in protecting the environment has been
made, enormous challenges lie ahead. The upcoming World Summit on
Sustainable Development (WSSD) in Johannesburg, South Africa, provides
the United States with a unique opportunity to take stock of our past
accomplishments and to build on them in helping to advance economic and
social growth and environmental stewardship. We have learned a great
deal since the Rio Earth Summit. WSSD gives us a chance to create a new
paradigm that stresses sound economic policies, national capacity for
good governance, anti-corruption, transparency and the role of science.
The Bush Administration is committed to its success.
______
Responses of James F. Turner to Additional Questions from Senator
Jeffords
Question 1. Please provide a complete list of the status of all
environmental treaties that the United States has signed and ratified
(or only signed) since 1945, including all dates of signature and
ratification. Please note the environmental treaties since 1945 that
the United States has neither ratified nor signed.
Response. The State Department does not maintain a separate data
base of environmental treaties, and is in the process of compiling the
requested information from the official records.
Question 2. What is the best way for the public to determine
whether the United States is complying with its international
environmental agreements?
Response. One useful method is to review the obligations contained
in the agreements and consider what steps the United States has taken
with respect to each such obligation. In some cases the latter will
involve considering a wide range of U.S. Government programs and
activities.
Question 3. Your boss, Ms. Dobriansky, and others in the
Administration have been quoted as saying ``Sustainable Development
begins at home.'' What exactly does that mean and how is it measured?
Response. The Administration uses the phrase ``sustainable
development begins at home'' to describe a provision in the agreement
reached at the U.N. Conference on Financing for Development in
Monterrey, Mexico in March this year, specifically, ``Each country has
primary responsibility for its own economic and social development . .
.'' We advocate that development be sustainable, and that to achieve
this sustainable development, nations must practice good domestic
governance. Good domestic governance is characterized by robust
democratic institutions (including a popularly elected legislature and
an independent judiciary); effective measures to combat corruption;
adherence to the rule of law (i.e., fair and consistent application of
law); public participation in decisionmaking; and the use of sound
science to guide those government decisions to the extent possible. A
country that is not committed to these goals, including being good
stewards of its natural resources, cannot expect development to occur
optimally, because the full range of development resources, both
domestic and foreign, will not be mobilized and effectively used to
foster economic and social development and environmental protection.
International cooperation and development assistance will continue to
play an important support role. However, the commitment to sustainable
development, and to establish the needed framework to promote such
development must begin domestically.
Question 4. One of the purposes of the World Summit is to re-
energize efforts at the national level in regard to sustainable
development and the implementation of Agenda 21. What domestic actions
is the Administration considering as followup to Johannesburg?
Response. The Administration plans to continue efforts to implement
Agenda 21 through a number of mechanisms including innovative public-
private partnerships. The Council on Environmental Quality, the
Environmental Protection Agency, Department of the Interior, Department
of Commerce, Department of Agriculture and other government agencies
are actively working with the public and private sectors to ensure that
sustainable development is a priority? at the national level.
Question 5. Could you please provide a list for the record of the
U.S. delegation representatives that will be attending, and the list of
U.S. delegation representatives that attended the Rio Earth Summit?
Response. We have attached a provisional list of the U.S.
delegation to the World Summit on Sustainable Development and a list of
the U.S. delegation to the United Nations Conference on Environment and
Development (the Earth Summit) held in Rio de Janeiro in 1992.
united states delegation to the world summit on sustainable
development, johannesburg, august 26--september 4, 2002
Ex Officio Head of Delegation
The Honorable Colin L. Powell
Secretary of State
Representatives
The Honorable Paula J. Dobriansky
Under Secretary for Global Affairs
Department of State
The Honorable John F. Turner
Assistant Secretary for Oceans and
International Environmental and Scientific Affairs
Department of State
Alternate Representatives
The Honorable Claude A. Allen
Deputy Secretary
Department of Health and Human Services
The Honorable Robert G. Card
Under Secretary for Energy, Science and Environment
Department of Energy
The Honorable James L. Connaughton
Chairman
Council on Environmental Quality
Executive Office of the President
The Honorable Linda J. Fisher
Deputy Administrator
Environmental Protection Agency
The Honorable Cameron R. Hume
United States Ambassador
Pretoria
The Honorable Conrad C. Lautenbacher, Jr.
Under Secretary for Oceans and Atmosphere
National Oceanic and Atmospheric Administration
Department of Commerce
Jonathan A. Margolis
Director
Office of Policy Coordination and Initiatives
Bureau of Oceans and International Environmental and Scientific
Affairs
Department of State
Richard T. Miller
Deputy Assistant Secretary
Bureau of International Organization Affairs
Department of State
The Honorable James R. Moseley
Deputy Secretary
Department of Agriculture
The Honorable Andrew S. Natsios
Administrator
Agency for International Development
Anthony F. Rock
Principal Deputy Assistant Secretary for Oceans and International
Environmental and Scientific Affairs Department of State
The Honorable Sichan Siv
Ambassador
United States Representative to the Economic and Social Council
United States Mission to the United Nations
The Honorable Peter S. Watson
President and Chief Executive Officer Overseas Private Investment
Corporation
The Honorable Christine Todd Whitman
Administrator
Environmental Protection Agency
Senior Advisers
Alan Hecht
Council on Environmental Quality
National Security Council
Executive Office of the President
Donald K. Steinberg
Deputy Director
Office of the Policy Planning Staff
Department of State
Advisers
Kate Almquist
Special Assistant
Office of the Administrator
Agency for International Development
Christo Artusio
Office of Global Change
Bureau of Oceans and International Environmental and Scientific
Affairs
Department of State
Deborah M. Atwood
Special Assistant to the Deputy Secretary
Department of Agriculture
The Honorable Judith E. Ayres
Assistant Administrator for International Affairs
Environmental Protection Agency
Adela Backiel
Director of Sustainable Development
Department of Agriculture
Janice F. Bay
Deputy Assistant Secretary
Bureau of Economic and Business Affairs
Department of State
John Beale
Deputy Assistant Administrator
Environmental Protection Agency
Karin Berry
Senior Policy Analyst
Department of Energy
Robert Blair
Office of International Health Affairs
Bureau of Oceans and International Environmental and Scientific
Affairs
Department of State
Evan T. Bloom
Office of the Assistant Legal Adviser for Oceans and International
Environmental and Scientific Affairs
Office of the Legal Adviser
Department of State
The Honorable Richard A. Boucher
Assistant Secretary for Public Affairs and Department Spokesman
Department of State
Marcel Bouquet
Interpreter
Office of Language Services
Department of State
Sarah K. Brandel
Office of Ocean Affairs Bureau of Oceans and International
Environmental and Scientific Affairs Department of State
William J. Brennan
Deputy Assistant Secretary
National Oceanic and Atmospheric Administration Department of
Commerce
Gayleatha Brown
Counselor for Political Affairs
United States Embassy
Pretoria
Lori Brutten
Office of Policy Coordination and Initiatives
Bureau of Oceans and International Environmental and Scientific
Affairs
Department of State
Steven Buckler
Counselor for Administrative Affairs
United States Embassy
Pretoria
Jeffry Burnam
Deputy Assistant Secretary
Bureau of Oceans and International Environmental and Scientific
Affairs
Department of State
Stephanie Childs
Senior Adviser
Office of the Under Secretary for International Trade
International Trade Administration Department of Commerce
Brent Christensen
Economic Officer
United States Embassy Beijing
Cynthia Church
Deputy Press Secretary
Department of State
Karen Clark
Department of the Interior
Lawrence E. Clark
Associate Chief
Natural Resource Conservation Service
Department of Agriculture
Gerald Clifford
Deputy Assistant Administrator
Office of International Activities
Environmental Protection Agency
Sally D. Collins
Associate Chief
United States Forest Service
Department of Agriculture
William E. Craft
Director
Office of Multilateral Trade Affairs
Bureau of Economic and Business Affairs
Department of State
Jonathan Crock
Office of the Ambassador-at-Large For War Crime Issues
Department of State
The Honorable Patrick M. Cronin
Assistant Administrator
Agency for International Development
Wayne D'Angelo
Advance Director
Environmental Protection Agency
John Davison
Deputy United States Representative to the Economic and Social
Council
United States Mission to the United Nations
Jill Derderian
Environment, Science and Technology Officer
United States Embassy
Pretoria
Stewart Devine
Advance Line Officer
Executive Secretariat
Department of State
Joseph Martin Dieu
Coordinator for the World Summit on Sustainable Development
Office of International Activities Environmental Protection Agency
Dirk Dijkerman
United States Agency for International Development Director
United States Embassy
Pretoria
Larisa Dobrianaky
Deputy Assistant Secretary
Department of Energy
James R. Dunlap
Executive Assistant
Bureau of African Affairs
Department of State
Dennie Ege
Office of International Conferences
Bureau of International Organization Affairs
Department of State
Virginia L. Farris
Public Affairs Officer
United States Embassy
Pretoria
Joseph Ferrante
Assistant to the Administrator
Environmental Protection Agency
Cory A. Firestone
Bureau of Oceans and International Environmental, and Scientific
Affairs
Department of State
The Honorable Emil Frankel
Assistant Secretary for Transportation Policy
Department of Transportation
The Honorable Jendayi E. Frazer
Special Assistant to the President And Senior Director for African
Affairs
National Security Council
Executive Office of the President
Joseph Freedman
Associate General Counsel
Environmental Protection Agency
William M. Frej
Director for Development Issues
National Security Council
Executive Office of the President
William R. Gaines
Coordinator for International Affairs
Office of Science and Technology Policy
Executive Office of the President
The Honorable David Garman
Assistant Secretary for Energy Efficiency and Renewable Energy
Department of Energy
Isabel N. Gates
Office of the Executive Director
Bureau of Oceans and International Environmental and Scientific
Affairs
Department of State
Joanne B. Giordano
Deputy Assistant Administrator
Bureau for Legislative and Public Affairs
Agency for International Development
Virginia Green
Vice President
Investment Policy
Overseas Private Investment Corporation
Jeff J. Grieco
Chief
Multimedia Communications Division ``Bureau for Legislativeand Public
Affairs
Agency for International Development
Joseph B. Ham
Trade Specialist
Department of Agriculture
Robert K. Harris
Attorney Adviser
Office of the Assistant Legal Adviser for Oceans and International
Environmental and Scientific Affairs
Office of the Legal Adviser
Department of State
John J. Hartley, II
Minister-Counselor for Economic Affairs
United States Embassy
Pretoria
Jennifer A. Haverkamp
Assistant United States Trade Representative for Environment and
Natural Resources
Office of the United States Trade Representative Executive Office of
the President
Richard Helm
Counselor for Agricultural Affairs
United States Embassy
Pretoria
Leonard A. Hirsch
Adviser
Smithsonian Institution
Teresa D. Hobgood
Bureau of Oceans and International
Environmental and Scientific Affairs
Department of State
Ronald Neil Hoffer
Environmental Protection Agency
The Honorable Jeffrey Holmstead
Assistant Administrator for Air and Radiation
Environmental Protection Agency
Heather Hopkins
Legislative Program Specialist
Congressional Liaison Division
Bureau for Legislative and Public Affairs
Agency for International Development
Robert P. Hopkins
Director
External Affairs
National Oceanic and Atmospheric Administration
Department of Commerce
Chase M. Huntley
Analyst
Natural Resources and Environment
General Accounting Office
Kelly A. Johnson
Principal Deputy Assistant Attorney General
Environment and Natural Resources Division
Department of Justice
The Honorable Walter H. Kansteiner
Assistant Secretary for African Affairs
Department of State
Roy S. Katayaina
Adviser
Agency for International Development
Craig Kelly
Executive Assistant
Office of the Secretary
Department of State
Carol Kramer-LeBlanc
Adviser on Food Security
Foreign Agricultural Service
Department of Agriculture
Luisa Joy G. Labez
Senior International Affairs Analyst
General Accounting Office
Washington, DC.
Karen T. Levine
United States Representative to the United Nations Environment
Program
United States Embassy
Nairobi
Herbert Levitan
National Science Foundation
Frances C. Li
National Science Foundation
Clay Lowery
Deputy Assistant Secretary for International Debt, Development and
Quantitative Policy Analysis
Department of the Treasury
James A. Mahoney
Vice President
Engineering and Environment
Export-Import Bank of the United States
Joe Martyak
Associate Administrator for Communications, Education and Media
Environmental Protection Agency
Jan L. McAlpine
Office of Ecology and Terrestrial Conservation
Bureau of Oceans and International Environmental and Scientific
Affairs
Department of State
John McCutcheon
Principal Deputy Assistant Secretary
Department of Energy
Elizabeth McLanahan
International Affairs Specialist
Department of Commerce
Thomas K. McNeil, Jr.
Personal Assistant to the Administrator
Environmental Protection Agency
James Metzger
Military Adviser to the Secretary of State and
Special Assistant to the Chairman, Joint Chiefs of Staff
Gillian Milovanovic
Deputy Chief of Mission
United States Embassy
Pretoria
Linda V. Moodie
Chief
Application and Information Services Branch
International and Interagency Affairs Office
National Oceanic and Atmospheric Administration
Department of Commerce
Franklin Moore
Director
Global Center for the Environment
Agency for International Development
Melinda Moore
Deputy Director
Office of Global Health Affairs
Department of Health and Human Services
Sahar Moridani
Special Assistant to the Assistant Secretary for Public Affairs
Department of State
The Honorable Everett L. Mosley
Inspector General
Agency for International Development
Jacob Moss
Special Assistant
Environmental Protection Agency
The Honorable Constance Berry Newman
Assistant Administrator
Bureau for Africa
Agency for International Development
Rachel Nugent
National Institutes of Health
Department of Health and Human Services
Elisha Nyman
Special Assistant to the Under Secretary for Global Affairs
Department of State
Jennifer M. O'Connor
Adviser
Department of Agriculture
Richard Parker
Assistant to the Deputy Secretary
Department of Health and Human Services
The Honorable Elizabeth Anne Peterson
Assistant Administrator
Bureau for Global Health
Agency for International Development
C. Anne Pence
Executive Assistant
Office-of the Under Secretary for Economic, Business and Agricultural
Affairs
Department of State
Brett Pomainville
Office of Policy Coordination and Initiatives
Bureau of Oceans and International Environmental and Scientific
Affairs
Department of State
Susan Povenmire
Office of Public Diplomacy
Bureau of Oceans and International
Environmental and Scientific Affairs Department of State
The Honorable Pierre Prosper
Ambassador-at-Large for War Crime Issues
Department of State
Scott C. Rayder
Chief of Staff
Office of the Under Secretary for Oceans and Atmosphere
National Oceanic and Atmospheric Administration Department of
Commerce
Henry David Reese
Environmental Protection Specialist
Department of Transportation
Daniel Rochberg
Office of Policy Coordination and.Initiatives
Bureau of Oceans and International
Environmental and Scientific Affairs Department of State
Peter Roussopoulos
Adviser on Sustainable Development
United States Forest Service
Department of Agriculture
James W. Rubin
Assistant Chief
Policy, Legislation and Special Litigation
Department of Justice
Aaron Salzberg
Office of Policy Coordination and Initiatives
Bureau of Oceans and International
Environmental and Scientific Affairs Department of State
Brenda Scarborough
Advance Communications
Executive Secretariat
Department of State
Walter Gary Sharp
Congressional Relations Adviser
Bureau of Legislative Affairs
Department of State
Betsi Shays
Adviser
Peace Corps
Marysue Shore
Senior Adviser to the President and Director of, African Affairs
Overseas Private Investment Corporation
The Honorable Eimny B. Simmons
Assistant Administrator
Bureau for Economic Growth, Agriculture and Trade
Agency for International Development
Daniel Smith
Deputy Executive Secretary
Department of State
Dean Thompson
Advance Line Officer
Executive Secretariat
Department of State
Griffin M. Thompson
Director
Office of Energy, Environment and Technology
Center for the Environment
Agency for International Development
Eileen Ramira Travoto
Deputy Assistant Administrator
Environmental Protection Agency
Michael C. Trulson
Office of Environmental Policy
Bureau of Oceans and International
Environmental and Scientific Affairs Department of State
David J. van Hoogstraten
Office of Environmental Policy
Bureau of Oceans and International
Environmental and Scientific Affairs
Department of State
Darci L. Vetter
Office of the United States Trade Representative
Executive Office of the President
Harlan Watson
Office of Global Change
Bureau of Oceans and International Environmental and Scientific
Affairs
Department of State
Eric B. Wilson
Senior Program Analyst
Bureau of Indian Affairs
Department of the Interior
William Stanley Wilson
Senior Scientist
National Environmental Satellite, Data and Information Service
National Oceanic and Atmospheric Administration
Department of Commerce
Whitney Witteman
Office of International Conferences
Bureau of International Organization Affairs
Department of State
Private Sector Advisers
Geraldine Barrows
Special Assistant
Office of the Mayor
Hempstead, New York
Manley A. Begay
Director
Native Nations Institute
Navajo Tribe
Tucson, Arizona
George D. Carpenter
Director of Corporate Sustainable Development
Procter and Gamble Company
Cincinnati, Ohio
Richard Coombe
Chair and Chief Executive Officer
Watershed Agricultural Council
Walton, New York
Dianne Dillon Ridgely
Director
The Center for a New American Dream
Iowa City, Iowa
Daniel Esty
Director
Yale Center on Environmental Law and Policy
Yale Law School
New Haven, Connecticut
The Honorable James A. Garner
Mayor
Hempstead, New York
Hank Habicht
Chief Executive Officer
Global Environment and Technology Foundation
Annandale, Virginia
Lauren Inouye
Stanford Institute for International Studies
Center for Environmental Science and Policy
Washington, DC.
John Klink
Montecito, California
F. Sherwood Rowland
National Academy of Sciences
Irvine, California
Chris Tucker
Actor and Comedian
Los Angeles, California
UNITED STATES CONGRESSIONAL OBSERVER DELEGATION TO THE WORLD SUMMIT ON
SUSTAINABLE DEVELOPMENT JOHANNESBURG, AUGUST 26--SEPTEMBER 4, 2002
Members of the House of Representatives
The Honorable Thomas H. Allen
House of Representatives
The Honorable Earl Blumenauer
House of Representatives
The Honorable James C. Greenwood
House of Representatives
The Honorable Dennis J. Kucinich
House of Representatives
The Honorable George Miller
House of Representatives
The Honorable Christopher Shays
House of Representatives
Congressional Staff
Sara Elizabeth Barth
Legislative Assistant
Office of Senator Barbara Boxer
U.S. Senate
Janine Benner
Legislative Assistant
Office of Congressman Earl Blumenauer
House of Representatives
Floyd DesChamps
Senior Professional Staff Member
Committee on Commerce, Science and Transportation
U.S. Senate
Greg Dotson
Counsel
Committee on Government Reform and
Office of Congressman Henry A. Waxman
House of Representatives
Deb Fiddelke
Press Director
Office of Senator Chuck Hagel
U.S. Senate
Kenneth W. Flanz
Deputy Legislative Director
Office of Senator Michael D. Crapo
U.S. Senate
Amy A. Fraenkel
Counsel
Committee On Commerce, Science and Transportation
U.S. Senate
Richard Frandsen
Senior Counsel
Committee on Energy and Commerce
House of Representatives
Stephen E. Moody
Legislative Assistant
Office of Congressman George Miller
House of Representatives
Maurice A. Perkins
Professional Staff member
Committee on Foreign Relations
U.S. Senate
Eric Pfuehler
Administrative Assistant
Office of Congressman David Bonior House of Representatives
Johanna F. Polsenberg
Legislative Fellow
Office of Congressman Sam Farr
House of Representatives
Tiffany Anne Prather
Legislative Fellow
Committee on Environment and Public Works
U.S. Senate
Paul L. Oostburg Sanz
Deputy Chief Counsel
Committee on International Relations
House of Representatives
Dallas Scholes
Counsel/Legislative Assistant
Office of Senator Michael Enzi
U.S. Senate
Alison Leigh Taylor
Chief Counsel
Committee on Environment and Public Works
U.S. Senate
The following Congressional Staff spouse will accompany the
delegation: Jacqueline Kae DesChamps.
Question 6. What measures should we look at to determine whether
U.S. programs and resources are achieving the goals of Agenda 21?
Response. There are a number of measures that could be considered
to evaluate our progress in achieving the goals of Agenda 21. The body
of international environmental agreements to which the United States is
a party provides one important measure. Beyond U.S. participation in
and implementation of treaties and conventions, however, is an
important body of domestic activities undertaken by both the U.S.
Government and the private sector to advance sustainable development
objectives. Examples of government activities include enactment and
implementation of Brownfields legislation (to promote cleanup and reuse
of contaminated land) and TEA-21 (which, among other things, promotes
sustainable transportation) and voluntary policy initiatives such as
the U.S.-led International Coral Reef Initiative (ICRI), the U.N.
Forest Forum (which is developing a set of indicators for the
sustainable management of the world's most endangered forest
resources), and the Arctic Council (which has identified and
implemented voluntary measures to reduce toxic chemicals that pose a
particular bioaccumulation risk in animals and humans in polar
regions). Voluntary measures implemented by the private sector in the
United States, such as the Energy Star program for energy efficient
appliances and the adoption of clean production technologies and
methods, have also contributed significantly to achievement of the
goals of Agenda 21.
Question 7. The Administration has strongly promoted the concept of
concrete ``partnerships,'' or Type II initiatives, including ones on
sustainable energy and clean water. What is the status of these efforts
and does the Administration plan to provide new financial resources for
such partnerships? How will the Administration guarantee that voluntary
partnerships will deliver real progress for sustainable development,
especially if they are not designed to implement specific international
agreements with targets and timetables? How can the Administration
guarantee that any partnerships that involve corporations are carried
out in a responsible manner if there is no independent oversight
framework?
Response. The United States is proposing four ``signature''
partnerships that have been created as a result of preparations for
WSSD. These are in the fields of energy, water, hunger and forests.
These partnerships are ``coalitions of the willing'', voluntary in
nature and open to those governments, NGO's, private sector entities,
and civil society groups who wish to participate. In other words, they
do not require the negotiation of an international treaty, but rather
are invitations to cooperate to achieve a shared goal. We would expect
that each partnership would identify its goals and periodically provide
a report on its progress. Such reports should be accessible and open to
the public. The Commission on Sustainable Development could be used as
the forum in which partnerships provide their reports, further
increasing transparency and thereby accountability. The Administration
plans to finance these partnerships through existing resources.
Question 8. The Administration has (rightly) been very strong on
the importance of ``good governance'' to sustainable development. The
President announced in a speech at the Inter-American Development Bank
on March 14 that the United States will increase its core development
assistance by 50 percent over the next 3 years, resulting in a $5
billion annual increase over current levels. These additional funds
will go to a new Millennium Challenge Account that will fund
initiatives to help developing nations improve their economies and
standards of living. The Millennium Challenge Account will set criteria
for how the additional $5 billion the United States has pledged will be
allocated. But ``good governance'' does not come cheap. How does the
Administration propose to assist countries to bring about ``good
governance,'' as opposed to rewarding countries exhibiting it? How much
of U.S. aid is currently spent on ``good governance''?
The Federal Government currently funds many programs that promote
good governance across in almost every developing country of the world.
U.S. assistance for governance programs was over $1.5 billion in fiscal
year 02 for programs supporting, among other things; policy training
for civil servants and elected officials, government information
management, promotion of civil society groups, election monitoring,
anti-corruption, judicial and prosecutorial. capacity-building, women's
and workers' rights, public-private partnerships, and food security.
These programs, among many others, will continue within the framework
of existing development assistance.
Tbe MCA will be a new account that will supplement, not replace,
existing programs. The MCA will assist countries that have made a
commitment to ruling justly, investing in people, and promoting
economic freedom. MCA funds will be distributed in flexible and
innovative ways so that they can have a maximum impact on economic
growth and poverty reduction. Country ownership is a critical component
of the MCA. The uses of the funds will be determined by full engagement
with recipient countries. We will partner with, not dictate to, MCA
countries.
Competition for the MCA will inspire non-recipient countries to
improve their performance on governance. Countries that do improve
their performance will be in a position to compete for MCA funding in
the future. Existing U.S. Government programs can help those countries
that are willing to engage in serious policy reform.
Question 9. What are the criteria for the Millennium Challenge
Account? Why is it proposed to announce these after WSSD? What will be'
the role of environmental measures in the criteria? What environmental
criteria will apply to expenditure of the funds?
Response. The Administration is still evaluating criteria to
determine how funds from the Millennium Challenge Account would be
disbursed. We are consulting with development partners in developed
countries as well as with potential developing country recipients as we
develop these criteria. This thorough process, which began immediately
after the Financing for Development Summit in Monterrey in March, is
independent of the timetable for WSSD.
Question 10. What effect has the U.S. farm bill had on U.S.
negotiating capacity and leverage, particularly with respect to the
issue of reducing environmentally harmful subsidies? How has this
affected U.S. credibility?
Response. The United States is strongly committed to an ambitious
outcome reducing global trade distortions in agriculture through the
WTO. As Ambassador Zoellick has made clear, our strategy in pursuing
this goal rests on a three-legged stool consisting of the new U.S.
proposal for the Doha WTO negotiations to reduce agricultural
subsidies, the U.S. Farm Bill, and trade promotion authority.
Many, particularly in the international community, have exaggerated
the provisions in the U.S. Farm Bill and claimed it throws into
question our true interest in seeking reduced agricultural subsidies.
But the bottom line is that domestic support under the farm bill is
entirely consistent with WTO obligations. Under WTO rules, the United
States is allowed to provide up to $19.1 billion annually in ``trade-
distorting'' support. The Farm Bill, for the first time, was
consciously drafted with these limits in mind. Not only did Congress
consider how support under the farm programs would be counted against
the U.S.-allowed support level, but also it included an unprecedented
``circuit breaker'' mandating the Secretary of Agriculture to modify
programs to ensure compliance with U.S. international obligations.
If other countries agree with the U.S. Government that world
agricultural tariffs and subsidies are too high, we urge them to join
us at the negotiating table. Congress has just renewed the President's
trade promotion authority, and we believe a successful conclusion to
the WTO negotiations will ensure congressional support for necessary
modifications to our domestic agricultural programs required under any
new WTO commitments.
Regarding environmentally harmful subsidies, it is worth noting
that the farm bill pays directly for conservation programs that are
important to the Americanpublic. This reflects our consistent stand
that it is important for governments to support farmers and rural
communities in ways that are targeted, transparent, and non-trade
distorting. By setting these examples, the farm bill, if anything,
strengthens the Administration's ability to work toward the
environmental objectives laid out in the Trade Promotion Authority act.
Question 11. Please list all the new ``Type I'' commitments--the
more conventional negotiated declarations and action plans--that the
United States intends to enter into at WSSD.
Response. The text is still under negotiation. The final outcomes
will be determined in Johannesburg. We will supply you with the final
Johannesburg Plan of Action and political declaration after the Summit
has ended. We note that any Type I outcomes will not be ``commitments''
in a legal sense because the WSSD outcomes. will all be non-binding.
Question 12. Explain the linkage between the Type I and Type II
initiatives. Aren't strong Type II partnerships connected to having
some type of concrete framework?
Response. The international community has already agreed to a large
number of goals, targets and timetables. For example, the United States
strongly supports the internationally agreed Millennium Declaration
goals. In our view, partnerships are clearly linked to such goals in
that partnerships are one of the main mechanisms through which to
implement such goals.
Question 13. How many Type II partnerships is the United States
proposing for WSSD? Where is the full list? What government agencies
and private companies are to be involved?
Response. While the major Type II partnerships under development
for WSSD are still under active review, they are outlined in the
response to question 7. Broad inter-agency teams composed of relevant
U.S.G agencies are working on these efforts. We welcome the broad
participation of business, NGO's, and other major groups in such
partnerships. We plan to continue building partnerships well after the
Johannesburg Summit has finished: this is not a process that ends with
the Summit.
Please see the attached list of our Type II partnerships.
united states delegation to the united nations conference on
environment and development (unced) rio de janeiro, june 3-14, 1992
Representative
The Honorable William K. Reilly
Administrator, Environmental Protection Agency
Alternate Representatives
The Honorable Curtis Bohien
Assistant Secretary for Oceans'and International Environmental and
Scientific Affairs
Department of State
The Honorable J. Michael Davis
Assistant Secretary for Conservation and Renewable Energy
Department of Energy
The Honorable Michael R. Deland
Chairman
Council on Environmental Quality
Executive Office of the President
The Honorable Robert Grady
Associate Director for Natural Resources, Energy and Science
Office of Management and Budget
Executive Office of the President
The Honorable Richard H. Melton
Ambassador
United States Embassy
Brasilia
The Honorable Edward J. Perkins
Ambassador
Permanent, Representative of the United States to the United Nations
New York
The Honorable Ronald W. Roskens
Administrator
Agency for International Development
The Honorable Robert J. Ryan, Jr.
Coordinator for United Nations Conference on Environment and
Development Preparations
Bureau of Oceans and International Environmental and Scientific Affairs
Department of State
The Honorable Michael K. Young
Deputy Under Secretary for Economic and Agricultural Affairs
Department of State
Advisers
Meredith Attwell
Office of Legislative Management
Bureau of Legislative Affairs
Department of State
Maureen Bannon, Lieutenant Commander, USN
Office of the Representative for Oceans Policy Affairs
Office of the Secretary
Department of Defense
Susan Biniaz
Assistant Legal Adviser for Oceans,
International Environmental and Scientific Affairs Office of the Legal
Adviser
Department of State
Patricia Bliss-Guest
Associate Director for International Law and Policy
Council on Environmental Quality
Executive Office of the President
Thomas A. Campbell
General Counsel
National Oceanic and Atmospheric Administration
Department of Commerce
Nancy O'Neal Carter
Coordinator for Population Affairs
Bureau of Oceans and International Environmental and Scientific Affairs
Department of State
Ed Cassidy
Deputy Chief of Staff and Deputy Assistant Secretary for Policy
Office of Policy, Management and Budget Department of the Interior
Stephanie J. Caswell
Office of Ecology, Health and Conservation
Bureau of Oceans and International Environmental and Scientific Affairs
Department of State
Melinda Chandler
Attorney-Adviser
Office of Oceans, International Environmental and Scientific Affairs
Office of the Legal Adviser
Department of State
David Cottingham
Director
Office of Ecology and Conservation
National Oceanic and Atmospheric Administration
Department of Commerce
Anthony A. Das
Director
Office of Public Communications
Bureau of Public Affairs
Department of State
Christine L. Dawson
Special Adviser for Environmental Issues
Office of the Under Secretary for Economic and Agricultural Affairs
Department of State
Michael S. Delello
Special Assistant
Office of the Secretary
Department of Energy
Susan F. Drake
Office of Environmental Protection
Bureau of Oceans and International Environmental and
Scientific Affairs
Department of State
Milton K. Drucker
Office of International Commodities
Energy, Resources and Food Policy,
Bureau of Economic and Business Affairs
Department of State
L. Val Giddings
Office of Biotechnology Biologics and Environmental Protection
Animal and Plant Health Inspection Service
Department of Agriculture
Alan D. Hecht
Deputy Assistant Administrator for International Activities
Environmental Protection Agency
Matthew P. Hennesey
Director
Office of Multilateral Development Banking
Department of the Treasury
Twig Johnson
Director
Office of Environment and Natural Resources
Bureau of Research and Development
Agency for International Development
Gerald L. Kamens
Office of Policy Analysis and Resources
Directorate for Policy
Agency for International Development
Mark P. Kindall
Office of International Activities
Environmental Protection Agency
Stephen Klein
U.S. UNCED Coordination Center
Bureau of Oceans and International Environmental and Scientific
Affairs.
Department of State
Jeffrey D. Kovar
Attorney-Adviser
Office of Legal Adviser
Department of State
William Lake
Consultant to the Administrator
Environmental Protection Agency
Gary L. Larsen
International Forestry
Forest Service
Department of Agriculture
The Honorable Thomas E. Lovejoy
Assistant Secretary for External Affairs
Smithsonian Institution
Washington, DC.
John P. McGuinness
Office of Technical Specialized Agencies
Bureau of International Organization Affairs
Department of State
The Honorable Jonathan Moore
Ambassador
United States Representative to the Economic and Social Council of the
United Nations
New York
Carol Ann Petsonk
Director
Office of Environmental Affairs
Office of the United States Trade Representative
Executive Office of the President
Eleanor W. Savage
Director
Office of Ecology, Health and Conservation
Bureau of Oceans and International Environmental and Scientific Affairs
Department of State
John P. Schmitz
Deputy Counsel to the President
Executive Office of the President
R. Tucker Scully
Director
Office of Ocean Affairs
Bureau of Oceans and International Environmental and Scientific Affairs
Department of State
Jeff N. Sirmon
Deputy Chief for International Forestry
United States Forest Service
Department of Agriculture
Zell Steever
U.S. UNCED Coordination Center
Bureau of Oceans and International Environmental and Scientific Affairs
Department of State
Linda Strachan
Special Assistant for Congressional Relations
Bureau of Oceans and International Environmental and Scientific Affairs
Department of State
Scott B. Styles
Office of Legislative Management
Bureau of Legislative Affairs
Department of State
Neal A. Walidrop III
Office of Global Change
Bureau of Oceans and International Environmental and Scientific Affairs
Department of State
Harlan Watson
Acting Assistant Secretary for Water and Science and Science Adviser to
the Secretary
Department of the Interior
Dr. Frank E. Young
Deputy Assistant Secretary for Health (Science and Environment)
Public Health Service
Department of Health and Human Services
______
subject: congressional delegation to the united nations conference on
environment and development (unced) rio de janeiro, june 3-14, 1992
1. The following individuals comprise the United States
Congressional Delegation to UNCED:
A. Members of the Senate
The Honorable Albert Gore, Jr. (Chairman of the Senate Delegation)
U.S. Senate
The Honorable John N. Chafee (Vice Chairman of the Senate Delegation)
U.S. Senate
The Honorable Max Baucus
U.S. Senate
The Honorable Bob Graham
U.S. Senate
The Honorable John Kerry
U.S. Senate
The Honorable Frank H. Lautenberg
U.S. Senate
The Honorable Claiborne Pell
U.S. Senate
The Honorable Larry Pressler
U.S. Senate
The Honorable Steve Symms
U.S. Senate
The Honorable Paul Wellstone
U.S. Senate
The Honorable Timothy B. Wirth
U.S. Senate
b. members of the house of representatives
The Honorable George Miller (Chairman of the House Delegation)
U.S. House of Representatives
The Honorable Anthony C. Beilenson
U.S. House of Representatives
The Honorable Ben C. Blaz
U.S. House of Representatives
The Honorable Cardiss Collins
U.S. House of Representatives
The Honorable Robert W. Davis
U.S. House of Representatives
The Honorable Edward F. Feighan
U.S. House of Representatives
The Honorable Benjamin A. Gilman
U.S. House of Representatives
The Honorable Bill Green
U.S. House of Representatives
The Honorable Dennis N. Hertel
U.S. House OF Representatives
The Honorable Nancy Pelosi
U.S. House of Representatives
The Honorable James H. Scheuer
U.S. House of Representatives
The Honorable Gerry Sikorski
U.S. House of Representatives
The Honorable Robert C. Torricelli
U.S. House of Representatives
The Honorable Jolene Unsoeld
U.S. House of Representatives
1
c. congressional staff supporting the paragraphs 1 and 2 above:
Unclassified
Daniel P. Beard
Staff Director
Committee on Interior and Insular Affairs
U.S. House of Representatives
Nancy M. Carman
Staff Consultant
Committee on Foreign Affairs
U.S. House of Representatives
Carol Doherty
Senior Staff Assistant
Committee on Foreign Affairs
U.S. House of Representatives
Susan Fagan
Legislative Assistant
Office of Senator Symms
U.S. Senate
David B. Finnegan
Majority Counsel
Committee on Energy and Commerce
U.S. House of Representatives
Susan R. Fletcher
Specialist, Environmental Policy
Environment and Natural Resources Policy Division
Congressional Research Service
Library of Congress
Gamier Jaszczaks, Colonel, USAF
Air Force Liaison Office
U.S. House of Representatives
Roy Kienitz
Professional Staff
Committee on Environment and Public Works
U.S. Senate
Jessica Laverty
Minority Counsel
Committee on Energy and Commerce
U.S. House of Representatives
John A. Lawrence
Administrative Assistant
Office of Congressman Miller
U.S. House of Representatives
Eileen Lee
Staff Director
Subcommittee on Environment
Committee on Science, Space and Technology
U.S. House of Representatives
Kathleen McGinty
Legislative Assistant
Office of Senator Gore
U.S. Senate
Thomas O. Melius
Professional Staff for Fish and Wildlife
Committee on Merchant Marine and Fisheries
U.S. House of Representatives
Julia Moffett
Professional Staff
Committee on Interior and Insular Affairs
U.S. House of Representatives
Charly Moore
Counsel
Committee on Merchant Marine and Fisheries
U.S. House of Representatives
Frank Norton, Colonel, USA
Army Liaison Office
U.S. Senate
John Robert Nunnally, Major, USAF
Air Force Liaison Office
U.S. House of Representatives
Joseph C. Pallone, Major, USA
Army Liaison Office
U.S. Senate
Jan Paulk
Director
Office of Interparliamentary Services
Office of the Secretary of the Senate
U.S. Senate
Steven N. Polansky
Professional Staff
Committee on Foreign Relations
U.S. Senate
Marl A. Ronash
Press Secretary
Office of Senator Gore
U.S. Senate
Joan Teague Rose
Staff Assistant
Committee on Agriculture
U.S. House of Representatives
Dr. Artie L. Shelton, Colonel, USA
Army Liaison Office
U.S. Senate
Steven J. Shimberg
Minority Staff Director and Counsel
Committee on Environment and Public Works
U.S. Senate
Russell J. Wilson
Minority Staff Consultant
Subcommittee on Europe and the Middle East
Committee on Foreign Affairs
U.S. House of Representatives
Daniel Weiss
Director for Public Affairs
Committee on Interior and Public Affairs
U.S. House of Representatives
2. Following Congressional spouses will accompany the delegation:
Tipper Gore, Virginia Chafee, Nuala Pell, Harriett Pressler, Loretta
Symms, Wren Wirth, Adele Graham, Ann Blaz, Nadine Feighan, Paul Pelosi
and Emily Scheuer.
Question 14. How and what is the United States commitment to WEHAB
(Water, Energy, Health, Agriculture, and Biodiversity)? What specific
actions will we take in these areas?
Response. WEHAB refers to the acronym that Secretary General Kofi
Annan proposed as priority areas for the Johannesburg Summit. We
support all five of the areas identified: water, energy, health,
agriculture, and biodiversity. The development assistance programs run
by USAID, USDA, EPA and other Federal agencies clearly reflect an
emphasis in these areas, as a survey prepared by USAID with input from
over 15 U.S. agencies indicates. Please see the attached document,
``Working for a Sustainable World: Government Initiatives to Promote
Sustainable Development.''
Question 15. The United States, with other nations, has subscribed
to the UN's Millennium Development Goals on the alleviation of poverty,
access to safe drinking water, health and education, etc. But in the
preparatory meetings leading up to WSSD, the United States has been
isolated in remaining resolutely opposed to international efforts to
set out how these Millennium Development Goals are to be achieved. Why
is there a gap. between rhetoric and reality?
Response. The United States strongly supports efforts to implement
the internationally agreed Millennium Development goals. In our view,
based on our 60 years of development experience, partnerships are the
most effective way to implement those goals. The United States has
taken the lead in pursuing partnerships and pushing this effort
forward. We hope that other countries will join us in focusing on the
implementation of the Millennium Development Goals. We have prepared a
compendium of success stories in water and energy, for example, which
details how partnerships in these sectors has led to concrete, on-the-
ground results improving the lives of individuals. (Please see the
attachment referred to in question 14). We have emphasized this view
throughout the preparatory process leading up to WSS]J.
Question 16. To what extent, financially or otherwise, will the
U.S. Government support President Mbeki's New Economic Partnership for
African Development (NEPAD)?
Response. NEPAD, the New Partnership for Africa's Development, was
adopted by African heads of State in October 2001. The United States
and others have welcomed NEPAD for its African origins and emphasis on
good economic and political governance, including peer review and
monitoring. The real test of NEPAD will be whether the bold rhetoric is
reflected in concrete action and change. The objectives set out in
NEPAD are consistent with the President's Compact for Development
initiative, which emphasizes aid effectiveness through performance-
based development assistance, accountability, measurable results, and
local ownership.
In response to NEPAD, the United States and its G-8 partners
developed an Action Plan for Africa in which we committed to enter into
enhanced partnership, including providing additional resources, with
countries whose performance reflects the NEPAD commitments.
Specifically, our efforts will focus on countries that demonstrate a
commitment to good governance and the rule of law, investing in their
people, and pursuing policies that promote democracy, spur economic
growth, and alleviate poverty.
Question 17. How effective has the NAFTA environmental side
agreement the North American Agreement on Environmental Cooperation
(NAAEC)--been at protecting the environment? Where could it be
improved?
Response. The North American Agreement on Environmental Cooperation
(NAAEC) has proven to be a useful tool for protecting the environment.
Pursuant to the NAAEC, the Commission for Environmental Cooperation
(CEC) was established and has evolved into an effective international
environmental institution. The CEC consistently demonstrates the
benefits of continental cooperation in addressing the environmental
components of liberalized trade, serving as a complement to the NAFTA.
The implementation of the NAAEC has led to environmental
achievements' including:
The phase-out and reduction of toxic chemicals in North
America, including DDT;
The protection of biodiversity through the North American
Bird Conservation Initiative, Species of Common Conservation Concern,
North American Marine Protected Areas Network, and the bilateral U.S.-
Mexico Wildlife Without Borders program; the sharing of environmental
management information through the North American Biodiversity
Information Network; and
The development of micro-financing partnerships to
promote pollution prevention for small and medium-sized businesses; the
promotion of sustainable agricultural practices for small scale
producers; and the establishment by Mexico of a Pollutant Release and
Transfer Register.
The NAAEC provides members of the public with avenues for input
through several advisory bodies and a public submission process. As a
result, the CEC has become an important forum for cooperation,
including public dialog and participation.
Over time, the CEC's cooperative work program has significantly
expanded and, gained momentum in addressing a wide array of
environmental issues of continental concern. At the same time, the
CEC's resource base has remained constant since its inception in 1995
at $3 million from each country annually. As such, the effectiveness of
this unique international environmental institution might be vastly
improved by increased funding and/or more focused work on priority
activities. In another area, the parties are working to strengthen
communication and cooperation between trade and environment officials
as envisioned in NAAEC Article 10(6), which calls for cooperation
between the CEC and the NAFTA Free Trade Commission ``to achieve the
environmental goals and objectives of the NAFTA. . . .''.
Question 18. The United States has a good record with respect to
promoting the Export Credit Agencies in the Organization for Economic
Cooperation and Development. Where do things stand on ECAs?
Response. The United States has led the effort to strengthen
environmental guidelines for official Export Credit Agencies (ECA5),
both at the G-8 and in the Organization for Economic Cooperation and
Development (OECD) Working Party on Export Credits and Credit
Guarantees (ECG).
We have made progress, but the current OECD proposal, ``Common
Approaches to the Environment'', falls short of our objectives of
securing a clear commitment on the part of ECAs to adhere to a minimum
set of common environmental standards and credible transparency
provisions, modeled on current World Bank standards. While our Export-
Import Bank has had environmental guidelines since 1995, only a few of
our competitors have standards that even approach the quality of Em-Im
Bank's. Others in the OECD insist that ECAs focus now on implementing
the ``Common Approaches'' that some Members said they would implement
on a voluntary basis at the November 2001 meeting, and then review our
respective experiences in 2003. Although we see the 2003 review as an
important opportunity to apply lessons learned to strengthening and
standardizing guidelines for ECAs, we do not intend to let this matter
rest, and will continue to take every opportunity to make progress.
Question 19. National laws are not able to address the striking
decline in the world's fishing stocks and the overall biomass of the
world's oceans in that portion of the earth's surface beyond any
national jurisdiction. What commitments are you prepared to make
regarding the creation and enforcement of international standards to
prcitect this area of the high seas from unsustainable mining
activities and fishing practices, such as bottom trawling and unwanted
by-catch problems that cause massive destruction of marine life?
Response. Under this Administration, the Department of State is
taking a lead role in efforts to strengthen both the rules governing
the conservation and management of living marine resources in areas
beyond national jurisdiction, and the enforcement of those rules.
In recent years, a new international framework has been established
to accomplish this goal. Much of this work has focussed on global
instruments such as the U.N. Fish Stocks Agreement, the FAO Compliance
A9reement and the FAO Code of Conduct for Responsible Fishing.
Together, these and other recent agreements provide an effective
toolbox for addressing issues such as overfishing, bycatch of non-
target species, excess capacity of fishing fleets, lack of enforcement
of existing rules and other problem areas.
It is now up to the United States and other countries that support
the principles embodied in these agreements to work for their effective
implementation at the regional and sub-regional levels through existing
and newly created regional fisheries management organizations. This is
not an easy task. Most international fisheries organizations operate by
consensus, giving great weight to those who oppose serious efforts to
effect necessary changes. However, we are committed to making every
possible effort to promote sustainable fishing practices on fish stocks
in areas both within and beyond national jurisdiction.
One area where much work needs to be done is the area of bycatch
and discards of small fish as well as other non-target fish species and
other species including sea turtles and sea birds. Bycatch of sea birds
and sea turtles in commercial longline fisheries, in particular, are
issues that require more international attention. Again, this is
difficult in that affected fleets may oppose conservation efforts that
could adversely impact their operations. Because we have limited market
leverage or other ways to compel action, we must work with other
nations and their fishing industries to convince rather than coerce.
Industry involvement and cooperation will be vital if we are to
identify and introduce the technological solutions that will be
necessary to address these issues.
As part of this process, the Western Pacific Regional Fisheries
Management Council, based in Honolulu, will convene this November the
Second International Fishers Forum (IFF2). The conference will bring
together representatives from the fishing industry, governments and the
environmental and academic communities to address these and other
issues. We strongly support this effort and will look carefully at the
results of that meeting to identify possible next steps by Governments
to mitigate sea bird and sea turtle bycatch in longline fisheries.
As to mining activities on seabed areas beyond the jurisdiction of
any nation, the United States participates as an observer in the
International Seabed Authority (ISA). The ISA is a body created by the
United Nations Convention on the Law of the Sea, to which the United
States is not yet a party. The ISA has completed Regulations on
Prospecting and Exploration for Polymetallic Nodules, which include
measures to protect the marine environment from mining activities.
Through its role as observer, the United States has worked hard to
develop measures that are consistent with U.S. interests.
Question 20. One of the significant outcomes of the Rio Earth
Summit was the U.N. Framework Convention on Climate Change, which
President George Herbert Walker Bush signed and which the U.S. Senate
subsequently ratified unanimously in a voice vote.' The Kyoto Protocol
gives effect to the objectives agreed to in the Climate Convention, and
it is likely to enter into force sometime this year, perhaps at WSSD.
The current Administration has said it does not support the Kyoto
Protocol'. Nevertheless, the United States is still a Party to the
Climate Convention. At the hearing, Mr. Connaughton admitted that the
United States has not fulfilled its commitments to report to the United
Nations on policies and measures to achieve 1990 levels of emissions.
What steps will the Administration take to rectify this noncompliance?
Response. The United States is in compliance with its commitments
to report on its policies and measures under Article 4 of the
Convention. The United States has submitted detailed information on our
policies and measures, in accordance with the procedures under the
Convention. Most recently, policies and measures are' detailed in the
U.S. Climate Action Report, the third National Communication from. the
United States to the Convention, submitted in May 2002. Concerning the
non-binding ``aim'' of returning emissions to their 1990 levels, this
aim refers to the year 2000, not the time period beyond 2000.
Question 21. Please explain how the Administration's policies on
climate change are consistent with our commitments under and the spirit
of the United Nations Framework Convention on Climate Change.
Response. The Framework Convention's commitments relate principally
to:
Support for research and systematic observation;
Promotion of education, training, and public awareness;
Various forms of cooperation among Parties;
For Annex I Parties (which includes the United States),
adoption of policies and measures on the mitigation of climate change,
as well as reporting on such policies and measures;
For Annex II Parties (which includes the United States),
support for developing countries in terms of financial resources and
environmentally sound technologies.
The Administration's policies implement all applicable commitments
under the Convention. Most recently, the U.S. national communication,
submitted in May 2002, detailed U.S. policies and measures to address
climate change.
The Administration's climate change policies involve extensive
cooperation with other Convention Parties, are consistent with U.S.
commitments under the Convention, and are designed to be economically
sustainable. They represent a significant contribution to the global
effort to address climate change both under the UNFCCC and elsewhere.
The Administration's greenhouse gas intensity goal and
the measures we will be taking over the next 10 years is both ambitious
and reasonable, and is in line with past administration forecasts of
the domestic reductions likely to be achieved under the Kyoto Protocol,
and forecasts of other countries' efforts with respect to climate
change policies.
The Administration's commitment to climate change-related
research and development is unmatched in the world, and represents what
is truly a unique contribution toward a longterm climate change
approach that is consistent with sustainable development. The
President's National climate Change Technology Initiative confirms
America as the leader in technology and innovation within the climate
change area. The President's fiscal year 2003 budget proposal dedicates
nearly $1.8 billion to fund basic scientific research on climate change
and $1.3 billion to fund research on advanced energy and carbon
sequestration technologies. The Administration has substantially
increased funding for climate-related technical assistance to
developing countries.
Overall, the President's fiscal year 2003 budget seeks $4.5 billion
in total climate spending--an increase of nearly $700 million. To the
extent that there could be said to be a ``spirit'' of the Convention,
the Administration's efforts are fully compatible with that spirit.
Question 22. In view of the recent EPA study that substantiated the
fact' that global warming is occurring, and the even more recent study
by Alaskan scientists published in the Washington Post on Friday, July
19, 2002 that the Alaskan glaciers are melting at over twice the rate
previously supposed, and the very real national security interest that
the United States has in ceasing its dependence on foreign oil, will
this Administration commit at the WSSD to increase its international
cooperation to reduce the generation of greenhouse gases?
Response. The Secretary General of the United Nations has outlined
five priority areas for the Summit: water and sanitation, energy,
health, agriculture, and biodiversity. The United States is actively
pursuing concrete initiatives to the Summit that are in line with these
priorities, namely on water, agriculture, health, energy, oceans and
forests. Climate change is not one of the Summit's priority areas,
because the U.N. Framework Convention on Climate Change serves as the
internationally agreed forum for addressing climate change. The
Administration is pursuing ambitious steps to address climate change
domestically, and is actively engaging in cooperative activities with
countries around the world. For example, the President's plan seeks to
continue the process of developing new technologies while nurturing the
growth' of the economy. To this end, the President is creating the
National Climate Change Technology Initiative, which will confirm
America as the leader in technology and innovation within the climate
change area. Furthermore, the President's fiscal year 2003 budget
proposal dedicates $1.7 billion to fund basic scientific research on
climate change and $1.3 billion to fund research on advanced energy and
sequestration technologies. Overall, the President's fiscal year 2003
budget seeks $4.5 billion in total climate spending--an increase of
nearly $700 million. This level of commitment is unmatched in the
world.
Question 23. Has the United States or its representatives,
officially or unofficially, discouraged countries from bringing climate
change initiatives or issues to the World Summit for consideration?
Response. The United States has not discouraged countries from
bringing climate change initiatives or issues to the World Summit on
Sustainable Development. The United States delegation has engaged
constructively on a substantial amount of text on a variety of climate
change issues occurring in the Plan of Implementation. Most of the
climate change-related text in the draft Plan of Implementation has
been agreed.
Several delegations have put forward textual proposals that have
the effect of asking the United States to endorse the Kyoto Protocol,
or to take on new climate-related commitments in the WSSD. The United
States does not support the Kyoto Protocol', and we have indicated to
those delegations that we cannot support text that is contrary to our
national position. The United States also has not agreed to additional
climate change commitments at WSSD because the internationally agreed
forum for negotiating climate change commitments is the U.N. Framework
Convention on Climate Change. The Eighth Conference of the Parties to
the Convention (COP-8) will take place in October 23--November 1, 2002.
Question 24. Throughout the process, many governments have
complained that the United States has turned a blind ear/eye to Rio.
The Secretary General thinks that recognition of the Rio Principles
will be key for successful implementation in Johannesburg. How will we
recognize and implement the ``spirit of'' the Rio Principles?
Response. We strongly support the principles of Rio, and would like
to see these principles reaffirmed within the Johannesburg Plan of
Action.
Question 25. What is the Administration's position on the Corporate
Accountability Convention that many non-governmental organizations have
called for?
Response. We strongly support efforts to promote corporate
responsibility.
We believe such efforts are best accomplished at the national level
through a combination of government regulations and oversight along
with voluntary corporate standards and practices implemented by the
public sector, elected officials, and the private sectors in respective
countries, not by a new multilateral treaty negotiation.
Question 26. The President has announced that he will ask Congress
for an extra $5 billion in overseas aid. Right now., the United States
spends about 0.1 percent of its GDP on aid--the lowest percentage of
any industrial country and below the average of 0.39 percent. Even with
the increase, we'll still be the lowest in the world. Why is that?
Response. Excluding the Administration's new commitment of $5
billion for the Millennium Challenge Account, Official Development
Assistance is being increased by 10 percent in fiscal year 2002. If the
Administration's fiscal year 2003 budget request is approved, funding
for HIV/AIDS over the past 2 years will have increased by 73 percent,
funding for education will have increased by 65 percent and funds
focused on Sub-Saharan Africa will have increased by 30 percent,
reaching $1 billion for the first time. In our view, how funds are
spent is more important than increased funding, which represents only
part of solution to address sustainable development. The Administration
believes that' assistance is most effective when it reinforces peace
and stability, domestic governance, investments in people through
health and education and private sector development.
______
Investing in Health: Fighting Infectious Disease for Sustainable
Development
key action
The Bush Administration is building upon recent announcements of
efforts to combat HIV/AIDS, tuberculosis, and malaria.
In June, President Bush announced a new $500 million
Mother-and-Child HIV Prevention Initiative for Africa and the
Caribbean,
The U.S. pledge of $500 million to the Global Fund to
Fight HW/AIDS, Tuberculosis, and Malaria represents approximately one-
fourth of all commitments to date.
Goal: To have, by 2015, halted, and begun to reverse, the spread of
HP//AIDS, the scourge of malaria and other major diseases that afflict
humanity. (United Nations Millennium Declaration)
Description: This multi-year initiative will:
Enhance technical assistance for Global Fund application
development and project implementation.
Strengthen surveillance and monitoring, research,
prevention, and care activities.
Expand efforts to combat mother-to-child transmission of
HIV/AIDS.
Pursue global partnerships and increased investment in
fighting HP//AIDS, TB, and Malaria.
Resources
U.S. resources for international HIV/AIDS, tuberculosis, and
malaria, including meeting the President's pledge to the Global Fund
are:
$1.1 billion committed in fiscal year 2002
? $1.2 billion requested for fiscal year 2003
Partners
The United States works with a wide array of partners including
governments, international organizations, private corporations,
foundations, faith-based groups and non-governmental organizations.
South Africa Housing Initiative
key action
?The United States will commit $15 million in support of the
construction of 90,000 homes in South Africa over the next 5 years.
This initiative, announced by the United States Overseas Private
Investment Corporation (OPIC), builds on a 10-year legacy of
strengthening housing finance for South Africa's poor begun by the
United States Agency for International Development (USAID).
Home ownership and community building are inextricably linked.
According to the National Department of Housing of South Africa, one of
the factors contributing to the deficit in construction of low-income
housing is insufficient sources of construction financing, particularly
for middle-to low-income wage earners.
Under the South Africa Housing Initiative, construction financing
will be made available for contractors constructing homes for middle-to
low-income families. Under this Initiative, a for-profit U.S. sponsor
will work with a South African Bank which, in turn, will be able to
lend the equivalent of $20 million to the NTJRCHA Equity Services
(NES), a for-profit entity operating under the National Urban Housing
Association (NURCHA) of South Africa.
The South Africa Housing Initiative is expected to stimulate South
Africa's construction sector through loans to for-profit builders,
contractors, and sub-contractors, and to efficiently expand employment,
skills, and training in an essential sector of the economy of South
Africa.
Over the past 10 years, USAID has underwritten $90 million in
private sector loans to enable South African banks to make available
$250 million in housing loans to benefit 110,000 needy households.
USAID has also financed considerable urban infrastructure (water,
sewers, and roads) to enable the construction of new neighborhoods. The
new OPIC initiative broadens this support for the transition of middle-
to low-income households to homeownership and so contributes to long-
term sustainable development for South Africa. Moreover, the delivery
of potable water through the construction of new homes and the
establishment of new housing communities for 90,000 households and
almost 500,000 South Africans will contribute to improved health and
achievement of Millennium Declaration goals.
Resources
The United States will commit $15 million in support of
this important initiative.
Oceans
White Water to Blue Water. This initiative, involving U.S.
Government agencies, the UK, France, and Spain, Caribbean governments,
the Caribbean Environment Program, other international organizations,
non-governmental organizations, and the private sector, emphasizes a
cross-sectoral approach to ecosystem management beginning with upstream
sectors (watersheds, inland forests, agricultural areas, and population
centers) and extending through wetlands, mangrove swamps and coral
reefs into the ocean. The initiative aims to improve capabilities of
coastal States to manage coastal-marine ecosystems and to promote
regional coordination among the partners to make best use of resources.
The initial focus will be on the Wider Caribbean region.
Geographic Information and Learning
Geographic Information for Sustainable Development. This
initiative brings together U.S. Government agencies, non-governmental
organizations, the private sector, and academia to improve the quality
and availability of data needed to understand better and monitor the
environment. Recent applications of data from satellite earth
observation systems, the Global Positioning System, Geographic
Information Systems, and data base management can help decisionmakers
address sustainable development problems in Africa, including food
security, sustainable' agriculture, natural resource management,
disaster mitigation, and poverty alleviation. More than 100 GISD-
related projects are currently underway In Africa. The initiative
already has funded 15 projects in the areas of Upper Niger, East
African Great Lakes, Kenya-Tanzania coast, and the Limpopo-Zambezi
Basin.
My Community, Our Earth. This partnership involves
partners such as the U.S. Department of Agriculture, the National
Geographic Society, the Association of American Geographers, the
Environmental Systems Research Institute (a geographic information
system and mapping company), and the U.N. Environmental Programme. The
partnership is using maps, images, and graphs to help secondary,
college, and university students worldwide learn about sustainable
development issues such as biodiversity, deforestation, pollution, food
production, fresh water supply, health, rural development, and
urbanization. It aims to increase awareness about the value of
geographic information systems technology, especially satellite images.
Nearly 500 volunteer mentors have registered to help over 2000 students
from more than 90 countries develop projects.
Biodiversity
Shade Coffee. This partnership helps small-to medium-
scale coffee producers produce more profitable, high-quality coffees
(organic, shade-grown, or ``Bird Friendly'' coffees), thereby promoting
conservation while meeting rural development needs. The Commission for
Environmental Cooperation, which is supported by the United States,
Canada, and Mexico, is facilitating establishment of a North American
sustainable agriculture debt facility that would make strategic credit
guarantees/interventions to enhance the ability of small-scale
producers groups, conservation groups, and private investors to
collaborate more effectively at the local and international levels.
Shade Coffee partners include the U.S. Agency for International
Development (USAID), U.S. Department of the Interior, U.S. Department
of Agriculture, the Smithsonian Institution's Migratory Bird Center,
Conservation International, Rainforest Alliance, Specialty Coffee
Association of America, and Starbucks Coffee.
Invasive Alien Species. This initiative aims to
understand the vectors and processes by which invasive alien species
are introduced and to develop mechanisms for detection, rapid response,
and mitigation. Partners include the governments of Australia, New
Zealand, Norway, and South Africa; the Global Invasive Species Program;
the U.S. Departments of Interior, Agriculture, Commerce, and State; the
Environmental Protection Agency; USAID; the Smithsonian. Institution;
many U.S. universities; State and local management authorities; and
non-governmental organizations.
Biological Diversity Informatics. This partnership seeks
to develop and expand availability of user-friendly, internet-based
access data that will allow users to link, integrate, analyze, and
visualize existing data and ongoing research pertaining to species
distribution. Partners include the U.S. National Invasive Species
Council, Global Diversity Information Facility, Inter-American
Biodiversity Information Network, North American Biodiversity
Information Network, U.S. Department of the Interior, Smithsonian
Institution, the Universities of California and Kansas, Conservation
International, and the International Union for the Conservation of?
Nature and Natural Resources.
Agriculture and Natural Resources
Building-a Partnership for Global Exchange of
Conservation Stewardship Practices. This partnership seeks to build
capacity in agriculture and natural resource conservation and
stewardship practices for sustainable agriculture and forest and
watershed management. A worldwide network will facilitate global peer-
to-peer learning and exchanges for short-term, on-the-ground,
community-and watershed-based activities, such as integrated land,
water and coastal management; land restoration and rehabilitation;
individual and community capacity building; and enterprise development.
This public/private partnership, initiated by the U.S. Department of
Agriculture, will increase the application of agriculture and natural
resource conservation practices, exchange of integrated resource
management approaches, and community participation in local
decisionmaking.
Principles of Sound Science in Decision-Making
Strengthening Science-Based Decision-Making. This
partnership brings together the Environmental Protection Agency, the
U.S. National Academies of Science, the American Chemistry Council, and
others in an effort to develop and strengthen linkages between science
and decisionmakers in developing countries so that policy decisions can
be based on the best available knowledge and so that research
priorities can take into account the needs of decisionmakers.
Health
Netmark: A Public-Private Partnership for Sustainable
Malaria Prevention. This partnership, involving USAIr, works with
country governments and the commercial private sector to promote
effective use of insecticide-treated bednets for the prevention of
malaria. At the heart of Netmark is an innovative use of public-sector
funds to reduce and eliminate the barriers to expanded commercial
investment in the manufacture and distribution of insecticide-treated
bednets. Netmark activities are underway in Ghana, Nigeria, Senegal,
and Zambia and there are plans to expand the partnership to other
countries in Africa and elsewhere.
Controlling Tuberculosis in High HIV Prevalence
Populations. Under the new WHO/ Joint U.N. Programme on HIV/AIDS
strategic framework to decrease the burden of the intersecting
epidemics of tuberculosis and HP//AIDS, the Uni?ed States and the
government of Japan will work with partners to improve coordination on
TB prevention and control (intensified case-finding and cure) and
interventions against HIV (and therefore indirectly against
tuberculosis).
Universal Flour Fortification. This public-private
partnership seeks to replicate a successful iodized salt fortification
model and address selected major remaining micronutrient deficiencies
through fortification of flour with iron, folic acid, and other
appropriate micronutrients. The partnership involves the U.S.
Departments of Health and Human Services and Agriculture; the
Australian, Canadian and U.S. Wheat Boards; the North American Millers'
Association; the North American Grain Exports Association; and others.
Health Promotores. This partnership will share
experiences and best models related to community health outreach and
education using lay community members in underserved areas. The
promotores concept derived from Mexico and Latin American countries and
is currently being pursued in U.S.-Mexico border communities. Partners
include the U.S. Department of Health and Human Services' Health
Resources and Services Administration, Environmental Protection Agency,
the government of Mexico, and the University of Arizona.
Children's Environmental Health Indicators. This
initiative proposes the creation of an international forum of
governments, U.N. agencies, intergovernmental and nongovernmental
organizations, the private sector, and communities to advance a global
effort to create children's environmental health indicators. This may
involve proposing modifications to the existing data collection surveys
in the U.N. system to incorporate children's environmental health,
which may include developing, testing, and promoting the use of
indicators.
Education
Africa Education Initiative. This Presidential
initiative, which was announced in June 2002, will provide $200 million
over the next 5 years to train more than 160,000 new teachers and
provide in-service training for more than 260,000 existing teachers in
Africa, partner with historically black colleges and universities in
America to provide 4.5 million more textbooks and other learning tools
for children in Africa, provide 250,000 scholarships for African girls,
and increase the role of parents in their children's education by
working to make school systems more transparent and open to reforms
from parents.
Global Food for Education. This multilateral school
feeding pilot program may help as many as seven million school
children, especially girls. The 2002 Farm Bill provides $100 million in
fiscal year 2003 to continue the pilot program. The United States is
reviewing the effectiveness and cost-effectiveness of the program in
meeting its educational and food aid objectives.
Sustainable Tourism
Vilanculos Coastal Wildlife Sanctuary. The Overseas
Private Investment Corporation is helping to finance this $10 million
coastal and wildlife eco-tourism project in Mozambique's Bazaruto
Archipelago. Backed by the Global Environmental Facility, the
International Finance Corporation, and the International Union for the
Conservation of Nature and Natural Resources, the Sanctuary has
followed world standards with regard to social and environmental
issues. The project will provide economic development from tourism and
job creation, and community development, including a health clinic,
school, and housing.
Transport
Nacala Port and Railway Network. The Overseas Private
Investment Corporation will provide financial assistance up to $35
million to a U.S. project sponsor to develop and rehabilitate the
railway corridor through Malawi and Mozambique and to refurbish the
exiting port at Nacala. This will provide a less expensive alternative
to Durban, South Africa, for moving goods to and from landlocked
countries and enhance agricultural productivity and exports by reducing
transport costs.
__________
Statement of James L. Connaughton, Chairman, White House Council on
Environmental Quality
Mr. Chairmen, Senator Smith, Senator Lugar and Members of the
Committee: I appreciate the opportunity to appear before the Committee
today to discuss the Bush Administration's strategy to address the
important, long-term, and highly complex challenge of global climate
change. I am pleased to share this panel with my colleague Mr. Turner.
President Bush has committed the Nation to ambitious, focused and
meaningful goals, programs and initiatives that provide a sensible and
constructive path forward. The President's strategy is predicated on
ensuring the strength and growth of the American economy, building on
our nation's tremendous and demonstrated record of leadership in
science and the promise of continued American technological innovation.
As the President stated over a year ago: ``We will act, learn, and act
again, adjusting our approaches as science advances and technology
evolves.'' He elaborated on this point this past February: ``[G]lobal
climate change presents a different set of challenges and requires a
different strategy [from policies designed to reduce air pollution].
The science is more complex, the answers are less certain, and the
technology is less developed. So we need a flexible approach that can
adjust to new information and new technology.'' The flexible path
toward long term progress that I will outline for you today sharply
contrasts with the view of some that the only acceptable policy
approach is near term, legislated restrictions that will needlessly
hurt our economy and cost American jobs.
The President committed the Nation to an immediate goal of reducing
America's greenhouse gas emissions relative to the size of our economy
by 18 percent in the next 10 years. This will set America on a path to
slow the growth of our greenhouse gas emissions and, if science
justifies, to stop and then reverse the growth of emissions. I would
emphasize that achieving this ambitious, yet realistic, national goal
will require a sustained commitment and significant investment and
effort from our nation's farmers, small businesses, workers,
industries, and citizens that rivals the hard gains in efficiency and
productivity we have earned over the last several decades.
To achieve this goal, the Administration is actively engaged and
moving forward on many fronts, looking at every sector of our economy,
with the recognition that meaningful progress depends on the
development and deployment of new technology. With the continued
support of Congress, we are advancing climate science, developing and
promoting energy efficiency, conservation, and sequestration
technologies and practices, pursuing near term greenhouse gas
mitigation programs and expanding international cooperation.
The President has reaffirmed America's commitment to the goal of
stabilizing atmospheric greenhouse gas concentrations at a level that
will prevent dangerous interference with the climate. At the same time,
the President noted that given current scientific uncertainties, no one
knows what that level is. This underscores the importance of the
President's focus on science and technology.
The President has called for nearly $700 million in additional
funding for the Federal Government's commitment to climate change in
Fiscal Year 1903--a 17 percent increase from last year--to support a
$4.5 billion program of research on climate science and energy
technology, mitigation incentives and programs, and international
technology transfer and outreach. This commitment is unmatched in the
world. The President's recent Report to Congress on Federal Climate
Change Expenditures details the numerous programs that this funding
will support. And there is a Cabinet-level effort to bring more
effective, high level management and focus to this significant
investment of public resources.
Importantly, the President's request includes $555 million in clean
energy tax incentives, the first part of a $4.6 billion commitment over
the next 5 years, reaching $7.1 billion over the next 10 years. These
incentives will spur investments in and purchases of renewable energy--
including solar, wind, and biomass--as well as advanced hybrid and fuel
cell vehicles, cogeneration, and landfill gas conversion. We also are
promoting clean coal technology, as well as nuclear power--which
produces no greenhouse gas emissions--and are working to safely improve
fuel economy for our cars and trucks. And we are advancing the prospect
of breakthrough technologies, such as the promise of zero-emission fuel
cell vehicles through the Department of Energy's Freedom Car
Initiative.
Under the recently enacted Farm bill and existing authorizations,
we will invest up to $47 billion in the next decade for conservation on
our farms and forest lands. Not only will this partnership with farmers
and small land owners help protect the water and air, and secure and
enhance habitat for wildlife, it will also provide opportunities to
store significant quantities of carbon in trees and the soil, and
promote other activities to mitigate greenhouse gas emissions.
We also are making substantial progress on the effort to create
world-class standards for measuring and registering greenhouse gas
emissions reductions, with organizations receiving transferable credits
for the reductions in emissions they secure. At the same time, we are
making progress on the President's challenge to businesses to further
reduce their emissions. EPA's Climate Leaders Program is well underway.
We look forward to seeing new commitments and even greater reductions.
These are simply a few significant examples of more than 60 Federal
programs--some mandatory, some incentive-based, some voluntary--that
will help to slow the growth in U.S. greenhouse gas emissions over the
next decade and beyond.
The President's strategy has also created a new framework for
expanding international cooperation. We are investing $25 million in
climate observation systems in developing countries, increasing funding
for tropical forest conservation to $50 million, and providing $178
million for the Global Environmental Facility next year, which includes
a substantial $70 million payment for arrears incurred during the prior
administration. The President's fiscal yea4r 2003 budget also requests
$156 million in funding for USAID climate change programs. And in the
past year alone, the Administration has entered into bilateral
agreements with Japan, Australia, Canada, Italy, the European Union,
CONCAUSA, China and India on climate change science, energy and
sequestration technology, and policy approaches.
The President's climate change strategy is the product of an
ongoing, combined working group of the National Security Council, the
Domestic Policy Council and the National Economic Council. Our actions
have been and will continue to be guided by the six principles that the
President outlined last June:
1. Consistency with the long-term goal of stabilizing
concentrations of greenhouse gases in the atmosphere at a level that
will prevent dangerous interference with the climate system,
recognizing that we currently do not know what that level is;
2. Measured actions, as we learn more from science and build on it;
3. Flexibility to adjust to new information and take advantage of
new technology;
4. Ensuring continued economic growth and prosperity for the United
States and the world;
5. Pursuing market-based incentives and spurring technological
innovation; and
6. Global participation, including developing countries.
The Bush Administration's strategy for action and progress--a solid
policy framework, a meaningful national emissions reduction goal, and a
suite of policies to achieve that goal--is calibrated to the actual
state of scientific knowledge and guards against costly and misdirected
policy errors. Commentary that continues to equate action on climate
change with acceptance of the Kyoto Protocol ignores the bipartisan
record of opposition to its approach. The Kyoto Protocol would have
cost our economy up to $400 billion and caused the loss of up to 4.9
million jobs, risking the welfare of the American people and American
workers. And without the participation of the world's developing
countries, many of which will experience rapid growth in coming
decades, it represented an ineffective policy response to this global
challenge.
President Bush's philosophy--which ties our benchmark for progress
with economic growth--represents a careful balancing that promises
significant emissions reductions over the course of the next decade,
while preserving the strength of the American economy. Only sustained
economic growth, both here and abroad, will allow for the significant
new investments in energy and sequestration technologies that will be
needed to address this long term challenge.
Again, thank you for inviting me today. I would be pleased to
answer any questions that you may have and ask that the written
material accompanying my testimony be entered into the record.
Appendices
1. statement of president george bush (june 11, 2001)
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release June 11, 2001
president bush discusses global climate change
The Rose Garden
11:10 A.M. EDT
President George W. Bush. Good morning. I've just met with senior
members of my administration who are working to develop an effective
and science-based approach to addressing the important issues of global
climate change.
This is an issue that I know is very important to the nations of
Europe, which I will be visiting for the first time as President. The
earth's well-being is also an issue important to America. And it's an
issue that should be important to every Nation in every part of our
world.
The issue of climate change respects no border. Its effects cannot
be reined in by an army nor advanced by any ideology. Climate change,
with its potential to impact every corner of the world, is an issue
that must be addressed by the world.
The Kyoto Protocol was fatally flawed in fundamental ways. But the
process used to bring nations together to discuss our joint response to
climate change is an important one. That is why I am today committing
the United States of America to work within the United Nations
framework and elsewhere to develop with our friends and allies and
nations throughout the world an effective and science-based response to
the issue of global warming.
My Cabinet-level working group has met regularly for the last 10
weeks to review the most recent, most accurate, and most comprehensive
science. They have heard from scientists offering a wide spectrum of
views. They have reviewed the facts, and they have listened to many
theories and suppositions. The working group asked the highly respected
National Academy of Sciences to provide us the most up-to-date
information about what is known and about what is not known on the
science of climate change.
First, we know the surface temperature of the earth is warming. It
has risen by .6 degrees Celsius over the past 100 years. There was a
warming trend from the 1890's to the 1940's. Cooling from the 1940's to
the 1970's. And then sharply rising temperatures from the 1970's to
today.
There is a natural greenhouse effect that contributes to warming.
Greenhouse gases trap heat, and thus warm the earth because they
prevent a significant proportion of infrared radiation from escaping
into space. Concentration of greenhouse gases, especially
CO2, have increased substantially since the beginning of the
industrial revolution. And the National Academy of Sciences indicate
that the increase is due in large part to human activity.
Yet, the Academy's report tells us that we do not know how much
effect natural fluctuations in climate may have had on warming. We do
not know how much our climate could, or will change in the future. We
do not know how fast change will occur, or even how some of our actions
could impact it.
For example, our useful efforts to reduce sulfur emissions may have
actually increased warming, because sulfate particles reflect sunlight,
bouncing it back into space. And, finally, no one can say with any
certainty what constitutes a dangerous level of warming, and therefore
what level must be avoided.
The policy challenge is to act in a serious and sensible way, given
the limits of our knowledge. While scientific uncertainties remain, we
can begin now to address the factors that contribute to climate change.
There are only two ways to stabilize concentration of greenhouse
gases. One is to avoid emitting them in the first place; the other is
to try to capture them after they're created. And there are problems
with both approaches. We're making great progress through technology,
but have not yet developed cost-effective ways to capture carbon
emissions at their source; although there is some promising work that
is being done.
And a growing population requires more energy to heat and cool our
homes, more gas to drive our cars. Even though we're making progress on
conservation and energy efficiency and have significantly reduced the
amount of carbon emissions per unit of GDP.
Our country, the United States is the world's largest emitter of
manmade greenhouse gases. We account for almost 20 percent of the
world's man-made greenhouse emissions. We also account for about one-
quarter of the world's economic output. We recognize the responsibility
to reduce our emissions. We also recognize the other part of the
story--that the rest of the world emits 80 percent of all greenhouse
gases. And many of those emissions come from developing countries.
This is a challenge that requires a 100 percent effort; ours, and
the rest of the world's. The world's second-largest emitter of
greenhouse gases is China. Yet, China was entirely exempted from the
requirements of the Kyoto Protocol.
India and Germany are among the top emitters. Yet, India was also
exempt from Kyoto. These and other developing countries that are
experiencing rapid growth face challenges in reducing their emissions
without harming their economies. We want to work cooperatively with
these countries in their efforts to reduce greenhouse emissions and
maintain economic growth.
Kyoto also failed to address two major pollutants that have an
impact on warming: black soot and tropospheric ozone. Both are proven
health hazards. Reducing both would not only address climate change,
but also dramatically improve people's health.
Kyoto is, in many ways, unrealistic. Many countries cannot meet
their Kyoto targets. The targets themselves were arbitrary and not
based upon science. For America, complying with those mandates would
have a negative economic impact, with layoffs of workers and price
increases for consumers. And when you evaluate all these flaws, most
reasonable people will understand that it's not sound public policy.
That's why 95 members of the U.S. Senate expressed a reluctance to
endorse such an approach. Yet, America's unwillingness to embrace a
flawed treaty should not be read by our friends and allies as any
abdication of responsibility. To the contrary, my administration is
committed to a leadership role on the issue of climate change.
We recognize our responsibility and will meet it--at home, in our
hemisphere, and in the world. My Cabinet-level working group on climate
change is recommending a number of initial steps, and will continue to
work on additional ideas. The working group proposes the United States
help lead the way by advancing the science on climate change, advancing
the technology to monitor and reduce greenhouse gases, and creating
partnerships within our hemisphere and beyond to monitor and measure
and mitigate emissions.
I also call on Congress to work with my administration to achieve
the significant emission reductions made possible by implementing the
clean energy technologies proposed in our energy plan. Our working
group study has made it clear that we need to know a lot more.
The U.N. Framework Convention on Climate Change commences to
stabilizing concentrations at a level that will prevent dangerous human
interference with the climate; but no one knows what that level is. The
United States has spent $18 billion on climate research since 1990--
three times as much as any other country, and more than Japan and all
15 nations of the EU combined.
Today, I make our investment in science even greater. My
administration will establish the U.S. Climate Change Research
Initiative to study areas of uncertainty and identify priority areas
where investments can make a difference.
I'm directing my Secretary of Commerce, working with other
agencies, to set priorities for additional investments in climate
change research, review such investments, and to improve coordination
amongst Federal agencies. We will fully fund high-priority areas for
climate change science over the next 5 years. We'll also provide
resources to build climate observation systems in developing countries
and encourage other developed nations to match our American commitment.
And we propose a joint venture with the EU, Japan and others to
develop state-of-the-art climate modeling that will help us better
understand the causes and impacts of climate change. America's the
leader in technology and innovation. We all believe technology offers
great promise to significantly reduce emissions--especially carbon
capture, storage and sequestration technologies.
So we're creating the National Climate Change Technology Initiative
to strengthen research at universities and national labs, to enhance
partnerships in applied research, to develop improved technology for
measuring and monitoring gross and net greenhouse gas emissions, and to
fund demonstration projects for cutting-edge technologies, such as
bioreactors and fuel cells.
Even with the best science, even with the best technology, we all
know the United States cannot solve this global problem alone. We're
building partnerships within the Western Hemisphere and with other
like-minded countries. Last week, Secretary Powell signed a new
CONCAUSA Declaration with the countries of Central America, calling for
cooperative efforts on science research, monitoring and measuring of
emissions, technology development, and investment in forest
conservation.
We will work with the Inter-American Institute for Global Change
Research and other institutions to better understand regional impacts
of climate change. We will establish a partnership to monitor and
mitigate emissions. And at home, I call on Congress to work with my
administration on the initiatives to enhance conservation and energy
efficiency outlined in my energy plan, to implement the increased use
of renewables, natural gas and hydropower that are outlined in the
plan, and to increase the generation of safe and clean nuclear power.
By increasing conservation and energy efficiency and aggressively
using these clean energy technologies, we can reduce our greenhouse gas
emissions by significant amounts in the coming years. We can make great
progress in reducing emissions, and we will. Yet, even that isn't
enough.
I've asked my advisors to consider approaches to reduce greenhouse
gas emissions, including those that tap the power of markets, help
realize the promise of technology and ensure the widest-possible global
participation. As we analyze the possibilities, we will be guided by
several basic principles. Our approach must be consistent with the
long-term goal of stabilizing greenhouse gas concentrations in the
atmosphere. Our actions should be measured as we learn more from
science and build on it.
Our approach must be flexible to adjust to new information and take
advantage of new technology. We must always act to ensure continued
economic growth and prosperity for our citizens and for citizens
throughout the world. We should pursue market-based incentives and spur
technological innovation.
And, finally, our approach must be based on global participation,
including that of developing countries whose net greenhouse gas
emissions now exceed those in the developed countries.
I've asked Secretary Powell and Administrator Whitman to ensure
they actively work with friends and allies to explore common approaches
to climate change consistent with these principles. Each step we take
will increase our knowledge. We will act, learn, and act again,
adjusting our approaches as science advances and technology evolves.
Our administration will be creative. We're committed to protecting
our environment and improving our economy, to acting at home and
working in concert with the world. This is an administration that will
make commitments we can keep, and keep the commitments that we make.
I look forward to continued discussions with our friends and allies
about this important issue.
Thank you for coming.
______
2. policy book accompanying presidential statement (june 11, 2001)
3. statement of president george bush (february 14, 2002)
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release February 14, 2002
remarks by the president on climate change and clean air
National Oceanic and Atmospheric Administration
Silver Spring, Maryland
2:05 P.M. EST
The President: Thank you very much for that warm welcome. It's an
honor to join you all today to talk about our environment and about the
prospect of dramatic progress to improve it.
Today, I'm announcing a new environmental approach that will clean
our skies, bring greater health to our citizens and encourage
environmentally responsible development in America and around the
world.
Particularly, it's an honor to address this topic at NOAA, whose
research is providing us with the answers to critical questions about
our environment. And so I want to thank Connie for his hospitality and
I want to thank you for yours, as well. Connie said he felt kind of
like Sasha Cohen--I thought for a minute he was going to ask me to talk
to his mother on his cell phone.
I also want to tell you one of my favorite moments was to go down
to Crawford and turn on my NOAA radio to get the weather. I don't know
whether my guy is a computer or a person. But the forecast is always
accurate, and I appreciate that. I also want to thank you for your hard
work, on behalf of the American people.
I appreciate my friend, Don Evans's leadership. I've known him for
a long time. You're working for a good fellow, if you're working at the
Commerce Department, or at NOAA. And I want to thank Spence Abraham and
Christie Todd Whitman for their service to the country, as well. I've
assembled a fabulous Cabinet, people who love their country and work
hard. And these are three of some of the finest Cabinet officials I've
got.
I want to thank Jim Connaughton, who is the Chairman of the Council
on Environmental Quality. He's done a fabulous job of putting this
policy together, a policy that I'm about to explain. But before I do, I
also want to thank some Members of Congress who have worked with us on
this initiative. I want to thank Bob Smith and George Voinovich, two
United States senators, for their leadership in pursuing multi-
pollutant legislation; as well as Congressmen Billy Tauzin and Joe
Barton. And I want to thank Senator Chuck Hagel and Larry Craig for
their work on climate issues. These Members of Congress have had an
impact on the policies I am just about to announce.
America and the world share this common goal: we must foster
economic growth in ways that protect our environment. We must encourage
growth that will provide a better life for citizens, while protecting
the land, the water, and the air that sustain life.
In pursuit of this goal, my government has set two priorities: we
must clean our air, and we must address the issue of global climate
change. We must also act in a serious and responsible way, given the
scientific uncertainties. While these uncertainties remain, we can
begin now to address the human factors that contribute to climate
change. Wise action now is an insurance policy against future risks.
I have been working with my Cabinet to meet these challenges with
forward and creative thinking. I said, if need be, let's challenge the
status quo. But let's always remember, let's do what is in the interest
of the American people.
Today, I'm confident that the environmental path that I announce
will benefit the entire world. This new approach is based on this
common-sense idea: that economic growth is key to environmental
progress, because it is growth that provides the resources for
investment in clean technologies.
This new approach will harness the power of markets, the creativity
of entrepreneurs, and draw upon the best scientific research. And it
will make possible a new partnership with the developing world to meet
our common environmental and economic goals.
We will apply this approach first to the challenge of cleaning the
air that Americans breathe. Today, I call for new Clean Skies
legislation that sets tough new standards to dramatically reduce the
three most significant forms of pollution from power plants, sulfur
dioxide, nitrogen oxides and mercury.
We will cut sulfur dioxide emissions by 73 percent from current
levels. We will cut nitrogen oxide emissions by 67 percent. And, for
the first time ever, we will cap emissions of mercury, cutting them by
69 percent. These cuts will be completed over two measured phases, with
one set of emission limits for 2010 and for the other for 2018.
This legislation will constitute the most significant step America
has ever taken--has ever taken--to cut power plant emissions that
contribute to urban smog, acid rain and numerous health problems for
our citizens.
Clean Skies legislation will not only protect our environment, it
will prolong the lives of thousands of Americans with asthma and other
respiratory illnesses, as well as with those with heart disease. And it
will reduce the risk to children exposed to mercury during a mother's
pregnancy.
The Clean Skies legislation will reach our ambitious air quality
goals through a market-based cap-and-trade approach that rewards
innovation, reduces cost and guarantees results. Instead of the
government telling utilities where and how to cut pollution, we will
tell them when and how much to cut. We will give them a firm deadline
and let them find the most innovative ways to meet it.
We will do this by requiring each facility to have a permit for
each ton of pollution it emits. By making the permits tradable, this
system makes it financially worthwhile for companies to pollute less,
giving them an incentive to make early and cost effective reductions.
This approach enjoys widespread support, with both Democrats and
Republicans, because we know it works. You see, since 1995 we have used
a cap-and-trade program for sulfur dioxide pollution. It has cut more
air pollution, this system has reduced more air pollution in the last
decade than all other programs under the 1990 Clean Air Act combined.
And by even more than the law required. Compliance has been virtually
100 percent. It takes only a handful of employees to administer this
program. And no one had to enter a courtroom to make sure the
reductions happened.
Because the system gives businesses an incentive to create and
install innovative technologies, these reductions have cost about 80
percent less than expected. It helps to keep energy prices affordable
for our consumers. And we made this progress during a decade when our
economy, and our demand for energy, was growing.
The Clean Skies legislation I propose is structured on this
approach because it works. It will replace a confusing, ineffective
maze of regulations for power plants that has created an endless cycle
of litigation. Today, hundreds of millions of dollars are spent on
lawyers, rather than on environmental protection. The result is
painfully slow, uncertain and expensive programs on clean air.
Instead, Clean Skies legislation will put less money into paying
lawyers and regulators, and money directly into programs to reduce
pollution, to meet our national goal. This approach, I'm absolutely
confident, will bring better and faster results in cleaning up our air.
Now, global climate change presents a different set of challenges
and requires a different strategy. The science is more complex, the
answers are less certain, and the technology is less developed. So we
need a flexible approach that can adjust to new information and new
technology.
I reaffirm America's commitment to the United Nations Framework
Convention and its central goal, to stabilize atmospheric greenhouse
gas concentrations at a level that will prevent dangerous human
interference with the climate. Our immediate goal is to reduce
America's greenhouse gas emissions relative to the size of our economy.
My administration is committed to cutting our nation's greenhouse
gas intensity--how much we emit per unit of economic activity--by 18
percent over the next 10 years. This will set America on a path to slow
the growth of our greenhouse gas emissions and, as science justifies,
to stop and then reverse the growth of emissions.
This is the common sense way to measure progress. Our Nation must
have economic growth--growth to create opportunity; growth to create a
higher quality of life for our citizens. Growth is also what pays for
investments in clean technologies, increased conservation, and energy
efficiency. Meeting our commitment to reduce our greenhouse gas
intensity by 18 percent by the year 2012 will prevent over 500 million
metric tons of greenhouse gases from going into the atmosphere over the
course of the decade. And that is the equivalent of taking 70 million
cars off the road.
To achieve this goal, our Nation must move forward on many fronts,
looking at every sector of our economy. We will challenge American
businesses to further reduce emissions. Already, agreements with the
semiconductor and aluminum industries and others have dramatically cut
emissions of some of the most potent greenhouse gases. We will build on
these successes with new agreements and greater reductions.
Our government will also move forward immediately to create world-
class standards for measuring and registering emission reductions. And
we will give transferable credits to companies that can show real
emission reductions.
We will promote renewable energy production and clean coal
technology, as well as nuclear power, which produces no greenhouse gas
emissions. And we will work to safely improve fuel economy for our cars
and our trucks.
Overall, my budget devotes $4.5 billion to addressing climate
change--more than any other nation's commitment in the entire world.
This is an increase of more than $700 million over last year's budget.
Our Nation will continue to lead the world in basic climate and science
research to address gaps in our knowledge that are important to
decisionmakers.
When we make decisions, we want to make sure we do so on sound
science; not what sounds good, but what is real. And the United States
leads the world in providing that kind of research. We'll devote $588
million toward the research and development of energy conservation
technologies. We must and we will conserve more in the United States.
And we will spend $408 million toward research and development on
renewables, on renewable energy.
This funding includes $150 million for an initiative that Spence
Abraham laid out the other day, $150 million for the Freedom Car
Initiative, which will advance the prospect of breakthrough zero-
emission fuel cell technologies.
My comprehensive energy plan, the first energy plan that any
administration has put out in a long period of time, provides $4.6
billion over the next 5 years in clean energy tax incentives to
encourage purchases of hybrid and fuel cell vehicles, to promote
residential solar energy, and to reward investments in wind, solar and
biomass energy production. And we will look for ways to increase the
amount of carbon stored by America's farms and forests through a strong
conservation title in the farm bill. I have asked Secretary Veneman to
recommend new targeted incentives for landowners to increase carbon
storage.
By doing all these things, by giving companies incentives to cut
emissions, by diversifying our energy supply to include cleaner fuels,
by increasing conservation, by increasing research and development and
tax incentives for energy efficiency and clean technologies, and by
increasing carbon storage, I am absolutely confident that America will
reach the goal that I have set.
If, however, by 2012, our progress is not sufficient and sound
science justifies further action, the United States will respond with
additional measures that may include broad-based market programs as
well as additional incentives and voluntary measures designed to
accelerate technology development and deployment.
Addressing global climate change will require a sustained effort
over many generations. My approach recognizes that economic growth is
the solution, not the problem. Because a Nation that grows its economy
is a Nation that can afford investments and new technologies.
The approach taken under the Kyoto protocol would have required the
United States to make deep and immediate cuts in our economy to meet an
arbitrary target. It would have cost our economy up to $400 billion and
we would have lost 4.9 million jobs.
As President of the United States, charged with safeguarding the
welfare of the American people and American workers, I will not commit
our Nation to an unsound international treaty that will throw millions
of our citizens out of work. Yet, we recognize our international
responsibilities. So in addition to acting here at home, the United
States will actively help developing nations grow along a more
efficient, more environmentally responsible path.
The hope of growth and opportunity and prosperity is universal.
It's the dream and right of every society on our globe. The United
States wants to foster economic growth in the developing world,
including the world's poorest nations. We want to help them realize
their potential, and bring the benefits of growth to their peoples,
including better health, and better schools and a cleaner environment.
It would be unfair--indeed, counterproductive--to condemn
developing nations to slow growth or no growth by insisting that they
take on impractical and unrealistic greenhouse gas targets. Yet,
developing nations such as China and India already account for a
majority of the world's greenhouse gas emissions, and it would be
irresponsible to absolve them from shouldering some of the shared
obligations.
The greenhouse gas intensity approach I put forward today gives
developing countries a yardstick for progress on climate change that
recognizes their right to economic development. I look forward to
discussing this new approach next week, when I go to China and Japan
and South Korea. The United States will not interfere with the plans of
any Nation that chooses to ratify the Kyoto protocol. But I will intend
to work with nations, especially the poor and developing nations, to
show the world that there is a better approach, that we can build our
future prosperity along a cleaner and better path.
My budget includes over $220 million for the U.S. Agency for
International Development and a global environmental facility to help
developing countries better measure, reduce emissions, and to help them
invest in clean and renewable energy technologies. Many of these
technologies, which we take for granted in our own country, are not
being used in the developing world. We can help ensure that the
benefits of these technologies are more broadly shared. Such efforts
have helped bring solar energy to Bangladesh, hydroelectric energy to
the Philippines, geothermal electricity to Kenya. These projects are
bringing jobs and environmental benefits to these nations, and we will
build on these successes.
The new budget also provides $40 million under the Tropical Forest
Conservation Act to help countries redirect debt payments toward
protecting tropical forests, forests that store millions of tons of
carbon. And I've also ordered the Secretary of State to develop a new
initiative to help developing countries stop illegal logging, a
practice that destroys biodiversity and releases millions of tons of
greenhouse gases into the atmosphere.
And, finally, my government is following through on our commitment
to provide $25 million for climate observation systems in developing
countries that will help scientists understand the dynamics of climate
change.
To clean the air, and to address climate change, we need to
recognize that economic growth and environmental protection go hand in
hand. Affluent societies are the ones that demand, and can therefore
afford, the most environmental protection. Prosperity is what allows us
to commit more and more resources to environmental protection. And in
the coming decades, the world needs to develop and deploy billions of
dollars of technologies that generate energy in cleaner ways. And we
need strong economic growth to make that possible.
Americans are among the most creative people in our history. We
have used radio waves to peer into the deepest reaches of space. We
cracked life's genetic code. We have made our air and land and water
significantly cleaner, even as we have built the world's strongest
economy.
When I see what Americans have done, I know what we can do. We can
tap the power of economic growth to further protect our environment for
generations that follow. And that's what we're going to do.
Thank you.
4. policy book accompanying presidential statement (february 14, 2002)
executive summary
``Addressing global climate change will require a sustained effort,
over many generations. My approach recognizes that sustained economic
growth is the solution, not the problem--because a Nation that grows
its economy is a Nation that can afford investments in efficiency, new
technologies, and a cleaner environment.''
President George W. Bush.
The President announced a new approach to the challenge of global
climate change. This approach is designed to harness the power of
markets and technological innovation. It holds the promise of a new
partnership with the developing world. And it recognizes that climate
change is a complex, long-term challenge that will require a sustained
effort over many generations. As the President has said, ``The policy
challenge is to act in a serious and sensible way, given the limits of
our knowledge. While scientific uncertainties remain, we can begin now
to address the factors that contribute to climate change.''
While investments today in science will increase our understanding
of this challenge, our investments in advanced energy and sequestration
technologies will provide the breakthroughs we need to dramatically
reduce our emissions in the longer term. In the near term, we will
vigorously pursue emissions reductions even in the absence of complete
knowledge. Our approach recognizes that sustained economic growth is an
essential part of the solution, not the problem. Economic growth will
make possible the needed investment in research, development, and
deployment of advanced technologies. This strategy is one that should
offer developing countries the incentive and means to join with us in
tackling this challenge together. Significantly, the President's plan
will:
Reduce the Greenhouse Gas Intensity of the U.S. Economy
by 18 Percent in the Next Ten Years. Greenhouse gas intensity measures
the ratio of greenhouse gas (GHG) emissions to economic output. This
new approach focuses on reducing the growth of GHG emissions, while
sustaining the economic growth needed to finance investment in new,
clean energy technologies. It sets America on a path to slow the growth
of greenhouse gas emissions, and--as the science justifies--to stop and
then reverse that growth:
In efficiency terms, the 183 metric tons of emissions per
million dollars GDP that we emit today will be lowered to 151 metric
tons per million dollars GDP in 2012.
Existing trends and efforts in technology improvement
will play a significant role. Beyond that, the President's commitment
will achieve 100 million metric tons of reduced emissions in 2012
alone, with more than 500 million metric tons in cumulative savings
over the entire decade.
This goal is comparable to the average progress that
nations participating in the Kyoto Protocol are required to achieve.
Substantially Improve the Emission Reduction Registry.
The President directed the Secretary of Energy, in consultation with
the Secretary of Commerce, the Secretary of Agriculture, and the
Administrator of the Environmental Protection Agency, to propose
improvements to the current voluntary emission reduction registration
program under section 1605(b) of the 1992 Energy Policy Act within 120
days. These improvements will enhance measurement accuracy, reliability
and verifiability, working with and taking into account emerging
domestic and international approaches.
Protect and Provide Transferable Credits for Emissions
Reduction. The President directed the Secretary of Energy to recommend
reforms to ensure that businesses and individuals that register
reductions are not penalized under a future climate policy, and to give
transferable credits to companies that can show real emissions
reductions.
Review Progress Toward Goal and Take Additional Action if
Necessary. If, in 2012, we find that we are not on track toward meeting
our goal, and sound science justifies further policy action, the United
States will respond with additional measures that may include a broad,
market-based program as well as additional incentives and voluntary
measures designed to accelerate technology development and deployment.
Increase Funding for America's Commitment to Climate
Change. The President's fiscal year 1903 budget seeks $4.5 billion in
total climate spending--an increase of $700 million. This commitment is
unmatched in the world, and is particularly notable given America's
focus on international and homeland security and domestic economic
issues in the President's fiscal year 1903 budget proposal.
Take Action on the Science and Technology Review. The
Secretary of Commerce and Secretary of Energy have completed their
review of the Federal Government's science and technology research
portfolios and recommended a path forward. As a result of their review,
the President has established a new management structure to advance and
coordinate climate change science and technology research.
The President has established a Cabinet-level Committee
on Climate Change Science and Technology Integration to oversee this
effort. The Secretary of Commerce and Secretary of Energy will lead the
effort, in close coordination with the President's Science Advisor. The
research effort will continue to be coordinated through the National
Science and Technology Council in accordance with the Global Change
Research Act of 1990.
The President's fiscal year 1903 budget proposal
dedicates $1.7 billion to fund basic scientific research on climate
change and $1.3 billion to fund research on advanced energy and
sequestration technologies.
This includes $80 million in new funding dedicated to
implementation of the Climate Change Research Initiative (CCRI) and the
National Climate Change Technology Initiative (NCCTI) announced last
June. This funding will be used to address major gaps in our current
understanding of the natural carbon cycle and the role of black soot
emissions in climate change. It will also be used to promote the
development of the most promising ``breakthrough'' technologies for
clean energy generation and carbon sequestration.
Implement a Comprehensive Range of New and Expanded
Domestic Policies, Including:
Tax Incentives for Renewable Energy, Cogeneration, and
New Technology. The President's fiscal year 1903 budget seeks $555
million in clean energy tax incentives, as the first part of a $4.6
billion commitment over the next 5 years ($7.1 billion over the next 10
years). These tax credits will spur investments in renewable energy
(solar, wind, and biomass), hybrid and fuel cell vehicles,
cogeneration, and landfill gas conversion. Consistent with the National
Energy Policy, the President has directed the Secretary of the Treasury
to work with Congress to extend and expand the production tax credit
for electricity generation from wind and biomass, to develop a new
residential solar energy tax credit, and to encourage cogeneration
projects through investment tax credits.
Business Challenges. The President has challenged
American businesses to make specific commitments to improving the
greenhouse gas intensity of their operations and to reduce emissions.
Recent agreements with the semi-conductor and aluminum industries and
industries that emit methane already have significantly reduced
emissions of some of the most potent greenhouse gases. We will build
upon these successes with new agreements, producing greater reductions.
Transportation Programs. The Administration is promoting
the development of fuel-efficient motor vehicles and trucks,
researching options for producing cleaner fuels, and implementing
programs to improve energy efficiency. The President is committed to
expanding Federal research partnerships with industry, providing
market-based incentives and updating current regulatory programs that
advance our progress in this important area. This commitment includes
expanding fuel cell research, in particular through the ``FreedomCAR''
initiative. The President's fiscal year 1903 budget seeks more than $3
billion in tax credits over 11 years for consumers to purchase fuel
cell and hybrid vehicles. The Secretary of Transportation has asked the
congressional leadership to work with him on legislation that would
authorize the Department of Transportation to reform the Corporate
Average Fuel Economy (CAFE) program, fully considering the recent
National Academy Sciences report, so that we can safely improve fuel
economy for cars and trucks.
Carbon Sequestration. The President's fiscal year 1903
budget requests over $3 billion--a $1 billion increase above the
baseline--as the first part of a 10-year (2002-2011) commitment to
implement and improve the conservation title of the Farm Bill, which
will significantly enhance the natural storage of carbon. The President
also directed the Secretary of Agriculture to provide recommendations
for further, targeted incentives aimed at forest and agricultural
sequestration of greenhouse gases. The President further directed the
Secretary of Agriculture, in consultation with the Environmental
Protection Agency and the Department of Energy, to develop accounting
rules and guidelines for crediting sequestration projects, taking into
account emerging domestic and international approaches.
Promote New and Expanded International Policies to
Complement Our Domestic Program. The President's approach seeks to
expand cooperation internationally to meet the challenge of climate
change, including:
Investing $25 Million in Climate Observation Systems in
Developing Countries. In response to the National Academy of Sciences'
recommendation for better observation systems, the President has
allocated $25 million and challenged other developed nations to match
the U.S. commitment.
Tripling Funding for ``Debt-for-Nature'' Forest
Conservation Programs. Building upon recent Tropical Forest
Conservation Act (TFCA) agreements with Belize, El Salvador, and
Bangladesh, the President's fiscal year 1903 budget request of $40
million to fund ``debt for nature'' agreements with developing
countries nearly triples funding for this successful program. Under
TFCA, developing countries agree to protect their tropical forests from
logging, avoiding emissions and preserving the substantial carbon
sequestration services they provide. The President also announced a new
agreement with the Government of Thailand, which will preserve
important mangrove forest in Northeastern Thailand in exchange for debt
relief worth $11.4 million.
Fully Funding the Global Environmental Facility. The
Administration's fiscal year 1903 budget request of $178 million for
the GEF is more than $77 million above this year's funding and includes
a substantial $70 million payment for arrears incurred during the prior
administration. The GEF is the primary international institution for
transferring energy and sequestration technologies to the developing
world under the United Nations Framework Convention on Climate Change
(UNFCCC).
Dedicating Significant Funds to the United States Agency
for International Development (USAID). The President's fiscal year 2003
budget requests $155 million in funding for USAID climate change
programs. USAID serves as a critical vehicle for transferring American
energy and sequestration technologies to developing countries to
promote sustainable development and minimize their GHG emissions
growth.
Pursue Joint Research with Japan. The U.S. and Japan
continue their High-Level Consultations on climate change issues. Later
this month, a team of U.S. experts will meet with their Japanese
counterparts to discuss specific projects within the various areas of
climate science and technology, to identify the highest priorities for
collaborative research.
Pursue Joint Research with Italy. Following up on a
pledge of President Bush and Prime Minister Berlusconi to undertake
joint research on climate change, the U.S. and Italy convened a Joint
Climate Change Research Meeting in January 2002. The delegations for
the two countries identified more than 20 joint climate change research
activities for immediate implementation, including global and regional
modeling.
Pursue Joint Research with Central America. The United
States and Central American Heads of Government signed the Central
American-United States of America Joint Accord (CONCAUSA) on December
10, 1994. The original agreement covered cooperation under action plans
in four major areas: conservation of biodiversity, sound use of energy,
environmental legislation, and sustainable economic development. On
June 7, 2001, the United States and its Central American partners
signed an expanded and renewed CONCAUSA Declaration, adding disaster
relief and climate change as new areas for cooperation. The new
CONCAUSA Declaration calls for intensified cooperative efforts to
address climate change through scientific research, estimating and
monitoring greenhouse gases, investing in forestry conservation,
enhancing energy efficiency, and utilizing new environmental
technologies.
NATIONAL GOAL
The President set a national goal to reduce the greenhouse gas
intensity of the U.S. economy by 18 percent over the next 10 years.
Rather than pitting economic growth against the environment, the
President has established an approach that promises real progress on
climate change by tapping the power of sustained economic growth.
The President's Yardstick--Greenhouse Gas Intensity--is a
Better Way to Measure Progress Without Hurting Growth. A goal expressed
in terms of declining greenhouse gas intensity, measuring greenhouse
gas emissions relative to economic activity, quantifies our effort to
reduce emissions through conservation, adoption of cleaner, more
efficient, and emission-reducing technologies, and sequestration. At
the same time, an intensity goal accommodates economic growth.
Reducing Greenhouse Gas Intensity by 18 Percent Over the
Next Ten Years is Ambitious but Achievable. The United States will
reduce the 183 metric tons of emissions per million dollars GDP that we
emit today to 151 metric tons per million dollars GDP in 2012. We
expect existing trends and efforts in technology improvement to play a
significant role. Beyond that, our commitment will achieve 100 million
metric tons of reduced emissions in 2012 alone, with more than 500
million metric tons in cumulative savings over the entire decade.
Focusing on Greenhouse Gas Intensity Sets America on a
Path to Slow the Growth of Greenhouse Gas Emissions, and--as the
Science Justifies--to Stop and Then Reverse That Growth. As we learn
more about the science of climate change and develop new technologies
to mitigate emissions, this annual decline can be accelerated. When the
annual decline in intensity equals the economic growth rate (currently,
about 3 percent per year), emission growth will have stopped. When the
annual decline in intensity exceeds the economic growth rate, emission
growth will reverse. Reversing emission growth will eventually
stabilize atmospheric concentrations as emissions decline.
As We Advance Science and Develop Technology to
Substantially Reduce Greenhouse Gas Emissions in the Long Term, We Do
Not Want to Risk Harming the Economy in the Short Term. Over the past
20 years, greenhouse gas emissions have risen with economic growth, as
our economy benefited from inexpensive, fossil-fuel based--and
greenhouse gas emitting--energy. While new technologies promise to
break this emission-economy link, a rapid reduction in emissions would
be costly and threaten economic growth. Sustained economic growth is
essential for any long-term solution: Prosperity is what allows us to
dedicate more resources to solving environmental problems. History
shows that wealthier societies demand--and can afford--more
environmental protection.