[Senate Hearing 107-1067]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 107-1067
 
                     GLOBAL CLIMATE CHANGE AND THE 
                       U.S. CLIMATE ACTION REPORT

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

                                HEARING

                               before the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 11, 2002

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation





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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia 
BILL NELSON, Florida
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
      Jeanne Bumpus, Republican Staff Director and General Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 11, 2002....................................     1
Statement of Senator Allen.......................................    14
Statement of Senator Boxer.......................................     8
    Prepared statement and executive summaries...................     8
Statement of Senator Burns.......................................     7
Prepared statement of Senator Dorgan.............................    16
Statement of Senator Kerry.......................................     1
    Article, dated June 14, 2002, entitled Dangerous Climate 
      Impacts and the Kyota Protocol.............................    83
Statement of Senator McCain......................................     5
Statement of Senator Nelson......................................    16

                               Witnesses

Connaughton, Hon. James L., Chairman, White House Council on 
  Environmental Quality..........................................    18
    Prepared statement...........................................    21
Hubbard, Hon. R. Glenn, Chairman, Council of Economic Advisers...    23
    Prepared statement...........................................    26
Mahoney, Hon. James R., Ph.D., Assistant Secretary of Commerce 
  for Oceans and Atmosphere......................................    47
    Prepared statement...........................................    49
Marburger III, Hon. John H., Director, Office of Science and 
  Technology Policy..............................................    43
    Prepared statement...........................................    45

                                Appendix

McPherson, Ronald D., American Meteorological Society, Executive 
  Director, letter to Hon. Ernest F. Hollings....................    93
Snowe, Hon. Olympia J., U.S. Senator from Maine, prepared 
  statement......................................................    91
Response to written questions submitted by Hon. John F. Kerry to:
    Hon. James L. Connaughton....................................    93
    Hon. R. Glenn Hubbard........................................   114
    Hon. James R. Mahoney........................................   135
    Hon. John H. Marburger III...................................   132
Response to written questions submitted by Hon. Ernest F. 
  Hollings to:
    Hon. James L. Connaughton....................................   102
    Hon. James R. Mahoney........................................   133
    Hon. John H. Marburger III...................................   129
Response to written questions submitted by Hon. John McCain to:
    Hon. James L. Connaughton....................................   103
    Hon. R. Glenn Hubbard........................................   109
    Hon. John H. Marburger III...................................   130


                     GLOBAL CLIMATE CHANGE AND THE 
                       U.S. CLIMATE ACTION REPORT

                              ----------                              


                        THURSDAY, JULY 11, 2002

                               U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:35 a.m. in room 
SR-253, Russell Senate Office Building, Hon. John F. Kerry, 
presiding.

           OPENING STATEMENT OF HON. JOHN F. KERRY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Kerry. Good morning. The hearing will come to 
order. I apologize to the witnesses and my colleagues for being 
a moment late.
    I want to thank Chairman Hollings and Ranking Member, 
Senator McCain, for their continued interest in this subject 
and for their support for this hearing today. I am particularly 
grateful to Senator McCain for his ongoing interest. When he 
was chairing this Committee last year in the early part of the 
year, he began a series of hearings into the subject of global 
warming, and I think they helped this Committee to lay an 
important benchmark--a baseline, if you will, for some of the 
issues before the Committee today.
    Today we're going to be hearing from key representatives of 
the Bush Administration regarding climate policy in the 
Administration. We have some concerns on the Committee about 
who is in charge, about differing views on global climate 
change policy within the Administration, and the proposed 
strategy, as it is called, for dealing with this critical 
issue.
    I remember taking part in the Rio meetings as a member of 
the official Senate observer delegation when the original 
convention was signed, and I have attended each of the meetings 
since then--Kyoto, The Hague, Buenos Aires. I will be 
officially leading the delegation, together with Senator 
McCain, to South Africa at the end of August in order to 
continue the Senate's participation in what we consider to be 
this most important process.
    It was precisely 1 year and 1 day ago that this Committee 
last held a hearing to consider the issue of global climate 
change. At that time, we requested the Administration share its 
views on climate change, and particularly looked for some 
insights into the technologies and policies that it would 
advocate as a means of addressing increasing global 
temperatures. I noted at the opening of that hearing that it 
was time to shift our focus from questions about the science, 
to the solutions of what we were really going to do in order to 
reduce global emissions.
    Unfortunately at that time, the Administration was 
reluctant to join in that policy discussion. This was despite 
the Administration's, ``unprecedented Cabinet-level 
attention.'' I think Secretary O'Neill and others were then 
focused on the issue, but now after months of Cabinet-level 
meetings and staff discussions, the Administration's policy 
appears to have taken several steps backwards, away from real 
solutions.
    Last year, in lieu of presenting policy, the Administration 
sent Dr. David Evans, a respected scientist and head of NOAA 
research, to speak about the state of scientific knowledge on 
climate change. Dr. Evans presented compelling evidence that 
reaffirmed the steady growth in the atmosphere of 
CO2, increasing, according to his testimony, by more 
than 30 percent over the industrial era compared with the 
preceding 750 years.
    Dr. Evans summarized his assessment of the science in this 
way, ``Emissions of greenhouse gases and aerosols due to human 
activities continue to alter the atmosphere in ways that are 
expected to affect the climate.'' He said also, ``Stabilizing 
concentrations means that we must ultimately end up with much 
lower net emissions.'' That was the Administration's witness 
last year.
    Since Dr. Evans' testimony before the Committee a year ago, 
the scientific evidence of increasing global temperatures 
associated with increasing atmospheric levels of CO2 
and the associated threats to our people and our environment 
has continued to grow. The Administration's own report, U.S. 
Climate Action Report 2002, only adds to the volume of 
evidence. Yet, the Administration continues to emphasize the 
uncertainty, promote delay, and limit near-term action to 
additional research.
    Today, the Administration will explain its ``action plan'' 
for global climate change, reducing greenhouse gas intensity--
this is a new word in the context of planning for global 
climate change, ``intensity''--through voluntary measures. I 
must say to each of the witnesses beforehand, just to set the 
stage for this hearing, that reducing intensity corresponds to 
increasing emissions, and 10 years of voluntary action has so 
far failed to decrease aggregate emissions. So many of us have 
very, very little confidence that the Administration is about 
to assert any responsible global environmental leadership on 
climate change.
    While the United States is responsible for 25 percent of 
all the greenhouse gas produced globally, we refuse to commit 
to any kind of fixed cap program or advance any serious 
alternative to the Kyoto Protocol, which the Administration has 
declared dead.
    By my own assessment of the new proposal, there is really 
no offering of anything that is new. It is founded on the 
notion that the science of climate change remains in doubt and 
that more research is needed. It also relies on voluntary 
action and adaptation as the primary response.
    So let me say that there are many of us in Congress--
Democrats, Republicans, Independents--who were very 
disappointed that the President seems to have gone backwards on 
his own campaign commitment about the problem of 
CO2. The United States is the largest producer of 
CO2 in the world. Utilities and transportation 
account for two-thirds of our emissions, and yet the 
Administration failed repeatedly to acknowledge the threat of 
increasing CO2 emissions or to present to Congress 
any real policies, programs or strategies to deal with it.
    To their credit, the states are taking a lead on this. 
Massachusetts has adopted the first CO2 cap and 
trade program. Now California has passed a law to reduce 
greenhouse gas emissions from automobiles.
    The impacts threatened by climate change may be projected, 
gentlemen, but they are based on observations that are 
increasingly real and supported by model projections. I know my 
friend, Senator Stevens, will also want to talk about that 
model projection.
    There's always some uncertainty in science. We know that. 
But that can't be an excuse for no action in the face of the 
risks that have been described to us.
    I would just like to point very quickly to a graph, which 
brings home the reality of this threat. I have chaired the 
Oceans Subcommittee on this Committee since I've been on this 
Committee. We have been following this very closely and have 
had many scientists from NOAA and elsewhere testify. It shows 
that the rising world ocean temperatures measured by NOAA since 
the 1950s and that the ocean has absorbed 90 percent of the 
heat resulting from human-induced temperature increases since 
the 1950s. Scientists have told us that as the oceans reach a 
point, which they can't absolutely predict, they cannot any 
longer absorb the heat. So, at some point, we can expect a 
climate surprise beyond those that have been modeled or which 
we are capable of modeling. These risks, gentlemen, are real, 
they're based on science, and they offer us some major choices 
with respect to our efforts to reduce the human input.

[GRAPHIC] [TIFF OMITTED] T1727.001

    We are slipping backwards, not going forwards. That's what 
I think most of us are most concerned about. The 
Administration's energy policy has sought to promote national 
energy security by simply increasing the development of oil, 
gas, coal, and other fossil fuels for energy production as the 
major component of our energy future. It opposed a plan by 
Senator Hollings, Senator McCain, myself and others to try to 
grab some reductions back, in terms of automobile emissions.
    The Climate Report acknowledges that energy-related 
CO2 emissions, even without the proposals in the 
National Energy Plan, are projected to increase by 33.6 percent 
before the year 2020. So we have to challenge, I think, the 
Administration's current notion of how we are going to address 
what it has accepted in its own report as a serious problem. I 
believe that the commitment thus far stated by the 
Administration on global climate change, remains rhetorical 
with respect to the acceptance of the science and has no 
substance with respect to any guarantee of reduced emissions 
overall. Today we need to talk, obviously, about the intensity 
issue.
    So we look forward to this explanation today about how 
greenhouse gas intensity could possibly be a more meaningful 
measure of progress than actual reductions in emissions in the 
atmosphere, which is the standard by which most countries are 
proceeding forward.
    I know Senator McCain and I and other Members of this 
Committee share a belief that we would like to look to the 
market forces to find solutions, which is why we like capping 
alternatives. We like trading. We think there are many ways to 
bring the corporate community into a least-cost, least-
intrusive, most-effective solution. But, gentlemen, this issue 
has been talked and talked about for too long now. It really is 
time for leadership and for new direction, and we look forward 
to hopefully achieving that in the near term.
    Senator McCain.

                STATEMENT OF HON. JOHN McCAIN, 
                   U.S. SENATOR FROM ARIZONA

    Senator McCain. Thank you, Mr. Chairman. Thank you for 
holding today's hearing. I would like to thank the witnesses 
for being here today, and I thank you for your patience.
    The State of Arizona is in the driest year in 120 years, 
according to scientists that I recently had a meeting with in 
Flagstaff, Arizona. The Rodeo Chaddisky wildfire consumed 
approximately 500,000 acres of woodland, destroyed over 1,300 
archeological sites, consumed over 420 structures, and required 
over 4,400 people to contain it. Its effects on the lives of 
our citizens are yet to be fully determined. Many other 
devastating fires have also been occurring in our country.
    It's believed by some that these fires are linked to 
climate change. Interestingly, in trying to find out whether 
any scientific basis existed for these beliefs, it was found in 
the U.S. Climate Action Report 2002, the subject of today's 
hearing. Chapter six of the report identifies key regional 
vulnerability and consequence issues. According to the report, 
the Southwest was identified as having increased fire potential 
because of the replacement of desert ecosystems in many areas 
with grasslands and shrub lands as a result of increased 
precipitation.
    Arizona is not the only place that is experiencing the 
effects of climate change. Fires have raged throughout the 
summer in a dozen western states. Ecosystems around the globe 
are showing the effects of climate change. The United Nations 
estimates that as much as 60 percent of the world's coral reefs 
are at risk of destruction, along with 27 percent that is 
already beyond recovery. Coral reefs, as we all know, are 
highly sensitive to water temperature changes and, thus, are 
particularly vulnerable to climate change. In fact, the largest 
known cause of coral loss was a massive climate-related coral-
bleaching event in 1998 in which more than 70 percent of the 
corals died across a wide region of the Indian Ocean.
    The National Research Council recently issued a report 
entitled, ``Abrupt Climate Change, Inevitable Surprises.'' That 
report states, ``The new paradigm of an abruptly changing 
climatic system has been well established by research over the 
past decade. But this new thinking is little known and scarcely 
appreciated in the wider community of natural and social 
scientists and policymakers.'' The report further states that, 
``Because climate change will likely continue in the coming 
decades, denying the likelihood or downplaying the relevance of 
past abrupt events could be costly.''
    Many of us assume that the climate system responds linearly 
to greenhouse gases, and, therefore, we have ample time to 
design long-term response strategies. What happens if the 
climate's response is not linear? According to the National 
Research Council's report, we have no idea.
    Although we have not taken any definitive actions on 
reducing the emission of greenhouse gases at the federal level, 
I am pleased to see that the California legislature has passed 
a measure that would require mandatory reductions in greenhouse 
gases from automobiles. The measure now awaits the governor's 
signature.
    Mr. Chairman, you and I were not in a position to endorse 
the specific state proposal. We did endorse the underlying 
goals of the California measure in our joint letter to Governor 
Gray Davis and members of the legislature, many of whom I spoke 
to personally. I hope that the governor signs the bill and 
makes California the first state to limit the emission of 
greenhouse gases. I know several other states are also 
considering legislation in this area and hope they are 
successful.
    With this growing interest at the state level to limit 
greenhouse gas emissions, it's only reasonable that Congress 
also address this issue. I think we've made some progress in 
the recent Senate-passed energy bill. The establishment of a 
registry with appropriate measurement and verification 
standards will go a long way toward assisting the many 
companies and entities who are already trading emission 
credits. The emission reporting required in the bill will give 
us a greater understanding of how much greenhouse gas we are 
emitting.
    Mr. Chairman, as you mentioned, the two of us have 
participated in a number of hearings on climate change over the 
past few years. We've listened to scientific and policy experts 
talk about the certainties and uncertainties associated with 
the science of climate change. The U.S. Climate Action Report 
2002 summarizes many of the previous reports on which we have 
held hearings. The report also lays out the Administration's 
approach to climate change.
    As I've stated previously, I disagreed with the President's 
decision to remove the United States from the Kyoto Protocol. I 
felt we could be much more effective remaining within and 
achieving our national goals rather than remaining outside of 
it. The U.S. produces approximately 25 percent of the total 
greenhouse gas emissions; therefore, leadership from the United 
States is needed. It's disappointing to know that although many 
of the world's leading industrialized countries, such as Japan 
and those in the European Union, are taking proactive steps to 
reduce emissions, the Administration has decided to essentially 
continue the United States' business-as-usual approach.
    Again, Mr. Chairman, thank you. I thank the witnesses, and 
I look forward to hearing from them on this--what I feel is an 
incredibly vital and important issue to the future of this 
Nation and the world.
    I thank you, Mr. Chairman.
    Senator Kerry. Thank you very much, Senator McCain.
    Senator Burns.

                STATEMENT OF HON. CONRAD BURNS, 
                   U.S. SENATOR FROM MONTANA

    Senator Burns. Thank you, Mr. Chairman.
    First of all, this morning I want to say there's some good 
news. That's surprising. We have good news here. The American 
dream is still alive, and it's still well. First of all, that 
our country, alone, accounts for about a quarter of the world's 
gross domestic product, all the production, and all of the 
wealth, and gives us the resources to spend a great deal of 
money on research. The United States spends $1.6 billion 
annually on climate science--more than Japan and the 15 E.U. 
countries combined.
    As a result of that science, we still have more questions 
than we do answers. But what else is new? Because climate will 
always hold more questions than it will answers. It's the 
biggest weather forecast of all time, and it's expensive, and 
it's complicated.
    The goods and services we produce and consume in this 
country require electricity and transportation. As a result, 
Americans create a great deal of energy. This should come as no 
surprise. Productivity and energy use are related. We use all 
kinds of energy in this country, some of which produces carbon 
dioxide. Again, this is no surprise. If you turned the light 
switch on, there's a 50-50 chance that that electricity was 
produced by coal.
    There are two important and related points here. The United 
States is a very efficient producer of energy, which is a part 
of the reason that we are so productive. Even though the total 
carbon emissions from the United States are relatively high, 
our ratio of emissions to GDP is not high at all. In fact, we 
do very well with what we've got.
    I was just noticing--and I should have made a chart of 
this--but as our GDP has increased, our tons of carbon dioxide 
per thousand dollars of GDP has actually declined, and we must 
make note of that.
    Can we do better? You bet we can do better. We will. I 
point to the Senate's decision on Yucca Mountain on Tuesday, 
for example. While some of my colleagues may not see the 
connection between nuclear power and reducing the carbon 
intensity of our economy, I will remind them that a part of the 
reason that the United States is already so efficient is 
because we produce 20 percent of our energy from nuclear 
sources. Two of the only countries who do better than we do is 
Japan and France, who depend heavily on nuclear power.
    Besides nuclear, we have so many options. The Department of 
Energy is continually working on clean coal technologies so 
that we can use our coal resources more efficiently. We are 
building and improving fuel cell technology every day, which 
will run our homes and our automobiles. Hydropower is an 
incredible source in this country, which can improve, and we 
can build upon. We can and will reduce carbon intensity of our 
economy, but we will do it through American ingenuity and 
better technology, not through rules or regulations that we may 
pass.
    The President is working on developing an effective and 
science-based approach to addressing global climate change, and 
I support his efforts. We need to be consistent, though, we 
need to be flexible, and we need to be smart, and we need to 
use the best technology that we can possibly find and still use 
the market-based approach. Most importantly, we need to 
cooperate with countries all over the world in this effort.
    These figures, Mr. Chairman, I want to make a part of the 
record----
    Senator Kerry. Without objection.
    Senator Burns.--because I think they are very important.*
---------------------------------------------------------------------------
    * The information referred to was not avaiolable at the time this 
hearing went to press.
---------------------------------------------------------------------------
    Senator Burns. And then we hear the criticism that the 
White House has, sort of, not really come forward. Keep in 
mind, we have two nominees before this Committee, that's being 
blocked, to head the Office of Science and Technology Policy, 
and one of them is highly qualified. And until we get some of 
those folks in place, it's pretty hard to put together a policy 
that one can rely on.
    So I would--I appreciate the witnesses today. I look 
forward to their testimony. I thank the Chairman for holding 
this hearing today.
    Senator Kerry. Thank you, Senator Burns.
    Senator Boxer.

               STATEMENT OF HON. BARBARA BOXER, 
                  U.S. SENATOR FROM CALIFORNIA

    Senator Boxer. Mr. Chairman, I'd like to put my statement 
in the record and summarize very briefly.
    First of all, my thanks to you and Senator McCain. This is 
very important.
    This country should be leading the way on global warming. 
We are not leading the way. I want to compliment Senator 
Jeffords of my--Chair of my Environment Committee. We did vote 
out a bill by one slim vote to reduce carbon emissions at power 
plants. The Administration is strongly opposed to this, and it 
was very contentious, but we managed to get the bill out. 
That's a tribute to Senator Jeffords. That's the only action 
I've seen in the Senate, in terms of a Committee, that's done 
the right thing. I hope we have a chance to do something, as 
well.
    Let me say how proud I am about my state. I believe 
Governor Davis will sign the bill that was alluded to. I want 
to pay a special tribute to my predecessor in the House of 
Representatives John Burton, who is now the Senate pro tem of 
the California Senate. I talked with him at length as this bill 
was moving through, and it was very difficult. He believed in 
it. He really believed in it. I think he is probably the only 
person--this is truly what I believe--to have been able to have 
gotten that bill out of the State Senate, and I want to thank 
him publicly for that.
    It's wonderful that states like California and 
Massachusetts and others are starting to do something about 
this problem, but we all know it's ridiculous. This has got to 
be done by our President and our Administration if it's going 
to really have an impact.
    Let me just simply cite two studies. I'd like to put the 
executive summaries in the record.
    Senator Kerry. Without objection.
    [The prepared statement and executive summaries of Senator 
Boxer follow:]

 Prepared Statement of Hon. Barbara Boxer, U.S. Senator from California

    Mr. Chairman, I want to thank you for holding this important 
hearing. In a little over a month, the United States will participate 
in the World Summit on Sustainable Development in South Africa, where 
climate will be a primary topic of discussion. I am eager to hear from 
this panel what position the U.S. will present in that international 
forum.
    Based on the lack of meaningful recommendations in the 
Administration's recent climate report to the United Nations, I fear 
the U.S. delegation will not have much to say. Meanwhile, our 
international colleagues are, to their credit, moving forward with the 
Kyoto Protocol and its binding emission standards without us.
    The timing of this hearing is also perfect because it allows me to 
brag for a minute about California.
    Once again, California is leading the way for the rest of the 
nation.
    Last week, the state legislature passed legislation that will 
regulate tailpipe emissions of carbon dioxide from all new, non-
commercial vehicles (including cars, light trucks, and SUVs).
    If Governor Davis signs it, which he has signaled he is likely to 
do and which I am strongly encouraging him to do, this will be one of 
the most significant steps ever taken in the United States to contend 
with carbon.
    This is vital given that the transportation sector nationally 
accounts for approximately 26 percent of carbon emissions and in 
California it accounts for approximately 40 percent.
    The bill directs the California Air Resources Board to develop by 
January 2005 the maximum technologically feasible, yet cost effective, 
standards for greenhouse gas reductions from new non-commercial 
vehicles. To give industry time to adjust, these new standards would 
not apply to vehicles manufactured before 2009.
    It is expected that California's new standards will push U.S. 
automakers to produce cars that burn less fuel more cleanly.
    While California is moving ahead, this Administration is just 
catching up with mainstream scientific opinion.
    In the Bush report we will hear about today, the Administration 
wrote:

          ``There is general agreement that the observed warming is 
        real and has been particularly strong within the past 20 years. 
        Human-induced warming and associated sea-level rises are 
        expected to continue through the 21st century. Secondary 
        effects include increases in rainfall rates and increased 
        susceptibility of semiarid regions to drought.''

    This is not news. The National Academy of Sciences and the 
Intergovernmental Panel on Climate Change have said this for years. 
What is news is that President Bush has finally admitted it.
    I have a particular interest in Mr. Bush's admission--and in some 
of the dire predictions contained in the report--because California is 
believed to be particularly vulnerable to the impacts of climate 
change.
    Around the time that the Bush report was released, a group of 
scientists released the findings of the most comprehensive regional 
climate change model ever completed, which provides detailed models of 
the temperature and precipitation impacts on California.
    Their peer-reviewed climate model predicts by the year 2050 
California will face higher average temperatures every month of the 
year in every part of the state. The average temperature in June in the 
Sierra Nevada mountains, for instance, will increase by 11 degrees 
Fahrenheit.
    The snowpack in the Sierra, which is a vital source of water in the 
state, is expected to drop by 13 feet and to have melted entirely 
nearly 2 months earlier than it does now. This means that the precious 
water we now rely upon for agriculture, drinking water, and other 
purposes will no longer be available.
    So, California has a lot at stake with regard to Mr. Bush's next 
steps.
    But unfortunately, President Bush shows no signs of taking 
meaningful action.
    Despite the frightening predictions in the Bush report, the recent 
California study I mentioned, and numerous other scientific 
assessments, the President proposes no real plan for reducing carbon 
emissions. Instead, the report notes we will simply have to learn to 
``adapt'' to climate change.
    To me, this incredible abdication of responsibility provides 
further justification for the Senate to step in where the President 
won't. I hope at some point we will be able to move forward with 
Senator Jeffords' Clean Power Act, which establishes a standard for 
carbon emissions that the first Bush Administration committed to (and 
the Senate ratified) as part of the UN Convention on Global Climate 
Change at Rio.
    While the United States has done much to contribute to the carbon 
in our global atmosphere, we have done little to fulfill our commitment 
to now reduce it.
    California appears poised to do its part.
    I am eager to hear from this panel how and when the rest of the 
United States is going to join them.
                                 ______
                                 
      Executive Summary: Scorched Earth by The Blue Water Network

        GLOBAL CLIMATE CHANGE IMPACTS ON PUBLIC LANDS AND WATER

    Protection and conservation of special ecosystems and wildlife has 
long been a fundamental American value. The Federal Government has 
responded by setting aside protected lands to provide a safe-haven for 
our nation's unique and biologically diverse ecosystems.
    The need for protective measures was recognized in 1872, when 
Yellowstone became the country's first national park. The National 
Wildlife Refuge System, America's only network of federal lands 
dedicated specifically to wildlife conservation, was founded in 1903, 
and the Forest Service was created in 1905 after President Theodore 
Roosevelt visited Yellowstone National Park and resolved to prevent 
further destruction of surrounding lands. By 1916, Congress understood 
that many other spectacular natural areas were worth preserving, and 
thus the National Park System was born. In 1972, the importance of 
preserving marine life was also recognized with the establishment of 
the National Marine Sanctuaries Program to protect ocean and coasts.
    Unfortunately, global climate change threatens the ecosystems of 
every national park, national forest, wildlife refuge, and marine 
sanctuary. Scorched Earth describes the expected impacts of global 
climate change on these public lands and waters; outlines the relevant 
legal requirements of federal agencies charged with protecting these 
resources; and provides recommendations for safeguarding these special 
places and the wildlife they protect.
    Chapter 1 begins with a comprehensive outline of climate changes 
expected over the next century, emphasizing the impacts these changes 
will have on species migration and survival, air quality, wildfires, 
glaciers, coastal lands, water resources, and visitor experience.
    Over the past 100 years, emissions of greenhouse gas pollution have 
led to increased global temperatures of more than 1 +F, which is 
unprecedented in the past 1,000 years. Scientists worldwide predict 
that the pace of global climate change will accelerate over the next 
century and impact ecosystems with increasingly dramatic results. 
Average global temperatures could increase by up to 10.4 +F, a change 
unprecedented over the past 10,000 years. This temperature increase is 
projected to result in reduced water availability, increased 
catastrophic wildfires and storms, and habitat impacts that could wipe 
out entire species and ecosystems. Scientists predict a rise in sea 
level of up to 2.89 feet as a result of projected global temperature 
increases. Coupled with increasingly severe storm events, a sea level 
rise of this magnitude will reshape coastlines and submerge low-
elevation islands entirely in both the U.S. and abroad. These global 
climate change impacts will occur so rapidly that many plant and 
wildlife species will not survive.
    In chapter 2, impacts are detailed for 5 high-profile examples of 
protected public lands and waters: Yellowstone National Park, the 
Arctic National Wildlife Refuge, Florida Keys National Marine 
Sanctuary, Tahoe National Forest, and Cape Cod National Seashore. Since 
global climate change will impact every region of the nation, chapter 
three highlights expected impacts at one important national park, 
wildlife sanctuary, marine sanctuary, or national forest in each state.
    From these profiles, it is clear that climate change will 
profoundly affect the protected lands and waters that are important to 
Americans for their unique wildlife habitats, magnificent scenery, and 
role in America's natural and cultural heritage. For example:
     A sea level rise of up to 30-inches over the next century 
will submerge much of the Florida Keys and Everglades National Park and 
Preserve, where large areas are less than three feet above sea level.
     All of Glacier National Park's glaciers will disappear 
within 28 years if temperatures continue to rise as predicted. Over the 
past 150 years, the Park's glaciers have shrunk by 73 percent.
     Arctic National Wildlife Refuge's entire North Slope 
tundra is expected to disappear by 2100.
     The Florida Coral Reef Tract will suffer severe bleaching 
and mortality from increased temperatures, atmospheric carbon dioxide, 
and sedimentation from storm-induced coastal erosion. In fact, 
scientists predict that by 2100 coral reefs could be dead in most areas 
of the world.
     A 2 +F temperature increase at Cape Cod National Seashore 
could transform a relatively benign mosquito-borne malaria parasite 
into a fully potent one, and could also increase the Lyme-disease-
carrying tick population.
     Warming rivers and streams at Yosemite National Park could 
devastate whitefish, brook trout, and Chinook salmon populations.
     At Alaska's Arctic National Wildlife Refuge, early onset 
of spring in the refuge's caribou calving grounds will disrupt the 
caribou herd's precisely-timed migration schedule, endangering its 
survival.
     Even a slight warming and drying of Yellowstone National 
Park's climate could result in the elimination of 90 percent of the 
park's whitebark pine habitat, decimating the park's grizzly bear 
population, which relies on the forests for a major portion of its 
diet.
     Native forests all across the nation will give way to non-
native species more tolerant of higher temperatures, including the 
maple-dominated forests at Great Meadows National Wildlife Refuge, 
which could decrease by 30-60 percent; the forested areas of Yosemite 
National Park, which are expected to decline by up to 50 percent; and 
the spruce forests of Alaska, where 4 million acres of trees are dead 
or dying from a spruce bark beetle infestation--the greatest tree loss 
ever recorded in North America.
     Non-native species are already out-competing native 
Hawaiian rainforest species--a situation that will only worsen with 
global climate change because non-native species are far more tolerant 
of changes in temperature, rainfall, and wildfire.
     Decreased precipitation and past fire-suppression efforts 
have left 40 percent of Yellowstone National Park vulnerable to 
catastrophic wildfire, a situation that will be greatly exacerbated by 
further global climate change.
     Tahoe National Forest will lose two-thirds of its 
snowpack, threatening California's water supplies and the winter 
recreation industry.
     Wildfires are expected to more than double in some areas. 
The National Interagency Fire Center in Boise, Idaho declared that the 
nation is at Level 5 fire risk as of June 2002--the highest fire danger 
ever recorded this early in the season. This indicates that fires have 
the potential to exhaust all available federal firefighting personnel 
and equipment.
    Chapter 3 ends with a special section outlining impacts to 
visitors, whose enjoyment of public lands and waters will also be 
severely impacted by the effects of global climate change. For 
instance, at the Grand Canyon National Park, smog formation from rising 
air temperatures and smoke from increased fires could obscure canyon 
views for the park's more than 4 million annual visitors. Decreased 
snowpack in areas such as California's Tahoe National Forest could 
reduce skiing areas and shorten the ski season. Lower summer stream 
flows could diminish recreational activities such as fishing, rafting, 
and kayaking at many parks and forests, including Grand Canyon National 
Park.
    Chapter 4 outlines the legal mandates of the 4 federal agencies--
the National Park Service, the Fish and Wildlife Service, the National 
Oceanic and Atmospheric Administration, and the U.S. Forest Service--
entrusted with managing and protecting these public lands. All 4 
agencies have clear legal mandates to guard the public lands and waters 
in their care for the enjoyment of current and future generations.
    The time has come for public land-management agencies to 
incorporate new scientific knowledge of global climate change into 
their planning and take steps to safeguard vulnerable natural resources 
from its impacts. In chapter 5, Scorched Earth concludes with specific 
recommendations for these agencies to address present and future global 
climate change impacts on public lands and waters. Specifically, 
agencies should:
    (1) Conduct complete and thorough analyses to determine the full 
scope and breadth of projected impacts from global climate change;
    (2) Conduct long-term planning to guide management actions with 
regard to climate change;
    (3) Consider potential mitigation measures, including establishing 
corridors for wildlife migration; increasing emphasis on protecting 
endangered species and their critical habitats; and reassessing the 
boundaries of national forests and parks, wildlife refuges, and 
national marine sanctuaries to ensure that borders are adequate to 
protect resources and wildlife from climate change impacts; and
    (4) Reduce greenhouse gas emissions from their own operations, by 
using renewable energy sources for power generation and renewable fuels 
for their vehicle and equipment fleets.
    These recommendations are echoed in formal petitions that Bluewater 
Network has filed with relevant federal agencies. In light of the 
devastating impacts expected from global climate change over the next 
100 years, it is imperative that comprehensive action is taken 
immediately to protect our unique natural heritage for future 
generations.
                                 ______
                                 
Executive Summary: Beneath the Hot Air--New Government Data Expose The 
   Truth Behind President Bush's Global Warming Plan by The National 
                          Wildlife Federation

    In February, President Bush announced a global warming plan that he 
claimed will reduce the nation's greenhouse gas emissions. But 
according to new Department of Energy data, the President's plan would 
allow more global warming pollution at a faster rate than if we simply 
continue the pollution trend of the past 5 years.
    The new data indicate that the amount of carbon dioxide 
(CO2) that the United States is adding to the atmosphere 
each year increased by 4.6 percent over the past 5 years (1996-2001), 
due to the nation's increasing dependence on coal, oil, and natural 
gas. If these trends were to continue for the next 10 years, we would 
expect the nation's CO2 emissions from energy to grow by 
another 9.5 percent.
    The President's plan includes an emissions goal that he stated 
would ``set America on a path to slow the growth of our greenhouse gas 
emissions.'' But the President's goal is stated in terms of emissions 
``intensity''--the amount of greenhouse gas emissions relative to the 
size of the economy--and not in terms of actual emissions levels. This 
``intensity'' goal actually hides an emissions increase that is likely 
to be larger and faster than what we experienced in the past 5 years. 
Based on the White House's predictions of economic growth, the 
President's target translates into an emissions increase of 13 percent 
over the next decade.

[GRAPHIC] [TIFF OMITTED] T1727.002


    The discrepancy exposes the truth behind the sound bites: President 
Bush's global warming response is simply a smokescreen of accounting 
schemes that hides the increased pollution from the President's energy 
plan and his efforts to relax enforcement of the Clean Air Act. The 
President's energy priorities, such as promoting more coal-fired power 
plants, will increase the nation's dependence on fossil fuels and 
accelerate the buildup of global warming pollution in the atmosphere.
    How does the Bush Administration claim that the President's 
emissions goal is a reduction when the nation would have to accelerate 
its pollution in order to meet it? The White House compares the 
President's emissions targets to a Department of Energy forecast that 
envisions hypothetical, skyrocketing emissions growth over the next 
decade. Analysis of the Department of Energy's new data provides a 
factually-based historical context for assessing future emissions 
targets.
    The new Department of energy data also demonstrate that, using even 
the yardstick of emissions ``intensity'' that President Bush favors, 
the President's target would do worse than the trend of the past 5 
years. The past 5 years altogether marked a period of robust economic 
growth. Emissions ``intensity'' is measured as the amount of U.S. 
greenhouse gases emitted per dollar of economic output. Over the past 5 
years, the ``intensity'' of the nation's CO2 emissions 
improved more quickly (a rate equal to a 23 percent improvement per 
decade) than the goal established by the President (an 18 percent 
improvement over the next decade).
    In other words, the President's goal would enable the United States 
to emit more CO2 emissions per dollar of economic output in 
2012 than it would by continuing the trend in emissions intensity 
improvement of the past 5 years. The new emissions data demonstrate the 
futility of establishing finely-tuned ``intensity'' targets in the face 
of uncertain emissions forecasts and underscore the need for mandatory 
policies and clear emission limits to control the nation's runaway 
pollution levels.
    The new emissions data follows closely on the heels of a Bush 
Administration report that detailed the unacceptable environmental 
threat global warming poses to wildlife, wild places, and the quality 
of life for Americans throughout the nation. Altogether, this new 
information provides an opportunity for President Bush to change course 
and take real action that prudently reverses the nation's rising 
emissions and protects America from the threat of global warming.

    Senator Boxer. One is called ``Scorched Earth.'' It was put 
out by the Blue Water Network, and they took a look at all the 
global warming work, and they said that this would be what 
would happen. In 28 years, Montana's Glacier National Park will 
disappear. Rising sea levels will submerge much of the Florida 
Keys and Everglades. Wildfires will double in some areas. 
Massachusetts' Cape Cod will become home to a large tick-
carrying population carrying Lyme Disease. Lake Tahoe, Nevada, 
will lose 75 percent of its snow cover. This is what they have 
come up with as they look at the scientists' predictions.
    The other--this is an amazing report that just came out, 
like, 10 minutes ago, and my staff just got it, the National 
Wildlife Federation, it's called ``Beneath the Hot Air, New 
Government Data Expose, The Truth Behind President Bush's 
Global Warming Plan.'' I'm just going to read two paragraphs.
    ``In February, President Bush announced a global warming 
plan that he claimed will reduce the nation's greenhouse gas 
emissions. The President's plan includes an emissions goal that 
he stated would set America on a path to slow the growth of 
greenhouse gas emissions, but the President's goal is stated in 
terms of emissions intensity''----intensity----``the amount of 
greenhouse gas emissions relative to the size of the economy 
and not in terms of actual emission levels.''
    Now, the point here is the atmosphere doesn't understand 
what gross domestic product is or gross national product. It 
doesn't understand that. The atmosphere is going to do what it 
does. What they say is, ``The President's plan would allow more 
global warming, pollution at a faster rate than if we simply 
continue the pollution trend of the past 5 years. President 
Bush's global warming response is simply a smokescreen of 
accounting schemes that hides the increased pollution from the 
President's energy plan and his efforts to relax enforcement of 
the Clean Air Act.''
    So, Mr. Chairman, this is an important debate, a debate 
that is worth having. It's unpleasant. It's--we want to be 
united. We want to go together down a path that makes sense, 
but, at this point, I think this is a fight, and I'm very glad 
that you've had this hearing this morning.
    Senator Kerry. Thank you very much, Senator Boxer.
    Senator Allen.

                STATEMENT OF HON. GEORGE ALLEN, 
                   U.S. SENATOR FROM VIRGINIA

    Senator Allen. Thank you, Mr. Chairman, for holding this 
hearing, and thank all these esteemed leaders that are here at 
this hearing for sharing their views with us. I'm sure it'll be 
an issue-filled hearing where we'll discuss various matters. I 
think we'll all agree on certain goals--that we need to improve 
our environment while also making sure there are job 
opportunities and competitiveness there for the American 
people, and they should not be mutually exclusive.
    I do want to associate myself with the remarks of Senator 
Burns' very eloquent remarks and sentiments, which I do very 
much share. In all due respect to some of the comments that 
have been made, and I know there are terrible fires--record-
breaking fires in Arizona. I would not blame it on climate 
change or greenhouse gases. I don't need any scientists or 
studies to know why those fires are going. People started them. 
They criminally set these fires. When you set a fire in a dry, 
arid area of the country with low humidity and dense woods, 
fire will spread, especially with winds. I think that what we 
need to do is, in these areas, look at ways that we can improve 
our environment.
    Now, as far as climate change, in our known history of the 
world, climate is always changing. It always has, whether it's 
ice ages or different times of our world's history. The issue 
is the extent to which humans are changing that climate. 
Climate will always change. The question we should be asking 
is: What are the human impacts on climate change?
    We need to improve the air quality in our country. We know 
that, regardless of climate change. The same with water 
quality. Now, as we move forward, I think we need to analyze 
the science and the impact of various proposals on people and 
their property and their jobs. As Senator Burns said, I feel 
very strongly that we must embrace and utilize the advances in 
technologies that improve our lives in so many ways such as 
improving jobs and improving the quality of consumer products. 
There are cleaner methods of manufacturing where there are 
fewer toxics, less waste, which helps our competitiveness as a 
country as well as our environment.
    I think the President has stated long-term goals that help 
stabilize the concentration of greenhouse gases in the 
atmosphere. I think he's pursuing the long-term goals in a 
correct way. I do think that first we have to make sure we're 
using the best science available to identify what is the 
current state of our environment. Second, we have to recognize 
that there are uncertainties; and, where there are 
uncertainties, I think we ought to target future research to 
fill in these scientific gaps. Third, we need to take action to 
address the climate-change issue where there are technically 
and economically viable means to do so. Fourth, I think that we 
need to set realistic goals that can be set and be achieved 
through innovation without causing undue stress on the economy 
or jobs. And fifth, I do think we ought to put in place a 
review mechanism to ensure that we're truly meeting the goals 
that we're setting out to accomplish.
    I hope that we will, at the least, in this hearing, begin 
to get some movement in the right direction. I do think the 
President's moving toward the right goal. The Kyoto Protocol, 
in my view--we could debate this later--would be very harmful 
to jobs in this country. I know, in Virginia alone, it has been 
estimated that there would be 12,500 manufacturing jobs lost 
out of the 35,000 total lost throughout the state.
    Regardless, I think there are things that we can do to 
improve the environment by using sound science and the best 
technology, in the future, and I think that's what people want 
us to do. We should not take drastic, hasty steps, but take 
reasonable, measured steps to improve our environment and also 
keep jobs for Americans.
    So I thank you, Mr. Chairman, and look forward to this 
hearing.
    Senator Kerry. Thank you very much, Senator Allen.
    Senator Nelson.

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Thank you, Mr. Chairman.
    Senator Burns, since you used the word ``heavenly,'' may I 
try to give you--I'd like to try to give you a perspective, a 
``heavenly'' perspective, on the issue at hand.
    When you look out the window of a spacecraft back at the 
earth and look at the rim of the earth, you can see a thin 
little film. That film sustains all of our life. It's called 
the atmosphere. As you look at the perspective of earth, even 
with the naked eye you can see how we're messing it up. For 
example, coming across South America, with the naked eye you 
can see the destruction of the rain forest in the Upper Amazon 
region. You can see that because of the color contrast. Then in 
the same window, you can look to the east and see part of the 
reason--of the result of that destruction. For, at the mouth of 
the Amazon, the waters of the Atlantic are discolored for 
hundreds of miles as a result of the silt that has been added 
as a result of the destruction of the trees upriver.
    When you come across a part of the earth, such as my state, 
you see this peninsula sticking down into what we know--we 
natives know--as ``hurricane highway,'' and you realize that a 
place all along that Gulf Coast and the eastern seaboard is so 
ravaged by storms. So when we look at the question of whether 
or not the earth is warming, the opportunity, because of 
warming, not only from the obvious, from that perspective of a 
spacecraft's window, of the rising seas of what it would do to 
all of the coastal communities in a place like Florida and the 
eastern seaboard, but also what it does in causing the 
temperature rises, or the increased ferocity of storms, the 
increase of pestilence, the increase of the level of the sea on 
the coast, and what that profoundly would affect.
    So it's just hard for me to understand how the 
Administration cannot take this and do everything possible to 
confront what the scientific community has clearly said is a 
real problem.
    Mr. Chairman, thank you for allowing me to get my 
perspective shared with the Committee.
    Senator Kerry. Senator Nelson, thank you very much. I think 
that's an eloquent and important statement, and it probably 
underscores, in ways that other arguments couldn't, the value 
having had a young congressman go up into space on the shuttle, 
and I think that it's an important observation that you've 
made, and I thank you for it.
    Senator Dorgan had to go to the floor, and I specifically 
wanted to note that he was here, and his statement will be put 
in the record, and he hopes to get back here.
    [The prepared statement of Senator Dorgan follows:]

              Prepared Statement of Hon. Byron L. Dorgan, 
                     U.S. Senator from North Dakota

    I see that James Connaughton from CEQ is testifying this morning. I 
am disappointed that he was able to be here for this hearing, but 
couldn't testify at a hearing I chaired yesterday on Missouri River 
management issues, nor could he send a representative from CEQ.
    I find the parallels between these two issues very interesting. In 
both cases, the Administration is ignoring and backing away from years 
of scientific data. The Army Corps of Engineers and the Fish and 
Wildlife Service have more than 12 years of scientific and economic 
data on the Missouri River. Yet, the Administration has not moved 
forward with revisions to the River's operating plan, based on sound 
science, even though the current plan is 40 years old and quite out of 
date, and scientific and economic data reflect the changing realities 
that have taken place along the River.
    Similarly, several agencies have collected significant scientific 
information on climate change and concluded that global warming is a 
serious problem and, indeed, that human activity is contributing to 
climate change and increases in greenhouse gas emissions. This 
information was published in the U.S. Climate Action Report--2002, 
which serves as ``our nation's official submission to the international 
community on the issue.'' Regrettably, however, about a week after the 
report was released, President Bush and EPA Administrator Whitman tried 
to distance themselves from the report's conclusions by announcing that 
they had nothing to do with the report, had not seen the report, and 
that the report was the responsibility of the ``bureaucracy.''
    A great deal of scientific information exists--enough to draw at 
least some conclusions and enable the Administration to take concrete, 
``no regrets'' actions. But, the Administration has decided to back 
away from the scientific information provided in this and other studies 
and to do nothing instead.
    I am concerned because, for example, climate models predict that 
the Great Plains are likely to experience more frequent and intense 
drought. The Western part of my state is already suffering from drought 
and fires.
    So, I think we should be taking ``no regrets'' actions that can 
save energy, save money, and reduce greenhouse gas emissions to help 
avoid or mitigate droughts and other regional climate impacts.
    This situation is absurd. I am frustrated that the Administration 
is choosing politics over policy and sound science. What we have here 
is ``a barrel-full of politics and a thimble-full of policy.''

    Senator Kerry. Before we begin with the witnesses, I--we 
obviously don't want to get into a debate at this moment 
between us. We see some of the divergent views already in the 
openings. But I do want to emphasize to my colleagues, who have 
sort of spoken, I guess, in support of not doing anything----
    [Laughter.]
    Senator Kerry.--that no one is suggesting that we do 
anything drastic or hasty. I don't think that 160 nations 
spending 10 years to come to an agreement about trying to stay 
at 1990 levels can be deemed drastic or hasty. Nor do I think 
that the presidents and prime ministers and leaders of all 
those countries that have embraced this deserve the sort of 
back of the hand that the United States of America seems to be 
giving their thinking process and their politics, which is 
committed to moving forward.
    I would just say very quickly to Senator Burns, who talked 
about efficiencies of American production, if ``efficiency'' is 
defined by producing a lot, then, yeah, we're pretty efficient. 
But if the measurement is true efficiency, we're really pretty 
inefficient, because the average coal-burning plant in America 
actually only converts about 33 to 38 percent of the energy 
that it consumes into electricity, and the rest is all lost--
lost--as heat. That's pretty inefficient.
    So the truth is that America is not a paragon of efficiency 
with respect to this, unless you measure it just by the amount. 
We do a lot, and we produce a lot for our people.
    I have suggested, and I say this to my friends, that we 
should embrace several principles as we approach this. I think 
we should say that we should do nothing that doesn't make 
economic sense. I think we can make economic sense out of our 
choices. I don't think we have to ask any American to give up 
any smidgen of quality of life. There is no requirement to give 
up quality of life in anything we have to do. I think most of 
the efficiencies we're going to gain are going to come from the 
current energy regime for the next 30 or 40 years.
    The issue is whether we're going to start to move in the 
right direction. California has made a decision. It is the 
fifth largest economy in the world. I hope the Governor will 
sign that. As Senator McCain has said, and we've tried to 
intervene, in a polite way, to suggest that it's important to 
do so. But if California does, then what the Senate rejected, 
in trying to offer some common sense about automobile 
emissions, will, in fact, become a reality, because one state 
in the country decides to do it, because the automobile 
industry will have no choice but to market to the fifth largest 
economy of the world, and that will be to the benefit of all 
the rest of our states. So I applaud their leadership and think 
that they can have a profound impact that will dwarf what the 
U.S. Senate itself was prepared to do.
    I'd like to turn now to our witnesses, and we thank you for 
your patience, but I think it's an important setting of the 
stage for you to hear, sort of, these opinions. I welcome the 
Chairman of the Council of Environmental Quality, Jim 
Connaughton; the distinguished Chairman of the Council of 
Economic Advisors, Glenn Hubbard; the Director of the Office of 
Science and Technology Policy, John Marburger; and the 
Assistant Secretary for Oceans and Atmosphere, Jim Mahoney. We 
welcome all of you. Thank you very much.
    Do you want to just begin, Mr. Connaughton, and then we'll 
just sort of run down the table? Thank you.

 STATEMENT OF HON. JAMES L. CONNAUGHTON, CHAIRMAN, WHITE HOUSE 
                COUNCIL ON ENVIRONMENTAL QUALITY

    Mr. Connaughton. OK. Thank you very much, Mr. Chairman, 
Senator McCain and other Members of the Committee. I appreciate 
the opportunity to testify here before you today to discuss the 
Bush Administration's strategy to address this important issue, 
as all have recognized. It's an issue that's long term, it's 
highly complex, and it's going to be quite challenging.
    I hope, during the course of today's discussion, we can 
actually spend a fair amount of time talking about the 
significant common ground, when it comes down to policies and 
measures, to address this challenge. I've had the good fortune, 
over the last year, to spend a lot of time on domestic policy 
issues, as well as speaking with my counterparts 
internationally. When you look at what the world is doing, in 
concrete terms, in taking the next steps toward addressing this 
challenge, there is a tremendous amount of common ground. So I 
hope that we can discuss that here today.
    I'm very pleased to share this panel with my colleagues in 
the Administration, Dr. Hubbard, Dr. Marburger, and Dr. 
Mahoney. It's nice to be here with the 3 doctors, being a 
mister myself.
    President Bush has committed the nation to ambitious, 
focused, and meaningful goals, programs, and initiatives that, 
in our view, provide a sensible, and, most importantly, a 
constructive path forward. The President's strategy is 
predicated on ensuring the strength and the growth of the 
American economy, building on our nation's tremendous and 
demonstrated record of leadership in science, as well as the 
promise of continued American technological innovation on which 
any response to the climate-change issue depends.
    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 
again just this past February. Global 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 
legislative restrictions that will needlessly hurt our economy 
and cost American jobs.
    The President has 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 that growth 
and then reverse the growth of those emissions. Dr. Hubbard 
will speak in detail about the compelling advantages of this 
national goal and how it will be measured.
    I would emphasize that achieving this ambitious, yet 
realistic, national goal will require a sustained commitment 
and a significant investment in effort from our nation's 
farmers, small businesses, workers, industries, and individual 
citizens, that will rival the hard gains and efficiency in 
productivity that we have earned and actually enjoyed 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, 
one, advancing climate science; two, developing and promoting 
energy efficiency, conservation, and sequestration technologies 
and practices; three, we're pursuing near-term greenhouse gas 
mitigation programs; and, finally, we are expanding, not 
diminishing, 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, however, the President has noted 
that, given significant scientific uncertainties, no one today 
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 2003. That's a 17-percent 
increase from last year. This will support a $4.5 billion 
program of research on climate science and energy technology, 
on mitigation incentives and programs, and on 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. Dr. Marburger and Dr. Mahoney will 
describe for you our Cabinet-level effort to bring more 
effective high-level management and focus to this significant 
investment of the Nation's public resources.
    Importantly, the President's request includes $555 million 
in clean energy tax incentives. That's the first part of a $4.6 
billion commitment over the next 5 years, that will reach $7.1 
billion over the next 10 years. Again, these are sums unmatched 
in the world.
    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 are also promoting clean coal 
technology as well as nuclear power. Of course, as the Senators 
noted earlier, nuclear power produces no greenhouse gas 
emissions. So any serious climate policy must include nuclear 
power in its mix. We are working to safely improve fuel economy 
for our cars and trucks. We are also advancing the prospect of 
breakthrough technologies such as the very real promise of 
zero-emission fuel-cell vehicles through the Department of 
Energy's Freedom Car Initiative.
    Let's look to another sector, an often overlooked one. 
Under the recently enacted Farm bill and existing 
authorizations, we will invest up to $47 billion--that's the 
``B'' word--in the next decade for conservation on our farms 
and forest lands. Not only will these incentives and this 
partnership with our nation's farmers and small landowners help 
protect the water and air, and secure and enhance habitat for 
wildlife, but they will also provide opportunities to store 
significant quantities of carbon in the trees and soil as well 
as promote other activities on our nation's farms and ranches 
that will mitigate greenhouse gas emissions. I say, again, this 
level of commitment and incentivization, and bringing stewards 
forward to assist in the greenhouse effort is unmatched in the 
world.
    We are also 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 reduction in the 
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, and we are looking forward to securing new 
commitments from a number of different sectors and even greater 
reductions as a result of these efforts.
    These are simply a few of the more than 60 federal programs 
that are currently underway--some are mandatory and, in fact, 
quite regulatory; some are incentive based; and some are 
voluntary--that will help to slow the growth in U.S. greenhouse 
gas emissions over the next decade and beyond.
    Finally, 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. We're increasing our funding for tropical 
forest conservation to $50 million in response to the point 
that I think Senator Nelson very eloquently raised. We're 
providing $178 million for the Global Environment Facility next 
year, which includes a substantial $70 million payment for 
arrears incurred during the prior administration. The 
President's fiscal year 2003 budget also requests $156 million 
in funding for USAID climate-change programs.
    In the past year alone, the Administration has entered into 
bilateral agreements with Japan, Australia, Canada, Italy, the 
European Union, CONCAUSA, which is the Central American 
countries, China, and India on climate-change science, energy, 
and sequestration technology and policy approaches. We have had 
more engagement internationally on this range of issues than 
anyone might have imagined. The conversation is quite dynamic 
right now.
    Senator Kerry. Mr. Connaughton, I need to just keep you 
mindful of the time frame.
    Mr. Connaughton. Certainly.
    President Bush's philosophy, which ties our benchmark for 
progress with economic growth, represents a careful balancing 
that promises significant emission 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, I thank you for inviting me here today, and I'll be 
pleased to answer any questions that you may have. I ask that 
the written material accompanying my testimony be entered into 
the record.
    [The prepared statement of Mr. Connaughton follows:]
      Prepared Statement of Hon. James L. Connaughton, Chairman, 
              White House Council on Environmental Quality

    Mr. Chairman, Senator McCain 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 colleagues Dr. Hubbard, Dr. 
Marburger, and Dr. Mahoney.
    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. Dr. 
Hubbard will speak in detail about the compelling advantages of this 
national goal and how it will be measured. 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 2003--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. Dr. Marburger and Dr. Mahoney will describe for you our 
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. 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 FY03 budget also requests $156 million 
in funding for USAID climate change programs. 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\
    1. Statement of President George Bush (June 11, 2001)
---------------------------------------------------------------------------
    \1\ The Appendices will be maintained in Committee files.
---------------------------------------------------------------------------
    2. Policy Book Accompanying Presidential Statement (June 11, 2001)
    3. Statement of President George Bush (February 14, 2002)
    4. Policy Book Accompanying Presidential Statement (February 14, 
2002)
    5. Report of Federal Climate Change Expenditures (July 9, 2002)
    6. Review of Bilateral Agreements and Initiatives

    Senator Kerry. Let me say that, for each of you, your full 
statements will be placed in the record as if read in full. If 
we could try to do the summaries in the 5 minutes appropriated, 
then that will give us more time to have some dialog. Thank 
you.
    Dr. Hubbard.

   STATEMENT OF HON. R. GLENN HUBBARD, CHAIRMAN, COUNCIL OF 
                       ECONOMIC ADVISERS

    Dr. Hubbard. Thank you, Mr. Chairman, Members of the 
Committee. I'll try to keep my remarks very brief, both 
absolutely and in intensity. I have a longer version of the 
testimony, but also would refer you to the Economic Report of 
the President this year, where there's a much longer discussion 
of the economic arguments that I'll make.
    I really just want to bring up three points. First is, as a 
matter of economic policy--and this question is so important, 
as you teed up, Mr. Chairman--How should one think about 
economic policy elements? Second, How would you design a goal, 
once you realize how important this problem is? And, third, How 
would you carry it out?
    The President's strategy really has three prongs. First, as 
has been noted, slowing the growth of net greenhouse gas 
emissions, then laying the groundwork for both current and 
future action. And, importantly, working with other nations to 
develop an efficient and effective response.
    This first element of the U.S. strategy is really slowing 
the growth of our greenhouse gas emissions. As you know, the 
President has set a greenhouse gas intensity target, that is 
emissions per dollar of GDP, a reduction of 18 percent over the 
next 10 years, as the picture here indicates. Two things I just 
want to stress about this picture. You'll notice that under 
current efforts, we would still have an improvement. As Senator 
Burns noted, the economy has efficiencies here anyway. We're 
not just producing more. We are doing it better. But the 
President has also requested improvement.
    One difference between an intensity target and an absolute 
target is as a problem of decision making under uncertainty; 
and, in here, in this respect, an intensity target will do much 
less damage to our economy, as I'll explain in a moment.
    The second element of the President's plan focuses on 
foundations for current and future policies, investments in 
science, technology, and institutions. You don't leap from 
textbook to practice here. Institutions do not develop 
overnight. Science does not develop overnight. These are very 
long-term efforts.
    The final element of the President's approach incorporates 
international elements, because, as we all know, without 
participation, eventually, of developing countries, we go 
nowhere.
    Now, to this question of uncertainty, the uncertainty 
surrounding the ultimate consequences of climate change and the 
necessity of the long-term effort here make it a point of 
economics that very sharp, short-term responses, as would have 
been required, for example, under the Kyoto Protocol, are not 
warranted. They are simply not the right medicine for the 
problem at hand.
    A quick analogy might be more instructive than economics 
and math. If you smell smoke in your house, it would be silly 
to simply lie there and pretend you don't smell it, but nor 
would you throw your children out the window and jump yourself. 
You'd probably get up, check it out, and then decide how to 
proceed.
    Starting in that right direction, President Bush responded 
to the need for a serious and measured response by calling for 
an intensity target, the very two--two very important features 
of this, the way in which this target is defined, and then how 
you get to 18 percent.
    Again, most of the discussion, as the Chairman helpfully 
indicated in his opening remarks, has been about absolute 
targets. This is a real problem when you have uncertainty. Much 
of the uncertainty, of course, is over economic growth rates as 
well as it is about science and the costs and benefits here. We 
could wind up doing very large damage to the economy were the 
economy simply to grow more rapidly. I'll come to the point 
about one way of satisfying Kyoto Protocols, as being simply to 
grow more slowly, in a moment.
    Indeed, while emissions growth rates varied a lot across 
countries in the 1990s, almost all of that variation can be 
explained by differing rates of economic growth, as my 
testimony indicated. That is also true over time for the United 
States. You simply cannot have a policy here that does not 
acknowledge this intensity fact. Intensity has a nice analog to 
other things, too. It's called productivity. Normally, when we 
think about giving incentives for innovation, we focus there.
    Now, how does one think about the 18 percent and designing 
a more responsible path than Kyoto? First, it's important to 
point out, as this picture indicates, that this is a real 
improvement over business as usual, and that's a business as 
usual that already assumes significant technological advance.
    The ability to achieve what the President has set out here 
is very similar to forecasts that my predecessors in the 
Clinton Administration had noted. For example, my predecessor, 
Janet Yellen, testified in 1998, under a set of trading 
assumptions that I wouldn't necessarily ascribe to, would 
produce a reduction roughly of the sort that we're talking 
about here. So there's really no disagreement at all under the 
economics. This is widely accepted in my profession.
    It's also important to note that the 4\1/2\ percent 
reduction extra that the President is asking for is, in fact, 
comparable to the average reductions required under Kyoto. Now, 
you're asking yourself, ``How can that possibly be? '' Well, 
you have to remember that much of the reductions under Kyoto 
aren't real. That is, they involve the trading of hot air. They 
are commercial and financial transactions. They are not 
bonafide long-term reductions. Or, put more starkly, the 
overall target could be met quite easily and always by simply 
using undesirably poor economic growth in some subset of 
countries. That's not good development policy. It's not good 
environmental policy. A group of economists at MIT has also 
come to the same conclusion that roughly the Kyoto reductions 
would match what we're talking about here.
    We need a long-term response to a long-term problem. This 
is a problem of greenhouse gas concentrations, which can be 
taken out, as they can be put in--that is, over time. The key 
is to do it in the lowest-cost way and to find the lowest-cost 
ways first before going to the highest-cost ways. Just to give 
you a quick example, a 30-percent reduction in emissions in the 
near term is not twice as costly as a 15 percent reduction. 
It's six times as costly. Timing matters a lot.
    Now, the other economic feature I'd highlight for you is 
that the signposts here are really marked by institutions. Just 
as in the trade area, we have spent 50 years building 
institutions to support an international trading regime; so, 
too, is it important to build institutions here. Jim has 
already referred to a set of institution-building mechanisms 
that are happening domestically. I just want to highlight a 
couple that are important for the economics.
    We cannot leap to systems without having infrastructure in 
place. We need a voluntary emissions registry. We need to 
provide transferable credits for voluntary real emissions 
reductions. We have to build these institutions. As Jim 
indicated, it is also important to join, as we have vigorously, 
the building of international institutions.
    So, just to close where I began, Mr. Chairman, again, I 
think there are three salient points here as a matter of 
economic policy. When you have decision making under 
uncertainty, you go slow, you take the lowest cost first, and 
you build institutions. When you design a goal, you make it 
match the problem, and that's intensity. Implementation is 
about building those institutions.
    Thank you very much.
    [The prepared statement of Dr. Hubbard follows:]

        Prepared Statement of Hon. R. Glenn Hubbard, Chairman, 
                      Council of Economic Advisers

    Mr. Chairman, Senator McCain, and Members of the Committee, I am 
pleased to appear before you this morning to discuss the 
Administration's climate change policy. On February 14, President Bush 
announced his effective and science-based strategy for moving forward 
on climate change. This strategy establishes environmentally and 
economically sensible goals, concrete steps to meet the goals, and a 
balanced portfolio of research, emission reductions, and international 
cooperation.
    The U.S. strategy has three-prongs: slowing the growth of net 
greenhouse gas (GHG) emissions, laying important groundwork for both 
current and future action, and working with other nations to develop an 
efficient and effective global response. This strategy builds on the 
Administration's June 2001 commitment to improve our understanding of 
the causes and potential harms posed by climate change, and to develop 
technologies that offer promise to significantly slow the growth of 
emissions. It is also the first step in a long-term commitment to slow 
and, if the science justifies, stop and then reverse the growth of GHG 
emissions. Importantly, it takes advantage of our growing experience 
with building better and more flexible institutions to address 
environmental problems--a topic discussed at length in this year's 
Economic Report of the President.
    The first element of the United States climate strategy is slowing 
the growth of our GHG emissions. The President set a national goal of 
reducing U.S. greenhouse gas intensity (GHG emissions per dollar of 
GDP) by 18 percent over the next 10 years. Like an absolute emissions 
target, an intensity reduction of this magnitude requires real effort. 
Unlike an absolute emission target, an intensity target will not 
inadvertently hurt our economy.
    The second element focuses on creating a solid foundation for 
current and future policies--investments in science, technology, and 
institutions. Better science promotes better decision-making. Better 
technology offers the promise to slow emissions growth significantly. 
Better institutions enable us to pursue the lowest-cost emissions 
reduction opportunities, whatever they may be, whenever they arise over 
time, and wherever they occur both within and across nations. 
Improvements in the existing voluntary registry of greenhouse gas 
emissions, along with transferable credits for real emission 
reductions, are an important part of this institutional foundation. The 
registry improvements include better measurement and verification of 
the different greenhouse gases emitted by a wide variety of sources and 
activities, providing greater confidence in the reported results and 
encouraging firms to take account of their emissions. Credits for real 
emission reductions provide a mechanism that allows firms to avoid 
being penalized under any future climate policy or be rewarded under 
any future incentive policy, provides tangible evidence of the impacts 
of voluntarily adopting superior technologies, and provides incentives 
to curb future emissions.
    The final element of the President's approach incorporates 
international efforts, recognizing the critical importance of 
developing-country participation in any effective international 
response to climate change. This participation includes both near-term 
efforts to slow the growth in emissions and longer-term efforts to 
build capacity for future cooperation.
    Importantly, the President's approach addresses key shortcomings of 
the Kyoto Protocol. These shortcomings include an arbitrary short-run 
emissions reduction target that was far too severe given the long-run 
aspects of climate change and remaining scientific uncertainties, and 
that was unresponsive to economic growth. Indeed, as I will note below, 
reductions from domestic sources in 2012 under the President's approach 
are expected to be roughly comparable to those anticipated under the 
Kyoto Protocol, but without the Protocol's undesirable features. The 
Kyoto Protocol's focus on near-term targets, rather than on building up 
the science, technologies and institutions that could minimize the 
economic impact of meeting long-run goals, is particularly faulty given 
the limited ability to mount a flexible and cost-effective response in 
the near term. Finally, the Kyoto Protocol failed to include developing 
countries, limiting the effectiveness of any international effort.

        A JOURNEY OF A THOUSAND MILES BEGINS WITH A SINGLE STEP

    While the potential for human-induced climate change is real and 
deserves serious attention, there is significant uncertainty about how 
increases in concentrations translate into changes in temperatures and 
climate patterns, especially on regional and local levels. Global 
climate models, with all their uncertainties, are unable to predict 
regional and local impacts reliably. The role of natural variation in 
climate is not well understood. There is still more uncertainty about 
how temperature and changes in the climate would impact the environment 
and human populations. In addition, the extent to which concentrations 
will rise in the future is unclear because neither future emission 
trends nor potential absorption of emissions by the ocean, vegetation, 
and other ``sinks'' is known with certainty.
    These large uncertainties underlay the President's decision in June 
2001 to focus spending on climate-related research, by creating the 
U.S. Climate Change Research Initiative. This initiative will identify 
and study priority areas where increased research can make the most 
significant strides toward reducing uncertainty. Over the next year 
alone, the United States will spend $1.75 billion for basic research on 
climate change.\1\ Indeed, the United States will spend as much as the 
rest of the world combined on research in this important area.
---------------------------------------------------------------------------
    \1\ See Global Climate Change Policy Book, http://
www.whitehouse.gov/news/releases/2002/02/climatechange.html.
---------------------------------------------------------------------------
    A distinguishing characteristic of climate change is that any 
successful effort to address the potential risk of climate change from 
most greenhouse gases will stem from cumulative efforts over decades, 
not just a few years. In 2000, for example, global CO2 
emissions contributed to an increase in atmospheric concentrations of 
less than 0.5 percent,\2\ a small increase compared to the 20 percent 
to 200 percent increase in concentrations that researchers often 
propose as a possible long-term stabilization goal.\3\ As substantial 
changes in concentration only result from cumulative emissions over a 
period of decades, the future benefits of efforts to reduce emissions 
will be nearly the same whether the reductions, ton for ton, occur 
today or years in the future.
---------------------------------------------------------------------------
    \2\ Data Source: C.D. Keeling, T.P. Whorf, and the Carbon Dioxide 
Research Group, Scripps Institution of Oceanography (SIO), University 
of California, La Jolla, California. See http://cdiac.ornl.gov/ftp/
ndp001/maunaloa.co2.
    \3\ This calculation is based on increasing from current 
concentration levels of approximately 370 ppmv to future stabilization 
targets ranging from 450 to 750 ppmv. See ``Climate Change 2001: The 
Scientific Basis,'' Intergovernmental Panel on Climate Change: Working 
Group One, Third Assessment Report, page 14 (http://www.ipcc.ch/pub/
spm22-01.pdf) and C.D. Keeling, T.P. Whorf, and the Carbon Dioxide 
Research Group, Scripps Institution of Oceanography (SIO), University 
of California, La Jolla, California. See http://cdiac.ornl.gov/ftp/
ndp001/maunaloa.co2.
---------------------------------------------------------------------------
    The uncertainty surrounding the ultimate consequences of climate 
change and the necessity of a long-term effort to address it combine to 
suggest that severe and costly near-term measures to reduce emissions 
are not warranted. Instead, a serious but measured first step is in 
order. A helpful analogy is posed by M.I.T. economist Richard 
Schmalensee and his colleagues: If you smell smoke in your house, it 
would be silly to do nothing until you actually see flames, but you 
also should not hose down the house after one whiff of what might be 
smoke.

                    STARTING IN THE RIGHT DIRECTION

    President Bush responded to the need for a serious but measured 
response by calling for an 18 percent reduction in greenhouse gas 
intensity (emissions of greenhouse gases per dollar of economic output) 
by 2012. As the President explained, this is the first step in a policy 
that will first slow, and if the science dictates the necessity, stop 
and reverse growth in greenhouse gas emissions (see Chart 1). There are 
two important features of this goal--the way in which the goal is 
defined based on GHG intensity, and the specific 18 percent target.
Redefining Short-term Goals
    Most discussions of goals for slowing the growth of greenhouse gas 
emissions at the national level have focused on absolute emission 
targets, exemplified by the Kyoto Protocol. Meeting absolute emission 
targets can be costly, however, because of the substantial uncertainty 
regarding how difficult it will be to meet them. This uncertainty about 
the difficulty or cost associated with achieving an absolute target is, 
in turn, primarily driven by uncertainty regarding how emissions would 
grow absent such a target and therefore the reductions required to meet 
it. The Intergovernmental Panel on Climate Change recently developed a 
number of possible scenarios for growth in emissions over the coming 
century. While it is not surprising that projections for growth over a 
century may vary widely, it is somewhat surprising that the various 
scenarios of potential growth in CO2 emissions from 2000 to 
2010 alone ranged from under 4 percent to almost 40 percent.\4\
---------------------------------------------------------------------------
    \4\ See ``Emission Scenarios,'' Intergovernmental Panel on Climate 
Change: Working Group Three, pages 247, 386, and 511.
---------------------------------------------------------------------------
    Much of the significant variation in projections of emissions 
growth reflects uncertainty about future economic growth. Indeed, Chart 
2 shows that, while emissions growth rates varied substantially across 
countries during the 1990s, much of this variation can be explained by 
differing rates of economic growth (hence the upward sloping pattern 
when these variables are plotted together). Moreover, looking at 
changes in emissions growth rates across time, Chart 3 shows that while 
U.S. GHG emissions growth over the past two decades was somewhat 
erratic, it has closely tracked economic growth. This correlation is 
largely due to the impact of economic growth on demand for energy and, 
in turn, the GHG emissions associated with the generation of that 
energy. The relationship is not exact, of course; energy efficiency has 
improved throughout the years, and nuclear power and renewable sources 
for electricity generation, among other factors, have limited the 
growth in fossil fuel use necessary to meet rising energy demands. 
Nonetheless, economic growth continues to be the key driver of 
emissions growth. By acknowledging and incorporating this relationship, 
an intensity-based goal linked to changes in economic output reduces 
uncertainty about the required level of effort.
    Just as an absolute goal, an intensity-based goal could be viewed 
as establishing a target for future emissions. The expected tonnage 
target equals the intensity goal times the expected level of economic 
output:

        Expected Tonnage Emissions Target (tons of carbon) = Intensity 
        Target 
        (tons of carbon per dollar)  Expected Economic Output 
        (dollars).

    If economic growth were certain, then the two types of goals would 
be identical. However, the most fundamental feature of climate change 
is uncertainty, and the pace of economic growth is one source of 
uncertainty. For this reason, the previous Administration, in 
discussing developing country participation in the Kyoto Protocol 
argued that ``An emissions target . . . could be indexed to a country's 
economic performance (such as GDP) . . . Such targets could avoid a 
crunch arising from faster than projected economic growth between now 
and the commitment period.'' \5\
---------------------------------------------------------------------------
    \5\ See Economic Report of the President 2000, Washington: U.S. 
Government Printing Office, Box 7-6, page 269.
---------------------------------------------------------------------------
    Thus, if economic growth is as expected, an absolute target can 
mimic the intensity target. However, if economic growth turns out to be 
much faster than expected, the intensity target flexibly adjusts the 
tonnage target upward to permit taking advantage of the benefits of 
additional resources from growth. Should growth be slower than 
expected, the intensity target permits a lower tonnage target in a way 
that an absolute emissions goal cannot.
    The long-term, cumulative feature of the climate change problem 
implies that the economic advantages of an intensity-based goal come 
with minimal environmental disadvantages. To see this, if an intensity-
based goal results in higher than expected emissions over the next 
decade, then more aggressive emissions reductions can remedy the 
problem in the future with little consequence for the environment.
Designing a More Responsible Path Than Kyoto
    Reaching a goal of 18 percent reduction in emissions intensity will 
require real effort over the next decade. In the past, emissions 
intensity has gradually fallen as a result of investment and 
innovations producing a number of significant changes in the economy: 
An increasing share of less energy-intensive sectors in national 
economic output, technological advances in pollution control and the 
cleaner use of fuels, and reductions in the emissions-intensity of 
electricity production due to (among other factors) the increased 
contribution of natural gas and nuclear power to electricity 
production. Even as these trends continue, independent forecasts by the 
Energy Information Administration predict only a 14 percent further 
improvement in emissions intensity over the next 10 years.\6\ The 
President's goal will require emissions intensity to fall 30 percent 
faster, resulting in a 4\1/2\ percent--or 100 million metric ton 
(carbon-equivalent)--additional decline in 2012 emissions relative to 
the EIA forecast (see Chart 4).
---------------------------------------------------------------------------
    \6\ See Addendum to the Global Climate Change Policy Book, http://
www.whitehouse.gov/news/releases/2002/02/addendum.pdf.
---------------------------------------------------------------------------
    The President's 4\1/2\ percent reduction plan results in roughly 
the same volume of domestic reductions as envisioned by the previous 
Administration. In March 4, 1998, testimony before the House 
Subcommittee on Energy and Power concerning the Kyoto Protocol, CEA 
Chair Janet Yellen argued that with key developing country 
participation and an efficient trading program (neither of which is 
true under the Kyoto Protocol under the Marrakech Accords), the U.S. 
would reduce between 100 and 150 million metric tons of carbon relative 
to business as usual. While I am skeptical that these developing 
countries would voluntarily agree to emission limits under the Protocol 
and, even if they chose to participate, that they could efficiently 
trade in emission reductions, I do agree that domestic reductions of 
100 million metric tons relative to forecast 2010 levels is a 
reasonable target.\7\
---------------------------------------------------------------------------
    \7\ See Testimony of Janet Yellen, Chairman, Council of Economic 
Advisers, on H271-9 before the Subcommittee on Power and Energy of the 
House Committee on Commerce, page 323, lines 26 and 29.
---------------------------------------------------------------------------
    The 4\1/2\ percent reduction is also comparable to the average 
reductions required under the Kyoto Protocol for countries remaining in 
that agreement. Chart 5 shows the U.S. commitment alongside estimates 
of the average required reductions for the remaining countries with 
emission limits under the Kyoto Protocol. While some regions, such as 
Canada and Japan, have particularly onerous targets, others, such as 
the transitional economies of the former Soviet Union and Eastern 
Europe, have targets far exceeding their forecast emissions--hot air. 
According to one set of estimates by the Energy Information 
Administration, this hot air exceeds the needs of other countries with 
actual reduction targets, with a net effect of zero required average 
reductions. Put more starkly, the overall target would be met by using 
undesirably poor economic growth in some countries as the route to 
compliance in the remainder. Another set of estimates from a group at 
MIT shows required average reductions of 7.2 percent. Viewed together, 
these forecasts suggest an effort to reduce emissions among remaining 
Kyoto countries that is roughly comparable to the U.S. commitment.\8\
---------------------------------------------------------------------------
    \8\ See Energy Information Administration (EIA), International 
Energy Outlook 2001, DOE/EIA-0484 (2001) (Washington, DC, March 2001); 
and John Reilly, MIT Joint Program on the Science and Policy of Global 
Change, Snowmass Summer Workshop (August 6, 2001). The IEO 2001 
estimates that total required reductions among the Annex I countries 
(those required to reduce emissions under the Kyoto Protocol) would be 
554 million metric tons in 2010. Of that, the United States' burden is 
558 million metric tons (page 14), leaving a marginal surplus of 
reductions--without any further effort--among remaining participants 
after U.S. withdrawal from the Protocol. The MIT study provides 
slightly higher estimates of the burden among remaining participants (7 
percent, or 290 million metric tons).
---------------------------------------------------------------------------
Developing a Long-term Response to a Long-term Problem
    Reducing greenhouse gas intensity requires a portfolio of policies 
including both research on future reduction technologies as well as 
investment in current technologies. Each potential short-term effort to 
limit the growth of GHG emissions should be evaluated in comparison 
with the option to shift effort to later decades, while still 
maintaining the same long-term cumulative reduction goal and desired 
level of environmental protection. Two alternative schedules of 
emissions reductions can lead to different levels of emissions over 
time, but the same ultimate level of GHG concentrations. The 
appropriate choice between paths that differ in near-term versus long-
term emissions reductions depends on whether we can reduce overall 
costs by spending more on research and less on emission reductions now, 
in order to achieve greater, but significantly cheaper, emission 
reductions in the future thanks to improved technologies. It also 
depends on whether reductions now require early retirement of 
productive assets; throwing away something valuable is a real cost. 
Consideration of the appropriate timing of emissions reduction is all 
the more important because the cost of achieving reductions over a 
short horizon increases dramatically with the scale of reductions. One 
estimate suggests that a 30 percent reduction in emissions in the near 
term is 6 times more expensive than a 15 percent reduction. That is, 
doubling the near-term reduction target increases costs sixfold.\9\
---------------------------------------------------------------------------
    \9\ Numerous estimates of the cost to the United States of 
different levels of emissions reductions are presented in John Weyant 
and Jennifer Hill, ``Introduction and Overview,'' The Energy Journal 
(Special Issue, 1999), page xxxvii.
---------------------------------------------------------------------------
    A substantial body of research has examined this issue of balancing 
current and future emission reductions.\10\ It has focused on the key 
features of the climate change problem--the uncertainty associated with 
the benefits and costs of addressing climate change; the replacement of 
existing energy-using equipment, structures, and other physical assets 
required to reduce emissions; and improvements in technology over time. 
These features commonly lead to two related conclusions. First, there 
is significant value associated with better information, suggesting a 
critical role for climate science. Second, the least expensive way to 
achieve a particular concentration target involves a gradual approach 
that avoids drastic changes to the capital stock.
---------------------------------------------------------------------------
    \10\ A summary of the research on this topic can be found in 
Michael Toman, ``Moving Ahead with Climate Policy,'' RFF Climate Change 
Issues Brief, 2000. An additional summary of studies on this topic can 
be found in ``Climate Change 2001: Mitigation,'' Intergovernmental 
Panel on Climate Change: Working Group Three, Third Assessment Report, 
pages 544-552. See http://www.ipcc.ch/pub/wg3spm.pdf.
---------------------------------------------------------------------------
    In addition to lowering overall costs, a more gradual approach to 
reducing greenhouse gas emissions reduces the possibility that an 
unnecessarily onerous economic burden will discourage pursuit of the 
long-term problem. The long-term response to climate change can be 
likened to running a marathon, in which the efforts in the next decade 
are analogous to the first few miles. The 30 percent reduction required 
of the United States under the Kyoto Protocol would entail progressing 
a third of the way towards the long-term response in the first 10 
years. That would be equivalent to sprinting the first few miles of a 
marathon. The risk of such a strategy is that, after sprinting the 
first few miles, a runner may be in such pain that she decides to quit 
the race even though she could otherwise have finished it had she 
started more gradually.

           THE JOURNEY'S SIGNPOSTS ARE MARKED BY INSTITUTIONS

    In addition to setting a responsible short-term goal, the 
President's approach recognizes that cost-effective climate change 
policies in the future are made possible only by building institutions 
to facilitate those policies today. Numerous studies demonstrate that 
taking advantage of low-cost opportunities to reduce emissions, 
wherever those opportunities occur, reduces the overall cost of meeting 
an emissions goal.\11\ Therefore expanding the set of reduction 
opportunities targeted by a policy--for instance, by including each of 
the various GHGs or a wider variety of sources--can substantially lower 
the cost of reaching a particular goal.
---------------------------------------------------------------------------
    \11\ A summary of studies on this topic can be found in ``Climate 
Change 2001: Mitigation,'' Intergovernmental Panel on Climate Change: 
Working Group Three, Third Assessment Report, pages 522-523 and 536-
542.
---------------------------------------------------------------------------
    The United States and the rest of the global community are still, 
however, far from being able to tap fully this flexibility in 
responding to climate change. On the one hand, the capacity already 
exists in the United States to encourage efficient reductions from 
energy-related sources that make up a substantial share of our 
aggregate GHG emissions. The $4.6 billion in tax incentives for 
renewable energy and energy efficiency programs in the President's 5-
year budget plan are examples of this kind of capacity. On the other 
hand, research suggests that about two-thirds of the low-cost 
reductions opportunities stem from the very sources for which we do not 
yet have this capacity; even less capacity exists in other nations. We 
need to build institutions to capture these opportunities.
    The President's recommendation to improve the nation's voluntary 
emissions registry and to provide transferable credits for voluntary 
real emission reductions--these are concrete steps to start building 
institutions. The improved emission registry will allow improved 
tracking of emissions from hard-to-reach sources that offer low-cost 
reductions. Transferable credits for real reductions--including credit 
for adoption of new energy-saving technologies and practices, 
reductions of non-CO2 gases, and sequestration--means that 
firms seeking insurance against future policy action on, or reward from 
future incentives for, climate change can obtain it from the lowest-
cost sources. This approach fosters the creation of institutions--
standards, protocols, technology, and popular awareness--that provide 
access to inexpensive reductions and help the country meet our emission 
goals efficiently.

Flexibility Matters
    In contrast to many environmental problems that result from a 
specific chemical or a narrow set of activities located in a confined 
area, the risk of climate change depends on the combined accumulation 
in the atmosphere of many different GHGs emitted from all over the 
world. While the contribution of a given amount of each GHG to climate 
change varies according to its relative potency in trapping energy and 
how long it naturally remains in the atmosphere, emission reductions of 
the various gases, adjusted for these differences, are equally 
valuable.\12\ Moreover, because atmospheric concentration of GHGs 
matter, not emissions, sequestration (e.g., absorption into forests and 
soil) of gases already in the atmosphere provides additional 
opportunities to reduce climate change risks.
---------------------------------------------------------------------------
    \12\ As a result, emissions of greenhouse gases are often measured 
in tons of carbon equivalent, which weights the emissions of each gas 
according to the combined effect of its relative potency and residence 
time in the atmosphere.
---------------------------------------------------------------------------
    The large contribution of carbon dioxide emissions to overall 
increases in the atmospheric GHG concentrations implies that reducing 
the growth in GHG emissions will be important to any long-term strategy 
to address climate change. Other gases comprised only 18 percent of 
total U.S. GHG emissions in 1999, while land-use changes and forestry 
in the United States sequestered the equivalent of roughly 15 percent 
of total emissions.\13\ However, emissions of these other gases and 
sequestration offer the bulk of inexpensive reduction opportunities for 
the United States right now--nearly twice as much as carbon dioxide 
emissions according to a recent EPA study--making it essential to 
include them in any cost-effective approach.\14\
---------------------------------------------------------------------------
    \13\ See Environmental Protection Agency, Inventory of U.S. 
Greenhouse Gas Emissions and Sinks: 1990-1999, (April 2001). See http:/
/www.epa.gov/globalwarming/publications/emissions/us2001/pdf/table-es-
1.pdf.
    \14\ See Environmental Protection Agency, Analysis of Multi-
emissions Proposals for the U.S. Electricity Sector, Requested by 
Senators Smith, Voinovich, and Brownback. See http://www.epa.gov/oar/
meproposalsanalysis.pdf.
---------------------------------------------------------------------------
    GHG emissions reductions also have the same climate change benefits 
wherever they occur--within a company, across the country, and around 
the world. In sharp contrast to emissions of pollutants like sulfur 
dioxide and nitrogen oxides that have both local and regional 
consequences, GHG emissions in Asia--or anywhere else--will have 
exactly the same consequences for the United States as GHG emissions 
within the United States. Not only do we want to encourage efficient 
emissions reductions across gases and activities, but across the 
country and around the world as well.
    While the absolute estimates of the costs and cost savings 
associated with various policies are subject to considerable 
uncertainty and disagreement, flexible policies undeniably lead to 
large relative cost savings compared to less flexible alternatives--if 
the right institutions are in place.

Flexibility Requires New Institutions
    Realizing the potential cost savings from flexible polices as we 
pursue our 18 percent intensity goal requires a certain set of 
institutions--regardless of whether the policy is based on voluntary 
challenges, or tax incentives, or possibly broad-based market programs 
in the future. Emissions and reductions must be measurable with 
equivalent treatment for equivalent emission consequences. Incentives 
are needed to motivate firms to seek reductions. Skills are needed to 
evaluate incentives and options. Awareness is required to uncover as 
many opportunities as possible. The President's plan addresses these 
needs in a creative and responsible manner.
    Perhaps the most desirable feature of a flexible system is to 
encourage the measurement and monitoring of emissions from a wide 
variety of sources. It is impossible to identify inexpensive 
opportunities to reduce emissions if emissions cannot be measured. 
Among greenhouse gases, these emissions can come from widely dispersed 
sources and/or be difficult to directly or indirectly monitor. The 
development of standardized protocols--such as the improved emission 
registry called for by the President--can overcome these difficulties, 
but it will take time.
    Once various emissions are measurable, reductions can be encouraged 
by an incentive. Here, U.S. policy has challenged businesses to help 
meet the goal, provided a set of tax incentives to spur certain 
activities, indicated additional measures may be forthcoming in 
response to both scientific, technological, and economic progress, and 
provided a means--the transferable credit system--for firms to protect 
their current actions from penalization, or to obtain rewards from 
incentives, under a future policy. By granting credits for real 
reductions from any source, and allowing anyone to buy those credits, 
the President has set up a program that allows firms to insure against, 
or take advantage of, future actions in the most flexible possible way. 
This approach creates a clear incentive to reduce emissions toward the 
nation's intensity goal, but because the program is voluntary, no one 
is compelled to do anything.

The U.S. Approach Provides the Building Blocks
    Developing the capacity to address climate change now and in the 
future will require substantial effort, institution building, and 
innovation. In his climate change statement on February 14, the 
President directed the Secretary of Energy to recommend improvements to 
an existing voluntary registry of emissions reductions established by 
the 1992 Energy Policy Act. The Secretary's recommendations, sent to 
the President on Monday of this week, and attached as an appendix to 
this testimony, emphasize means of improving the accuracy, reliability, 
and verifiability of measurements of emissions and reductions, as well 
as means of providing transferable credits for real emission reductions 
that will avoid penalizing firms for those reductions under any future 
program.
    Improvements to the existing emission registry address one of the 
institutions required for a flexible policy--improved standards and 
protocols for emissions measurement from as many sources (and sinks) as 
possible, treating all real reductions equivalently. The provision of 
transferable credits, along with tax incentives and the President's 
national challenge, addresses another: incentives. In addition to the 
obvious incentives associated with tax incentives and a Presidential 
challenge, transferable credits provide an opportunity for firms to 
obtain insurance against, and take advantage of, future climate policy 
actions. That opportunity is an incentive, one enhanced by several 
features of the President's initiative.
    First, the President has indicated that these credits should 
protect firms who reduce their emissions now from penalization, or 
permit rewards from incentives, under any future policy. This 
protection per se has value. The creation of such a hedge is analogous 
to the purchase of automobile insurance--a fixed expenditure now that 
may become more valuable precisely in the face of an adverse outcome 
(stricter emission limits in the climate context or an auto accident in 
the insurance context).
    Second, the credits are only given for real reductions, as 
determined by an accurate, reliable, and verifiable emissions registry. 
As the existing registry is improved and the rules for crediting are 
developed, they will be designed to create the utmost confidence in the 
measured reductions. It is this confidence, as much as statements and 
statutes, that ensures that future policy will honor these credits in 
later years--if the science, technology, and economic considerations 
require it.
    Third, the credits are transferable, allowing businesses that want 
to insure against penalties, or take advantage of incentives, in future 
policy and even speculators to purchase these government-sanctioned 
reductions--regardless of their own reduction opportunities. Firms and 
individuals with the greatest interest in hedging against future 
climate policies may want more credits than they can generate through 
their own reduction opportunities. Likewise, firms and individuals with 
significant low-cost reduction opportunities may not want as many 
credits as they can generate. Trading allows those who want more 
credits to buy them from the cheapest sources, inside or outside of 
their own firm.
    Regardless of whether one is concerned about encouraging voluntary 
reductions now, or preparing for possible cost-effective responses in 
the future, registry enhancement and transferable credit for real 
reductions create the right institutions for current and future 
policies.

           A SUCCESSFUL JOURNEY REQUIRES BROAD PARTICIPATION

    The U.S. climate change initiative has taken a number of explicit 
steps to develop an efficient and practical international response to 
climate change, and a number of its domestic elements have significant 
implications for broadening international participation. A major focus 
of the new approach is increasing the capacity of developing countries 
to contribute to international efforts to address climate change. The 
participation of developing countries is critical for two reasons. 
First, in the long run, the ability of any effort to mitigate 
effectively potential human-induced climate change depends on the 
participation of developing countries as those countries make up a 
majority of total GHG emissions now and much of the expected growth in 
coming years. Second, many low-cost opportunities for reducing net GHG 
emissions can be found in developing countries. Ignoring these 
opportunities raises the overall potential cost of addressing climate 
change for the world as a whole.
    The United States is providing assistance to increase the capacity 
of developing countries to address climate change. The President has 
requested $50 million to fund tropical forestry conservation in 
developing countries; up to $40 million of these funds may be used for 
the Tropical Forest Conservation Act, reducing countries' debt burdens 
while protecting existing greenhouse gases sequestered in forests and 
biomass. In addition, the President has requested $178 million in 
funding for the United Nations' Global Environment Facility. The Global 
Environment Facility funds the extra costs (over normal development 
costs) of reducing greenhouse gas emissions in energy and other 
projects in developing countries. The President has also requested $156 
million for climate change programs through the U.S. Agency for 
International Development. Also, the President has focused on helping 
developing countries prevent illegal logging.
    Efforts by developing countries to limit GHG emissions will be 
promoted by these direct steps, and also by the introduction of an 
intensity-based goal and development of improved methods for measuring 
and crediting emissions reductions. A key concern for developing 
countries contemplating efforts to reduce GHG emissions is how 
absolute, Kyoto-like, emissions targets could limit opportunities for 
economic growth. In contrast, an intensity-based approach explicitly 
takes account of economic growth, adjusting the emissions goal in 
tandem with changes in economic output. By shifting toward such a goal, 
one can highlight a way of defining short-term goals that would be more 
attractive to developing countries than are absolute targets. Note that 
an 18 percent intensity goal, adopted by all nations over the next 10 
years, would lower world emissions by more than 800 million metric tons 
relative to forecast levels.\15\
---------------------------------------------------------------------------
    \15\ This estimate is based on world GDP and carbon dioxide 
emissions forecasts from Energy Information Administration (EIA), 
International Energy Outlook 2002, Tables A3 and A10. See http://
www.eia.doe.gov/oiaf/ieo/pdf/0484(2002).pdf.
---------------------------------------------------------------------------
    Standardizing means of measuring net emissions from a wide variety 
of sources through registry enhancements also has implications for 
developing-country participation. For many developing countries, 
energy-related activities are a much smaller share of total GHG 
emissions, while more difficult to measure activities--for example, 
agriculture--are an even greater contributor than in the United 
States.\16\ An improved ability to measure reductions in such emissions 
will enhance the capacity to tap into cheap emissions reduction 
opportunities in those developing countries. At the same time, not only 
will efforts to reduce the growth of GHG emissions occur at a low cost, 
but they may also yield health benefits in developing countries by 
reducing emissions of harmful pollutants.
---------------------------------------------------------------------------
    \16\ See ``Asia Least-Cost Greenhouse Gas Abatement Strategy: India 
National Report,'' 
Table no. 1-1. Manila: Asian Development Bank, ADB-GEF-UNDP, 1998. See 
http://www.ccasia.teri.res.in/country/india/ghg/tables.htm.
---------------------------------------------------------------------------
             A BALANCED APPROACH IS THE WAY TO MOVE FORWARD

    The Administration's approach to climate change carefully balances 
the need for immediate emission reductions, the need to develop strong, 
flexible institutions, and the need to learn more about the science and 
available technologies. First, the approach sets an intensity goal that 
requires real reductions while accommodating economic growth. Voluntary 
programs coupled with more than $4.6 billion in tax incentives over the 
next 5 years offer businesses and individuals opportunities and 
incentives to meet the goal. Second, the approach develops knowledge 
and institutions to address policies in the future. An enhanced 
emission registry, transferable credit for real emission reductions, 
$1.2 billion for technology research, development, and deployment to 
reduce emissions, and $1.7 billion for fundamental science this year 
related to climate change are substantial investments in our future 
capacity to address climate change. Finally, the approach emphasizes 
the importance of international, and especially developing-country, 
cooperation--looking for opportunities but recognizing constraints. 
These opportunities include both bilateral efforts (e.g., debt-for-
nature swaps and technology transfer programs) and multilateral efforts 
(e.g., funding for the Global Environmental Facility and the illegal 
logging initiative).
    Most importantly, the U.S. approach looks beyond the next decade. 
Climate change is a long-term issue that for too long has been 
mischaracterized as a short-term crisis. In particular, divisive 
efforts to seek dramatic short-term reductions ignore the need for a 
long-term architecture that is flexible in the face of economic growth 
and can adjust to new information. Intensity targets are a more 
sensible way to think about the evolution of goals, as absolute 
emission targets tend to penalize growing economies--precisely the 
countries that need to be included for an international response to 
work. Improved science, technology, and institutions are more 
valuable--and more achievable--than dramatic emission reductions right 
now.
    Thank you, Mr. Chairman. I look forward to answering any questions 
you or Members of the Committee may have.

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    Senator Kerry. Thank you very much, Dr. Hubbard.
    Dr. Marburger.

 STATEMENT OF HON. JOHN H. MARBURGER III, DIRECTOR, OFFICE OF 
                 SCIENCE AND TECHNOLOGY POLICY

    Dr. Marburger. Good morning, Mr. Chairman and Members of 
the Committee. I, too, am grateful for this opportunity to 
testify before you on this important subject of global climate 
change.
    The President takes the issue of global climate change very 
seriously, as we all do. In a series of clear and public 
statements, beginning June 11th last year, the President has 
described climate change as a complex, long-term challenge that 
requires an effective and science-based response. He's 
acknowledged the responsibility of the United States to lead in 
dealing with this challenge, and he has reaffirmed 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. He understands that the current 
state of climate science does not tell us what that level is.
    To accelerate our understanding of climate change, the 
President has taken steps to engage the best science and 
technology, stating that, ``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.''
    To begin the process within his Administration, the 
President last year requested the National Academy of Sciences 
to produce a report on the state of climate-change science. 
That report, the report that subsequently appeared, contains a 
sentence that is often half quoted, and I would like to read it 
here in its entirety. `` The changes observed over the last 
several decades are likely mostly due to human activities, but 
we cannot rule out that some significant part of these changes 
is also a reflection of natural variability.'' Later on in the 
report, the report says that, ``Because of the large and still 
uncertain level of natural variability inherent in the climate 
record and the uncertainties and the time histories of the 
various forcing agents, a causal linkage between the buildup of 
greenhouse gases in the atmosphere and the observed climate 
changes during the 20th century cannot be unequivocably 
established. The fact that the magnitude of the observed 
warming is large in comparison with natural variability in 
simulated climate models is suggestive of such a linkage, but 
it does not constitute proof of one, because the model 
simulations could be deficient in natural variability on the 
decadal to century time scale.''
    This entire report, available on the National Academy's Web 
site, provides valuable insights into the state of climate 
science, including the areas of fundamental uncertainty that 
require additional investigation. Even a cursory reading of 
this report indicates that the uncertainties are real, and they 
are significant.
    Mr. Chairman, I ask that this important report from our 
national academies be included as part of the record of this 
hearing.* It's the best summary of current science that I'm 
aware of on this issue.
---------------------------------------------------------------------------
    * The Information referred to has been retained in the Committee 
files.
---------------------------------------------------------------------------
    I would like to address some concerns that have arisen 
since the Climate Action Report was released several weeks ago. 
Some press accounts have said that this report acknowledged a 
dire, near-term threat to the environment from climate change. 
This is not true. Since much of the discussion of climate 
change and its impact centers on the use of computer models 
that attempt to look into the future, it may be useful to say a 
few words about them.
    Climate forecasting is similar to weather forecasting. With 
the most powerful computers, we can forecast the weather 
reliably only a few days ahead. How, then, can we hope to 
predict climatic conditions far into the future? Well, science 
has developed approaches to long-term climate modeling that do 
not attempt to give the fine detail that we expect in a weather 
report.
    Long-term climate models are sets of computer programs that 
attempt to simulate all the processes of nature that affect the 
atmosphere. The best current models average these properties 
over an area roughly the size of the State of Connecticut. It 
is not enough to model just the atmosphere, because climate is 
affected by the cloud cover, by vast ocean currents, by the 
polar ice sheets, by the presence of atmospheric chemicals and 
light-absorbing or -reflecting particles, and by the 
interaction of all these with life processes--trees, crops, 
ocean organisms and human beings. All these processes need to 
be understood quantitatively before they can be modeled. This 
is the ongoing challenge of climate-change research.
    Once the models are constructed, a task that is by no means 
complete today, they have to be loaded with current conditions 
before they can be used for prediction. That means the state of 
the entire earth must be determined at a given instant of time 
by measurements on land, sea, and air. Satellite imagery is 
important, but not sufficient for this task. Since the output 
of the models depends on the input, incomplete knowledge of the 
state of the earth translates to uncertainty in the 
predictions, and the output is notoriously sensitive to the 
input.
     This is why the Intergovernmental Panel on Climate Change 
concluded, in it's third assessment report, that, ``Science 
cannot predict the climate and its impacts in Milwaukee, 
Mombai, or Moscow half a century ahead very accurately, and it 
may never be able to do so.''
    Today's climate models cannot be used for definite 
predictions of regional or local conditions. They are typically 
run many times for a range of input assumptions, and the 
results are assessed with statistical methods. Given our 
present state of knowledge, it is not surprising that the 
results vary widely, leading to apparently contradictory 
results. That is why reports such as the 2002 U.S. Climate 
Action Report do not claim to make predictions about future 
impacts. That report employs scenarios that are invented to 
capture the range of results of multiple runs of different 
climate models with different ad hoc input assumptions.
    The scenarios are then used to make ``projections,'' a word 
that is carefully defined in an important footnote on page 84 
of this report, where it says that prediction is meant to 
indicate forecasting of an outcome that will occur as a result 
of the prevailing situation and recent trends, such as 
tomorrow's weather or next winter's El Nino event; whereas, 
``projection'' is used to refer to potential outcomes that 
would be expected if some scenario of future conditions were to 
come about. Notice that such projections can give no 
information about when or even if the assumed scenarios occur. 
I fear that many readers of the Climate Action Report have 
mistaken its projections for forecasts.
    President Bush is addressing the serious issue of climate 
change through a focused and vigorously managed program. He's 
engaging science to increase our understanding and technology 
to devise ways of meeting our responsibility to future 
generations while preserving our quality of life and 
maintaining the competitiveness of our economy.
    Thank you again for this opportunity to make these 
statements, and I'll be glad to answer questions, as well.
    [The prepared statement of Dr. Marburger follows:]

 Prepared Statement of Hon. John H. Marburger III, Director, Office of 
                     Science and Technology Policy

    Good morning, Mr. Chairman and Members of the Committee. I am 
grateful for this opportunity to testify before you on the important 
subject of global climate change.
    The President takes the issue of global climate change very 
seriously, and so do I. In a series of clear and public statements, the 
President has described climate change as a complex, long-term 
challenge that requires an effective and science-based response. The 
President has acknowledged the responsibility of the United States to 
lead in dealing with this challenge.
    On June 11 of last year, President Bush said that ``the issue of 
climate change respects no border. Its effects cannot be reined in by 
an army or 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.''
    In a subsequent speech on February 14 the President reaffirmed 
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. At the same time, the President noted that given current 
scientific uncertainties, no one knows what that level is. This clear 
statement challenges the scientific community to improve our 
understanding of this and other important uncertainties that remain, 
including the effect of natural variations in climate on warming, the 
actual degree and rate of warming, and how some of our actions could 
impact it.
    To accelerate our understanding of climate change, the President 
has taken steps to engage the best science and technology on these 
issues, stating, ``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.''
    The climate change at issue is a global phenomenon, and dealing 
with it requires actions that will affect the economies of nations. The 
``serious and sensible'' approach advocated by the President responds 
to the breadth of this challenge, and also to the quality of judgment 
needed to address it. To begin the process within his administration, 
the President last year requested the National Academy of Sciences to 
produce a report on the state of climate change science. The 2001 
National Academy Report on climate change that subsequently appeared 
contains a sentence that is often half-quoted, and I would like to read 
it here in its entirety: ``The changes observed over the last several 
decades are likely mostly due to human activities, but we cannot rule 
out that some significant part of these changes is also a reflection of 
natural variability.'' This is the third sentence in the summary at the 
very beginning of the report. The entire report, available on the 
National Academies website, provides valuable insights into the state 
of climate science, including areas of fundamental uncertainty that 
require additional investigation. Even a cursory reading of the report 
indicates that the uncertainties are real and they are significant. Mr. 
Chairman, I ask that this important report from our National Academies 
be included as part of the record of this hearing.
    I would like to address some concerns that have arisen since the 
Climate Action Report was released several weeks ago. Some press 
accounts have said that this report acknowledged a dire, near term 
threat to the environment from climate change. This is not true. Since 
much of the discussion of climate change and its impacts centers on the 
use of computer models that attempt to look into the future, it may be 
useful to reflect for a moment on these models and how they are 
employed.
    ``Climate'' is a general term for physical properties of the 
atmosphere, especially air temperature and pressure, wind, water vapor, 
and particle content. Air is a substance that obeys laws of motion that 
can be solved for small volumes using a computer. The same equations 
are used to estimate, or ``forecast,'' future weather, based on current 
conditions. With the most powerful computers, we can forecast the 
weather reliably only a few days ahead, as you know. How then can we 
hope to predict climatic conditions far into the future? Science has 
developed approaches to long-term climate modeling that do not attempt 
to give the fine detail we expect in a weather report.
    Long-term climate models are sets of computer programs that attempt 
to simulate all the processes of nature that affect the atmosphere. The 
best current models average these properties over an area roughly the 
size of the State of Connecticut. It is not enough to model just the 
atmosphere, because climate is affected by the cloud cover, by vast 
ocean currents, by the polar ice sheets, by the presence of atmospheric 
chemicals and light absorbing or reflecting particles, and by the 
interaction of all these with life processes--trees, crops, ocean 
organisms, and human beings. All these processes need to be understood 
quantitatively before they can be modeled. This is the ongoing 
challenge of climate change research.
    Once the models are constructed--a task that is by no means 
complete today--they have to be loaded with current conditions before 
they can be used for prediction. That means the state of the entire 
earth must be determined at a given instant of time by measurements on 
land, sea, and air. Satellite imagery is important but not sufficient 
for this task. Since the output of the models depends on the input, 
incomplete knowledge of the state of the earth translates to 
uncertainty in the predictions. And the output is notoriously sensitive 
to the input. This is why the Intergovernmental Panel on Climate Change 
concluded in its Third Assessment Report that ``Science cannot predict 
the climate and its impacts in Milwaukee, Mumbai, or Moscow half a 
century ahead very accurately, and it may never be able to do so.''
    Today's climate models cannot be used for definite predictions of 
regional or local conditions. They are typically run many times, for a 
range of input assumptions, and the results are assessed with 
statistical methods. Given our present state of knowledge, it is not 
surprising that the results vary widely, leading to apparently 
contradictory results.
    That is why reports such as the 2002 U.S. Climate Action Report do 
not claim to make predictions about future impacts. That report employs 
``scenarios'' that are invented to capture the range of results of 
multiple runs of different climate models with different ad hoc input 
assumptions. The scenarios are then used to make ``projections,'' a 
word that is carefully defined in an important footnote on page 84 of 
the report: ``. . . prediction is meant to indicate forecasting of an 
outcome that will occur as a result of the prevailing situation and 
recent trends (e.g. tomorrow's weather or next winter's El Nino event), 
whereas projection is used to refer to potential outcomes that would be 
expected if some scenario of future conditions were to come about. . . 
.'' Notice that such projections can give no information about when, or 
even if, the assumed scenarios occur. I fear that many readers of the 
Climate Action Report have mistaken its ``projections'' for forecasts.
    The President believes, and I strongly concur, that responsible 
implementation of public policy on a scale commensurate with global 
climate change requires the best possible understanding of the 
phenomena we wish to influence. The uncertainties have to be reduced. 
That is why the President established a new management structure to 
advance and coordinate climate change science and technology research. 
Under this structure, we are accelerating work in areas needed to 
create better tools to provide science-based policy guidance, and 
developing a technology base that matches the climate change challenge. 
To these ends, the President established a Cabinet-level Committee on 
Climate Change Science and Technology Integration to oversee the entire 
effort. The Secretary of Commerce and Secretary of Energy are leading 
the effort, in close coordination with my office, the Office of Science 
and Technology Policy (OSTP), and this effort incorporates work 
conducted under the Global Change Research Act of 1990. OSTP will 
continue to perform important coordinating functions within this new 
framework. I want to emphasize that the point of the new organization 
is to take advantage of the global change research that is under way, 
and focus it on the current urgent need to improve climate change 
analysis tools.
    The President's FY03 budget proposal dedicates $1.7 billion for 
fundamental scientific research on climate change and $1.2 billion to 
fund research on advanced technologies including energy production and 
carbon sequestration technologies relevant to the climate issues. These 
figures include $80 million in funding dedicated to implementation of 
the Climate Change Research Initiative (CCRI) and the National Climate 
Change Technology Initiative (NCCTI) announced last year. My colleagues 
on this panel will be providing you with more details about these two 
initiatives.
    President Bush is addressing the serious issue of climate change 
through a focused and vigorously managed program. He is engaging 
science to increase our understanding, and technology to devise ways of 
meeting our responsibility to future generations while preserving our 
quality of life and maintaining the competitiveness of our economy.
    Thank you again for the opportunity to speak with you today. I will 
be glad to respond to specific questions on these important issues.

    Senator Kerry. Thank you very much, Dr. Marburger.
    Dr. Mahoney.

STATEMENT OF HON. JAMES R. MAHONEY, Ph.D., ASSISTANT SECRETARY 
             OF COMMERCE FOR OCEANS AND ATMOSPHERE

    Dr. Mahoney. Thank you, Mr. Chairman, Mr. McCain, and other 
Members of the Committee.
    I'll start by just noting it's 6 months ago since I 
appeared before you in my confirmation hearing, and I simply 
thank you for your vote in sending my confirmation to the 
floor. At least I think I thank you. I'm delighted to be back. 
It's been a busy time.
    I'm appearing specifically in my capacity as the Director 
of the interagency science activity for the government. There 
are 12 agencies named at the beginning of my statement, all of 
the ones you would expect, who are collaborating in the 
development of this work. In turn, we report to my colleagues 
at the table here, the Council on Environmental Quality, the 
Council of Economic Advisors, and the President's Science 
Advisor, Dr. Marburger.
    To start my comments, I'd note first that the status of the 
entire earth system, with all of its challenges and its concern 
about global and climate change, is the capstone environmental 
issue of our generation, and I feel certain it will be the 
capstone issue of the next generation, as well. I had hoped 
that, by the generation of our grandchildren, that advances in 
technology will take this back off the table as such a capstone 
issue. This sets somewhat of the same view of the long-term 
nature of the very serious questions and challenges we face.
    In the science work, I'd start by noting that 
comprehensive, objective, transparent, and well-reviewed 
scientific inquiry must be at the core of the methodologies we 
use to examine the complex interrelationships between climate 
parameters and ecosystem parameters. We intend that all of the 
U.S. Global Change Science Program represent the gold standard 
of thoughtful, careful, and well-reviewed scientific reporting 
to the Nation and in contribution to the world community, as 
well.
    During the last 13 years, the United States, as I think we 
heard a few minutes ago, has made the world's largest 
scientific investment in the areas of global change and climate 
change. The amount of that investment is already approximately 
$20 billion. And very much scientific progress has been made 
since 1970 when the Global Change Research Act was passed. But 
substantial uncertainties remain to be addressed.
    To cite just one key example, among the community of very 
well-understood climate models today, the projections of 
century-long temperature increases expected for the earth's 
atmosphere range from as small as 1 degree centigrade or 
Celsius to as much as 4\1/2\ degrees centigrade or Celsius out 
by the year 2100. Obviously that range of uncertainty covers 
territory from a relatively small to a relatively significant 
range of impact.
    Similarly, the scientific knowledge about the interaction 
between climate parameters, like carbon dioxide, greenhouse 
gases, and black carbon aerosol, is a matter of great 
increasing concern in the scientific community. These arise 
especially from low-temperature combustion and literally 
millions of home heating units and small heaters and boilers in 
small industries and apartment complexes in many parts of the 
developing world. We're just beginning to get a better handle 
on much of this.
    Our theme is this: Because of the substantial scientific 
accomplishments already attained in the last decade and longer, 
we have now finished what we might call a period of discovery 
and characterization of the problem. We have a problem, and we 
know that, and we are entering a period of differentiation and 
strategy evaluation. The issue now is not, ``Do we have a 
problem? '' The issue is, ``What do we do about the problem? '' 
This puts an even higher demand upon our best thoughts and our 
best good will about addressing this.
    I want to very quickly note the kinds of things we're doing 
with the science program about this. First of all, there's an 
organizational matter. You all know that the Global Change 
Research Program is 12 years old and counting, and the 
President began last year his Climate Change Research 
Initiative. I want to be clear that we have integrated the two 
of these. There are very different goals for the two of these, 
so, as they meet their goals, they're separate, but the 
management of this activity, with a very robust collaboration 
of all 12 federal agencies who play a role, is fully 
integrated. The agency key representatives and the overall 
management group for this is exactly the same.
    Just to mention on our current products, we will have a new 
annual report, the next version of ``Our Changing Planet'' out 
in September, as scheduled. We are actively developing a new 
strategic plan that will lay a path forward, both about our 
inquiry, about which I'll speak in just a moment, as well as 
our plans to report findings and positions. I will talk about 
that more in a minute, because that's really at the center of 
our strategy. We have been and will continue to look to the 
National Academy of Sciences' National Research Council for a 
very robust review of all of our activities.
    We are proceeding in the science program with a clear 
understanding of three tiers of inquiry. Those tiers, in a 
word, and then just a word about them, are, first of all, the 
continued science inquiry; second, a major increase in focus on 
global observing systems so that we maximize our development of 
data based on real observations, not only for climate 
parameters, but for ecosystem parameters. We look specifically 
at the evidence for change and try to understand that change in 
the world's ecosystems as well as in the climate system. Third, 
and perhaps most importantly, we're moving very aggressively to 
convert our models and all of our scientific data into a robust 
set of decision tools. Just as my colleagues have already laid 
out, what we have to do is begin using our best available 
information to make the projections for many different kinds of 
cases and to make the variational analysis so that we can find 
the optimal path forward. This is why you hear us consistently 
talk about the concept of taking all the obvious steps first, 
keep measuring, keep watching, and then build on that going 
forward.
    I'll close by noting the special effort we're putting into 
the issue of credibility of all of our scientific inquiries and 
all of this decision tool and strategy analysis reporting going 
forward. As a first step in this process, we are planning a 
very significant open public workshop on global climate change 
and global change to be held here in the Washington area in 
early December of this year. We will have a specific date very 
soon.
    Let me just mention the formulation of that. We are now 
very actively developing our updated strategic plan. We will 
publish this plan and pass forward--in particular, we'll put it 
on our Web site with a target time of October of this year. 
It's taking us that long to get through this very complex 
process. As soon as we have it, it will be on the Web site. We 
are asking all of the scientific community, all of the 
stakeholders and our international colleagues as well, to read 
this information and consider it a strawman path forward about 
our analyses and our reporting methodologies. Then we will 
conduct a very robust workshop to have debate about all these 
matters. More than that, we'll leave the record open after the 
workshops so that everybody who attends, or even if they don't, 
can make their full set of comments, which we'll take under 
consideration before issuing a final plan.
    At the same time, we'll be engaging the National Academy of 
Sciences to watch this whole process of the development of this 
open approach to our science and reporting and to give us and 
the Nation their views, not only on the process, but on the 
plan that emerges from all of that. This is our commitment to 
having the best possible path forward so that we can put in 
front of our Nation and our colleagues around the world our 
very, very best views about the developments that will best 
serve our analysis on this challenging problem for the years 
ahead.
    Thank you, Mr. Chairman and all, and I'll--of course, will 
be glad to answer questions.
    [The prepared statement of Dr. Mahoney follows:]

Prepared Statement of Hon. James R. Mahoney, Ph.D., Assistant Secretary 
                 of Commerce for Oceans and Atmosphere

    Good morning, Senator Kerry, Senator McCain and Members of the 
Committee. I am James R. Mahoney, Assistant Secretary of Commerce and 
Deputy Administrator of the National Oceanic and Atmospheric 
Administration. I am appearing today in my capacity as Director of the 
Climate Change Science Program of the Interagency Working Group on 
Climate Change Science and Technology. The Climate Change Science 
Program integrates the federal research on global change and climate 
change, as sponsored by twelve federal agencies (NSF, DOC, DOE, EPA, 
NASA, DOS, DOI, USDA, HHS, DOT, DoD and the Smithsonian Institution) 
and overseen by the Office of Science and Technology Policy, the 
Council on Environmental Quality, the National Economic Council and the 
Office of Management and Budget.
    I am very pleased to have this opportunity to present testimony on 
the Administration's scientific research program on global change and 
climate change. The status of the entire earth system, including the 
potential impacts of climate and ecosystem variability (regardless of 
its origin), is a capstone issue for our generation and will continue 
to be so for our children. The Administration fully embraces the need 
to provide the best possible scientific basis for understanding the 
complex interactions that determine the constantly changing nature of 
our earth's life systems. Moreover, the Administration is committed to 
making full use of our best scientific information to determine optimal 
investments and actions on the global, national and regional scales to 
mitigate adverse anthropogenic changes, and to adapt to unavoidable 
natural changes.
    Comprehensive, objective, transparent and well-reviewed scientific 
inquiry must be the core methodology used to evaluate the complex 
relationships between natural and anthropogenic influences on earth 
systems, and to project the expected outcomes of the many different 
investment and action strategies that have been proposed to mitigate or 
adapt to potential changes in global conditions. If we fail to fully 
evaluate the scientific information bearing on global change, we would 
be subject to the justifiable criticism that our strategy to cope with 
potentially our largest-ever investment in environmental management 
would be seen as a ``ready-fire-aim'' approach.
    During the past 13 years the United States has made the world's 
largest scientific investment in the areas of climate change and global 
change research--a total investment of almost $20 billion. The U.S. 
Global Change Research Program (USGCRP), in collaboration with several 
other national and international science programs, has documented and 
characterized several important aspects of the sources, abundances and 
lifetimes of greenhouse gases; has mounted extensive space-based 
monitoring systems for global-wide monitoring of climate and ecosystem 
parameters; has begun to address the complex issues of various aerosol 
species that may significantly influence climate parameters; has 
advanced our understanding of the global water and carbon cycles (but 
with major remaining uncertainties); and has developed several 
approaches to computer modeling of the global climate.
    Much scientific progress has been made since 1990, but substantial 
uncertainties remain to be addressed. For example, various global 
climate models project significantly different temperature profiles: 
from approximately 1 degree Celsius by the year 2100, to more than 4 
degrees Celsius during the same period. Resolving this scientific 
uncertainty in global climate models will have a major impact on 
determining optimal types, amounts and schedules of greenhouse gas 
emission management; will help resolve key questions of the relative 
importance of the management of greenhouse gases, carbon-based aerosols 
and sulfate-based aerosols on long-term climate parameters; and will be 
essential to understanding the scope of any climate change impact on 
global ecosystems.
    Scientific knowledge of the interactions between climate 
variability and global ecosystems has improved during recent years. 
However, understanding of specific cause-effect relationships, and 
prioritization of the most important relationships, is just beginning 
to emerge. Information about both ``forcing'' and ``feedback'' 
relationships in ocean-atmosphere-ecosystems interactions is urgently 
needed to understand the fundamental mechanisms, and to prioritize the 
important effects to be addressed. The climate-ecosystems questions 
require continued scientific inquiry on both global and regional 
scales.
    Because of the scientific accomplishments achieved by USGCRP and 
other research programs during a productive ``period of discovery and 
characterization'' since 1990, we are now ready to move into a new 
``period of differentiation and strategy investigation'', which is the 
theme of the President's Climate Change Research Initiative (CCRI). In 
announcing the CCRI, the President directed us to reestablish 
priorities for climate change research, including a focus on 
identifying the scientific information that can be developed within 2 
to 5 years to assist the nation's evaluation of optimal strategies to 
address global change risks. The President also called for improved 
coordination among federal agencies, to assure that research results 
are made available to all stakeholders, from national policy leaders to 
local resource managers.
    We are energetically responding to the direction of the President, 
and the following comments summarize the actions taken by the 
Interagency Task Force to develop the most useful information to 
address climate and global change issues.

     1. CONSOLIDATING MANAGEMENT OF THE USGCRP AND CCRI ACTIVITIES

    The President's direction for CCRI, focusing on the development of 
near-term decision support information, requires close integration with 
the many existing programs managed under the U.S. Global Change 
Research Program. This will ensure internal consistency of the CCRI 
research with the full body of global change information developed 
under the USGCRP.
    To accomplish this integration of USGCRP and CCRI activities, the 
Interagency Climate Change Science Program has assumed oversight of 
both programs, with a single interagency committee responsible for the 
entire range of science projects sponsored by both programs. The 
Interagency Climate Change Science Program retains the responsibility 
for compliance with the requirements of the Global Change Research Act 
(GCRA) of 1990, including its provisions for annual reporting of 
findings and short-term plans, scientific reviews by the National 
Academy of Sciences/National Research Council, and periodic publication 
of a 10-year strategic plan for the program. Plans for these activities 
include:
     Annual Report: Our Changing Planet for FY03 is currently 
undergoing agency review, and it will be published in September 2002. 
The Our Changing Planet series will be continued in future years, with 
increasing emphasis on detailed analyses of proposed mitigation 
strategies and other national ``decision support tool'' information.
     Strategic Plan: The 1990 GCRA stipulates that an updated 
10-year ``National Global Change Research Plan'' be prepared for USGCRP 
every 3 years. In fact, no such 10-year plan responding to this 
requirement has been published since the original plan resulting from 
the 1990 Act was adopted. A fully updated strategic plan for the 
combined USGCRP and CCRI activities is currently being developed by the 
interagency group, based on the following information resources: the 
draft 10-year USGCRP strategic plan prepared prior to the President's 
CCRI initiative, the August 2001 CCRI summary of research options, the 
interagency review draft of Our Changing Planet for FY03, a 
comprehensive interagency inventory of climate and global change 
research programs completed during the past 2 months, and an updated 
statement of interagency research goals and priorities currently in 
final review. The updated draft plan will be posted on the USGCRP/CCRI 
web site by November 1, 2002, to be available for comprehensive review 
by the scientific community, interested stakeholders, the general 
public and interested international specialists at a public USGCRP/CCRI 
workshop planned for the Washington, DC area in early December 2002. 
(This workshop is further discussed below.) A final version of the 
plan, taking account of workshop and Academy review comments, will be 
published in March 2003.
     Academy Review: We will be requesting a full NAS/NRC 
review of the combined USGCRP/CCRI planning process and products. The 
National Academy will be asked to review the interagency draft plan 
available by November 1, 2002, the public review workshop process, and 
the post-workshop final strategic plan to be published in March 2003.

 2. IMPLEMENTING A NEW RESEARCH STRATEGY: A THREE-TIER SCOPE OF INQUIRY

    Consistent with the move from the ``period of discovery and 
characterization'' to the ``period of differentiation and strategy 
evaluation'', future plans for the combined USGCRP/CCRI program are 
being focused on 3 broad tiers of activities: (1) scientific inquiry, 
which has been the core activity over the years, with several key 
issues continuing to await resolution, (2) observations and monitoring 
systems, which have always been part of the program, but which have not 
been sufficiently integrated or focused to support strategy analyses, 
and (3) development of decision support tools, including detailed 
analyses of projected environmental, economic and energy system 
outcomes of various proposed scenarios. The CCRI initiative will 
supplement the ongoing USGCRP work by providing targeted focus to 
elements of each of the 3 tiers, where significant 2 to 5 year 
improvements in decision-relevant information is possible.
    The 3 tiers of inquiry are intended to focus the necessary 
resources on the key categories of information needed to underpin 
national decision-making on global change response strategy.
     Continued Science Inquiry: Much has been learned about 
greenhouse gas emissions, abundance in the atmosphere, radiative 
properties, reaction rates and removal rates; and global climate models 
have developed to the point of moderate utility as analysis tools for 
application on a global scale and over long time averaged conditions. 
However, significant uncertainties remain regarding several issues that 
are critically important for defining optimal strategies for the 
management of global change. Among several key uncertainties, the 
following are illustrative of the continuing need for improved 
scientific understanding:

          The significant differences in long-term global 
        average temperature changes projected by various well-
        recognized climate models.
          The relative importance of (1) carbon-based (black 
        carbon) aerosols, (2) sulfate-based aerosols and (3) CO2 
        and other greenhouse gases in influencing climate change--each 
        related to differing control strategies.
          The uncertainties in understanding the dynamics of 
        marine ecosystems in the carbon cycle. Typical ocean uptake of 
        CO2 by biological productivity is many times larger 
        than total global fossil fuel CO2 emissions. 
        Enhancement of this biological productivity could affect future 
        atmospheric CO2 levels.
          Major uncertainties in climate-ecosystems 
        interactions, and land use/land cover influences on climate.
          Uncertainties in understanding global water cycles, 
        including the current inability of general circulation models 
        to successfully represent water vapor transport in the 
        equatorial regions.
          The poor regional performance of current general 
        circulation models, which severely restricts the examination of 
        potential global change influences on key regional ecosystems 
        such as bays, estuaries, and inland watersheds.

     Increased Emphasis on Measurements and Monitoring Systems 
for Climate and Ecosystem Information: Observations and monitoring 
systems have been major elements of the USGCRP-sponsored scientific 
studies throughout the past 13 years. Because additional space-based 
and in situ data are needed to improve our scientific analyses and 
computer models, and because stable, long-term measurement records are 
essential to interpret earth system variability and trend data, there 
is a critical need for a well-designed, comprehensive climate and 
ecosystem monitoring system. A comprehensive monitoring system will 
necessarily be global in scope, and the United States should continue 
to make leadership contributions to the global system design and 
implementation. The United States is already contributing to the 
development and operation of several global observing systems, 
including support for a wide array of NASA and NOAA satellites, the 
ARGO floats being deployed in the world's oceans, the Global Climate 
Observing System (GCOS) sponsored by the World Meteorological 
Organization, and the Global Ocean Observing System (GOOS) sponsored by 
the Intergovernmental Oceanographic Commission. Within the next few 
years data from these systems will provide substantially improved 
information for calibrating global atmospheric and oceanic circulation 
models and for understanding the mechanisms that contribute to climate 
and ecosystem variability.
    The combined USGCRP and CCRI program will place major emphasis on 
requirements-driven specification of comprehensive monitoring systems 
that incorporate the following attributes:

          Development of ``climate quality'' data, with stable 
        measurement methods, consistent exposures, good intercomparison 
        between data sets, and back- and forward-standardization of 
        long-term data records.
          Provisions for high quality data assimilation 
        methods, combined with efficient archiving and retrieval 
        methods, to facilitate research, analysis and forecasting 
        applications.
          Creative capture of the relevant information from the 
        myriad of special research projects conducted throughout the 
        world during recent decades, to optimize the information 
        available for scientific analysis and computer model 
        evaluations of global change and climate change.
          Special emphasis on the complex observations and 
        monitoring systems needed to analyze terrestrial and aquatic 
        ecosystem variability.

     Substantially Increased Focus on the Development of 
Decision Support Tools: The potential economic and energy security 
impacts of several commonly suggested global change and climate change 
mitigation strategies are very large--substantially larger than all 
other environmental controls imposed during the past 30 years for some 
suggested strategies. In view of the potentially high costs and energy 
security impacts, careful evaluation of the projected outcomes of a 
wide array of suggested mitigation strategies should be undertaken. 
Note that the scientific analysis should not be aimed at recommending 
specific strategies. The scientific analysis should address ``if . . ., 
then . . .'' questions, and should focus on comparisons between 
suggested mitigation strategies.
    The highest and best use of the scientific information developed in 
the combined USGCRP and CCRI programs should be the development of 
comparative information that will assist decision makers, stakeholders 
and the general public in debating and selecting optimal strategies for 
mitigating global change, while maintaining sound economic and energy 
security conditions in the United States and throughout the world. 
Significant progress in developing and applying science-based decision 
tools during the next 1 to 3 years is a key goal of the combined USGCRP 
and CCRI program. Examples of analyses expected to be completed during 
this time period include:

          Long-term global climate model projections (e.g., up 
        to the year 2100) for a wide selection of potential mitigation 
        strategies, to evaluate the expected range of outcomes for the 
        different strategies.
          Detailed analysis of variations from defined ``base'' 
        strategies, to investigate the importance of specific factors, 
        and to search for strategies with optimum effectiveness.
          Linked climate change and ecosystem change analyses 
        for several suggested strategies, to search for optimum 
        benefits.
          Detailed analyses of the outcomes that would be 
        expected from application of the wide selection of energy 
        conservation technologies, and carbon sequestration strategies, 
        currently being investigated by the National Climate Change 
        Technology Initiative.

      3. MAINTAINING A CULTURE OF OPEN, TRANSPARENT, WELL-REVIEWED
                           SCIENTIFIC INQUIRY

    The United States global change and climate change research 
programs must consistently meet the highest standards of credibility, 
transparency and responsiveness to the scientific community, all 
interested constituencies, and our international partners. To assure 
credibility, the scientific inquiries must be policy-neutral, and must 
focus on ``if . . ., then . . .'' questions. Appropriate products of 
the scientific inquiries include:
          The best scientific descriptions of current climate 
        and ecosystems status, with particular emphasis on the factors 
        that can impact (positively or negatively) the current 
        conditions.
          Prioritization of the importance of the various 
        factors that can change current climate and ecosystems 
        conditions.
          Trend information (based on careful evaluation of 
        measurement records, supplemented by reference to scientific 
        and computer model analysis) that helps identify significant 
        patterns of variability, and that suggests the high priority 
        concerns regarding future changes in climate and ecosystems 
        conditions.
          Descriptions of cause-effect relationships between 
        key climate and ecosystem parameters. These descriptions should 
        typically include both one-by-one cause-effect descriptions 
        relative to individual key factors, and multiple-relationship 
        descriptions involving the combined influence of several key 
        factors acting jointly.
          Global climate models, ocean circulation models and 
        other integrated computer models that integrate our scientific 
        information about climate change and ecosystem impacts, and 
        that project future conditions expected to result from various 
        strategies.
          Scientific evaluation of technology initiatives that 
        translate the effects of proposed mitigation technologies into 
        scientific parameters suitable for scenario analyses.
          Cost, economic and energy supply analyses related to 
        various suggested scenarios that allow projections of the 
        outcomes expected to result from the scenarios.
          Comparisons between a wide selection of suggested 
        scenarios, that facilitate our search for the most effective 
        and efficient approaches to mitigate the effects of both 
        natural and anthropogenic caused climate change.
          Careful statements of the scientific uncertainties 
        relative to each of the matters described above. Note that 
        appropriate uncertainty statements should always be part of 
        scientific descriptions.

    To facilitate the development of scientific credibility in the 
conduct of the combined USGCRP and CCRI program, the following steps 
are being taken:
          All upcoming program plan and result information will 
        be published for open review as soon as practical in each case.
          The planned December 2002 workshop will ``jump 
        start'' a comprehensive review of the updated plans for the 
        combined USGCRP and CCRI program.
          Ongoing reviews of the combined USGCRP/CCRI program 
        will be sought from the National Academy of Sciences/National 
        Research Council. Specifically, the Academy will be asked to 
        review both the process and the substance of the updated 
        program planning (including the public workshop) to be 
        completed during upcoming months.
          The USGCRP/CCRI program management is regularly 
        involved in ongoing discussions with a wide array of members of 
        the national and international scientific community. The 
        program encourages comments and critiques from all sources and 
        welcomes in-person discussions, subject only to the practical 
        limitations of staff time.
          The USGCRP/CCRI program management also welcomes 
        communication and meetings (time permitting) with interested 
        stakeholders and advocates for specific positions. The 
        management has a clear guideline of strict neutrality in these 
        communications, and a guideline of equal access for 
        representatives of all positions.
          The program management will provide all plans and 
        reports to interested Members of Congress and their staff, as 
        soon as such information is available. Program representatives 
        are available to meet with Members and staff upon request.

                      4. PROGRAM STATUS AND PLANS

    The following comments summarize elements of the current status and 
near-term action plans for the combined USGCRP/CCRI program, for the 
interest of the Committee.
     Ongoing USGCRP Project Work: Current USGCRP projects 
(i.e., as funded in the FY02 budget) are underway according to the 
plans of the individual sponsoring agencies. The USGCRP coordinating 
office staff continues to collect interagency project information for 
integrated reporting. The USGCRP coordinating office staff will be 
augmented with additional specialists to address the focused questions 
raised by the President as part of the CCRI initiative. The combined 
USGCRP/CCRI coordinating office staff will move to 1717 Pennsylvania 
Avenue, NW in Washington as of October 1, 2002, when the lease on the 
current coordinating office space expires.
     The August 2001 CCRI Document: A climate research planning 
group hosted by the Commerce Department prepared a working plan 
document (i.e., not a final reviewed strategic plan) in August 2001, 
discussing options for additional, focused research aimed at improving 
short-term decision making related to climate change, as part of the 
Climate Change Research Initiative. This draft document was provided to 
the House Science Committee at their request, and is available to the 
public. This document is one of several resources being used to develop 
the new strategic plan for the combined USGCRP/CCRI program.
     The 10-Year National Global Change Research Plan for 
USGCRP: A draft 10-year strategic plan was prepared in 2001, prior to 
the announcement of the President's Climate Change Research Initiative. 
The draft strategic plan is being updated to incorporate consideration 
of the CCRI activities. A revised draft strategic plan will be placed 
on the USGCRP/CCRI web site by November 1, 2002, in preparation for the 
December 2002 climate science planning workshop. The final version of 
the plan will be published in March 2003.
     FY04 Budget Planning: The interagency Climate Science 
Program working group is actively engaged in the development of FY04 
agency budget requests that reflect the themes of the President's 
Climate Change Research Initiative: focused efforts to reduce 
scientific uncertainties on key issues; improved specification, 
development and operation of various climate and ecosystem monitoring 
systems; and increased emphasis on the development and testing of 
decision support tools to facilitate public debate on climate change 
issues.
     December 2002 Workshop on USGCRP/CCRI Plans: This workshop 
is being planned for the Washington, DC area, to provide a mechanism 
for broad scientific community and stakeholder community comment on the 
program plans and the expected reporting schedule for the USGCRP/CCRI 
activities. The workshop will address:

          The focus on key unresolved scientific issues,
          The plans for a comprehensive approach to climate and 
        ecosystem observations and monitoring systems,
          The plans to develop and demonstrate decision support 
        tools to facilitate public and stakeholder debate about global 
        change and climate change issues,
          The plans and schedules for future USGCRP/CCRI 
        reports on specific findings, monitoring system designs and 
        scenario analyses.

    Thank you, Mr. Chairman and Members of the Committee. I look 
forward to the opportunity to respond to any questions you may have.

    Senator Kerry. Thank you very much, Dr. Mahoney. Thank you 
all for your testimonies.
    Senator McCain apologizes that he had to leave, and his 
questions will be made part of the record, and we will submit 
them.
    I must say, I'm sitting here a little bit overwhelmed by 
the barrage of pronouncements of how well we're doing. It's 
hard to begin to figure out quite where to start, though I 
think I have a good sense of it.
    I must say that--Dr. Hubbard, to hear the enthusiasm of 
your embracing of the amount of money that's being spent really 
surprises me, given the fact that, as a Member of the Finance 
Committee, I remember how hard we fought your Administration to 
put in the balance for which you're now claiming credit with 
respect to the tax incentives and technology initiatives. Most 
of the money you refer to, I might add, is in the tax incentive 
structure, though some of it is in direct spending. I'm not 
fighting it. I just want to say that the real issue here, 
despite all the words that we've just heard, is the question of 
reductions--of whether or not we're going to get reductions and 
of what the best methodology is to try to achieve that.
    Let me begin, if I may, by trying to sort of clarify the 
climate report that was issued in May. Can you tell me, Dr. 
Hubbard, who was responsible for that? Did you or other CEQ 
personnel write and edit the report?
    Dr. Hubbard. I mean, do you want to speak to the process? I 
mean, certainly the document was widely circulated within the 
Administration and figured as part of our climate change 
process.
    Senator Kerry. OK. So it was approved by you and others for 
the Administration?
    Dr. Hubbard. That's correct.
    Senator Kerry. OK. Why did the President try to dismiss it 
and say it was put out by the bureaucracy and third-level 
personnel? Do you consider yourself a third-level person?
    Mr. Connaughton. Actually, the CEQ is coordinating this 
process, Senator, so perhaps I could speak to that. The Climate 
Action----
    Senator Kerry. But I assume, if he's not a third-level 
person, he can speak for himself.
    Mr. Connaughton. Well, actually, Senator, I don't think the 
President ever uttered the words ``third-level person.'' The 
fact of the matter is the report was prepared by the 
bureaucracy. This was a very intensive interagency effort 
involving--going well beyond even the 12 agencies that Dr. 
Mahoney has talked about--as well as going through two rounds 
of public comment on which substantial public comment was 
received. So it was, in fact, a widespread----
    Senator Kerry. Well, he distanced----
    Mr. Connaughton.--governmental effort----
    Senator Kerry.--he distanced himself from the report. He 
didn't embrace it and say, ``This is a valued report which we 
have to respond to.''
    Mr. Connaughton. Well, actually, the characterization of 
``dismissive'' was actually the characterization by a reporter. 
What the President was describing was the fact that there was 
not a story to be had in terms of the foundation that the 
information in this report provided for the Administration. 
This really underpins the strategy that we're considering.
    Senator Kerry. Well, I'm delighted to hear he embraces it 
fully, because let me share it with you a little bit. The Bush 
Administration, therefore, agrees, according to your own 
report, that greenhouse gases are accumulating in the earth's 
atmosphere as a result of human activities causing global mean 
surface air temperature and subsurface ocean temperature to 
rise. You have warned us--you have warned the Nation and the 
world, in submitting it to the United Nations, of grave 
consequences likely to occur as a result of climate change in 
the United States. In the report, you list the following that 
you believe are likely to occur as a result of climate change.
    ``Coastal communities will be at greater risk of storm 
surges, especially in the Southeastern United States.'' That's 
page 82.
    ``The continuing growth in greenhouse gas emissions is 
likely to lead to an annual average warming over the United 
States that could be as much as 3 to 9 degrees Farenheit during 
the 21st century.'' That's page 84.
    ``Climate change and the resulting rise in sea level are 
likely to exacerbate threats to buildings, roads, power lines, 
and other infrastructure in climate-sensitive areas. For 
example, infrastructure damage is expected to result from 
permafrost melting in Alaska and from sea-level rise and storm 
surges in low-lying coastal areas.'' Page 89.
    ``Habitats of alpine and subalpine spruce fur in the 
contiguous United States are likely to be reduced and possibly, 
in the long term, eliminated as their mountain habitats warm. 
The extent of aspen, eastern birch, and sugar maple are likely 
to contract dramatically in the United States.'' Page 98.
    ``Hurricanes that do develop are likely to have higher wind 
speeds and produce more rainfall.'' Page 101.
    ``Warming is likely to alter coastal weather and could 
affect the intensity, frequency, and extent of severe storms. 
Melting of glaciers and ice sheets and thermal expansion of 
ocean waters will cause sea levels to rise, which is likely to 
intensify erosion and endanger coastal structures.'' Page 103.
    ``Even a small rise in sea level can produce a large inland 
shift of the shoreline. The rise will be particularly important 
if the frequency or intensity of storm surges or hurricanes 
increases.'' Page 103.
    ``Coastal erosion increases the threats to coastal 
development, transportation infrastructure, tourism, freshwater 
aquifers, fisheries, many of which are already stressed by 
human activities''--those are your words--``and coastal 
ecosystems. Coastal cities and towns, especially those in 
storm-prone regions such as the Southeast, are particularly 
vulnerable.'' Page 103.
    ``The projected increase in the current rate of sea-level 
rise is very likely to exacerbate the nationwide rate of loss 
of existing coastal wetlands.'' Page 104.
    ``Increases in the frequency of heat waves are very 
likely.'' Page 82.
    ``Drying is likely to create a greater susceptibility to 
fire,'' Senator Allen, ``and then loss of the vegetation that 
helps to control erosion and sediment flows.'' Page 100.
    ``Changes in the frequency and intensity of flood, drought, 
or fire events,'' page 102.
    ``Increases in heavy precipitation events are likely to 
flush more contaminants and sediments into lakes and rivers, 
degrading water quality.'' Page 100.
    ``The resulting changes in the amount and timing or runoff 
are very likely to have significant implications for some 
basins of water management, flood protection, power production, 
water quality, the availability of water resources,'' and so 
forth. This goes on. I have a whole other two pages of your 
dire warnings to this country about the implications of 
increased global warning. Yet you have a policy that has no 
reduction of emissions guarantee at all. Purely voluntary? Can 
you tell us why?
    Dr. Marburger. I'll start, and my colleagues will add, as 
necessary, in those areas that I'm not----
    Senator Kerry. Well, first of all----
    Dr. Marburger. Yes?
    Senator Kerry.--do you accept the findings of the report 
that you've issued?*ST
    Dr. Marburger. The----
    Senator Kerry. Are all of these real warnings to Americans 
that you have issued?
    Dr. Marburger. Let me characterize----
    Senator Kerry. Answer that question. Are they real warnings 
to Americans that you have issued?
    Dr. Marburger. No, I don't accept them in those terms.
    Senator Kerry. Well, you just said you signed off on the 
report.
    Dr. Marburger. That's correct. But one of the points of my 
testimony was to make it----
    Senator Kerry. No, I want to ask you how you sign off on a 
report, and now you reject the report?
    Dr. Marburger. OK. I'm not rejecting the report.
    Senator Kerry. You just did.
    Dr. Marburger. No, I'm only rejecting your 
characterizations of the statement----
    Senator Kerry. Well, these are your words, not my words. 
I'm reading your words. You say these are the things likely to 
happen as a consequence of global warming.
    Dr. Marburger. Let me say a few words about the nature of 
these statements in the report. These are all from the chapter 
footnoted by the statement that I read in my testimony, on Page 
84. These are projections based on scenarios that are what-if 
scenarios. They're consequences of warming events that may or 
may not occur on a regional basis. They are consequences that 
have been known for some time, were quite well known to the 
President when he made his June 11th statement last year. The 
seriousness of these consequences is precisely why the 
President takes global warming seriously and why we're here 
today to work out the best possible approach to dealing with 
the issues as they now exist.
    All of the statements in the chapter that you're referring 
to of the CAR report are projections based on scenarios that 
are not derived from climate models, but from a whole range of 
possible results that may occur. They are not predictions. They 
are not----
    Senator Kerry. The word you use is ``likely,'' not ``may.''
    Dr. Marburger. The word that is used in the report is 
``likely'' based on----
    Senator Kerry. I quote ``likely.''
    Dr. Marburger.--based on what-if scenarios.
    Senator Kerry. But the what-if scenarios--these are based 
on----
    Dr. Marburger.--the report makes it very clear----
    Senator Kerry.--these are based on modeling. This is what 
most of the models suggest. Let me ask you whether or not you 
embrace the language that was signed into law by the U.S. 
Congress and by the President of the United States, George 
Bush, 41, in 1992. I attended that conference. I know how hard-
fought it was and how serious the concern was. In 1992, we 
signed and ratified the framework, which states, as a goal, 
``stabilization of greenhouse gas concentrations in the 
atmosphere at a level that would 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.'' Do you 
support that commitment of the United States?
    Dr. Marburger. Yes, I do.
    Senator Kerry. Do all of you support that commitment of the 
United States?
    Dr. Hubbard. Absolutely. The framework convention is 
perfectly underlying the President's policy.
    Senator Kerry. If we continue on our current path, with 
emissions rising every year, we don't achieve that goal.
    Dr. Hubbard. But, Senator, that's not, of course, what the 
President is proposing. One, we don't know what the appropriate 
level is. As the science informs that, the President plans to 
first slow, then stop and reverse as we know more about the 
science and about the benefits and the costs of any mitigating 
actions. So I don't see any inconsistency there.
    Senator Kerry. There is an inconsistency, Dr. Hubbard, 
because the President doesn't reduce the level of emissions to 
the level set in the framework convention. The goal is not met. 
Emissions will increase each year under your program. You may 
slow the rate, but you don't reduce emissions.
    Dr. Hubbard. You're talking about the first phase of the 
program. Remember, we mentioned 3 things. One was slowing in 
the first phase as we improve intensity, as we learn more about 
the science and the costs and benefits of mitigation, then 
stopping and eventually reversing. You're right, of course, to 
get to stabilizing concentrations--that, we must do. But we 
have 2 fundamental uncertainties--uncertainty about the level 
toward which we're reverting and over what the right pace is at 
which to revert.
    Senator Kerry. Well, again, according to--there's a chart 
here. I could show you. Where is the chart on the intensity 
levels?
    I've gone over my time, but I want to come back to this. 
Maybe I should do that. In fairness to my colleagues, why don't 
I do that.
    But I will show you how the measurement of intensity, in 
fact, allows the emissions to grow in complete violation of 
what we set out in the framework, in complete violation of what 
other nations are adopting under Kyoto, and contrary to all of 
the best science of what we have to do in order to respond to 
this problem. So I will come back to that and talk to you about 
this new intensity measurement.
    Senator Boxer is next.
    Senator Boxer. Thank you very much, Mr. Chairman, and also 
for your line of questioning.
    Mr. Connaughton--did I say that right?
    Mr. Connaughton. Yes, thank you.
    Senator Boxer. You're welcome.
    Mr. Connaughton. It's rare.
    Senator Boxer. You're the Chairman of the Council on 
Environmental Quality.
    Mr. Connaughton. Right.
    Senator Boxer. I am interested in who was consulted in the 
drafting of the President's Climate Change Initiative.
    Mr. Connaughton. The number of people is quite vast, 
actually, and it starts at the top with the President and his 
Cabinet-level review process, which went on during--from the 
start of the Administration all the way through the February 
14th announcement and carries on to this day. That involved 8 
Cabinet Members, the President's senior staff, being briefed by 
a range of scientists, of economists, some NGO representatives, 
and then, beyond that, every Cabinet officer involved in that 
process----
    Senator Boxer. Were there any industry groups----
    Mr. Connaughton.--every----
    Senator Boxer.--were there any industry groups that came in 
to give their point of view on this?
    Mr. Connaughton. Well, this is the next part of what I was 
about to say. Virtually every Cabinet officer, and then as well 
as myself, Glenn Hubbard, and others involved in that process, 
had countless conversations with representatives of NGO 
groups----
    Senator Boxer. For example----
    Mr. Connaughton.--of industry participants, with 
academics----
    Senator Boxer.--give me an example of an NGO group.
    Mr. Connaughton. I sat down with the Natural Resources 
Defense Council, would be one.
    Senator Boxer. OK.
    Mr. Connaughton. I've talked with Eileen Claussen at the 
Pew Center a number of times.
    Senator Boxer. Uh-huh.
    Mr. Connaughton. Fred Krupp, of Environmental Defense, the 
World Wildlife Fund, various groups both came in to sit down, 
as well as provided significant written letters, the kinds of 
studies that you even referred to today.
    Senator Boxer. Uh-huh.
    Mr. Connaughton. The record of activity--and I want to make 
clear, too, that each of the Cabinet officers, then, had a 
variety of different conversations, certainly, over at NOAA. 
Secretary Evans, Deputy Secretary----
    Senator Boxer. So let me just cut to the reason I'm asking. 
As you know, we have a lot of problems finding out who Vice 
President Cheney met with before the energy policy came 
forward. So you would provide us with a list of those that you 
met with to develop this.
    Mr. Connaughton. You're looking for a list of the people 
that I met with to discuss climate change?
    Senator Boxer. The Council for Environment Quality.
    Mr. Connaughton. Yes, I can provide you that information.
    Senator Boxer. Yes, that would be very helpful.
    Mr. Connaughton. But I do want you to know, Senator, that 
my conversations were a mere fraction of the level of discourse 
that's occurred across the Administration, with a wide range of 
actors, and particularly in the science and economics----
    Senator Boxer. OK, well, we may ask that of others, but I 
would appreciate knowing who you, personally, met with from 
outside the government.
    Now, who came up with this intensity idea?
    Mr. Connaughton. Well, actually, the--I'll speak at the 
high level, then I'll turn it over to Glenn. The intensity idea 
was actually--when folks were looking--many years ago, before 
Kyoto--looking at various ways of--how can we articulate a goal 
to which people can respond? I think the intensity idea 
actually had its genesis long ago. It was brought to the fore 
in our policy dialog as we were trying to capture a goal around 
which both our domestic actors, but also our international 
partners could actually orient their policies and actually 
create the kind of metric for success that isn't tied to this 
dimension that Dr. Hubbard described of, you know, taking 
credit for economies that are going bankrupt.
    Senator Boxer. Well, who came up with this intensity idea? 
Do you recall who it was who used the word and--it seems to be 
now the central--centerpiece of this Administration's global 
warming policy, ``intensity.'' Let me tell you that I think 
it's a smokescreen for doing very little. I think it takes us 
off the mark.
    Let me explain why I say that. Let's say there's a 400-
pound man, clearly not well, needs help, goes to the doctor, 
and the doctors says, ``Mr. Smith, you need to lose 200 pounds. 
You need to get down to 200 pounds to be healthy.'' Everyone 
agrees that that's the level. That's what he needs to do to be 
healthy. Now he goes up to 500 pounds. It's going to take 
greater intensity for him to get to his desired weight. But 
they can't say now, ``Go to 300 pounds.'' Because 200 pounds is 
where he needs to go, even if he goes up to 500 pounds or 600 
pounds.
    So it seems to me that what you're losing here is the fact 
that there is a point we have to reach here to be healthy as a 
planet. The more we wait, by the way, the worse off we are, the 
harder it is, and it still doesn't change the fact, whatever 
the economic growth, of what we have to do.
    So I would say that this report that came out today is--by 
the World--National Wildlife--is absolutely on target. This is 
a mess, and we're going to explode it. It's baloney. It's way 
out of this to talk about intensity, because if we're going to 
stay healthy, we have to preserve this planet, as our friend 
said, who got an unbelievable chance to see what our challenge 
is. So----
    Mr. Connaughton. But, Senator----
    Senator Boxer.--you're saying this idea of intensity didn't 
come up--it's just something that's developed over the years, 
but you grabbed onto it about when?
    Mr. Connaughton. Well, we actually grabbed onto it during 
the course of our Cabinet-level review process. Dr. Lindsey had 
spoken of it, Dr. Hubbard has spoken of it in the past----
    Senator Boxer. Uh-huh.
    Mr. Connaughton.--it had shown up in various Senator 
formulations most recently.
    Senator Boxer. It didn't show up in the report, though.
    Mr. Connaughton. I'm sorry?
    Senator Boxer. It didn't show up in the report that Senator 
Kerry talks about, did it?
    Mr. Connaughton. Oh, it's described in great detail in the 
Administration's Climate Action Report. But, Senator, in 
particular, I would hope to diminish the suspicion or your 
frustration with the concept, because it has two very important 
components to it that actually are going to create an 
environment in which we can have a meaningful dialog, not just 
nationally, but internationally. The intensity metric really 
comes down to efficiency, which we all support and we're 
pushing for, and productivity. The goal is to create the 
quality of life that we ought to enjoy, and do it with fewer 
emissions. That's what the intensity metric represents.
    And what it enables us to do, however, you know, unlike the 
situation in Russia, where their economy just cratered--but 
arguably you could say let's take credit for all the greenhouse 
gas emissions avoided from the bank----
    Senator Boxer. Wait a minute.
    Mr. Connaughton.--from the cratering of the Russian 
economy.
    Senator Boxer. The Russian economy cratered because they're 
doing so much about global warming?
    Mr. Connaughton. No, I'm saying--when you say Russia now 
has credits for their greenhouse gas emissions, it's because 
they had a 1990 baseline that preceded the collapse of their 
economy. Now, we shouldn't be taking credit--we shouldn't be 
looking at policies that are promoting economic stagnation as a 
way to reduce our greenhouse gas emissions.
    Senator Boxer. Who has suggested that?
    Mr. Connaughton. That is the suggestion of just----
    Senator Boxer.--has suggested that?
    Mr. Connaughton.--of just looking at absolute----
    Senator Boxer. What a strong man that is. Listen, I want to 
talk to you about something. When I was a county supervisor, I 
had a great job. I went into the Air Pollution Control 
District. The first thing you heard when you got there is, 
``Oh, my lord''--and this was a very long time--you were really 
young then--and they said, ``Oh, we can't do anything. We can't 
use best-available technology, because that will ruin our 
economy. We can't get better fuel economy''--those days it was, 
like, at 12 miles per gallon--``it will ruin us.''
    I have to tell you, sir, it doesn't happen. The fact is, 
when you do the right thing by the environment, you create so 
many jobs. We have proof of it. I can send you the proof of it. 
We've seen it in California as we are on the cutting edge of 
environmental protection. We are creating industries where we 
export.
    Have you ever driven a hybrid car?
    Mr. Connaughton. Yes, I have.
    Senator Boxer. Isn't it an experience?
    Mr. Connaughton. Yeah, it's great.
    Senator Boxer. You know what? You can get 52 miles per 
gallon right now as we sit here. You know what that----
    Mr. Connaughton. It is very encouraging that many of the 
manufacturers are now coming out with those. It's a very great 
development. Through our tax incentive package, we're 
actually--we seek to promote that and create----
    Senator Boxer. Well, you wouldn't----
    Mr. Connaughton.--much more purchase of those kinds of 
vehicles.
    Senator Boxer.--you wouldn't know it from your energy plan, 
but good.
    Mr. Connaughton. Well, it's in the energy----
    Senator Boxer. The bottom----
    Mr. Connaughton.--plan, Senator.
    Senator Boxer. Well, may I just say, if you look at this 
energy plan the President sent over, it's real light. It's real 
light on new ways to save energy. So I have to say I'm glad 
you're enthusiastic. The point if you were that enthusiastic, 
you wouldn't sit here and say it's going to be economic 
stagnation. Because I can get to work just as easily in my 
hybrid car and save money and have more money to spend 
somewhere else instead of to the oil companies.
    One last question. I don't mean to be difficult. It's just 
that I disagree with you, so that's where we are. It's one of 
those things. What did you do before you got this appointment? 
Because I don't have your bio in front of me.
    Mr. Connaughton. I negotiated international environmental 
standards on environmental management practices on environ-
mental----
    Senator Boxer. Who did----
    Mr. Connaughton.--life-cycle assessment.
    Senator Boxer.--you represent?
    Mr. Connaughton. I represented a coalition of businesses 
and trade associations and other groups in an international 
consensus process, which is actually quite dynamic and created 
products that are now being used around the world. It was a 
consensus process that involved NGO's----
    Senator Boxer. Good.
    Mr. Connaughton.--academics, governments--it was really 
quite something. Then I spent 5 years, immediately before 
taking this job----
    Senator Boxer. What was the name of the group you 
represented?
    Mr. Connaughton. Well, the process was called the U.S. 
Technical Advisory----
    Senator Boxer. No, the group you represented.
    Mr. Connaughton. There was no name of the group. It was a--
--
    Senator Boxer. OK.
    Mr. Connaughton.--it was an ad hoc group of private-sector 
entities.
    Senator Boxer. OK, well, I'd like----
    Mr. Connaughton. But I----
    Senator Boxer.--to see that.
    Mr. Connaughton.--I would note----
    Senator Boxer. And I----
    Mr. Connaughton.--I would note, though----
    Senator Boxer. And I want to ask you one more question.
    Senator Kerry. Barbara, let him answer.
    Senator Boxer. Go ahead.
    Mr. Connaughton. You asked my background. I actually spent 
5 years before coming to this job working with private firms 
doing environmental management systems, and I would note that, 
as a result--the reason I'm so optimistic, you know, in each of 
those exercises--I worked with 50 to 70 different firms around 
the United States, Latin America, and Asia--they're all looking 
at efficiency and at productivity as the way to, one, save 
money, but also it's limiting their emissions, and it's going 
to have substantial greenhouse benefits.
    There's a tide going on out there in the private-sector 
community. As long as you can orient it around efficiency and 
productivity, because that's what their business people care 
about, that's what they respond to, that's what they set goals 
to. That's why this metric is so meaningful, because it's 
actually the way we do business, and it's what our economics 
policy----
    Senator Boxer. I would say even further----
    Mr. Connaughton.--support.
    Senator Boxer.--because I have a meeting at just 11:30 with 
Dupont, who's doing a lot of that----
    Mr. Connaughton. Yeah, it's great.
    Senator Boxer.--and doing it wonderfully. I would say if we 
set some--something in law, it would be a greater incentive. 
One of the problems you have--there's a lot of businesses who 
want to do more, and there's no law, and they're wondering, 
``Why am I doing all this when my competitor isn't? '' So I 
would say, you know, we need to tap into that with some laws 
here that would make it work.
    I know my time is up. I want to ask you one more question. 
Your chief of staff, is from the Petroleum Institute. Is that 
correct?
    Mr. Connaughton. He came from the American Petroleum 
Institute, yes.
    Senator Boxer. OK. Well, let me just say to you, I hope, 
after this hearing--and who knows what you think about this 
hearing, but I just want to say this--that you will understand 
why we're frustrated. There's a report that comes out, goes to 
the United Nations, which basically spells out what could 
happen if we don't act. Then we see this Administration 
opposing the Jeffords bill--we get it out by a hair--opposing 
reductions of CO2 for utilities, not doing very much 
on the energy bill, despite what you say about a couple of 
credits--that's great, but--not doing enough on fuel 
efficiency--you can talk to, you know, our Chair today about 
his frustration on that front--not backing that, and sitting 
here today saying, yeah, this is a problem, using this idea of 
intensity, which we're really being told here the President's 
plan would allow more global warming pollution at a faster rate 
than if we simply continue the pollution trend of the past 5 
years. These people have science in this report.
    So it is exceedingly frustrating, and I hope you can talk 
to the President and let him know that particularly in this day 
where corporations don't seem to be reaching for the highest 
and the best for society, that perhaps they can take another 
look, you can take another look, at what your position really 
is here, because it's frustrating for us. We feel we need to 
act, we need to be a leader. Senator Kerry, from Massachusetts, 
I'm from California, we see forward-looking legislators and 
governors in our states, and we'd like to just see a little of 
that in this Administration, and we don't see it, frankly.
    Senator Kerry. Senator Allen.
    Senator Allen. Thank you, Mr. Chairman.
    I'm going to use some time on Senator Boxer's comments. I 
think businesses like to use efficient means of production 
where they have less waste, fewer toxics, and can recycle them 
in their systems. It is good for the environment, but it also 
makes economic sense to them. You just look at the 
semiconductor fabrication facilities and see how they have 
improved over the decades with fewer toxics and few emissions. 
It also allows them to compete, because those substances or 
gases cost a great deal of money--one, to purchase, and, two, 
obviously to dispose of.
    Mr. Connaughton's comments about the energy bill--there 
were some differences of opinion, but I think one thing that I 
thought was the most forward-looking of the whole energy bill 
were the incentives for fuel-cell technology, hybrid vehicles, 
electric vehicles, the clean coal technology generally for 
energy, but it was premised on that positive approach to 
consumer choice. Right now consumers have a great number of 
choices in the vehicles, and I think that's the approach that 
ought to be taken. I do think fuel cell technology, electric 
vehicles, hybrid and so forth, really are the future.
    What this measure, if it will become law in this aspect of 
it, the tax provisions, will, positively affect consumer choice 
and options as opposed to arbitrary government dictates forcing 
people into smaller, unsafe vehicles that mothers and fathers 
don't want for themselves or their families.
    Now, those are the sort of reasonable actions I think we 
ought to take. We have heard here from Senator Nelson about his 
State of Florida and the sedimentation plumes from the forestry 
practices or logging practices in the Amazon, heard about coral 
reefs. I do think humans did start the forest fires out West. 
But for them starting these forest fires, they would not have 
occurred. But we have all these concerns about nutrients and 
sedimentation and so forth.
    I know that in this area, here, one of our greatest 
estuaries or resources is the Chesapeake Bay. In Virginia, we 
banned phosphate detergents to cut down on those nutrients 
derived from phosphates. Also, we have a goal of many states 
working in this region to get forestation and grass strips and 
buffers along the rivers and tributaries of the Chesapeake. We 
have requested in the budget oyster reefs. Oysters are down 
about 12 percent of what their historic levels were. They're 
good for the economy, but they're also great for cleansing the 
waters of the Chesapeake Bay.
    Then we have, presently, a clear and present danger of 97 
ships of the so-called ghost fleet of which--out of these 97, 
71 of these ships are obsolete. They're holding nearly eight 
million gallons of fuels and oils sitting at the lower end of 
the James River. I've asked this Committee since this spring to 
hold a hearing on this issue. If these ships break loose and 
are not disposed of properly, you're going to have an 
environmental disaster. Now, there's something we can do 
something about. Unfortunately, nothing has been done. Senator 
Warner and I are working with the Administration, also this 
Committee and Appropriations, to get that done.
    Now, as far as incentives from the Bush Administration--I 
guess I'll go to Dr. Hubbard on this--you mentioned that many 
people have expressed concerns about the price of addressing 
climate change to the U.S. economy. If you or others want to 
break in on it, too--do you think that innovative technologies 
can help meet our environmental goals as well as our economic 
goals simultaneously? And if so, could you give us some 
examples?
    Dr. Hubbard. Sure. I think this is a critical part of the 
argument. Earlier, I guess when Senator Boxer had said it's 
more costly or harder the longer we wait, that's, of course, 
just false. That's the whole point of this. You want to take 
the lowest-cost actions first, and then provide the incentives 
for such innovation.
    Technological innovation doesn't happen in a vacuum. It 
happens because of incentives. So having tax incentives, having 
these voluntary goals, giving people credit for doing more 
through voluntary credits that could be transferable provide 
the incentives for innovation.
    We're already seeing innovation in the private sector. The 
hybrid car was an excellent example of that.
    Senator Allen. Dr. Marburger, let me ask you a question. 
You mentioned various uncertainties as far as the predictions, 
and they've been documented by the National Research Council--
if you want to list any of these uncertainties for the record, 
that is fine--but also I would ask you whether or not our U.S. 
scientists, including state climatologists, should conduct an 
independent assessment of their input into the U.N. IPCC to 
remove any bias that may be driven by the differences or 
agendas of different nations?
    Dr. Marburger. Well, first, Senator, I do believe that the 
IPCC working groups have adequate scientific expertise and 
representation that broadly represents the scientific 
community. I think that, in fact, the U.S.-supported chairman 
of the working group No. 1, which is the one that's most 
directly relevant to science, is Susan Solomon, who happens to 
be a government employee, and we're satisfied that good science 
is being done in those working groups.
    With respect to the uncertainties in the model, this is, 
indeed, a very difficult problem. There are problems of 
measuring, getting the right input, understanding what's 
happening to the globe in all its dimensions and different 
ecosystems and parts of ocean and ice caps and atmospheric 
phenomena. Many of these issues are understood. A lot of 
progress has been made in the last decade, and computer 
modeling is improving very rapidly with the computer 
technology.
    But there are still some basic--a very, very important 
uncertainty, such as clouds, which are very dynamic. High 
clouds have a warming effect. Low clouds have a cooling effect. 
The mechanisms that create clouds in the first place, and the 
mixing of water vapor with air that goes with them, are all 
occurring on a much smaller scale than the scale that are--of 
the nets or the grids that our models can accommodate. So we 
have to have some ad hoc way of putting in the cloud mechanism, 
which is one of the most important factors in determining the 
heat input to the earth.
    So we have these very large uncertainties. I believe that 
science is capable of narrowing the uncertainties, and that's 
why the President implemented the Climate Change Research 
Initiative that Dr. Mahoney is leading so effectively right 
now.
    So I'm optimistic about how much science can tell us about 
the alternatives and the technical path forward that we should 
take. But, at this point, we cannot make those predictions with 
the certainty required to make the kind of tough policy choices 
that we will have to make in the future.
    Senator Allen. Let me ask you--again, follow up on state 
climatologists. Do you see them as being of value, as far as 
having the practical, pragmatic view from their state's 
perspective when trying to develop these policies?
    Dr. Marburger. Dr. Mahoney is a meteorologist. I'm going to 
ask him to----
    Senator Allen. All right. Dr. Mahoney.
    Dr. Marburger.--to respond to that question.
    Dr. Mahoney. Yes, I'm pleased to respond, Senator Allen, 
and say that I think there is a definite contributing role from 
the state and regional climatologists and others with special 
technical information.
    You know, we've had some great dispute about how well the 
global scale computer models can really characterize what goes 
on on a smaller scale, and I think that it's still pretty 
widely agreed in the scientific community that this is a--that 
the small or regional-scale issues are beyond the capability of 
the global model's calculations, not just because of computer 
technology, but because of the underlying science.
    Meanwhile, at the same time, we have a major resource of 
data and understanding of problems because those climatologists 
are there--the state climatologists, in particular, as well as 
the--of course, all of the climate and weather-service 
capabilities and the National Weather Service as part of NOAA.
    So one of the themes that we're after, and one of the 
themes we're after in the science generally, is that we need to 
make sure we make the best use of the real information we have, 
the measured information and the measured judgment in various 
cases. I'm not saying that as a policy argument. I'm saying 
that when we try to do our best science, what we need to do is 
to, of course, use the computer models for the global 
circulation, and, at the same time, we really need to be 
factoring in our best observations, both global observations 
and definitely the regional observations of the sort--it's the 
regional observations and the information and the history that 
the state climatologists and others have.
    Senator Allen. Good, thank you. My time's up.
    Thank you, Mr. Chairman. Thank you, gentlemen.
    Senator Kerry. Thank you very much, Senator Allen.
    Senator Nelson.
    Senator Nelson. Thank you, Mr. Chairman.
    Dr. Mahoney, I enjoyed your testimony the most, and I'd 
like to get some clarification for the Committee, if I may. 
Would you describe for the Committee the greenhouse effect?
    Dr. Mahoney. Certainly. I'll try to do it in very brief 
form but in form that gets to the issue. It's called the 
greenhouse effect because it is of the same nature as we have 
with greenhouses, to start with. The concept is that the energy 
in the earth comes from the sun to--the very vast majority--a 
little bit of cosmic radiation and so forth, but basically from 
the sun. It comes to the surface, or it's reflected off of 
clouds, where they exist.
    Then the--every heated surface--every surface all--of all 
sorts emanates radiation back, away from itself and, in the 
case of the earth, as a system which you had a chance to 
observe, emanates it back to space.
    The amount of the long-wave radiation that emanates back 
out, the heat radiation, is controlled, in large part, by the 
amount of greenhouse trapping--that is, some substances hold 
that in. Far and away the dominant greenhouse gas is water 
vapor because--in fact, if we look at other planetary 
atmospheres and we compare the earth, the biggest difference 
with the earth is the earth is much warmer in the range that it 
can support life of the sort that we know, with carbon-based 
amino acids, for example, because it's temperature is much 
higher than it would be if it didn't have an atmosphere with 
water vapor.
    Other gases, in addition to water vapor, also affect--also 
have greenhouse properties. Now, the best known of those, and 
the most commonly observed, clearly is carbon dioxide. Carbon 
dioxide occurs naturally, but it certainly also occurs as a 
result of combustion of fossil fuels. We know quite well that 
the carbon dioxide concentration in the atmosphere was around 
280 parts per million before the industrial revolution began. 
It is now around 365 parts per million, and growing. We are all 
familiar with the annual track--the sawtooth track, because 
there's a seasonal variation. But if you look at it in the 
measurements that Dr. Keeling, from Scripps, says it conducted 
at Mauna Loa from way back now--we've seen that kind of thing 
and had that confirmed very widely in the world.
    We know there are several other greenhouse gases, as well. 
Methane and the other carbon-based--other hydrocarbons. We 
have, in the last 2 years, I would say, and especially in the 
last year, an increasing understanding that one class of 
aerosols, the fine particles that we may not have been focusing 
on as much in the past, is really key, and those are the so-
called ``black-carbon aerosols.'' For a long time, we thought 
of aerosols predominantly as those that arise also from fossil 
fuel combustion in the sense of large industrial sources with 
sulphur in them. So we have sulphate aerosols, and we've 
studied those quite a bit.
    What we haven't done as much until more recently as we're 
getting more observations around the world, is to look at the 
fact that very inefficient combustion--and I made a reference 
in my opening statement to millions of home heaters and so 
forth, especially in the highly populated underdeveloped 
countries--it's easy to cite China and India as two examples. 
They're not the only ones, but certainly, in terms of the large 
populations, they are good examples--with millions of sources 
of this sort, we are now beginning to develop information, much 
of it published in the last year, and much of it currently in 
debate, which would suggest that tropical circulation patterns 
are being heavily influenced by the change in radiation 
reaching the surface because of the large amounts of so-called 
Asian brown cloud in many cases that we've seen carry out over 
the Pacific for a fairly large region, as well.
    Let me note, for emphasis, too, I'm not trying to target 
one or another country. I'm just trying to say that's an easy 
way to observe this effect, which I'm sure occurs around the 
world various ways.
    This whole matter is, in a sense, a sobering reminder to us 
that when we think of the atmosphere, it's easy to think of 
just the greenhouse and warming and we're done with it. The 
fact is, the atmosphere and ocean system is a tremendously 
complex system where it may be that the energy flow from 
atmosphere to ocean and from the equator regions, the tropical 
regions, toward the poles is heavily influenced by the amount 
of precipitation and cloud cover, that the energy in creating 
water vapor out of liquid water is very large, so we're being 
brought back to some sort of first principles.
    One of the first things we learned in global meteorology is 
the concept that if it weren't for the flow in the atmosphere, 
the motion, our tropical areas would be much hotter than they 
are, and the poles would be extremely cold. But the atmosphere 
is a great engine to move these things around.
    It's enough of this long answer to your question, Senator 
but the point is, there's no question that the greenhouse 
gases, by themselves, have a warming influence. Most would 
agree--most scientists, I think, would agree that there are 
some cooling influences as a result of scattering back to space 
from sulphate aerosols and other general aerosols and from more 
clouds, if there are more clouds.
    I would add one other matter that we're beginning to see 
the real concern of possible climate impacts from these other 
inefficient combustion sources, which suggest, by the way, to 
get--to make the point clear--that it may be--massive increase 
in providing technology transfer to get better heating and 
combustion sources in developing countries may be the most 
important thing that we could do over the next decade. I'm not 
ready to say that for sure. Note I said ``may.'' I'm trying to 
give an illustration.
    So I'm trying to illustrate that there are some real key 
questions to address, and there is a humbling level of 
uncertainty about the whole system when we try to understand. 
I'm not trying to make that as an argument that we should do 
nothing. I don't think--I'm very aware that the President's 
program is not to do nothing. It is to take a series of steps. 
But I certainly think we need to intensively improve our 
understanding of the atmosphere-ocean system and their effects 
on the ecosystems right now and in the next several years.
    Senator Nelson. Thank you for that comprehensive answer.
    [Laughter.]
    Dr. Mahoney. Thank you. I deserved that.
    Senator Nelson. I take it it's--because of how you 
described that, is why, in your statement earlier today, that 
you said that we do have a problem.
    Dr. Mahoney. Yes.
    Senator Nelson. Now, you're saying that there might be a 
source of many different reasons of why we have a problem. 
Would--and I take it from your comprehensive answer that you 
suggest that carbon dioxide is one of those sources. So in 
your--is it fair to summarize your statement that you're just 
not sure which is the greatest cause of the greenhouse effect 
that we see, as you articulated that we've gone from 280 to 365 
parts per--was that billion or million?
    Dr. Mahoney. Parts per million.
    Senator Nelson.--parts per million of----
    Dr. Mahoney. Of CO2, carbon dioxide.
    Senator Nelson. Of CO2. That statement, in 
itself, would lend one to be quite concerned about the increase 
of CO2. Can you elucidate the Committee on that?
    Dr. Mahoney. I'd better give the brief-squared version, but 
I will say that rise has been not exactly linear, but it has 
occurred over 200 years, and it has certainly--we've had more 
of it as fossil-fuel use has increased, I would say, in the 
last--since World War II, is perhaps one good measure, as the 
world economies began using more energy. But interesting to 
note----
    Senator Nelson. Which is a pretty good indicator, is it 
not, that they're----
    Dr. Mahoney. Well, yes, but the----
    Senator Nelson.--the----
    Dr. Mahoney.--but the increase in CO2 occurred 
over the whole time. And now----
    Senator Nelson. I thought you said it accelerated more 
recently.
    Dr. Mahoney. No, we don't have the data to make that kind 
of statement. I'm just saying that I know the fossil-fuel use 
has increased a lot, and some data certainly suggest it's more 
than linear, but I'm not prepared to say how much off a linear 
track it is.
    What strikes me is that we did not, for--we did not see 
what we would think of as climate--temperature effects, and 
other possible effects, emerging over the last 150 years, until 
more recently. Now, two ways too look at that. One of them is, 
aha, we found the trigger. We did enough of it, and now we have 
a real problem. Another way is to say, no, we have a lot of 
record that says that climate doesn't change much--temperature 
and other effects don't change much directly as a result of 
this, and that what we have is more random effects in the 
atmosphere.
    Even the IPCC in the National Academy, for example, 
carefully state--and the U.S. Climate Action Report quotes 
them--on the matter that we have a great uncertainty about 
that. As I said in my own statement, we're now looking at the 
matter that temperature change, not CO2 change, with 
our best models, is--are projected to run from just over 1 
degree centigrade over the century or over 98 years, to 4\1/2\ 
degrees. That's a tremendous range of uncertainty, because if 
it's 1 degree over a century, it's one thing. If it's almost 5 
degrees over a century, it's something quite different. That is 
the compelling reason to be first to, of course, address our 
science carefully and prove our measurements and really work on 
our projection models and debate them very openly. It is also 
the reason I want to stick to the science.
    But I think that that scenario suggests the idea of: take 
steps, but don't go way down one road completely so we don't 
have the ability to go down another road if, 5 years from now, 
we have a different view about what we ought to be controlling.
    Senator Nelson. You suggested that water vapor might be one 
of the causes. Water vapor would certainly occur all the more 
as the greenhouse effect heated up the greenhouse. You'd have 
more water vapor. Is that not a reason to accelerate our 
concern of finding exactly what that is that is causing the 
greenhouse effect?
    Dr. Mahoney. Well, yes, but with a significant caution. 
Simple temperature increase would, of course, lead to more 
water vapor and a--literally a greenhouse, a kind of a fixed 
box. When we talk about the dynamic system that the atmosphere 
and the atmosphere-ocean system are, in fact, there are some 
suggestions that increased precipitation rates in the tropics 
may result in somewhat less net water in the atmosphere.
    I say that not argumentatively. I think, not only do I not 
know for sure, I don't think we can give a strong answer about 
that in the scientific community at this time, but I'd say it's 
part of what we need to--while we have our broad view on, we 
looking at the atmosphere not just as a greenhouse, but as a 
moving, dynamic system where water moves through the whole 
series of cycles.
    Perhaps instructive on that, in this major program in the 
global change and climate change research that you've been--
continue to authorize and appropriate for--two of the most 
significant working groups in our study area are a global water 
measure panel and a global carbon major panel. The reason for 
that is if we take everything else out of the way, we have to 
say how well can we characterize these things, and exactly what 
we're trying to do is to carry all these concepts back over to 
investigate the technology scenarios, but the--that Jim is 
talking about and that are led by the Department of Energy with 
input from all of us, as a matter of fact.
    Senator Nelson. Well, I appreciate your answers. Are you 
aware that your expressions here, basically that CO2 
is not necessarily the culprit--and I think that's a fair 
statement of what you've just said--are you aware that that 
would be in the significant minority of opinion in the 
scientific community?
    Dr. Mahoney. I don't accept the characterization that I 
said that CO2 is not necessarily the culprit. What I 
was trying to say is that there--that I don't think we can 
simply look at CO2 as the predominant culprit to the 
level that there are not other considerations that we need to 
pay attention to. It is in that context I take the black carbon 
aerosol issue.
    To say it directly, I think that insofar as we project 
changes in climate conditions, I think CO2, by any 
measure, is first order. It is a major player and likely the 
major player. What I am saying is that there are other 
considerations, and I would name two--first, the black carbon 
aerosols we talked about; and second, the--what I might call 
the hydrodynamics of the atmosphere, the change in 
precipitation patterns and the like and the differences in 
tropical conditions that may also be first order.
    But I'm glad you asked, because I'm not trying to somehow 
take CO2 out of the first rank. It's definitely 
first rank.
    Senator Nelson. Well, on the basis of what you've said, and 
this global climate is so complex, as you, I think, have 
accurately tried to describe it, one may be affecting another. 
You're talking about the changes in precipitation, you're 
talking about the changes in wind patterns, and so forth. And 
who knows? That may be because of the rising temperature that 
may be as a result of the explosion of the CO2 per--
parts per million.
    It just seems to me, in an abundance of caution of us being 
good stewards of what we have, which, as I said earlier, looks 
so fragile from the perspective of out there looking back at 
home, that it would seem that the conservative, cautious 
approach would be to do things that are reasonable that will 
stop the CO--that will lessen the CO2 emissions. 
That is what I wanted to get across to you, and I appreciate 
your testimony, Dr. Mahoney.
    Dr. Mahoney. Thank you, Senator.
    Senator Kerry. Thank you, Senator Nelson. I appreciate it.
    Gentlemen, let me try to see if we can pursue a couple of 
lines of questioning here, and I want to do so, hopefully, you 
know, not combatively, but with a good dialog and see if we can 
try to get at your thinking and understand where we're heading 
here.
    At one of our hearings on climate change last year--and I 
addressed this to Dr. Marburger and Dr. Mahoney--Dr. Kevin 
Trenberth--do you know him? Are you familiar with him? At the 
National--he's at the climate center. He made a point that 
resonated with me and I think with--I hope with some other 
Members. But he said that because of the long residence time of 
CO2 in the atmosphere, achieving the targets of 
Kyoto would literally only buy us 10 years of time to figure 
out how to effectively reduce emissions beyond that.
    His point was that achieving the Kyoto targets would only 
slow the rate of carbon emissions currently loading the 
atmosphere, not stabilize, and not even reduce greenhouse gas 
emissions in the atmosphere. So, in other words, that's only a 
first step, and more needs to be done.
    Now, as a scientist, do you agree with that?
    Dr. Marburger. I believe that it's important to take action 
on mechanisms that you know will have an impact on future 
climate. The problem is that the link between any specific 
actions that we take and the actual impact on the climate has 
to be forged through these models. The question is what exactly 
is it--what exactly is a sensible approach? That--the 
Administration's position is that it is taking a sensible 
approach, that it----
    Senator Kerry. But that's not----
    Dr. Marburger.--it is taking action.
    Senator Kerry. Let me stop you there, because I'm willing 
to have a dialog, but I do want to have my questions answered. 
I'm not asking you to say whether the Administration is having 
a sensible approach or not. I'm just trying to get at the 
science here.
    Do you agree that there is a long residence time of 
CO2 in the atmosphere?
    Dr. Marburger. Absolutely.
    Senator Kerry. OK. Given the long residence time, do you 
agree that, given the Kyoto level of reduction, does that only 
buy you 10 years of time in terms of reduction of emissions? 
I'm not talking about whether the model says you get an impact.
    Dr. Marburger. As long as we talk about the emissions and 
the greenhouse gases, as opposed to the warming effect, I'm 
with you, yes.
    Senator Kerry. OK. So you agree with that.
    Dr. Marburger. Yes.
    Senator Kerry. All right. Now, if achieving the Kyoto 
target only gets us 10 years to plan and doesn't stabilize the 
greenhouse gas, the approach that you're taking essentially 
discards the notion that there is a relationship between the 
greenhouse gas and the warming effect, because you're 
effectively willing to live notwithstanding that negative 
consequence.
    Dr. Marburger. No, I disagree with that statement.
    Senator Kerry. Well, help me with it, then. Do you--is 
there a linkage? Your report says human emissions are 
contributing to global warming, correct? That is the principal 
finding of the report.
    Dr. Marburger. That's not necessarily the principal finding 
of the report, because there are, in fact, uncertainties about 
the link between the emissions and the climate. That's just the 
critical point.
    Senator Kerry. Well, Doctor, I've looked at a lot of those 
models for the last years since we've been going at this--I 
agree there are uncertainties in the modeling. I don't disagree 
with that. I can't sit here and tell you with certainty that I 
know exactly what the relationship reduction is, but I also 
know, just as a matter of reasoning, that there's a certain 
level of cause and effect that scientists have accepted. And 
you do, too.
    Dr. Marburger. Correct.
    Senator Kerry. Based on that, I have a responsibility as a 
public official to try to decide, well, what can we do--we, 
humans--to reduce what is in our power that we know we're 
affecting in terms of the cause and effect? It's the 
precautionary principle, so to speak. Do you think that 
principle ought to be completely discarded here?
    Dr. Marburger. No, that's a good principle. The question 
is, should we just turn off all the power plants, for example--
--
    Senator Kerry. No one has suggested that, Doctor.
    Please, that is an extreme----
    Dr. Marburger. That is----
    Senator Kerry.--comment.
    Dr. Marburger. Yes, that is extreme. The other extreme is 
doing nothing. The really important issue is where do you draw 
the line? What is reasonable, given our current state of 
knowledge and our current understanding of the situation?
    Senator Kerry. Well, let me ask you about that. Why is it 
reasonable, in Europe and in other countries, for presidents 
and prime ministers of their countries to decide they're going 
to accept fixed targets? Do we know something they don't know?
    Dr. Marburger. No, we don't. That's why they're anxious to 
collaborate with us to improve their knowledge of the climate 
system, as well.
    Senator Kerry. But they're doing it.
    Dr. Marburger. But they have different economic conditions 
than we do, and I believe that the primary input into the 
decision about where to draw that line, or one of the inputs, 
science being a major one, is the economic status of----
    Senator Kerry. Well, let's talk about that economic status. 
That's a--it's a good place to go, I think, a little bit here 
to, sort of, see what the variations are.
    Let me start by showing you a chart, which is your White 
House climate proposal, which talks about greenhouse gas 
intensity. This is your intensity theory of how you're doing 
something under the intensity theory.
    Can we get that up? Is there a--so we can share it with 
them? Is there an easel, or do you want to hold it on the chair 
here so that the witness can see it? If you'd just hold it 
right there so they can see it up front. Thanks.
    This is from your report. What it shows is--you say--and 
you honestly acknowledge that there'll be some increase here of 
emissions, but you show a reduction in intensity even as the 
gross domestic product goes up. So you show a projected 
increase in gross domestic product, a reduction in intensity, 
but a 12-percent increase in emissions.

[GRAPHIC] [TIFF OMITTED] T1727.012

    Now, if we go to 1990 to 1999 to apply your intensity 
theory to the economy, here's how it actually would have 
happened. Yours is a projection. I want to show you what would 
happen. There was a lesser reduction in intensity over that 
period of time. There is an increase in the gross domestic 
product between 1990--it was up in the total about 33 percent, 
but there is a 12-percent increase in emissions that actually 
took place during that period of time.

[GRAPHIC] [TIFF OMITTED] T1727.013

    So emissions are growing. That's what's going to happen. We 
are sitting here being told by you that you have this fancy 
concept of measuring intensity, which is related to the gross 
domestic product. There's no specific requirement of any 
company having to adopt any procedure--not specific. It's 
completely voluntary. So whether companies are going to do it 
or not, nobody knows.
    So effectively, the United States is not requiring 
anything. You're hoping there will be this reduction of 
intensity. But it's linked to the growth of the economy. It's 
not linked to any reductions of emissions, which is the 
critical issue here--reduction of CO2, reduction of 
methane, reduction of any of the greenhouse gases that are the 
problem that you've acknowledged exists.
    Now, why should any American be satisfied that that is a 
legitimate response to this crisis or problem, that we face?
    Dr. Marburger. Yes. I'm going to let Dr. Hubbard address 
that, and I may add at the end.
    Dr. Hubbard. Well, I think, Senator, you raise the very 
important tension between emission reduction and economic 
growth. In the short run, a very important reason to have an 
intensity target is because you do have long live capital that 
you're encouraging to turn over.
    One reason it is very costly to pursue very rapid 
reductions of the sort that Kyoto would have done for the 
United States is, in a rapidly growing economy, we would have 
essentially still quite productive capital.
    You can always find a link between an efficiency target and 
an absolute target. That's arithmetic. But that's in a world of 
certainty. If we have uncertainty about the rate of economic 
growth, we can agree on an intensity target and still have very 
different effects on the economy.
    The third thing I'd like to say----
    Senator Kerry. But that depends on what assumptions you're 
making, Doctor, about the economy. If you make an assumption 
that a requirement to reduce emissions has a negative impact, 
then you come up with one outcome. But there are plenty of 
models around that would suggest that reductions have a 
positive impact.
    Dr. Hubbard. I know of very few such models, Senator.
    Senator Kerry. Well, let me give you one.
    Dr. Hubbard. The three----
    Senator Kerry. Let me give you one. Jim Rogers, the CEO of 
Synergy, Inc., testified before Congress that his utility 
company supported placing a carbon commitment in any power 
plant legislation, because ``without some sense of what our 
carbon commitment''--this is him speaking; I'm quoting him--
``might be over the next 10, 15, or 20 years, how can I, or any 
other utility CEO, think we can have a complete picture of what 
major requirements our plants may face? '' There is a plea for 
certainty in the marketplace to know where they're going.
    Second, in a hearing before our Science and Technology 
Subcommittee last year, a representative from American Electric 
Power talked about their programs in forest sequestration, 
including large-scale programs in which AEP and the Nature 
Conservancy purchased forest land in Brazil and other 
countries. They make the point that domestic or international 
trading in carbon credits afforded by sequestration would not 
alone stabilize the concentrations. You need actual emission 
reductions. They would like to see targets and timetables, 
because that enables them to actually use the marketplace more 
effectively.
    Third example, in the Clean Air Act, we had predictions 
from the industry that the cost--and I remember being involved 
in those negotiations in 1990--the cost was going to be $8 
billion, and they couldn't do it in the timetable. The 
environmental community said the cost of reducing SO2 
and grabbing it back was going to be about $4 billion and 
thought we could do it in the timetable. In fact, we beat the 
timetable, and it cost only $2 billion, because nobody properly 
factored in the exponential benefit or impact of the technology 
advances that would be made because you set a fixed target. 
That fixed target was achieved, even as our gross domestic 
product grew. I believe we have a chart that shows that.
    We show that the SO2 cap and trade program, 
specific cap and trade program--here's your gross domestic 
product going up. That's the blue line. The total net 
electricity generation is your red line--also went up. Your 
SO2 emissions from electricity went down at the same 
time. So it completely contradicts your notion that you can't 
be specific and still have a growing economy and create jobs.

[GRAPHIC] [TIFF OMITTED] T1727.014

    Dr. Hubbard. If I might, Senator, I think you raise three 
very important points. First, on the issue of the effect on the 
economy as a whole, let me be stronger. There is no model of 
which I'm aware in the energy modeling form studies over the 
years that would suggest the economy as a whole benefits from 
putting shadow prices on carbon. That does not mean this is not 
an interesting discussion, only that there's a tradeoff.
    Second, on the point about certainty, you're quite right 
that business people do want a sense of how we value carbon. I 
think there, what the Administration is saying, we have a lot 
of institution-building to do with registries, with developing 
credit mechanisms that are very, very important to generate 
certainty and valuation.
    On the point about trading mechanisms, of course, 
economists are the key fans of the program that you mentioned. 
It's a hallmark of economic success and regulation. But, again, 
it's an issue of a tradeoff. No one I know of is suggesting it 
wasn't costly to do the program, simply that it was done in the 
most efficient way possible.
    Senator Kerry. Well, but that doesn't--that's just a non-
response with respect to why we can't do that now with respect 
to these greenhouse gases. I mean----
    Dr. Hubbard. When a----
    Senator Kerry.--it just doesn't respond to it. It leaves me 
baffled.
    Dr. Hubbard. With due respect, Senator, we believe the 
President's program does respond to that.
    Senator Kerry. No. With all due respect, it doesn't, 
because it doesn't set a cap, it doesn't have a specific 
requirement, and there's no market force that's going to take 
effect here that's going to require what was required there.
    Dr. Hubbard. Senator, if I might, you----
    Senator Kerry. We required that in the Clean Air Act. We 
set a specific goal. And President Bush, 41, signed it.
    Dr. Hubbard. If I might, Senator, you do not have the 
infrastructure--we do not, as a country, have the 
infrastructure in place to implement a cap and trade----
    Senator Kerry. Well, that's very interesting. The State of 
Massachusetts just put a program in place, and they're going to 
do it. I disagree with you. There is a capacity to do cap and 
trade in this country today.
    Dr. Hubbard. There's a significant amount of institution-
building that would have to be done for a mandatory program, 
Senator, for reporting----
    Senator Kerry. Well, let's start to do it.
    Dr. Hubbard.--for verification, for----
    Senator Kerry. Why don't we do that?
    Dr. Hubbard. Senator, we are proposing registries, the 
development of credits which could be used in any programs. 
Those are very important steps.
    Senator Kerry. Let me confront you, if I may, with an 
article by a scientist. It appears in Science Compass Policy 
Forum--I don't know if you've seen it--by Brian C. O'Neil and 
Michael Oppenheimer. Have you read that, Dr. Marburger?
    Dr. Marburger. I've seen it.
    Senator Kerry. He [Dr. Oppenheimer] is an authority on 
climate change and a member of the IPCC. He's at Princeton 
University, and Dr. Brian O'Neil is at Brown University. They 
show that, in order to prevent, ``dangerous anthropogenic 
interference in the climate system or dangerous climate change 
ranging from elimination of all coral reef systems to 
disintegration of the West Antarctic ice sheet, it's necessary 
to begin reducing total actual emissions within the next two 
decades.'' According to these scientists, any delay beyond that 
timeframe would have irreversible effects on the climate 
system. They say that the sooner emissions drop, the easier it 
will be to achieve concentrations necessary to prevent 
dangerous climate change.
    I read the article entitled, Dangerous Climate Impacts and 
the Kyoto Protocol. It talks about delay until 2020 risks 
foreclosing the option of stabilizing concentrations at 450 
ppm. You're talking about 350 today. Just going out with the 
Kyoto target level, they find that you'd have to begin now in 
order to avoid that.

[GRAPHIC] [TIFF OMITTED] T1727.015

    Now, I would assume--I don't know if this will happen. It's 
obviously over a long period of time that it would happen. But 
it's clear that if you don't begin that emissions reduction 
process now with some seriousness, we, as a generation, may 
have it on our shoulders that we were unwilling to be 
responsible when we had the chance to.
    Where does the precautionary principle fit into the science 
that they are discussing now in your proposal?
    I would also put this article in the record.
    [The information referred to follows:]

            Science's Compass, Policy Forum: Climate Change
            Dangerous Climate Impacts and the Kyoto Protocol

            (By Brian C. O'Neill and Michael Oppenheimer) *

    Defining a long-term goal for climate change policy remains a 
critical international challenge. Article 2 of the UN Framework 
Convention on Climate Change defines the long-term objective of that 
agreement as stabilization of greenhouse gas concentrations at a level 
that avoids ``dangerous anthropogenic interference'' with the climate 
system. ``Dangerous interference'' can be viewed from a variety of 
perspectives, and the choice will ultimately involve a mixture of 
scientific, economic, political, ethical, and cultural considerations, 
among others.\1\ In addition, the links among emissions, greenhouse gas 
concentrations, climate change, and impacts are uncertain. Furthermore, 
what might be considered dangerous could change over time.
---------------------------------------------------------------------------
    * B.C. O'Neill is at the Watson Institute for International Studies 
and the Center for Environmental Studies, Brown University, Providence, 
RI 02912 USA. E-mail: [email protected]. M. Oppenheimer is at the 
Woodrow Wilson School of Public and International Affairs and the 
Department of Geosciences, Princeton University, Princeton, NJ 08544, 
USA. E-mail: [email protected].
---------------------------------------------------------------------------
    However, both proponents and detractors of the Kyoto Protocol, 
which was designed as an initial step to implement the Framework 
Convention, have begun to demand a definition of long-term objectives. 
For example, on 11 June 2001, U.S. President George W. Bush stated that 
the emissions targets embodied in the Kyoto Protocol ``were arbitrary 
and not based upon science'' and ``no one can say with any certainty 
what constitutes a dangerous level of warming, and therefore what level 
must be avoided.''
    Here, we propose several plausible interpretations of dangerous 
interference in terms of particular environmental outcomes \2\ and 
examine the consistency between the Kyoto Protocol and emissions 
changes over time that would avoid these outcomes. Although the 
emissions limits required by the Kyoto Protocol would reduce warming 
only marginally,\3\ we show that the accord provides a first step that 
may be necessary for avoiding dangerous interference.

                    WHAT IMPACTS ARE ``DANGEROUS'' ?

    Attempts to develop limits to warming predate the Framework 
Convention and have taken a variety of analytical approaches,\4\ 
including the recent elaboration in the Inter-governmental Panel on 
Climate Change (IPCC) Third Assessment Report of a detailed ecological 
and geophysical framework for interpreting Article 2. We examine the 
implications of defining ``dangerous'' according to two of the criteria 
of ``concern'' identified by the IPCC:\1\ warming involving risk to 
unique and threatened systems and warming engendering a risk of large-
scale discontinuities in the climate system. These choices can be used 
to infer an upper limit for future concentrations.\5,\ \6\
    Large-scale eradication of coral reef systems provides one marker 
for policy-makers. Even before the development of the Framework 
Convention, which calls for a long-term target that will ``allow 
ecosystems to adapt naturally,'' coral reefs were cited as a potential 
indicator system.\4\ Coral reefs are charismatic ecosystems with high 
local economic value and a high degree of biodiversity. They can be 
found in most of the world's oceans in the latitude belt between 30 +N 
and 30 +S. By and large, coral reefs are thought to thrive in climate 
conditions that are close to their thermal limits for existence. As 
waters warm toward this limit, corals expel symbiotic zooxanthellae in 
a process called bleaching. Sustained bleaching over consecutive warm 
seasons increases the risks permanent loss of the reefs. Widespread 
bleaching has occurred in the Northern Hemisphere during recent El Nino 
events, indicating that for some coral reefs, the climate limit is only 
slightly above current seasonal maximum temperatures. Hoegh-Guldberg\7\ 
has estimated that sustained global warming in excess of 1 +C would 
cause bleaching to become an annual event in most oceans, leading to 
``severe'' effects worldwide, even allowing that some acclimation and/
or genetic adaptation may occur.\8\

[GRAPHIC] [TIFF OMITTED] T1727.016


    Effects of delay. Global CO2 emmissions (A), and annual 
change in CO2 emissions (B), 2000 to 2100, leading to 
stabilization of atmospheric CO2 at 450 ppm by 2100 for a 
scenario consistent with the Kyoto Protocol (magenta) and a scenario 
with a 10-year delay (green). Three carbon-cycle parameterizations are 
used (see text): best gusee (thick solid linens), strong uptake (thin 
solid lines), and weak uptake (thin dashed lines).
    Outcomes that have even a low probability of occurrence at a given 
level of warming, particularly within a century or two, but that 
clearly would be disruptive to societies, could provide markers for 
policy-makers. Alternatively, so could outcomes that have high 
probability but a low risk of causing widespread disruption. An example 
of the first case would be disintegration of the West Antarctic Ice 
Sheet (WAIS). An example of the second may be the weakening or shutdown 
of the density-driven, large-scale circulation of the oceans 
(thermohaline circulation or THC). Complete disintegration of WAIS 
would raise sea level by 4 to 6 meters, an outcome that certainly ranks 
as disruptive, even if it occurs gradually. Views on the probability 
and rate of disintegration for a given global warming vary widely,\9\ 
largely because current models do not adequately capture certain 
dynamical features of ice sheets. In general, the probability is 
thought to be low during this century, increasing gradually thereafter. 
Limited evidence from proxy data suggests WAIS may have disintegrated 
in the past during periods only modestly warmer ( 2 +C global mean) 
than today; other estimates suggest that disintegration could 
ultimately occur from about 3 +C (global mean) to 10 +C (local 
mean).\9\ The process of disintegration could extend over anywhere from 
5 to 50 centuries, although shorter time scales have also been 
proposed.
    There is strong evidence that the THC had shut down in the past, in 
association with abrupt regional and perhaps global climate 
changes.\10\ Most coupled atmosphere-ocean model experiments show 
weakening of the THC during this century in response to increasing 
concentrations of greenhouse gases, with some projecting a shutdown if 
the trends continue.\11\
    Whether a shutdown results in large consequences is sensitive to 
the timing of regional cooling from shutdown versus regional warming 
[e.g., in northwest Europe],\12\ as well as the magnitude of ocean heat 
transport to the North Atlantic region. The influence of the latter on 
regional climate may be smaller than some investigators have previously 
supposed.\13\ We interpret the current state of affairs as a 
substantial likelihood that forcing due to unrestrained emissions would 
slow or shut down the THC, but modest probability that THC changes will 
yield unmanageable outcomes beyond a local scale.

                           PLAUSIBLE TARGETS

    A long-term target of 1 +C above 1990 global temperatures would 
prevent severe damage to some reef systems. Taking a precautionary 
approach because of the very large uncertainties, a limit of 2 +C above 
1990 global average temperature is justified to protect WAIS. To avert 
shutdown of the THC, we define a limit at 3 +C warming over 100 years, 
based on Stocker and Schmittner.\14\
    The implications of the temperature limits for concentrations of 
CO2 are subject to uncertainties in both the climate 
sensitivity and future levels of other radiatively active trace gases. 
For CO2 stabilization at 450, 550, or 650 ppm, corresponding 
ranges of global warming over the next 100 years are about 1.2+ to 2.3 
+C, 1.5+ to 2.9 +C, and 1.7+ to 3.2 +C, respectively.\11\
    Full protection of coral reefs is probably not feasible for this 
concentration range. It is plausible that achieving stabilization at 
450 ppm would forestall the disintegration of WAIS, but it is by no 
means certain, because additional warming would occur beyond 2100.\15\ 
Avoiding the shutdown of the THC is likely for 450 ppm. We adopt 450 
ppm for our illustration as one that could conceivably be applied to 
these examples.

                         IMPLICATIONS OF TIMING

    Some studies find justification for preferring reductions sooner 
rather than later in order to account for the inertia of energy 
systems, to stimulate technological development, or to hedge against 
uncertain future concentration limits.\16\ Others conclude that 
although early investment in research and development may be justified, 
undertaking emissions reductions later can lower costs, even when 
accounting for uncertain concentration limits, by avoiding premature 
retirement of capital, taking advantage of the marginal productivity of 
capital, and allowing for technical progress.\17\ However, at a certain 
point, postponing mitigation requires unrealistically rapid emissions 
reductions, especially for low stabilization targets.\18\ Our ability 
to identify this point is constrained by our incomplete understanding 
of the carbon cycle.
    The consequences of delay if one assumes a goal of stabilization of 
atmospheric CO2 at 450 ppm by 2100 is illustrated in the 
figure. Because assumptions about the strength of carbon uptake by the 
terrestrial biosphere are an important determinant of required 
emissions, we include estimates that span a plausible range of levels 
of terrestrial uptake.\19\ In one scenario, industrialized countries 
are assumed to meet the cumulative Kyoto emissions target in 2010; the 
rest of the world follows a reference path.\20\ Beyond 2010, global 
emissions necessary to achieve stabilization are calculated with a 
global carbon-cycle model.\21\ In a second scenario, mitigation is 
delayed by 10 years, with industrialized countries meeting the Kyoto 
target in 2020. If reductions are delayed by a decade, growth in global 
emissions must then be quickly reversed. The subsequent rates of 
decline in global emissions depend critically on the carbon cycle: with 
strong terrestrial uptake, required emissions reductions peak at 2 
percent per year; if terrestrial uptake is weak, reductions reach a 
staggering 8 percent per year before 2040. Given inertia in energy 
systems, such high rates of reduction may be prohibitively costly.\22\ 
Some relief is possible by allowing temporary overshoot of the 450 ppm 
limit,\23\ although this strategy may still require rapid reductions 
and also leads to greater climate change over the next century or 
more.\24\
    Thus delay until 2020 risks foreclosing the option of stabilizing 
concentrations at 450 ppm, especially if the terrestrial carbon sink 
turns out to be weak. In contrast, the scenario consistent with the 
Kyoto targets in 2010 requires challenging but substantially lower 
reduction rates. Global emissions peak between 2010 and 2020, and fall 
at between 1 and 3 percent annually between 2020 and 2040, depending on 
the carbon-cycle parameterization. Beyond 2050, reductions proceed at 
about 1.5 percent per year in all cases.
    Stabilizing CO2 concentrations near 450 ppm would likely 
preserve the option of avoiding shutdown of the THC and may also 
forestall the disintegration of WAIS, although it appears to be 
inadequate for preventing severe damage to at least one unique 
ecosystem. Taking into account uncertainties in the working of the 
carbon cycle, the cumulative Kyoto target is consistent with this goal. 
Delaying reductions by industrial countries beyond 2010 risks 
foreclosing the 450 ppm option.

                          References and Notes

    1. J.B. Smith et al., in Climate Change 2001: Impacts, Adaptation, 
and Vulnerability, J. J. McCarthy et al., Eds. (Cambridge Univ. Press, 
Cambridge, 2001), pp. 913-967.
    2. Compare C. Azar, H. Rodhe, Science 276, 1818 (1997).
    3. T.M.L. Wigley, Geophys. Res. Lett. 25, 2285 (1998).
    4. F.R. Rijsberman, R.J. Swart, Eds., Targets and Indicators of 
Climatic Change (Stockholm Environment Institute, Stockholm, 1990).
    5. M.D. Mastrandrea, S.H. Schneider, Clim. Policy 1, 433 (2001).
    6. Determining targets and trajectories by optimization of costs 
and benefits provides an alternative approach. See W.D. Nordhaus, J. 
Boyer, Warming the World (MIT Press, Cambridge, MA, 2000).
    7. O. Hoegh-Guldberg, Mar. Freshw. Res. 50, 839 (1999).
    8. A.C. Baker, Nature 411, 765 (2001).
    9. M. Oppenheimer, Nature 393, 325 (1998).
    10. W.S. Broecker, Science 278, 1582 (1997).
    11. U. Cubasch et al., in Climate Change 2001: The Scientific 
Basis, J.T. Houghton et al., Eds. (Cambridge Univ. Press, Cambridge, 
2001), pp. 525-582.
    12. T.F. Stocker et al., in Climate Change 2001: The Scientific 
Basis, J.T. Houghton et al., Eds. (Cambridge Univ. Press, Cambridge, 
2001), pp. 417-470.
    13. R. Seager et al., Q.J.R. Meteorol. Soc., in press.
    14. T.F. Stocker, A. Schmittner, Nature 388, 862 (1997).
    15. Temperature ranges at equilibrium for CO2 
stabilization at 450, 550, and 650 ppm are 1.5 + to 3.9 +C, 2.0 + to 
5.2 +C, and 2.4 + to 6.1 +C, respectively. R.T. Watson et al., Climate 
Change 2001: The Synthesis Report (Cambridge Univ. Press, Cambridge, 
2001).
    16. See, e.g., M. Ha-Duong et al., Nature 390, 270 (1997).
    17. See, e.g., T.M.L. Wigley et al., Nature 379, 242 (1996).
    18. C. Azar, Int. J. Environ. Pollut.. 10, 508 (1998).
    19. Supporting online material is available on Science Online at 
www.sciencemag.org/cgi/content/full/ 296/5575/1971/DC1.
    20. The reference scenario is taken to be the IPCC A1B marker 
scenario. N. Nakicenovic et al., IPCC Special Report on Emissions 
Scenarios (Cambridge Univ. Press, Cambridge, 2000).
    21. A. Jain et al., Global Biogeochem. Cycles 9, 153 (1995).
    22. For example, a cost function that depends on both the degree 
and rate of emissions reduction\16\ yields estimated annual total costs 
peaking at 5 to 12 percent of gross world product (GWP) in the weak 
sinks case, depending on the assumed degree of socioeconomic inertia in 
the energy system. In contrast, in the Kyoto scenarios, costs peak at 1 
to 3 percent of GWP if sinks are assumed to be weak. Calculations 
assume cost-lowering technical progress of 1 percent per year, and an 
inertia time scale of 20 to 50 years. If carbon backstop technologies 
turn out to be less expensive than implicit in this cost function, 
costs would be reduced.
    23. T.M.L. Wigley, personal communication.
    24. For example, we calculate that if the CO2 
concentration is allowed to rise to 500 ppm in 2075 and then return to 
450 ppm 150 years later, peak emissions reduction rates fall from 8 
percent per year to 3 percent per year in the weak sinks case, and the 
timing of this peak can be delayed from 2025 to 2045. However, global 
average temperature change is 0.2 + to 0.4 +C greater in 2100 in this 
case, depending on the climate sensitivity, which could be significant 
compared with the range for stabilization at 450 ppm.
    25. The authors acknowledge partial support from Environmental 
Defense, and thank C. Azar, J. Smith, T. Stocker, R. Stouffer, F. Toth, 
T. Wigley, and anonymous reviewers for helpful comments.

    Dr. Marburger. I'll have to--I don't specifically recall 
that particular paper. I would have to look at it carefully 
before commenting on it, but I would be very glad to comment 
for the record in a written response.\1\
---------------------------------------------------------------------------
    \1\ Discussion of Oppenheimer-Brown article is included in 
questions and answers submitted for the record.
---------------------------------------------------------------------------
    Senator Kerry. I would appreciate that, and I'm happy to do 
that. I will submit it. I regret--I'm afraid that other Senate 
responsibilities are impeding on this. This is a discussion 
which really needs to go on.
    The President himself has said that he recognizes America's 
responsibility to decrease emissions. ``But we don't do it.'' 
For the entire period of what you're offering us, you're 
saying, yourselves, there's a 12-percent increase. I mean, you 
cannot tell me that under your current approach that you've 
offered, greenhouse gas intensity, greenhouse gas emissions 
will rise. Correct? Is that true?
    Mr. Connaughton. Senator, greenhouse gas emissions will 
rise under our approach, no question about that. The question 
is--the question, as stated, and as the President articulated, 
and the international challenge, is how do we get everybody 
mobilized, including the developing countries, who are putting 
even more--they're--they've got an increasing rate--how do we 
get everyone off business as usual to slow the rate of growth? 
That is what we can do in this near term. Then that enables us 
to create the capital cycles that Dr. Hubbard has spoken of. 
That is where, as you saw in the--in our materials, there are 
three steps, and we need to get the institutions going, and we 
need to get the world mobilized.
    I would note that, for example, China--you know, China is 
now looking at this issue, and they're looking at this issue in 
a way by which they can articulate a meaningful goal for 
themselves. They're looking at intensity as a way of developing 
their economy, because we hope that they do a better job than 
business as usual right now because they're kind of 
inefficient. I think that's a real----
    Senator Kerry. Mr. Connaughton.
    Mr. Connaughton.--they----
    Senator Kerry. Mr. Connaughton.
    Mr. Connaughton. Yes, sir.
    Senator Kerry. Let me tell you something. China is reducing 
its emission rate, and has done a better job than the United 
States over the last years of making decisions to do that. I'm 
very familiar with what they've been doing.
    Mr. Connaughton. Well, but, in fact, Senator----
    Senator Kerry. China has done a more aggressive job of 
restraining its emissions rate of growth than the United 
States.
    Mr. Connaughton. We are actually--by the way, we should be 
looking at Japan as the hallmark, because they have the----
    Senator Kerry. You're now switching----
    Mr. Connaughton.--they have the best intensity.
    Senator Kerry.--countries, right?
    Mr. Connaughton. No, but I want to put in perspective----
    Senator Kerry. Well, I'm trying to put it in perspective.
    Mr. Connaughton. If we're trying to get the world oriented 
toward an approach by which we can remove the total amount of 
carbon going into the atmosphere, we have to get everybody on a 
track of slowing that rate of growth. As China has done. By the 
way, as we have done. As we have done over the last decade. We 
had--we made substantial progress, but it did not come without 
cost, and it came with a significant amount of innovation----
    Senator Kerry. Well----
    Mr. Connaughton. OK? That's what we need to spur and 
motivate in order to reduce the rate of----
    Senator Kerry. I don't disagree. I've been fighting for 
that on this Committee for years as a Member of the Science and 
Technology Subcommittee. I've created tax credits for it. I'm 
all in favor of doing it, but I can tell the difference between 
a serious effort to engage in this and one that isn't. I say to 
you respectfully--you know, I've been to those meetings. I've 
sat in The Hague and in Buenos Aries and elsewhere and 
negotiated and talked to the Chinese and to the Japanese and to 
others about the difficulties of getting these rates.
    Their economies were also affected, may I say to you, about 
the choices that they had to make at Kyoto. All of them. The 
United States, which is 4 percent of the world's population, is 
currently contributing 25 percent of the world's global warming 
gases.
    Now, I have talked until I'm blue in the face with some of 
the representatives of those countries about how they have to 
be part of the solution. Let me remind you, sir, I was the one 
who managed the floor amendment with Senator Byrd and Senator 
Hagel that said to President Clinton we wouldn't go forward and 
shouldn't go forward with Kyoto as it was until we also include 
less developed countries. I understand that we have to do that. 
But I don't see the kind of concerted effort that's going to 
make that happen.
    In fact, let me just share with you that I was disturbed to 
learn at the recent meetings in Bonn, I believe. There was a 
disturbing report.
    It's my understanding that observers there reported to the 
Committee that this Administration--your Administration--worked 
with a number of the developing countries led by Saudi Arabia 
to literally dilute the role played by the IPCC scientists and 
their latest state of Science Report, and a U.S. negotiator 
objected to the use of the word ``robust'' to characterize the 
IPCC assessment, even though the National Academy of Sciences 
had, in fact, characterized it that way. So I don't understand 
why, if you're so earnest about including them and bringing 
them into the process, you're actually working to marginalize 
them at the international level in that way.
    Mr. Connaughton. Well, I would just disagree there, Senator 
respectfully. We've not marginalized at all.
    Senator Kerry. Well, was there objection----
    Mr. Connaughton. In fact, the nature of our----
    Senator Kerry .--was there objection to the use of the word 
``robust,'' which----
    Mr. Connaughton. I don't know the specifics of what you're 
saying. So----
    Senator Kerry. Well, then you can't object to what I'm 
saying.
    Mr. Connaughton. No, no. I would--you took a specific 
negotiating point and amplified it out as a characterization of 
the kinds of conversations we were having with our partners 
both in the umbrella group, in Europe, and as well as with the 
developing countries, and I think that's a wholly----
    Senator Kerry. Well, I'd like----
    Mr. Connaughton .--inaccurate characterization.
    Senator Kerry.--to ask you if you would submit to the 
Committee a full account of those negotiations.
    Mr. Connaughton. Actually, attached as one of the tabs to 
my testimony is an extensive outline of the kinds of 
conversations we have been having.
    Senator Kerry. Well, I was in Kyoto, Saudi Arabia was one 
of the problem countries, with respect to reaching an 
agreement. Saudi Arabia, interestingly enough, has also adopted 
your intensity measurement. That may be a message.
    Mr. Connaughton. Well, I would note there, Senator, if you 
look at Japan and at Germany and several other countries, when 
you look at the domestic measures that they're employing, Japan 
is talking with their industry about an intensity measure, 
Germany is talking with its industry about an intensity 
measure----
    Senator Kerry. Well, you may well have opened an option for 
a lot of countries to kind of get out from under something that 
we were moving in a different direction, and that may be even 
more of a tragedy, then.
    Mr. Connaughton. But what you----
    Senator Kerry. I don't take----
    Mr. Connaughton.--what I would disagree with--in fact, the 
Japanese are trying to work--their industry, by the way, has 
made substantial strides, as has American manufacturing 
enterprises. I mean, they've got a reduction----
    Senator Kerry. But you see, these countries have their--you 
see, their companies, here's the dynamics, sir--with all due 
respect--their companies want to compete in the world, too. 
Their companies come screaming to their government saying, 
``Gee whiz, you guys have committed us to this thing in Kyoto, 
but look at what the United States is doing. They're thumbing 
their nose at us and at it. So we now are at a competitive 
disadvantage.'' I'd do exactly what they're doing. That is 
precisely what many of us predicted would be the consequence of 
the United States not showing leadership on this.
    So if we're going to take this seriously--now, look, I'm 
not a scientist. I am a lawyer, and I learned pretty well, in 
doing some cases, how to become immersed in something for a 
period of time and begin to understand it so you can plead your 
case adequately. Just speaking as somebody who's spent now a 
long time on this Committee listening to a lot--I mean, I began 
way down the line there sitting next to Al Gore, long before Al 
Gore wrote a book on it, and we heard a lot of hearings here, 
and we've been through this for a long period of time. Too many 
scientists that I know and respect, too many people in too many 
countries that we know and respect, have accepted this science.
    Only in this country are we still arguing about 
uncertainties. Scientists in other countries and leaders in 
other countries scratch their heads in befuddlement and in 
frustration over our unwillingness to fully embrace the 
science.
    Now, I'm not crazy folks. I understand the importance of 
our economy. I represent a state that thrives on cutting-edge 
technological, high value-added job creation. I just happen to 
have a different view of how we can harness the energy of that 
creative entrepreneurial spirit to begin to find the solutions 
to this in, as I say, a least-cost, least-intrusive, most-
productivity oriented, most profitable fashion for us.
    I think we're fighting a useless, stupid fight here. The 
fight ought to be to get the corporations to the table and 
figure out--saying to them, ``Look, you guys--how do we do this 
in the most sensible way? '' But I'll tell you, there are too 
many people, like the chairman Lloyd Brown of British 
Petroleum, and our own Secretary of the Treasury, who, when he 
was chair of Alcoa, before he came into the Administration, all 
of whom have accepted the need for us to be more responsible 
and do something. I think, unless you start setting some 
targets and goals or embracing some more realistic efforts, the 
United States is going to encourage other countries to seek 
ways to get out from under, rather than to move forward.
    Now, unfortunately, I regret, it's not my unwillingness to 
sit here, nor yours, and I understand that. I appreciate your 
patience enormously. Perhaps we will continue this discussion. 
I hope we can. I am anxious to work with you to find sensible 
ways. Nobody wants to--and I might add--and I want to make sure 
the record reflects this--I think there have been some stupid 
environmental demands that have found their way into 
legislative forum that don't adequately reflect the difference 
between a big company or a small company or the capacity to 
find some market-oriented solutions. Command and control 
doesn't have to be the solution, even as we set some targets. 
But we've got to recognize the need to move here, or I think 
we're going to find ourselves inheriting the wind, so to speak. 
I think it would be a tragedy for our generation of leaders not 
to have been more responsible about it.
    So I welcome a good dialog about it, but I don't want to 
call something what it isn't here, and I think we've got to 
find a better solution. So----
    Do you want to have the last word? I don't want to----
    Mr. Connaughton. I'd just----
    Senator Kerry.--not allow you to do that.
    Mr. Connaughton.--like to just make an offer, Senator, 
following what you just said. Obviously, from an economic 
perspective, I believe what the President put forth is best. I 
would welcome a chance to talk further with you or your staff 
and give you a sense, from our end, on what we think the 
implied shadow prices on carbon and effects on the economy are 
from any proposal you'd like to consider.
    Senator Kerry. Well, I appreciate that, and we'll follow up 
on that in good faith and see if we can move it.
    As I said, Senator McCain and I, and I think Senator Hagel, 
and I hope a few others, will be traveling to South Africa. We 
intend to engage these other countries and hopefully you in a 
constructive effort to move this issue forward.
    I thank you very much for taking time to be here this 
morning. We stand adjourned.
    [Whereupon, at 12:10 p.m., the hearing was adjourned.]

                            A P P E N D I X

  Prepared Statement of Hon. Olympia J. Snowe, U.S. Senator from Maine

    As Harvard University professor E.O. Wilson has said, ``Because all 
politics is ultimately ethical at its base--or at least pretends to 
be--the decision making processes that will save the natural 
environment must be grounded in moral reasoning fed into political life 
through education.'' You are the President's team of advisors for the 
nation's climate change goals and strategies and I am looking forward 
to your further educating us today as to how the Administration plans 
to address this pressing issue, and how we can help in this process.
    There is now a large amount of peer-reviewed scientific literature 
that documents that the burning of fossil fuels, and the subsequent 
release of carbon dioxide, is impacting the environment--and may 
literally be changing the climate. Significantly, the U.S. Climate 
Action Report--2002, recently submitted to the United Nations' 
Secretariat, states that human actions, namely burning fossil fuels, 
are largely to blame for rising global temperatures, and that 
increasing temperatures could significantly alter daily life and 
ecosystems in the United States over the next few decades. The Report 
was the third formal national communication submitted to the U.N. by 
the United States as a signer of the 1992 UN Framework Convention on 
Climate Change, or UNFCCC.
    While scientific uncertainties remain, certain facts are known and 
we must listen to the scientific body of knowledge before us while 
continuing to probe the unanswered questions through further research 
and technological development. The fact is that, since about 1750, the 
concentrations of greenhouse gases have increased: carbon dioxide by 31 
percent, methane by 151 percent, and nitrous oxide by 17 percent. 
Evidence also shows that the 20th century was the warmest in the last 
1,000 years, and the 1990s the warmest decade.
    Since 1983, we have experienced the 10 warmest years--seven of them 
since 1990, with 1988 being the warmest year in the past millennium. At 
the same time, changes in precipitation patterns and rises in sea level 
have been noted around the world. I believe the United States need not 
only adapt to the changes to which the vast majority of scientists are 
alerting us, but we also must give serious consideration to taking 
steps to reverse this trend, taking into account both the environment 
and the economy.
    I think we can safely say that, like the times, the climate is 
changing and how we respond to these changes, how we mitigate and how 
we adapt to these changes are of utmost importance to our moral 
obligation as to how we leave the planet for the generations that will 
follow.
    Climate change is now better understood by our constituents who are 
increasingly aware of the concerns raised by scientists throughout the 
world. I am interested to hear what the Administration plans to do to 
address the potential impacts of climate and global change on our 
society.
    Climate change has also become a concern to U.S. businesses, who 
worry that they might miss out on the economic and technological 
advantages that are developing to address climate change in the 
international marketplace as they watch most of the rest of the world 
move forward with international agreements.
    There is an interesting report that came out last month entitled, 
``Global Climate Change: Fact or Fiction? It Doesn't Matter--The Issue 
Is Here to Stay.'' This was one of the Executive Action series produced 
by The Conference Board--a group of over 3,000 concerned business 
leaders representing a variety of major industries around the globe. 
The report's thesis is that: ``. . . while science is unlikely to 
provide unequivocal answers to the global climate change debate, 
governments and markets are likely to act on their perception of the 
science. The only certainty right now is that these actions will have 
an impact on global business.''
    The conclusion reached by the authors of the report is that: ``. . 
. climate change as an issue for business leaders will not go away. It 
will increasingly affect the way business is done. But . . . by 
effectively meeting the challenge of climate change, businesses will 
also deal effectively with several other issues, ([such as] energy 
costs, reliability, and volatility) that affect competitiveness. New 
business opportunities will very likely be discovered in the process. 
Forward-looking business managers who approach climate change from this 
perspective can expect to gain long-term competitive advantage as a 
result.''
    I am interested in hearing from you today what the Administration 
is currently doing, and is planning to do, to address the concerns of 
the business sector that is requesting future certainty for receiving 
credit for actions they are taking, or can take now, to reduce 
greenhouse gas emissions.
    I also await the Administration's views on the Senate's provisions 
in the Energy bill, especially the Corzine-Brownback bipartisan 
amendment for Title XI, for which I am a cosponsor. Working with 
industry representatives and environmental groups, I believe we have 
found common ground for a meaningful approach to reduce manmade 
emissions impacting the climate by crafting provisions that set up a 
national greenhouse gas database. The provisions set up an inventory of 
greenhouse gas emissions from significant sources and also a registry 
of voluntary reductions.
    I believe it is time to send a clear signal to the nation's larger 
polluters that they can voluntarily report but, if, in the next 5 
years, the industry has not stepped up to the plate to create a vibrant 
voluntarily system for reporting that reaches a threshold of at least 
60 percent of total national aggregate greenhouse gas emissions--and 
one that heads us in the direction of reducing greenhouse gas 
emissions--the program will become mandatory for all large GHG 
emitters. Overall, the Title XI provisions provide a strong incentive 
for companies to measure their emissions and find ways to reduce them 
sooner rather than later.
    Dr. Mahoney, I realize that you are fairly new to your position at 
NOAA and are in the planning process for a new research strategy as 
required under Section 104 of Public Law 101-606, the Global Change 
Research Act of 1990. I expect that you must have progressed far enough 
to determine, as the Act calls for, ``the goals and priorities for 
federal global change research which most effectively advance 
scientific understanding of global change and provide usable 
information on which to base policy decisions relating to global 
change.'' I understand that you are integrating the GCRP with the 
President's new initiative, the Climate Change Research Initiative, or 
CCRI.
    Based on recommendations of the 2001 National Research Council 
report on ``The Science of Regional and Global Change'', the President, 
in his June 11th report, directed your Department ``. . . to maximize 
coordination among federal agencies'' in addressing global and climate 
change issues. I am familiar with multi-agency programs in the past 
that have had laudatory goals to address complex, multidisciplinary 
problems--programs that, following implementation, have produced 
fragmented results from individual agencies with no sense of synthesis 
or cohesiveness.
    It appears to me that the agencies have gone down their individual 
paths and done their own thing without an eye toward the big picture. 
The research program did not look at the broad questions that needed 
answering, but rather at what an agency is doing that could perhaps 
contribute to an isolated piece of an answer. There was no forethought 
as to what issues need to be addressed and how we get there. Rather, it 
was what answers can we produce, and does there happen to be a question 
that we can pose that fits that answer.
    There is a vast wealth of scientific information and innumerable 
products that have been generated by the individual agencies involved 
in the global change research program--and there will be far more 
generated in the future. Providing a unified view of the research 
program will be of benefit to all stakeholders involved and to the 
program itself. As required by the Global Change Research Act, there is 
a need to focus on understanding the nature of and interaction among 
physical, chemical, biological, and social processes related to global 
change.
    So, again, I am interested in hearing your plans to ensure that the 
approaches to climate and global change questions are taken from a 
comprehensive perspective, rather than from individual agency 
perspectives. I feel that this is an extremely important distinction in 
the approach to the issue. I am particularly interested in hearing what 
your plan will do to estimate the societal vulnerabilities in the U.S. 
to climatic variability and change.
    I look forward to your testimonies this morning and also look 
forward to working with you and the Administration in the very near 
future for what I consider to be an issue of environmental security.
    Thank you Mr. Chairman.
                               __________
                           American Meteorological Society,
                                          Boston, MA, July 9, 2002.
Hon. Ernest F. Hollings,
U.S. Senate,
Washington, DC.
    Dear Senator Hollings:
    The American Meteorological Society wishes to comment on the 
scientific basis for the recent publication. U.S. Climate Action 
Report--2002. The following statement has been approved by the AMS 
Committee on Public Policy:
    The AMS has not reviewed the EPA report U.S. Climate Action 
Report--2002 in its entirety and consequently is unable to take a 
position regarding the report. The AMS does, however, endorse the 
science-based documents that were used, in part, within the report to 
present the state-of-the-science and the uncertainties within that 
science. These documents include: IPCC Third Assessment Report--Climate 
Change 2001 and the 2001 NRC report, `` Climate Change Science: an 
Analysis of Some Key Questions.''
    I appreciate the opportunity for the atmospheric sciences and 
services community represented by the AMS to comment on this important 
report.

            Sincerely,
                               Ronald D. McPherson,
                                        Executive Director.
                               __________
     Response to Written Questions Submitted by Hon. John F. Kerry 
                      to Hon. James L. Connaughton

                 ACCOUNTING OF PROJECTED ``REDUCTIONS''

    Question 1. The Administration has stated that its proposal to 
reduce emissions intensity, using voluntary action, will result in 
lowering emissions per million dollars of GDP from 183 metric tons to 
151 metric tons in 2012 and that this plan will achieve ``100 million 
metric tons of reduced emissions'' in 2012.
    However, these are mere projections based on assumptions that are 
not clear. Based on the Climate Action Report, it is clear that total 
emissions to the atmosphere will continue to increase over today's 
levels, even as emissions intensity decreases. Mr. Connaughton, you 
told the Committee on July 11th that ``there is no question about 
that.''
    With a projected increase in emissions, I don't understand how you 
arrived at the claim of 100 million metric tons of reduced emissions.
    Answer. The reductions are measured from the Annual Energy Outlook 
(AEO) 2002 reference case, augmented by an EPA forecast of non-energy 
related greenhouse gas emissions. In 2012, the AEO2002 projected energy 
related carbon emissions to be 1892 mmtce, while an internal EPA 
forecast of growth rates for non-energy-related GHG yielded an 
additional 387 mmtce in 2012, for a total of 2279 mmtce in 2012 in the 
reference case. If carbon intensity were to be reduced by 18 percent 
between 2002 and 2012, total GHG in 2012 would be 2173 mmtce. Thus, the 
reduction in emissions would be 106 mmtce in 2012.
    Question 2. Is this a reduction from the projected rate of increase 
under ``business as usual'' or are the reductions measured from today's 
emissions levels?
    Answer. See above. This reduction is from the AEO2002 reference 
case in 2012, not today's emission levels.
    Question 3. What are the assumptions that underlie any business as 
usual emission projections and your projection?
    Answer. The assumptions for the reference case are those of the 
AEO2002, including world oil price, macroeconomic growth rate, and 
other assumptions including technology improvement embedded in the 
National Energy Modeling System. The forecast assumes current laws and 
regulations. Therefore, the emission projections in the reference case 
do not assume any caps on future energy-related carbon emissions.
    Question 4. Please describe exactly what ``reductions'' you are 
measuring, and from what baseline.
    Answer. As stated above, the reductions are total GHG emissions in 
2012 from a reference case projection for 2012 based on the AEO2002 and 
an estimate of non-energy related GHG emissions from an internal EPA 
forecast of non-energy related GHG emission growth rates. The total 
reduction as a result of the Administration's proposal would be 106 
mmtce in 2012, relative to that baseline.

                           VOLUNTARY MEASURES

    Question 5. The U.S. has advocated and supported voluntary actions 
to reduce emissions--including under the Clinton Administration. Yet 
after a decade of such voluntary actions, emissions continue to 
increase rapidly both for the United States and the rest of the world. 
Even those who are supporters of voluntary emissions reductions point 
to the record and observe that in the aggregate, voluntary actions have 
not succeeded at curbing the overall growth in U.S. emissions. And the 
data in the Report support that view.
    Mr. Connaughton, does it make sense to spend another 10 years 
proving what the record already tells us?
    Answer. President Bush has stated that addressing global climate 
change will require a sustained effort over many generations. The 
Administration recognizes that achieving long-term stabilization of 
atmospheric greenhouse gas concentrations at a level to prevent 
dangerous interference with the climate system, may eventually involve, 
as the science justifies, stopping and reversing greenhouse gas 
emissions growth. Slowing the growth of these emissions in the next 
decade is a serious, but measured mitigation response and it allows 
time for the development of new technologies that will most likely help 
to substantially reduce greenhouse gas emissions in the long term, 
without the risk of harming the economy in the short term.
    Voluntary approaches can offer substantial reductions in emissions 
in greenhouse gases over the next 10 years. Voluntary programs, when 
properly designed, are capable of substantial emissions reductions from 
business-as-usual and will help capture the significant greenhouse gas 
emissions reductions and energy bill savings from these normal capital 
stock turnover opportunities. In addition, the President's budget has 
devoted $588 million towards the research and development of energy 
conservation technologies and will spend $408 million towards research 
and development on renewable energy (including $150 million for the 
FreedomCAR initiative--which will advance the prospect of breakthrough 
zero-emission fuel cell technology) to ensure that the next generation 
of technologies plays a central role in an effective long term response 
to climate change. Finally, President Bush's energy plan 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.
    Question 6. What data does the Administration have to support the 
effectiveness of voluntary measures in reducing actual emissions?
    Answer. Chapter 4 of the recently released U.S. Climate Action 
Report 2002 highlights the accomplishments of many of the voluntary 
climate protection programs that are being implemented by the 
Department of Energy, the Department of Transportation, the Department 
of Agriculture and the EPA. In 2000 alone, U.S. climate change programs 
reduced the growth in greenhouse gas emissions by 242 teragrams of 
carbon dioxide equivalent (66 MMTCE). To date, these voluntary programs 
have been very effective. They have slowed the growth of greenhouse 
gases, while reducing air pollution and saving businesses, 
organizations, and consumers billions of dollars on their energy bills, 
all in a period of strong economic growth.
    Examples of successful voluntary programs include the Energy Star 
labeling program, the EPA's Voluntary Aluminum Industrial Partnership, 
the AGStar program, and various initiatives to reduce methane. EPA's 
Energy Star labeling program is reshaping the way manufacturers make 
products and the way consumers purchase them. Over 600 million Energy 
Star products have been purchased to date across over 30 product 
categories.
    Twelve of the 13 U.S. primary aluminum producers, representing 96 
percent of the U.S. primary aluminum production capacity, have joined 
EPA's Voluntary Aluminum Industrial Partnership. Companies 
participating in this program have committed to make reductions in two 
potent PFCs, tetrafluoromethane (CF4), and hexafluoroethane (CF6). The 
program met its 2000 goal to reduce PFC emissions from U.S. primary 
aluminum smelting by 45 percent--equivalent to 1.8 million metric tons 
of carbon--using cost-effective approaches that make economic and 
environmental sense for the partners.
    In the agriculture sector, USDA and EPA have partnered on the Ag-
STAR program and the Ruminant Livestock Efficiency Program (RLEP), 
which focus on reducing methane emissions. The overall impact of these 
two programs on greenhouse gas emissions has been small on a national 
scale, but program stakeholders in the agricultural community have 
demonstrated that the practices can reduce greenhouse gas emissions and 
increase productivity.
    Because of the potency of methane relative to carbon dioxide, a 
``methane-first'' strategy for greenhouse gas mitigation is cost-
effective. A variety of U.S. industry and government partnerships have 
reduced methane emissions, and they are expected to hold emissions at 
or below 1990 levels through and beyond 2010. Partners in EPA's methane 
programs are projected to maintain emissions below 1990 levels through 
2010.
    EPA's Natural Gas STAR program includes companies representing 40 
percent of the U.S. natural gas production, 72 percent of transmission 
company pipeline miles, 49 percent of distribution company service 
connections, and 23 percent of processing throughput. This partnership 
has achieved significant reductions. In 2000, EPA estimates a reduction 
in methane emissions of 4 million metric tons of carbon equivalent, and 
projects for 2010 a reduction of 6 million metric tons of carbon 
equivalent.
    EPA's Coalbed Methane Outreach Program (CMOP) encourages industry 
to reduce methane emissions from underground coal mines. The program 
provides technical assistance to mining companies on technologies for 
recovered methane. EPA estimates that CMOP reduced 2 million metric 
tons carbon equivalent in 2000.
    The President's plan builds on this success with new partnerships, 
with tax incentives, with expanded research and reporting programs. For 
example, the question below elaborates on the Administration's current 
plans, in response to the President's directive, to improve the 
Department of Energy's national greenhouse gas emissions reduction 
registry.
    Question 7. What kinds of ``voluntary measures'' and verifiable 
emissions reductions will be implemented over the next 10 years with 
the two largest sources of emissions and growth in emissions: 
transportation and utilities?
    Answer. President Bush's plan calls for improvements to be made to 
DOE's Voluntary Emissions Reduction Registry, which will result in much 
higher standards for registered emissions reductions, including 
verification standards. These new standards should encourage greater 
confidence in the federal registry and thus encourage increased efforts 
and participation by many sectors, including transportation, 
electricity generation, commercial and residential.
    The President has also challenged American industries and 
businesses to make specific commitments to improve the greenhouse gas 
intensity of their operations and to reduce emissions. The President's 
plan will build on successful sector challenges, such as agreements 
with the semiconductor and aluminum industries, with broader agreements 
and greater reductions. EPA's Climate Leaders program was launched in 
2002 and now has more than 31 major corporate partners. Additionally, 
DOE has been working with representatives of major energy intensive 
industrial sectors to identify opportunities for cost effective 
greenhouse gas reductions and to facilitate consensus building within 
these sectors on common reporting methodologies and voluntary 
strategies.
    Developing new technologies to improve the energy efficiency of 
transportation in the United States will be a key element in achieving 
reductions in greenhouse gas emissions. The Administration is currently 
promoting the development of fuel-efficient motor vehicles and trucks, 
researching options for producing cleaner fuels, and implementing 
programs to improve energy efficiency. Research and development of 
breakthrough technology, such as the zero-emission fuel cell technology 
towards which FreedomCAR is working, is a long-term strategic goal. 
Along with these advances, the Administration also expects results in 
the next 10 years through tax credits for new hybrid or fuel cell 
vehicles. These credits will encourage the purchase of highly fuel-
efficient vehicles that incorporate advanced automotive technologies 
and will help move hybrid and fuel cell vehicles from the laboratory to 
the highway. In 2001, EPA agreed to license to the Ford Motor Company a 
unique, high efficiency ``hydraulic hybrid'' technology that has the 
long term potential to reduce energy consumption and greenhouse gas 
emissions. The first application of this technology, planned for model 
year 2005, will result in a minimum 30 percent improvement in vehicle 
fuel economy (with a payback period of less than 3 years); the second 
phase, planned for as early as 2009, should double fuel economy (with a 
payback of less than 2 years). EPA has also launched voluntary programs 
focusing on commuter choice benefits to reduce vehicle miles traveled 
and reducing emissions from trucking fleet operations.
    As a final point, I associate myself with the views that Dr. Glenn 
Hubbard, Chairman of the Council of Economic Advisors, shared with the 
Committee. The Administration is also taking action on developing new 
CAFE standards that are based on sound science and consider passenger 
safety and utility. The National Energy Policy recommended that the 
Department of Transportation review and provide recommendations on 
establishing CAFE standards with due consideration of the National 
Academy of Sciences 2001 study, ``The Effectiveness and Impact of CAFE 
Standards.''

         ``NO REGRETS'' POLICIES--TRANSPORTATION AND UTILITIES

    Question 8. The Climate Action Report states that as the largest 
source of U.S. greenhouse gases, CO2 accounted for 82 
percent of total U.S. greenhouse gas emissions in 1999. Carbon dioxide 
from fossil fuel combustion was the dominant contributor, with 31 
percent of CO2 emissions coming from transportation 
activities.
    The Administration's proposal emphasizes the importance of 
technological innovation to address climate change, but is missing some 
great opportunities--forcing the use of technology today will spur jobs 
and reduce emissions right now. For example, the NAS study on corporate 
average fuel economy pointed to existing technologies that would 
accomplish multiple goals in a cost-effective way.
    This is the ultimate ``no regrets'' action: reducing on oil imports 
while reducing greenhouse gas and other emissions.
    (a) Given the rapid increase in greenhouse gas emissions due to 
transportation, what is being done to curb emissions?
    (b) What action has the Administration taken on developing CAFE 
standards through rule-making to address this source of CO2 
emissions?
    (c) Will technical innovation that moves us away from a fossil fuel 
economy occur rapidly enough to prevent ``dangerous climate change'' as 
defined by the UNFCCC's Article II?
    (d) What is the U.S. Government's present investment in renewable 
and alternative energies and technologies relative to the last 10 years 
of government investments in the same categories, factoring in 
inflation?
    Answer. I associate myself with the views that Dr. Glenn Hubbard, 
Chairman of the Council of Economic Advisors, shared with the 
committee. The Administration does not agree that ``forcing the use of 
technology'' represents a ``great opportunity.'' In contrast to many 
environmental problems that result from a specific chemical or a narrow 
set of activities located in a confined area, the risk of climate 
change depends on the combined accumulation in the atmosphere of many 
different GHGs emitted from all over the world. While the contribution 
of a given amount of each GHG to climate change varies according to its 
relative potency in trapping energy and how long it naturally remains 
in the atmosphere, emission reductions of the various gases, adjusted 
for these differences, are equally valuable.\1\ Moreover, because 
atmospheric concentration of GHGs matter, not emissions, carbon 
sequestration (e.g., absorption into forests and soil) of gases already 
in the atmosphere provides additional opportunities to reduce climate 
change risks.
---------------------------------------------------------------------------
    \1\ As a result, emissions of greenhouse gases are often measured 
in tons of carbon equivalent, which weights the emissions of each gas 
according to the combined effect of its relative potency and residence 
time in the atmosphere.
---------------------------------------------------------------------------
    The large contribution of carbon dioxide emissions to overall 
increases in the atmospheric GHG concentrations implies that reducing 
the growth in carbon dioxide emissions will be important to any long-
term strategy to address climate change. Other gases comprised only 18 
percent of total U.S. GHG emissions in 1999, while land-use changes and 
forestry in the United States sequestered the equivalent of roughly 15 
percent of total emissions.\2\ However, emissions of these other gases 
and carbon sequestration offer the bulk of inexpensive reduction 
opportunities for the U.S. right now--nearly twice as much as carbon 
dioxide emissions according to a recent EPA study--making it essential 
to include them in any cost-effective approach.\3\ These facts 
represent the genesis of the Administration's approach to climate 
change, which is holistic, rather than sector-specific, and stresses 
efficiency and cost-effectiveness.
---------------------------------------------------------------------------
    \2\ Environmental Protection Agency, Inventory of U.S. Greenhouse 
Gas Emissions and Sinks: 1990-1999, (April 2001). See http://
www.epa.gov/globalwarming/publications/emissions/us2001/pdf/table-es-
1.pdf.
    \3\ Environmental Protection Agency, Analysis of Multi-emissions 
Proposals for the U.S. Electricity Sector, Requested by Senators Smith, 
Voinovich, and Brownback. See http://www.epa.gov/oar/
meproposalsanalysis.pdf.
---------------------------------------------------------------------------
    At the sector-specific level, addressing greenhouse gas emissions 
in the transportation sector would include action taken on Corporate 
Average Fuel Economy (CAFE) standards. The Administration is taking 
action on developing new CAFE standards: the National Energy Policy 
recommended that the Department of Transportation review and provide 
recommendations on establishing CAFE standards with due consideration 
of the National Academy of Sciences 2001 study on The Effectiveness and 
Impact of CAFE Standards. The Administration believes that CAFE 
standards should be addressed analytically and be based on sound 
science, considering passenger safety and utility.
    In addition, the Administration is proceeding with the FreedomCAR 
program and the recently announced ``New Vision for the 21st Century 
Truck Partnership.'' Both partnerships move the U.S. toward a vision of 
a safe and cost-effective transportation sector that is not reliant on 
imported oil, and creates no harmful emissions, of either criteria 
pollutants or greenhouse gases.
    Regarding technological innovation, the IPCC reports an entire 
family of scenarios in which technological change is sufficient to 
maintain CO2 concentration levels between 550-750 ppm 
through 2100 (see IPCC, ``Climate Change 2001, Mitigation'' Report of 
Working Group III, p. 4). The scientific community is as yet unable to 
determine what level of greenhouse gas concentrations or cumulative 
climate change leads to a ``dangerous level'' and this Administration 
is committed to advancing our understanding of climate science. The 
United States will continue to be a leader in science and technology 
under this Administration.
    Below is a table of the Office of Energy Efficiency and Renewable 
Energy's budget for the past 10 years, in real 2002 dollars. EERE is 
the Department of Energy's primary program for research and development 
of energy efficiency and alternative energy sources and technologies, 
and as such represents the bulk of U.S. Government spending in this 
area. The EERE program is responsible for strengthening America's 
energy security, environmental quality, and economic vitality through 
public-private partnerships that enhance energy efficiency and 
productivity to bring clean, reliable and affordable energy 
technologies to the marketplace, and enhancing consumer's energy 
choices.

                               EERE Budget
                    [2002 Real Dollars in Thousands]
------------------------------------------------------------------------
                Year                                Budget
------------------------------------------------------------------------
                   2002                           $1,298,394
                   2001                           $1,198,448
                   2000                           $1,087,759
                   1999                           $1,081,546
                   1998                             $971,667
                   1997                             $907,355
                   1996                             $933,186
                   1995                           $1,262,202
                   1994                           $1,173,037
                   1993                             $986,025
------------------------------------------------------------------------

    It is also important to note that the President's FY03 budget 
proposal seeks $4.6 billion in clean energy tax incentives over the 
next 5 years. These tax credits will spur investments in renewable 
energies such as solar, wind, and biomass, hybrid and fuel cell 
vehicles, cogeneration, and landfill gas.

                      ADMINISTRATION VIEW OF IPCC

    Question 9. I understand the Administration recently sent 
representatives to Bonn to participate in technical negotiations under 
the Framework Convention.
    I was shocked to hear from observers that the Administration 
worked, together with developing countries, led by Saudi Arabia--to 
strongly dilute the role played by IPCC scientists and their latest 
``state of the science'' report (the Third Assessment)--including its 
role in helping policymakers consider if concentrations are trending 
toward stabilization.
    A U.S. negotiator even objected to the use of the word ``robust'' 
to characterize this IPCC Assessment, even though our own NAS 
characterized it this way.
    What is the Administration's position on the role of the IPCC under 
the UNFCCC--to which I remind you, the U.S. is a Party?
    Answer. The Administration regards the IPCC as an essential 
organization for coordinating international work on climate change.
    Question 10. Does this Administration support the IPCC as the 
appropriate body to assess available information on the science, the 
impacts, and the economics of-and the options for mitigating and/or 
adapting to-climate change; and to provide scientific, technical and 
socio-economic advice to the Parties to the UNFCCC?
    Answer. The Administration does regard the IPCC as an appropriate 
body for these functions.
    Question 11. As discussed during the July 11th hearing, I would 
like a full account of these negotiations as soon as possible.
    Answer. As a general matter in the negotiation process, the U.S. 
delegation is cognizant of the need to ensure that UNFCCC conclusions 
are accurately characterized and are likely to lead to outcomes that 
are in the U.S. interest.
    With respect to the specific instance raised in your question, the 
U.S. delegation did not question the robustness of the findings of the 
IPCC generally. As noted above, the U.S. concurs with the NAS report, 
which is largely positive with respect to the accuracy of IPCC 
assessment, and the position of the U.S. delegation in Bonn was fully 
consistent with this position. Rather, the delegation questioned 
whether the IPCC's findings with respect to the objective of the 
Convention (Article 2) could be characterized as robust.
    This point was relevant given the stated desires of some other 
delegations to move toward a determination of specific levels for what 
constitutes a ``dangerous'' level under Article 2. While the U.S. 
delegation was willing to make reference to the objective of the 
Convention in the conclusions of the Subsidiary Body for Scientific and 
Technical Advise (SBSTA) under the UNFCCC conclusions as a point for 
further discussion, the delegation considered that any such discussion 
should adequately account for the numerous remaining uncertainties 
regarding the nature and timing of climate change. An EU proposal would 
have put ``robust findings'' and ``uncertainties'' on equal footing, 
which the U.S. delegation indicated it did not consider appropriate in 
the context of the ultimate objective of the Convention.
    The U.S. view on this matter is supported by findings in the IPCC 
Synthesis Report. In its intervention on this point, the U.S. 
delegation cited and quoted the paragraph on page 22 of the IPCC 
Synthesis Report, which notes the advances made in understanding the 
qualitative character of the impacts of climate change, but notes that 
because of a number of uncertainties (listed in the paragraph), 
``comprehensive, quantitative estimates of the benefits of 
stabilization at various levels of atmospheric concentrations of 
greenhouse gases do not yet exist.''
    Similarly, the U.S. position is consistent with the NAS report, 
which did not identify a ``safe'' level of greenhouse gas emissions, 
but instead identified a number of variables. The report notes:
     ``The course of future climate change will depend on the 
nature of the climate forcing (e.g., the rate and magnitude of changes 
in greenhouse gases, aerosols) and the sensitivity of the climate 
system. Therefore, determination of an acceptable concentration of 
greenhouse gases depends on the ability to determine the sensitivity of 
the climate system as well as knowledge of the full range of the other 
forcing factors, and an assessment of the risks and vulnerabilities. 
Climate models reflect a range of climate sensitivities even with the 
same emission scenario . . .''
     ``The range of model sensitivities and the challenge of 
projecting the sign of the precipitation changes for some regions 
represent a substantial limitation in assessing climate impacts . . . 
The differences among climate model projections are sufficiently large 
to limit the ability to define an ``acceptable concentration'' of 
atmospheric greenhouse gases. In addition, technological breakthroughs 
that could improve the capabilities to adapt are not known . . .''

                           KYOTO ALTERNATIVE

    Question 12. The President has publicly registered his concern with 
the Kyoto Protocol, stating it is ``fundamentally flawed'' because it 
does not include developing countries and its targets are 
``precipitous.'' Yet his Climate Change policy announcement 
acknowledges the seriousness of climate change and states that ``the 
President recognizes American's responsibility to reduce emissions.''
    Assuming the Administration continues to oppose the Kyoto Protocol, 
are you developing an alternative international approach to ensure 
meaningful reductions of actual greenhouse gas emissions? When can we 
expect such a proposal?
    Answer. The U.S. Senate in 1997 advised the prior Administration, 
in its unanimous Senate Resolution, 98, against entering into an 
agreement that exempted developing countries or risked serious harm to 
the American economy. Given our strong confidence and commitment to the 
United Nation Framework Convention on Climate Change, we do not have 
plans to put forward any additional approach through the multilateral 
system at this time. Other countries have expressed their desire to go 
forward with the Kyoto Protocol based on their own circumstances, and 
the Administration has respected their desire. We consider that at this 
point, it is most constructive for us to move forward with the 
President's plan, and to work cooperatively with others in the context 
of the UNFCCC and through bilateral and regional cooperation. We are 
actively engaged in both of these efforts.
    As for the question of ``actual'' reductions, this is not a measure 
used in the Kyoto Protocol itself. Eight countries in Annex 1 have 
targets under the Kyoto Protocol that are above the 1990 emissions 
levels (a level that was arbitrarily set, with no basis in science), 
including 5 in the EU; in fact, if the UK and Germany are excluded from 
the EU's overall target of -8 percent (since they experienced 
substantial emissions reductions unrelated to climate policy), the 
remaining 13 EU member states have an overall average growth target 
(note 0.5 percent increase). Another dozen countries are former 
socialist states whose targets are above their projected emissions for 
the Kyoto commitment period because of severe economic weakness in the 
past decade. Still others will meet much of their target through 
substantial purchases of overseas credits, often generated from 
faltering economies, or through generous accounting of carbon sinks.
    Not only is ``actual reductions'' not a Kyoto benchmark, it does 
not say very much, about the level of effort required by different 
countries under Kyoto. The United States' target under Kyoto was 
uniquely stringent, due to the unparalleled growth in both our economy 
and population in the 1990s compared to other countries. As a result, 
``actual'' reductions could not possibly be achieved in the 6 years 
left before the Kyoto commitment period without a very substantial and 
unnecessary cost, since it would mean reducing emissions by over \1/3\ 
of total U.S. emissions.
    This fact was well recognized by the previous administration. 
According to its economic analysis, the United States would have 
achieved only a fraction of the required reduction under Kyoto at home 
(100-150 tons), meaning that actual U.S. emissions would have grown 
substantially (by some 20-30 percent). Its analysis also projected a 
need to meet Kyoto's target primarily through the purchase of credits 
from Russia and other countries, resulting in a transfer of U.S. wealth 
to these countries of billions of dollars.
    Question 13. The President's initiative declares that ``Greenhouse 
Gas Intensity'' is a more ``practical way to discuss goals with 
developing countries,'' suggesting that the United States may be 
advocating the use of this measure with developing nations in 
evaluating progress toward meeting the goals of the Framework 
Convention.
    What direction has the Administration provided you regarding the 
promotion of this metric of ``progress'' instead of total emissions or 
atmospheric concentrations in international discussions, including 
under the Framework Convention or in the IPCC?
    Answer. At this stage, we are working with a number of countries 
bilaterally and regionally on a broad range of issues covering 
scientific and technological cooperation and policy dialogue. In many 
of our interactions, we have explained the advantages of the 
President's greenhouse gas intensity approach, as well as other aspects 
of our policy that we believe they will find favorable.
    We believe that an approach using greenhouse gas intensity is 
likely to be an attractive alternative to absolute targets for many 
developing countries, particularly since absolute emissions are 
difficult to gauge in economies that have unpredictable rates of 
growth. Where growth rates are unpredictable, countries are likely to 
be more reluctant to agree to an absolute target, because they are more 
likely to overshoot their projections. They understand that if their 
economic growth rate is greater than projected, meeting an absolute 
target would require them effectively to impose a ceiling on economic 
development simply due to this miscalculation. At the recent Eight 
Conference of the Parties to the UNFCCC, Indian Prime Minister Vajpayee 
noted the intensity metric in his remarks to the Conference: ``As the 
cumulative effect of all these policies and measures, the energy 
intensity of our GDP has been declining steadily.''
    Notably, even the prior administration's economic advisors 
acknowledged the advantages of an intensity metric: ``Consistent with 
the Framework Convention on Climate Change, targets for developing 
countries should help promote their sustainable development. For them 
to do so, such targets should accommodate emissions growth, because 
some growth is emissions is an unavoidable consequence of development . 
. . An emissions target could also take other forms. It could for 
example, be indexed to a country's economic performance (such as GDP) 
between now and the 2008-12 commitment period. Such targets could avoid 
the risk of a crunch arising from faster than projected economic growth 
between now and the commitment period.'' (Economic Report of the 
President, February, 2000).
    Question 14. Are the Administration's actions and positions in 
international negotiations consistent with that goal?
    Answer. Yes. A greenhouse gas intensity goal as a metric is a 
measure that links progress to the rate of economic growth, rather than 
setting an absolute quantitative goal at a moment in time. In either 
case (intensity or quantitative goal), the goal can be adjusted to meet 
most objectives that could now be envisioned under the UNFCCC.
    Question 15. Is the Administration working to convince other 
countries to reduce their emissions, or is it true that the 
Administration is trying to convince them to only reduce ``intensity'' 
?
    Answer. The Administration has not discussed this issue in such 
specific terms. We have articulated a reasonable and aggressive target 
for ourselves that would slow the growth of emissions over the next 10 
years.
    As noted above, this is also consistent with the previous 
administration's approach to reductions in its plans to implement the 
Kyoto Protocol. The previous administration, in its own economic 
analysis, did not envision an absolute reduction in U.S. greenhouse gas 
emissions, but rather a reduction from business-as-usual emissions 
growth of between 100 and 150 million metric tons of carbon--comparable 
to the amount envisioned in the President's plan.
    Question 16. How would using this metric worldwide have any effect 
on emissions reduction in our lifetime?
    If all the countries in the world--or even the major emitters from 
both developed and developing countries--began to reduce their 
greenhouse gas intensity, there is no question that the effect on 
emissions could be quite substantial--far more so, in fact, than the 
approach taken under the Kyoto Protocol, which called for unpredictable 
and in some cases unrealistic targets for a small minority of 
countries, with many other countries taking on absolutely no targets 
whatsoever. Whether the Kyoto Protocol ever enters into force and 
whether the countries participating in it actually achieve their 
targets, remains very unclear.
    The Administration recognizes that achieving long-term 
stabilization of atmospheric greenhouse gas concentrations to avoid 
dangerous interference with the climate system may involve--as the 
science justifies--stopping and reversing greenhouse gas emissions 
growth. Slowing the growth of these emissions through expanded use of 
voluntary initiatives and proposed tax incentives will allow for the 
development of technology to substantially reduce greenhouse gas 
emissions in the long term, without the risk of harming the economy in 
the short term. The President has also committed that if progress is 
not sufficient by 2012 and sound science justifies further action, the 
United States will respond with additional measures that may include a 
broad, market-based program, as well as additional incentives and on 
voluntary measures designed to accelerate technology development and 
deployment.
    Question 17. From the testimony submitted on July 11th, it appears 
inconsistent for the Administration to simultaneously claim that, on 
the one hand, meeting the Kyoto targets would ruin the U.S. economy, 
and on the other hand, the President's plan achieves as much reductions 
as other nations under the Kyoto protocol.
    Answer. This question was also asked very appropriately of Dr. 
Glenn Hubbard, Chairman of the Council of Economic Advisors. I 
associate myself with his answer and attach a copy, (Attachment A) for 
your convenience.
    Had the United States intended to meet its Kyoto target exclusively 
through domestic abatement, we would have had to reduce our greenhouse 
gas intensity in 2012 significantly more than 4 percent below the 
baseline projected in the AEO 2002.
    As Dr. Hubbard mentioned in his testimony, Janet Yellen, a former 
CEA chair, testified that domestic reductions of 100 to 150 million 
metric tons could be obtained.\4\ This is close to the 106 million, or 
4.5 percent reduction called for by the President.
---------------------------------------------------------------------------
    \4\ See Testimony of Janet Yellen, Chairman, Council of Economic 
Advisers, on H271-9 before the Subcommittee on Power and Energy of the 
House Committee on Commerce, page 323, lines 26 and 29.
---------------------------------------------------------------------------
    For your convenience, Chart 5 from Dr. Hubbard's testimony is 
below. Chart 5 shows the U.S. commitment alongside estimates of the 
average required reductions for the remaining countries with emission 
limits under the Kyoto Protocol. While some countries, such as Canada 
and Japan, have challenging targets, others, such as the transitional 
economies of the former Soviet Union and Eastern Europe, have targets 
that are much greater than the current emissions. According to one set 
of estimates by the Energy Information Administration, these surplus 
allowances exceed the needs of other countries with targets that 
require reductions below their baseline, with a net effect that 
required reductions through domestic abatement activities are zero. 
Another set of estimates from a group at MIT shows required average 
reductions of 7.2 percent below baselines. Viewed together, these 
forecasts suggest domestic abatement efforts to reduce emissions among 
remaining Kyoto countries would be roughly comparable to the U.S. 
commitment.\5\
---------------------------------------------------------------------------
    \5\ See Energy Information Administration (EIA), International 
Energy Outlook 2001, DOE/EIA-0484 (2001) (Washington, DC, March 2001); 
and John Reilly, MIT Joint Program on the Science and Policy of Global 
Change, Snowmass Summer Workshop (August 6, 2001). The IEO 2001 
estimates that total required reductions among the Annex I countries 
(those required to reduce emissions under the Kyoto Protocol) would be 
554 million metric tons in 2010. Of that, the United States' burden is 
558 million metric tons (page 14), leaving a marginal surplus of 
reductions--without any further effort--among remaining participants 
after U.S. withdrawal from the Protocol. The MIT study provides 
slightly higher estimates of the burden among remaining participants (7 
percent or 290 million metric tons).

[GRAPHIC] [TIFF OMITTED] T1727.017


    Question 18. Mr. Connaughton, you submitted testimony that 
implementing the provisions contained in the Kyoto Protocol would have 
a $400 billion impact on the economy, as CO2 emissions are 
reduced to 7 percent below 1990. However, Dr. Hubbard testified that 
the U.S. greenhouse gas reductions that will result from the 
President's plan are ``comparable to the average reductions required 
under the Koto Protocol for countries remaining in the agreement.'' I 
understand that Dr. Hubbard's assessment is based on the notion that 
countries would buy the credits they need through international 
trading.
    Answer. Addressed above.
    Question 19. Mr. Connaughton, does the $400 billion impact figure 
that you came up with consider international trading and the other 
mechanisms found in the provisions of the Kyoto Protocol?
    Answer. For more information, please refer to answer to CEQ 
Question #1. It is noteworthy that the Annex B Parties that have 
decided to participate in the Kyoto Protocol have imposed constraints 
on Kyoto's Clean Development Mechanism.
    Question 20. Can you provide the specific assumptions relevant to 
the Kyoto flexibility mechanisms (international trading, sinks, and 
non-CO2 gas trading) behind the $400 billion figure on the 
one hand, and on Dr. Hubbard's assessment of emissions on the other?
    Answer. Please see the answer to CEQ Question #1 for information 
regarding the assumptions behind the $400 billion loss to the economy 
estimated by the EIA, as a result of the Kyoto Protocol.
    Question 21. Could you provide for me a consistent assessment 
(based on the same set of assumptions) of the cost of implementing the 
Kyoto Protocol and achieving the 7 percent reduction in CO2, 
and on the President's plan achieving the same level of CO2 
reductions?
    Answer. Please see the answer to CEQ Question #1.
    Question 22. What is the present assessment of the economic impact 
of the projections presented as ``likely'' in the Climate Action 
Report?
    Answer. I associate myself with the views that Dr. Glenn Hubbard, 
Chairman of the White House Council of Economic Advisors, has shared 
with the Committee. From an economic perspective, due to the 
fundamental gaps that remain in our current understanding of human-
induced global climate change, significant uncertainty surrounds any 
attempt to estimate the benefits of greenhouse gas reductions, 
generally. However, the President's aggressive national goal, that 
significantly exceeds (by 28 percent) the projected reductions in our 
greenhouse gas intensity in the next decade, represents an appropriate, 
near-term response to the seriousness of this long-term issue.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                        to James L. Connaughton

                                  CAFE

    Question 1. At the hearing, you stated that the Administration is 
``working'' to ``improve fuel economy for our cars and trucks,'' yet 
the Administration to my knowledge has not articulated any plan to 
improve fuel economy, or even a timeline for doing so. This lack of 
action--encapsulated in your ``Climate Action Report''--is remarkable, 
since the National Academy of Sciences came out 2 years ago advocating 
improvements in automotive fuel economy to both reduce reliance on 
imported oil and reduce dangerous emissions of greenhouse gases. The 
NAS also specifically advocated doing more than what the market forces 
alone would require.
    What is the Administration's view of the NAS report findings?
    Answer. The NAS report included two important findings: (1) that 
fuel economy can be significantly increased through the use of new and 
existing technology without compromising safety, and (2) that the 
current CAFE system has created an incentive for manufacturers to 
produce smaller and lighter cars, which the majority of the NAS 
committee believes has led to many additional traffic injuries and 
fatalities. The Administration is deeply concerned about the NAS 
study's findings about the adverse impact the current CAFE program has 
had on safety.
    In light of their findings, the NAS committee made specific 
recommendations for reforming the CAFE system. Most significantly, the 
report recommended that the current CAFE system should be replaced with 
an attribute-based system (such as weight-based standards), and that a 
system of freely tradable fuel economy credits should be established. 
Accordingly, the Administration is also interested in obtaining 
legislation that would authorize the Department of Transportation to 
reform the CAFE program, giving full consideration to NAS report 
findings. The NAS committee also recommended that NHTSA update its 1997 
size and safety study. NHTSA has already undertaken the effort to 
update the study and it should be completed later this year.
    Question 2. Does the Administration advocate increasing fuel 
economy of the fleet?
    Answer. The Administration supports increasing fuel economy by 
encouraging new technologies that reduce our dependence on imported oil 
while protecting passenger safety and American jobs.
    Question 3. What is the Administration actually doing to improve 
fuel economy, aside from funding fundamentally the same long-term 
research as the Clinton Administration?
    Answer. The Administration has taken several actions aimed at 
improving fuel economy. In a letter sent on July 10, 2001, Secretary 
Mineta requested that Congress remove the appropriations rider that had 
prevented the Department of Transportation from revising CAFE standards 
for six fiscal years. Once Congress finally removed the appropriations 
rider on December 18, 2001, the Department's National Highway Traffic 
Safety Administration (NHTSA) has moved expeditiously in resuming its 
CAFE rulemaking responsibilities. On February 7, NHTSA issued a Request 
for Comment in the Federal Register to acquire information the agency 
needs to develop a rulemaking proposal for new CAFE standards for light 
trucks beginning in model year (MY) 2005. The Request for Comment also 
sought public comment on reforms to the CAFE system, particularly those 
recommended in the NAS report. NHTSA plans to cover all or some of 
model years 2005 to 2010 in its proposal this fall. A final rule 
establishing the new CAFE standards for light trucks will be issued no 
later than April 1, 2003. To encourage Americans to buy more fuel 
efficient vehicles today, the President has proposed tax incentives for 
the purchase of hybrid and fuel cell vehicles. To advance and 
accelerate the development of even more fuel efficient vehicles in the 
future, the Administration is funding and working with partners 
(research universities and the private sector) to leverage resources 
for research and development of new vehicle and fuel technologies, 
including the new fuel cell FreedomCAR initiative, hybrid vehicles, and 
ultra-low sulfur fuels.
    Question 4. If gasoline prices remain low, and CAFE standards 
remain the same, how can the Bush Administration expect to promote 
purchases of fuel efficient cars? Does this conform to the modeling and 
findings of the NAS?
    Answer. To encourage Americans to buy more fuel efficient vehicles, 
the President's energy plan proposes tax incentives for the purchase of 
hybrid and fuel cell vehicles totaling more than $3 billion (from 2002 
to 2012). The NAS study mentions (pg. 94) that such a system would 
provide incentives for manufacturers to pursue advanced technology 
research and then bring those new technologies to market and for 
consumers to buy these products. However, because it was beyond the 
scope of the study, the committee did not evaluate such policy 
instruments.
    Question 5. What is the status of the rulemaking NHTSA announced it 
was collecting information on?
    Answer. NHTSA is currently completing its analysis of light truck 
CAFE standards for MY 2005 and beyond. A proposed rule for light truck 
CAFE standards will be published soon. NHTSA plans to cover all or some 
of model years 2005 to 2010 in its proposal. A final rule establishing 
the new CAFE standards for light trucks will be issued no later than 
April 1, 2003.
    Question 6. Will NHTSA issue a rule to improve fuel economy of both 
passenger cars and light trucks?
    Answer. Because NHTSA is statutorily required to issue the MY 2005 
light truck standard before April 1, 2003, the agency's current 
rulemaking is focused on establishing CAFE standards for light trucks 
for MY 2005 and beyond.
    Question 7. When is NHTSA expected to issue a proposed and final 
rule to increase fuel economy under the CAFE program?
    Answer. NHTSA will issue a proposed rule to increase the fuel 
economy of MY 2005 light trucks and beyond in Fall 2002. NHTSA will 
issue a final rule establishing light truck CAFE standards for all or 
some of MYs 2005-2010 by April 1, 2003.
    Question 8. What greenhouse gas emissions savings do you project 
from improved fuel economy?
    Answer. Until we determine the level of the new standards, we 
cannot quantify the amount of greenhouse gas emissions savings that 
will be realized as a result of our rulemaking action.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. John McCain 
                        to James L. Connaughton

    Question 1. Your statement mentions that the Kyoto Protocol would 
have cost the United States $400 billion and 4.9 million jobs. What are 
those numbers based upon? What are the key assumptions that support the 
numbers?
    Answer. I associate myself with the views that Dr. Glenn Hubbard, 
Chairman of the Council of Economic Advisors, shared with the 
Committee. The Energy Information Administration created a report 
titled Impacts of the Kyoto Protocol on U.S. Energy Markets and 
Economic Activity. Specifically, Chapter 6--``Assessment of Economic 
Impacts'' addresses the issue of model assumptions and development.
    The macroeconomic impacts were derived by simulations of the Data 
Resources, Inc. (DRI) model of the U.S. economy. Two key features shape 
the magnitude of the macroeconomic impacts: (1) the disposition of 
funds collected with a permit auction run by the Federal Government; 
and (2) the international trading of carbon permits.
    Regarding the disposition of funds, the default analysis returned 
collected revenues to consumers through personal income tax rebates. 
The alternative analysis assumed a reduction in payroll tax rates.
    The role of international trading and sinks is handled through the 
specification of alternative targets for carbon reduction. It should be 
noted that non-CO2 gases are not addressed in the EIA Kyoto 
study. The inclusion of sinks provides a 3 percent offset to the most 
stringent case (the 7 percent reduction relative to 1990 levels of 
carbon emissions). The movement to other cases (1990, 9 percent 
increase, 14 percent increase, and 24 percent increase) represent 
increasing purchases of international permits, at lower international 
permit price assumptions.
    Pooling this information, as one proceeds from the most stringent 
case (7 percent decline) to the least stringent case (24 percent 
increase), the impacts on the economy diminish. The $400 billion figure 
mentioned refers specifically to the default analysis with a 7 percent 
decline relative to the reference case.
    The 4.9 million job loss is also associated with the aforementioned 
default analysis with a negative 7 percent reduction relative to 1990 
levels of carbon emissions. Although the EIA report, Impacts of the 
Kyoto Protocol on U.S. Energy Markets and Economic Activity, does not 
explicitly calculate the employment impacts, the loss of jobs figure 
can be calculated by comparing the labor force level and unemployment 
rate after the Kyoto Protocol relative to the base case. Given the 7 
percent decline and default analysis, the level of the labor force 
declined and the unemployment rate rose relative to the base case. 
Consequently, these two effects combine for an employment loss relative 
to the baseline of approximately 4.9 million jobs.
    Question 2. The President has stated that the emissions level in 
the Kyoto Protocol is too costly for the U.S. Is there some level of 
emissions that would not be too costly?
    Answer. The national mitigation goal articulated by the President 
in February focuses on significantly accelerating projected reductions 
in greenhouse gas emissions intensity, or greenhouse gas emissions per 
dollar of GDP, specifically a reduction of 18 percent in the next 
decade. This goal significantly exceeds current projections of an 
approximate 14 percent reduction in the next decade, which will result 
in the avoidance of over 100 million metric tons of carbon equivalent 
emissions in 2012.
    The philosophy underlying the Administration's policy was best 
summed up by the President on February 14, 2002. ``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.'' This philosophy, of course, represents a sharp contrast 
to the policy formulated by the prior Administration, which would have 
imposed sharp constraints on the U.S. economy in order to meet the 
arbitrary, near term emissions reduction targets of the Kyoto Protocol. 
The problem with that approach toward mitigation is that it represented 
a costly, unbalanced and ineffective overreaction to this long-term 
challenge and thus enjoyed no political support (e.g., Senate 
Resolution 98 passed by a 95-0 vote).
    I associate myself with the views that Dr. Glenn Hubbard, Chairman 
of the Council of Economic Advisors, shared with the Committee. Growing 
economies--especially those with significant population growth--use 
more energy and generate more emissions. Even with aggressive programs 
to increase energy efficiency, this relationship is unlikely to change 
in the near term. Currently, there are few viable alternatives to 
fossil fuels, other than nuclear power, that can provide large amounts 
of energy. Under these conditions, it makes sense first to slow the 
growth of net greenhouse gas emissions, lay important groundwork for 
both current and future action, and work with other nations to develop 
an efficient and effective global response. Emissions may rise in the 
near term, but climate change must be viewed as a long-term problem, 
requiring a long-term solution that has broad-based country-level 
participation and allows for the economic turnover of our existing 
capital stock toward the advanced energy and sequestration technologies 
of the future. At this point, some model estimates predict that 
mandatory reductions, such as those called upon for the Kyoto Protocol, 
could cost the U.S. up to $400 billion and 4.9 million jobs.
    Question 3. The U.S. Climate Action Report 2002 states that 
developed and developing nations must work together to address climate 
change effectively. Can you update the Committee on the U.S.'s 
technology transfer efforts, including the transfer of equipment and 
capacity building?
    Answer. The Administration considers technology transfer to be a 
key component of assistance for developing countries and economies in 
transition in addressing their greenhouse gas emissions and their 
energy needs.
    The Administration's FY03 budget request seeks $155 million to fund 
technology transfer and capacity building programs to address climate 
change, that are administered by the U.S. Agency for International 
Development. In addition, the Administration has requested $178 million 
to fund the Global Environment Facility (``GEF'') in FY03, to maintain 
its strong technology transfer programs and pay arrears incurred by the 
United States during the last 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).
    Also, in response to the recommendation of the National Academy of 
Sciences for improving and expanding climate observation systems 
throughout the developing world, the President has allocated $25 
million and challenged other developed nations to match the United 
States' commitment.
    The United States has for some time been a leader in efforts to 
promote technology transfer internationally. In 1997 the United States 
established the Technology Cooperation Agreement Pilot Project (TCAPP) 
to demonstrate the benefits of an integrated approach to technology 
transfer, one of the first formal initiatives in support of the 
technology transfer goals of the U.N. Framework Convention on Climate 
Change. Last year, this project was transformed into the Technology 
Cooperation Initiative (TCI), which serves as a coordination mechanism 
for agencies involved in multilateral and bilateral climate-related 
technology transfer activities.
    In addition to extensive technology transfer and related capacity 
building activities conducted on an ongoing basis through various 
agencies such as DOE, EPA, State, USAID, and the national laboratories, 
the U.S. has also been very active in multilateral technology transfer 
activities through the Climate Technology Initiative (CTI). This 
activity, launched in 1995 by 23 OECD countries and the European 
Commission, supports the objective of the UN Framework Convention on 
Climate Change by fostering international cooperation to accelerate the 
more rapid development and diffusion of advanced technologies and 
practices.
    During the past several years, CTI's efforts have been principally 
focused on working with developing and transition countries to assess 
their technology needs and develop a practical plan to implement these 
technologies in a manner consistent with the long term sustainable 
development goals of the country. Such a country-driven assessment 
provides for the more efficient targeting of capacity building and 
training along with enhanced access to technology information. Critical 
to this process is the identification of any institutional or other 
potential barriers that need to be addressed in order to provide the 
necessary enabling environment essential to the active engagement of 
the business and financial communities. In addition to positive 
feedback from the developing and transition countries participating 
directly, CTI has been recognized by the Framework Convention 
Secretariat as making a valuable contribution to technology transfer 
under the Convention. A listing of U.S. technology information 
activities developed for a U.S. submission to the UNFCCC appears below:
ANNEX I: Selected U.S. Technology Information Activities
    The U.S. Government has supported and continues to support a range 
of technology information projects that can be considered as elements 
of the new FCCC Clearinghouse. Some examples include:
    1. The Climate Technology Initiative (CTI) (www.climatetech.net): 
The U.S., through CTI, supported work that helped to develop early 
designs for the broad architecture of a prototype website. We continue 
to support development and demonstration of a dedicated search engine 
for user friendly access to high quality information by technology, 
region, etc., and development of a searchable directory of technology 
expert centers in developing countries (demonstration site at (http://
itdomino1.icfconsulting.com/unfccc/climate.nsf).
    2. The Global Technology Network (GTN) (http://www.usgtn.net/). The 
GTN is a program of the U.S. Agency for International Development 
(USAID) with the mission: ``To facilitate sustainable economic growth 
in developing countries and emerging markets through business linkages 
and technology transfer.'' GTN facilitates the transfer of technology 
and services through the identification, dissemination and matching of 
industry specific requests for quotations (RFQs) for our member 
companies located in the United States, developing countries and 
transition economies. Regionally driven leads are electronically 
matched to pre-qualified U.S. registered suppliers or companies 
participating in our intra-regional trade programs in Africa, Asia and 
Southeast Europe. While there is a likelihood that GTN can lead to 
direct sales, there is also an emphasis on sustainable, long-term 
opportunities for suppliers, in the area of direct investment, 
establishing joint ventures and selecting regional/national agents and 
distributors in areas of the world that USAID has an active presence. 
GTN primarily focuses on four key industry sectors: Agribusiness 
Technology; Information & Communication Technology (ICT); Environmental 
& Energy Technology; and Health & Medical Technology and currently has 
operations in Africa, Asia/Near East, Europe & Eurasia, and Latin 
America & Caribbean.
    3. The Global Network of Environment & Technology (GNET) (http://
www.gnet.org): GNET, sponsored by the U.S. Department of Energy's 
Office of Science and Technology, contains information resources on 
environmental news, innovative environmental technologies, government 
environmental technology programs, contracting opportunities, market 
assessments, market information, current events and other material of 
interest to the environmental technology community. GNET uses 
communications and state-of-the-art technology to bring together the 
information, resources and people that shape the environment and 
technology marketplace. GNET is not merely a website, but a practical 
system for managing business activities and solving problems in the 
environmental technology marketplace. More than an information archive, 
GNET provides services to enhance efforts to communicate, gather and 
exchange information, and conduct business.
    4. ECOLINKS (www.ecolinks.org): This USAID initiative promotes 
market-based solutions to urban and industrial environmental problems 
in Central and Eastern Europe and Eurasia. It focuses on the 
environmental needs of businesses, associations and municipalities 
through partnership grants, trade and investment, and information 
technology. The latter is accomplished through the U.S. Clean 
Technology Exchange (www.cleantechexchange.com).
    5. US Asia Environment Partnership (www.usaep.org): The United 
States-Asia Environmental Partnership (US-AEP) is a public-private 
initiative that promotes environmentally sustainable development in 
Asia. US-AEP works in four program areas--Policy, Urban, Industry and 
Technology Cooperation. It embodies a model of cooperative development 
that encourages U.S. and Asian partnerships, engages key decision-
makers who affect economic change and environmental awareness in Asia 
and the U.S. With a wide range of partners-governments, NGOs, academia, 
and the private sector, US-AEP has become a flexible, responsive 
vehicle for delivering timely answers to environmental questions.
    6. The Information for Africa Climate Technology Transfer (iACTT) 
Pilot Project: Recently, the U.S. EPA has initiated this pilot project 
to build institutional capacity and to provide additional information 
tools to African decision makers and technical experts on 
environmentally sound technologies, services and financing. The 
coordinating technical institution will be the Environmental 
Development Action in the Third World (ENDA) (www.enda.sn) in Dakar, 
Senegal. Initial pilot activities will be carried out in Nigeria, 
Senegal, South Africa and Uganda.
    Question 4. The U.S. Climate Action Report 2002 highlights a major 
obstacle to a global solution to climate change, when it states that 
``higher anthropogenic greenhouse gas emissions are a consequence of 
robust economic growth.'' As countries such as India and China reach 
higher stages of industrialization, it is expected that their 
greenhouse gas emissions will skyrocket. What steps can the United 
States take to aid developing countries in reaching greater economic 
development without causing a tremendous increase in greenhouse gas 
emissions?
    Answer. Many aspects of the preceding answer to Question #3 
highlight the unrivaled leadership of the Untied States in transferring 
advanced energy and sequestration technologies to the developing world, 
as well as enhancing their capacity to deploy these technologies and 
understand their current and projected emissions profiles.
    Action to address climate change will require action by countries 
from all regions of the world, not just the developed countries listed 
in the Kyoto Protocol. As the President stated on June 11, 2001, we 
want to work cooperatively with these countries in their efforts to 
reduce greenhouse emissions and maintain economic growth. The 
President's approach provides a significant opportunity toward engaging 
developing countries in a more meaningful partnership than in the past. 
The President's plan expands cooperation with developing countries 
through substantial increases in funding for the Global Environment 
Facility and international forest conservation programs that will 
sequester carbon, as well as dedicating significant funding for 
bilateral technical assistance and the technology transfer programs of 
the U.S. Agency for International Development.
    The Administration is actively engaged in enhancing bilateral 
cooperation with India, China and other countries with significant 
greenhouse gas emissions, including Korea, Mexico, and Brazil. In 
February 2002, President Bush and President Jiang of China agreed on a 
joint working panel on environment and climate change. The 
Administration has since been working with Chinese agencies to 
strengthen the already very broad range of cooperative activities 
between our governments relating to clean energy and climate change. 
The President and Indian Prime Minister Vajpayee agreed to expand 
cooperation on environment and energy issues, and the Administration is 
building on one of the most effective bilateral assistance programs in 
the world for addressing climate change. The Department of Energy and 
the Agency for International Development are engaged in projects to 
promote energy efficiency and cleaner fuels that they estimate are 
resulting in a reduction of 10 million metric tons of CO2 
equivalent annually. And recently at the World Summit on Sustainable 
Development, the U.S. announced an investment of up to $43 million in 
2003 to leverage $400 million in clean energy initiatives. This 
commitment will enhance access to energy through Global Village 
Partnership (AID), enhance energy efficiency through Energy Efficiency 
for Sustainable Development Initiative (DOE) and focus on phasing out 
lead in gasoline and eliminating polluting home cooking stoves through 
the Clean Air and Healthy Homes initiative. These types of activities 
provide a solid foundation from which to deepen our cooperation with 
these countries, and show them that economic development and protection 
of the environment can go hand in hand.
    In the longer term, investment in technology research and 
development will be a cornerstone of an effective strategy for helping 
all countries grow their economies while reducing projected greenhouse 
gas emission increases. The President's unprecedented investment in 
climate change research and development, through the National Climate 
Change Technology Initiative and other programs, as well as through 
investment incentives for firms and households, represents a unique 
level of commitment toward these new technologies. As technologies 
become available, the United States will continue to promote approaches 
that enable developing countries to invest in and effectively apply 
these technologies. As indicated in question 3 above, the United States 
has been a leader in the development of an effective framework for 
technology diffusion in the developing world, and this will continue to 
be a point of emphasis in our future cooperative efforts.
    Question 5. One of the principles of the President's plan from last 
June is to foster global participation in meeting the challenge of 
climate change. However, many developing countries feel betrayed by the 
irrational exuberance of the Rio Summit's promise of ``win-win'' 
economic development and environmental protections and the later 
struggle over the Kyoto Protocol. What steps can the Administration 
take to restore confidence in the idea of ``sustainable development'' 
to help developing countries make the hard choices between economic 
growth and environmental protection?
    Answer. The recent ``Delhi Declaration'' issued at the Eighth 
Conference of the Parties to the UNFCCC resolves: ``Parties should have 
a right to, and should, promote sustainable development. Policies and 
measures to protect the climate system against human-induced change 
should be appropriate for the specific condition of each Party and 
should be integrated with national development programmes, taking into 
account that economic development is essential for adopting measures to 
address climate change.''
    The Administration strongly believes that economic development is a 
necessary prerequisite for environmental protection. Strong economies 
generate the resources necessary to invest in the environment. Last 
February, President Bush stressed this point:

          ``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. . . . 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. . . . 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. . . .

    We believe that it is possible to convince countries that they can 
develop on a cleaner path without threatening economic development. 
Unfortunately, many developing countries consider the possibility that 
they will need to assume the kinds of drastic and inflexible targets 
contained in the Kyoto Protocol to pose just such a threat. Previous 
efforts to impose Kyoto-like measures on developing countries were 
soundly and almost universally rejected.
    We believe that there are many aspects to the President's plan that 
will be of great interest to developing countries in looking toward a 
new approach, and that can also help to move beyond the current North-
South stalemate. For example, the Administration's use of greenhouse 
gas intensity as a way of measuring progress provides countries with a 
more manageable and flexible approach than that contained in the Kyoto 
Protocol, particularly because it is premised on their economic growth 
and reinforces their legitimate aspirations for improved living 
standards. As President Bush said last February:

          ``It would be unfair--indeed, counter-productive--to condemn 
        developing nations to slow growth or no growth by insisting 
        that they take on impractical and unrealistic greenhouse gas 
        targets. . . . 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.''

    This is especially important for developing countries, whose growth 
rates can be highly variable from year to year. The Administration's 
plan also substantially increases U.S. funding for climate change-
related technical assistance, and we are moving forward aggressively to 
develop partnerships to promote clean energy technologies, both in our 
climate change activities and in other contexts, such as the recent 
World Summit on Sustainable Development. As noted above, we believe 
that in the longer term, technology will be the key for all countries 
to address climate change in a cost-effective manner, and we are 
working together with developing countries to promote the deployment of 
cleaner technologies.
    The basis for all of our cooperative activities is our shared view 
that economic growth and environmental protection can and should be 
mutually reinforcing. We believe that our activities now can serve as 
the foundation for a more cooperative and effective partnership with 
the developing world on climate change as we deal with this long-term 
challenge.
    Question 6. The United Nations Framework Convention on Climate 
Change has a voluntary goal of limiting year 2000 emissions to 1990 
levels. This was attempted through voluntary measures over the last 
decade, but the data in the U.S. Climate Action Report 2002 
demonstrates that this was not accomplished. Yet, again, what the 
Administration proposes for the future are largely voluntary programs 
and the goal does not get the U.S. back to 1990 emission levels, as 
called for in the Convention. Is there any basis for believing that 
continued reliance on voluntary measures has a reasonable chance of 
achieving the objective of the Framework Convention?
    Answer. The U.S. did not meet the voluntary reporting aim of the 
Convention for emissions in the year 2000 because, in retrospect, given 
the strong performance of the U.S. economy and relatively high 
population growth, it was the wrong aim: the aim itself could not have 
been realistically achieved without dramatically slowing the U.S. 
economy. Moreover, very few nations that experienced economic growth in 
the 1990s, achieved this non-binding reporting ``aim.'' For example, 
carbon emission in 10 European Union countries actually increased 
between 1990 and 1999, according to International Energy Agency data.
    The fact that the target was overly stringent does not negate the 
effectiveness of voluntary measures during the 1990s, which contributed 
to significant decoupling of the rates of economic growth and growth in 
greenhouse gas emissions. It is estimated that Federal Government 
programs alone achieved 66 million metric tons of carbon equivalent 
reductions or avoidance in 2000. There is strong reason for optimism 
that there will be broader and more committed private sector 
participation in voluntary programs under the President's plan than was 
the case in the 1990s. Many companies postponed decisions during and 
after the Kyoto negotiations because they had fundamental questions 
about the direction of U.S. climate change policy. The President's 
approach sends a strong signal to the private sector about the kinds of 
measures that will be effective over the next 10 years. We believe that 
these signals reflect a consensus for aggressive but realistic action, 
and that we will see significant reductions over this period as a 
result. The President's proposal to enhance the reporting system under 
Section 1605(b) of the Energy Policy Act provides an additional 
incentive to act, since companies will receive recognition for their 
actions.
    As for the question of whether voluntary measures have a reasonable 
chance of achieving the long-term objective of the Convention, to avoid 
dangerous interference with the climate system, there are many 
variables that are unknown at this time, and it is too early for an 
informed answer. We do not know, for example, the level and timing of 
effort needed to meet the objective of the Convention, because of gaps 
in knowledge about the behavior of the climate system. The 
Administration is working aggressively to reduce those gaps in a timely 
manner, but fundamental questions will likely remain in the foreseeable 
future. We also do not yet know the extent to which future technologies 
will help us meet the objective as they are developed in the future and 
introduced into the market.
    While no one knows at what level of greenhouse concentrations may 
need to be stabilized to meet the objective of the Convention, the 
Administration recognizes that achieving long-term stabilization of 
atmospheric greenhouse gas concentrations may involve--as the science 
justifies--stopping and reversing greenhouse gas emissions growth. 
Slowing the growth of these emissions through expanded use of voluntary 
initiatives, continued implementation of numerous mandatory programs 
(e.g., Corporate Average Fuel Economy and energy efficiency standards) 
and proposed tax incentives will enable the development of technology 
to substantially reduce greenhouse gas emissions in the long-term 
without the risk of harming the economy in the short term. The 
President has also committed that if progress is not sufficient by 2012 
and sound science justifies further action, the United States will 
respond with additional measures that may include a broad, market-based 
program, and/or additional incentives and voluntary measures designed 
to accelerate technology development and deployment.

                               __________

      Response to Written Questions Submitted by Hon. John McCain 
                        to Hon. R. Glenn Hubbard

    Question 1. The greenhouse gas intensity is defined as emissions of 
greenhouse gases per dollar of economic output. Is it possible that 
under certain conditions, the President's 18 percent target could be 
met, while the actual amount of emissions increase?
    Answer. Growing economies--especially those with significant 
population growth--use more energy and generate more emissions. Even 
with aggressive programs to increase energy efficiency, this 
relationship is unlikely to change in the near term. Currently, there 
are few viable alternatives to fossil fuels, other than nuclear power, 
that can provide large amounts of energy. Under these conditions, it 
makes sense to slow the growth of net greenhouse gas emissions, lay 
important groundwork for both current and future action, and work with 
other nations to develop an efficient and effective global response. 
Emissions may rise in the near term, but climate change must be viewed 
as a long-term problem, requiring a long-term solution that has broad-
based country-level participation. At this point, some model estimates 
predict that a hard cap, such as that called upon by the Kyoto 
Protocol, could cost the U.S. up to $400 billion and 4.9 million jobs.
    Consequently, the President's plan seeks to continue the process of 
developing new energy and sequestration technologies and reducing 
fundamental uncertainties in our current state of scientific knowledge 
about global change, while nurturing the growth of the economy. To this 
end, the President created the National Climate Change Technology 
Initiative, which builds upon America's leadership in technology and 
innovation within the area of climate change. Furthermore, the 
President's FY03 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 carbon sequestration technologies. Overall, the 
President's FY03 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 2. In the attachment to your testimony, you included 
comments by the Secretaries of Energy, Commerce, and Agriculture, and 
the EPA Administrator on improving the DOE's greenhouse gas registry. 
When Senator Brownback and myself were developing our registry bill, 
industry told us that it was preferable to start an entirely new 
registry rather than modifying the existing DOE registry. Given the 
extensive amount of work necessary to improve the DOE registry as 
indicated by the comments from the Cabinet Members, why is it important 
that the DOE registry be maintained?
    Answer. We have found a wide range of views on this point, 
reflecting more than one perspective of the purposes, functions, and 
proper design of a greenhouse gas registry. An extensive amount of work 
will be necessary to develop a registry that is a significant 
improvement over the existing program, and it seems wise and prudent to 
build on the experience gained by DOE and more than 200 reporters in 
developing, operating, and participating in the Voluntary Reporting of 
Greenhouse Gases Program over the past 10 years.
    We concur that this effort is considerably more complex than the 
creation of the program in 1992-1994, but leaving this task with DOE 
leads to an expedited process based on the recommendations and 
additional ideas we expect to emerge from our ongoing outreach efforts. 
The process, which will culminate in new guidelines by January 2004 
(for reporting 2003 data) includes: several stakeholder workshops; 
sufficient time to update technical guidelines based on analysis and 
workshops; public comment periods to review the revised guidelines; 
development of reporting forms, software, and a public-use database; 
and required Office of Management and Budget (OMB) review and clearance 
of new reporting forms.
    Question 3. The U.S. Climate Action Report 2002 states that the 
U.S. plan will reduce the greenhouse gas intensity of the U.S. economy 
by 18 percent over the next 10 years. The report also states that a 14 
percent reduction would be achieved in the absence of additional 
proposed policies and measures. What is the value of the additional 4 
percent reduction?
    Answer. We view the actual 4 percent greenhouse gas intensity 
reduction as an incomplete measure of the value of the President's 
plan. Taking into account the vast uncertainties associated with 
climate change, on both the cost and benefit side, the President 
adopted a flexible, but aggressive, strategy to promote technological 
change without undermining the ultimate source of that technological 
advance--productivity growth. As I outlined in my testimony, the 
Administration's strategy has three-prongs: slowing the growth of net 
greenhouse gas emissions, laying important groundwork for both current 
and future action, and working with other nations to develop an 
efficient and effective global response. This strategy builds on the 
Administration's June 2001 commitment to improve our understanding of 
the causes and potential harms posed by climate change, and to develop 
technologies that offer promise to significantly slow the growth of 
emissions. It is also the first step in a long-term commitment to slow 
and, if the science justifies, stop and then reverse the growth of GHG 
emissions. Importantly, it takes advantage of our growing experience 
with building better and more flexible institutions to address 
environmental problems--a topic discussed at length in this year's 
Economic Report of the President.
    The President's plan seeks to continue the process of developing 
new energy and sequestration technologies and reducing fundamental 
uncertainties in our current state of scientific knowledge about global 
change, while nurturing the growth of the economy. To this end, the 
President created the National Climate Change Technology Initiative, 
which builds upon America's leadership in technology and innovation 
within the area of climate change. Furthermore, the President's FY03 
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 carbon sequestration technologies. Overall, the 
President's FY03 budget seeks $4.5 billion in total climate spending--
an increase of nearly $700 million. This level of commitment is 
unmatched in the world.
    From an economic perspective, due to the fundamental gaps that 
remain in our current understanding of human-induced global climate 
change, significant uncertainty surrounds any attempt to estimate the 
benefits of greenhouse gas reductions, generally. However, the 
President's aggressive national goal, that significantly exceeds (by 28 
percent) the projected reductions in our greenhouse gas intensity in 
the next decade, represents an appropriate, near-term response to the 
seriousness of this long-term issue. If achieved, and if advanced 
energy and carbon sequestration technologies are successfully developed 
in the next decade, our country will be in a far stronger position to 
increase its contribution toward addressing this global challenge, as 
the science may justify going forward.
    Question 4. As you know, the Congress just passed legislation that 
would allow for the long-term storage of high level nuclear waste at 
Yucca Mountain in Nevada. Do you feel that this decision will provide a 
stimulus for the construction of new nuclear power plants? Do any of 
your projections for emissions intensity take into account any 
increases in nuclear power generation?
    Answer. The recent passage of legislation in support of moving 
forward with the construction and licensing of a facility for long term 
storage of high-level nuclear waste at Yucca Mountain could in part 
stimulate building new nuclear power plants, but not in and of itself. 
Having a safe, scientifically tested, geologic repository can be looked 
at as a resolution to one of the few difficult issues that are keeping 
power companies from choosing the nuclear option today. A high-level 
waste repository--both for dealing with spent fuel already generated 
and with spent fuel to be generated from continued operation of current 
plants and operation of new plants--is necessary, but not likely 
sufficient to stimulate new orders.
    The Annual Energy Outlook, 2002, produced by DOE's Energy 
Information Administration (EIA) projects in its reference case that 
energy-related carbon dioxide emissions intensity will decrease 14 
percent between 2002 and 2012. This projected baseline, which assumes 
no change in policies beyond those in place at the time projections 
were made, estimates no additional generation from nuclear power. 
Rather, it assumes nuclear generation will decline from 8 percent of 
total U.S. energy consumption to about 6.5 percent. Any efforts, such 
as incentive policies, R&D to reduce costs, or efforts to address 
nuclear waste, such as Yucca Mountain, could maintain or increase 
nuclear generating plant capacity and thus further lower U.S. emission 
intensity.
    Question 5. In your statement, you indicate that the ``4\1/2\ 
percent reduction'' in the emission intensity is comparable to the 
average reductions required under the Kyoto Protocol for countries 
remaining in the agreement. How does the 4\1/2\ percent reduction 
compare to the original target for the U.S. in the protocol?
    Answer. Had the United States intended to meet its Kyoto target 
exclusively through domestic abatement, we would have had to reduce our 
greenhouse gas intensity in 2012 more than 4 percent below the baseline 
projected in the AEO 2002.
    As I mentioned in my testimony, Janet Yellen, a former CEA chair, 
testified that domestic reductions of 100 to 150 million metric tons 
could be obtained under Kyoto.\1\ This is close to the 106 million, or 
4\1/2\ percent, reduction called for by the President.
---------------------------------------------------------------------------
    \1\ See Testimony of Janet Yellen, Chairman, Council of Economic 
Advisers, on H271-9 before the Subcommittee on Power and Energy of the 
House Committee on Commerce, page 323, lines 26 and 29.
---------------------------------------------------------------------------
    For your convenience, I extract Chart 5 from my testimony and 
present it below. Chart 5 shows the U.S. commitment alongside estimates 
of the average required reductions for the remaining countries with 
emission limits under the Kyoto Protocol. While some regions, such as 
Canada and Japan, have onerous targets, others, such as the 
transitional economies of the former Soviet Union and Eastern Europe, 
have targets that are much greater than current emissions. According to 
one set of estimates by the Energy Information Administration, these 
surplus allowances exceed the needs of other countries with targets 
that require reductions below their baseline, with a net effect that 
required reductions through domestic abatement activities are zero. 
Another set of estimates from a group at MIT shows required average 
reductions of 7.2 percent below baselines. Viewed together, these 
forecasts suggest domestic abatement efforts to reduce emissions among 
remaining Kyoto countries would be roughly comparable to the U.S. 
commitment.\2\
---------------------------------------------------------------------------
    \2\ See Energy Information Administration (EIA), International 
Energy Outlook 2001, DOE/EIA-0484 (2001) (Washington, DC, March 2001); 
and John Reilly, MIT Joint Program on the Science and Policy of Global 
Change, Snowmass Summer Workshop (August 6, 2001). The IEO 2001 
estimates that total required reductions among the Annex I countries 
(those required to reduce emissions under the Kyoto Protocol) would be 
554 million metric tons in 2010. Of that, the United States' burden is 
558 million metric tons (page 14), leaving a marginal surplus of 
reductions--without any further effort--among remaining participants 
after U.S. withdrawal from the Protocol. The MIT study provides 
slightly higher estimates of the burden among remaining participants (7 
percent or 290 million metric tons).

[GRAPHIC] [TIFF OMITTED] T1727.018


    Question 6. The 18 percent emission intensity target is set to be 
reviewed in 2012. Given the fact that the nation has been on a 
voluntary system since 1992 under the United Nations Framework 
Convention on Climate Change, does the President plan an interim review 
before the 2012 date?
    Answer. No formal review is planned. Yet, as with other 
Administration policies, there will be continuous monitoring of 
impacts. The President's target of reducing the greenhouse gas 
intensity of the American economy by 18 percent in the next decade 
represents an ambitious national goal, which significantly exceeds 
current projections and is expected to result in the avoidance of 106 
million metric carbon-equivalent tons in 2012 alone. Importantly, it is 
also calibrated to our current level of understanding of the risk posed 
by human-induced climate change and current energy and carbon 
sequestration technologies, topics in which the Administration will be 
investing billions of dollars to improve in the next decade.
    Question 7. Mr. Connaughton has stated that the Kyoto Protocol 
would have cost the U.S. $400 billion and 4.9 million jobs. However, 
the U.S. is also beginning to incur damages from the effects of global 
warming, including fires in Arizona; drought in 40 percent of the 
country; and structured damages to towns and the Alaskan Pipeline in 
Alaska. These events will cost Americans millions of dollars. Has the 
Administration completed any studies of the economic damage that 
climate change is causing the U.S. both today and in the future?
    Answer. It is extremely difficult to separate out the individual 
influence of factors on events such as fires and drought. Changes in 
temperatures can be a factor, but there still remains the question of 
whether the annual changes are cyclical or secular. Additionally, there 
are other reasons that these events may occur. For example, concerning 
fires, the USGCRP points out in Climate Change Impacts on the United 
States that ``wildfires on all lands in the western U.S. increased in 
the 1980s after 30 years of aggressive fire suppression that had led to 
increase in forest biomass.'' \3\ There is strong evidence that this is 
a factor in recent fires and, as you know, the President has recently 
announced changes in forest management practices to reduce future 
risks.
---------------------------------------------------------------------------
    \3\ USGCRP, 2001. P. 500.
---------------------------------------------------------------------------
    Because much of the discussion of climate change and its impacts 
centers on the use of computer models that attempt to look into the 
future, it may be useful to reflect for a moment on these models and 
how they are employed.
    As Dr. Marburger noted in his testimony, ``climate'' is a general 
term for physical properties of the atmosphere, especially air 
temperature and pressure, wind, water vapor, and particle content. Air 
is a substance that obeys laws of motion that can be solved using a 
computer, which is what we do to predict future weather, based on 
current conditions. With the most powerful computers, we can predict 
the weather only a few days ahead, as you know. How then can we hope to 
predict climatic conditions far into the future? Science has developed 
approaches to long term climate modeling that do not attempt to give 
the fine detail we expect in a weather report.
    Long-term climate models are sets of computer programs that attempt 
to simulate all the processes of nature that affect the atmosphere. The 
best current models average these properties over an area roughly the 
size of the State of Connecticut. It is not enough to model just the 
atmosphere, because climate is affected by the vast ocean currents, by 
the presence of atmospheric chemicals and light absorbing or reflecting 
particles, and by the interaction of all these with life processes--
trees, crops, ocean organisms, and human beings. All of these processes 
need to be understood quantitatively before they can be modeled. This 
is the ongoing challenge of climate change research.
    Once the models are constructed--a task that is by no means 
complete today--they have to be loaded with current conditions before 
they can be used for prediction. That means the state of the entire 
earth must be determined at a given instant of time by measurements on 
land, sea, and air. Satellite imagery is important but not sufficient 
for this. Since the output of the models depends on the input, 
incomplete knowledge of the state of the earth translates to 
uncertainty in the predictions. And the output is notoriously sensitive 
to the input. This is why the Intergovernmental Panel on Climate Change 
concluded that ``Science cannot predict the climate and its impacts in 
Milwaukee, Mumbai, or Moscow half a century ahead very accurately, and 
it may never be able to do so.''
    Today's climate models cannot be used for definite predictions of 
regional or local conditions. They are typically run many times, for a 
range of input assumptions, and the results are assessed with 
statistical methods. Given our present state of knowledge, it is not 
surprising that the results vary widely, leading to apparently 
contradictory results.
    That is why reports such as the U.S. Climate Action Report 2002 do 
not claim to make predictions about future impacts. That report employs 
``scenarios'' that are invented to capture the range of results of 
multiple runs of different climate models with different ad hoc input 
assumptions. The scenarios are then used to make ``projections,'' a 
word that is carefully defined in an important footnote on page 84 of 
the report: ``. . . prediction  is meant to indicate forecasting of an 
outcome that will occur as a result of the prevailing situation and 
recent trends (e.g., tomorrow's weather or next winter's El Nino 
event), whereas projection is used to refer to potential outcomes that 
would be expected if some scenario of future conditions were to come 
about . . .''
    The President believes, and I strongly concur, that responsible 
implementation of public policy on a scale commensurate with global 
climate change requires the best possible understanding of the 
phenomena we wish to influence. That is why the President has 
established a new management structure to advance and coordinate 
climate change science and technology research. The idea is to 
accelerate work in areas needed to create better tools to provide 
science based policy guidance, and to develop a technology base that 
matches the climate change challenge. To these ends, the President has 
established a Cabinet-level Committee on Climate Change Science and 
Technology Integration to oversee the entire effort. The Secretary of 
Commerce and Secretary of Energy will lead the effort, in close 
coordination with the Council of Economic Advisers (CEA), the Council 
on Environmental Quality (CEQ), the National Security Council (NSC), 
and the Office of Science and Technology Policy (OSTP), and the 
research program will be coordinated with existing work conducted under 
the Global Change Research Act of 1990. OSTP will continue to perform 
important coordinating functions within this new framework. I want to 
emphasize that the point of the new organization is to take advantage 
of the global change research that already exists, and focus it on the 
current urgent need to improve climate change analysis tools.
    If you have any particular models that you would like us to 
examine, please feel free to contact me.
    Question 8. While the Kyoto Protocol may cause short-term costs for 
foreign companies to come into compliance with its emissions targets, 
some analysts have argued that these companies may also benefit by 
operating more efficiently and reducing negative externalities, such as 
pollution. Will American companies be at a long-term competitive 
disadvantage as foreign companies start operating more efficiently 
because of the Kyoto Protocol?
    Answer. A substantial body of research has examined the issue of 
balancing current and future emission reductions.\4\ It has focused on 
the key features of the climate change problem--the uncertainty 
associated with the benefits and costs of addressing climate change; 
the replacement of existing energy-using equipment, structures, and 
other physical assets required to reduce emissions; and improvements in 
technology over time. These features commonly lead to two related 
conclusions. First, there is significant value associated with better 
information, suggesting a critical role for climate science. Second, 
the least expensive way to achieve a particular concentration target 
involves a gradual approach that avoids drastic changes to the capital 
stock.
---------------------------------------------------------------------------
    \4\ A summary of the research on this topic can be found in Michael 
Toman, ``Moving Ahead with Climate Policy.'' RFF Climate Change Issues 
Brief, 2000. An additional summary of studies on this topic can be 
found in ``Climate Change 2001: Mitigation,'' Intergovernmental Panel 
on Climate Change: Working Group Three, Third Assessment Report, pages 
544-552. See http://www.ipcc.ch/pub/wg3spm.pdf.
---------------------------------------------------------------------------
    One of the Administration's goals is to stimulate technical 
progress and speed up the technological learning processes so that 
eventually renewable energy technologies may be able to better compete 
with conventional technologies. The President's plan accounts for the 
opportunity cost inherent in any type of private technological 
spending--a dollar invested here leads to one less dollar invested 
elsewhere--by providing important flexibility that is necessary to 
solve the long-term problem of climate change.
    As I noted in my testimony, technological innovation does not occur 
in a vacuum, it occurs in response to incentives. Thus using tax 
incentives, giving transferable credits to companies that can show real 
emissions reductions, funding basic scientific research, and the like 
will induce technological innovation. The President has begun an 
aggressive strategy to promote technological change without undermining 
the engineer of that technological advance--productivity growth.
    The President's plan seeks to continue the process of developing 
new energy and sequestration technologies and reducing fundamental 
uncertainties in our current state of scientific knowledge about global 
change, while nurturing the growth of the economy. To this end, the 
President created the National Climate Change Technology Initiative, 
which builds upon America's leadership in technology and innovation 
within the area of climate change. Furthermore, the President's FY03 
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 carbon sequestration technologies. Overall, the 
President's FY03 budget seeks $4.5 billion in total climate spending--
an increase of nearly $700 million. This level of commitment is 
unmatched in the world.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John F. Kerry 
                        to Hon. R. Glenn Hubbard

              ECONOMIC IMPACTS TO INDUSTRY OF DELAY POLICY

    Question 1. The Administration has stated that it wants to take a 
leadership role in addressing climate change, yet the Administration's 
current proposal to mitigate climate change essentially amounts to 
postponing the decision until 2012.
    Recently, some businesses--including Honeywell International and 
Maytag Corp., have objected that `` U.S. companies will lose out to 
foreign competitors that gain expertise and market share in energy-
reducing technologies, and may face trade sanctions against U.S. 
exports that are made at higher-polluting facilities'' if the U.S. does 
not participate in the international effort--including the trading 
system under Kyoto.
    (a) Has the White House considered the economic effects on U.S. 
businesses of not participating in the international effort?
    (b) Has the Administration evaluated the economic effects of NO 
plan to cap emissions on utility companies and the magnitude of 
retrofits and mitigation that will be needed down the line if there is 
continued delay? What about the costs or disadvantages to them if they 
want to be involved in international trade?
    Answer. I do not view the Administration's current proposal as 
postponing mitigation measures until 2012. Rather, it significantly 
accelerates the projected reductions in the greenhouse gas intensity of 
the American economy. The philosophy underlying the Administration's 
policy was best summed up by the President on February 14, 2002: ``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.'' This philosophy, of course, represents a sharp contrast 
to the policy formulated by the prior Administration, which would have 
imposed sharp constraints on the U.S. economy in order to meet 
arbitrary, near term emissions reduction targets. The problem with that 
approach toward mitigation, which no one could accuse of ``postponing'' 
action, is that it represented a costly, unbalanced and ineffective 
overreaction to this long-term challenge and thus enjoyed no political 
report (e.g. Senate Resolution 98 passed by a 95-0 vote).
    A substantial body of research has examined the issue of balancing 
current and future emission reductions.\5\ It has focused on the key 
features of the climate change problem--the uncertainty associated with 
the benefits and costs of addressing climate change; the replacement of 
existing energy-using equipment, structures, and other physical assets 
required to reduce emissions; and improvements in technology over time. 
These features commonly lead to two related conclusions. First, there 
is significant value associated with better information, suggesting a 
critical role for climate science. Second, the least expensive way to 
achieve a particular concentration target involves a gradual approach 
that avoids drastic changes to the capital stock.
---------------------------------------------------------------------------
    \5\ Ibid.
---------------------------------------------------------------------------
    It is also important to note that two alternative schedules of 
emissions reductions can lead to different levels of emissions over 
time, but the same ultimate level of GHG concentrations. The choice 
between paths that differ in near-term versus long-term emissions 
reductions depends on whether we can reduce overall costs by spending 
more on research and less on emission reductions now, in order to 
achieve greater, but significantly cheaper, emission reductions in the 
future thanks to improved technologies, if the science justifies. It 
also depends on whether reductions now require early retirement of 
productive assets; if we have to throw away something valuable--that is 
a real cost. Consideration of the appropriate timing of emissions 
reduction is all the more important because the cost of achieving 
reductions over a short horizon increases dramatically with the scale 
of reductions. One estimate suggests that a 30 percent reduction in 
emissions in the near term is six times more expensive than a 15 
percent reduction. That is, doubling the near-term reduction target 
increases costs sixfold.\6\
---------------------------------------------------------------------------
    \6\ Numerous estimates of the cost to the United States of 
different levels of emissions reductions are presented in John Weyant 
and Jennifer Hill, ``Introduction and Overview,'' The Energy Journal 
(Special Issue, 1999).
---------------------------------------------------------------------------
    One of the Administration's goals is to stimulate technical 
progress and speed up the technological learning processes so that 
eventually renewable energy technologies may be able to better compete 
with conventional technologies. The President's plan critically 
accounts for the opportunity cost inherent in any type of private 
technological spending--a dollar invested here leads to one less dollar 
invested elsewhere--by providing important flexibility that is 
necessary to solve the long-term problem of climate change.
    As I noted in my testimony, technological innovation does not occur 
in a vacuum, it occurs in response to incentives. Thus using tax 
incentives, giving transferable credits to companies that can show real 
emissions reductions, funding basic scientific research, and the like 
will induce technological innovation. The President has begun an 
aggressive strategy to promote technological change without undermining 
the engineer of that technological advance--productivity growth.
    The President's plan seeks to continue the process of developing 
new energy and sequestration technologies and reducing fundamental 
uncertainties in our current state of scientific knowledge about global 
change, while nurturing the growth of the economy. To this end, the 
President created the National Climate Change Technology Initiative, 
which builds upon America's leadership in technology and innovation 
within the area of climate change. Furthermore, the President's FY03 
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 carbon sequestration technologies. Overall, the 
President's FY03 budget seeks $4.5 billion in total climate spending--
an increase of nearly $700 million. This level of commitment is 
unmatched in the world.
    The Administration has also begun putting in place a number of 
programs that will lower the cost of future emission reductions. For 
example, we are developing a technology strategy that will make 
available cheaper, more effective technologies in the future. At the 
same time, the Administration is enhancing the U.S. scientific research 
program on climate to improve our understanding of precisely what 
emissions reductions may be necessary. In addition to aggressively 
pursuing voluntary reductions and commissioning an enhancement to the 
1605(b) registry operated by the Energy Information Administration, the 
Administration is developing a technology strategy that will make 
available cheaper, more effective technologies in the future. GDP 
growth induces innovation, which leads to long term solutions.
    Finally, I am unaware of any legal basis under which trade 
sanctions could be pursued against non-Parties to the Kyoto Protocol.

                 KYOTO ``COSTS'' AND COSTS OF NO ACTION

    Question 2. Mr. Connaughton in his testimony stated that the Kyoto 
Protocol would have had a $400 billion economic impact on the U.S. 
economy, if implemented. Yet Dr. Hubbard, you testified that the U.S. 
greenhouse gas reductions that will result from the President's plan 
are ``comparable to the average reductions required under the Kyoto 
Protocol for countries remaining in the agreement.''
    (a) What is the basis for the $400 billion estimate?
    (b) Does it assume ``command and control'' or ``cap and trade''? 
Will you share your assumptions and calculations with the Committee?
    Answer. The Energy Information Administration issued a report 
titled Impacts of the Kyoto Protocol on U.S. Energy Markets and 
Economic Activity. Specifically, Chapter 6--``Assessment of Economic 
Impacts'' addresses the issue of model assumptions and development.
    The macroeconomic impacts were derived by simulations of the Data 
Resources, Inc. (DRI) model of the U.S. economy. Two key features shape 
the magnitude of the macroeconomic impacts: (1) the disposition of 
funds collected with a permit auction run by the Federal Government; 
and (2) the international trading of carbon permits.
    Regarding the disposition of funds, the default analysis returned 
collected revenues to consumers through personal income tax rebates. 
The alternative analysis assumed a reduction in payroll tax rates.
    The role of international trading and sinks is handled through the 
specification of alternative targets for carbon reduction. [It should 
be noted that non-CO2 gases are not addressed in the EIA 
Kyoto study.] The inclusion of sinks provides a 3 percent offset to the 
most stringent case (the 7 percent reduction relative to 1990 levels of 
carbon emissions). The movement to other cases (1990, 9 percent 
increase, 14 percent increase, and 24 percent increase) represent 
increasing purchases of international permits, at lower international 
permit price assumptions.
    Pooling this information, as one proceeds from the most stringent 
case (7 percent decline) to the least stringent case (24 percent 
increase), the impacts on the economy diminish. The $400 billion figure 
mentioned refers specifically to the default analysis with a 7 percent 
decline relative to the reference case.
    The 4.9 million job loss is also associated with the aforementioned 
default analysis with a negative 7 percent reduction relative to 1990 
levels of carbon emissions. Although the EIA report, Impacts of the 
Kyoto Protocol on U.S. Energy Markets and Economic Activity, does not 
explicitly calculate the employment impacts, the loss of jobs figure 
can be calculated by comparing the labor force level and unemployment 
rate after the Kyoto Protocol relative to the base case. Given the (7 
percent decline and default analysis), the level of the labor force 
declined and the unemployment rate rose relative to the base case. 
Consequently, these two effects combine for an employment loss relative 
to the baseline of approximately 4.9 million jobs. If you would like 
CEA to examine any further modeling assumptions, please let me know.
    Question 2c.  Will you provide this Committee with estimates of 
costs if the gains that were achieved with a program like the SO2 
cap and trade program (or full emissions trading) are accounted for?
    Answer. A national greenhouse gas cap-and-trade system would 
necessarily be a far more complex, expensive, and intrusive system than 
the current sulfur emissions trading program, so one should be cautious 
about drawing conclusions from the experience of the sulfur trading 
program. For example, SO2 permit trading, which gradually 
included plants (beginning with 263 units in 1995 and now including 
over 2000 units), was a natural development of existing regulations. 
SO2 regulation in the 1970s and 1980s led to netting 
(allowing emissions reduction credits earned elsewhere in the plant to 
offset the increases expected from the expanded more modernized 
portion), banking (established procedures that allowed firms to store 
emission reduction credits for subsequent use in the bubble, offset, or 
netting programs), and bubbling (allowed existing sources to use 
emission reduction credits to satisfy their SIP control 
responsibilities); each of which provided firms with increased 
flexibility in reducing emissions. Greenhouse gases, which are 
generated from numerous sectors, rather than dominated by one sector, 
are not presently at this stage. Second, by 1995, SO2 
emitters had gained a wealth of experience with abatement technologies 
and understood the costs of these technologies well. It made sense to 
adopt mandatory caps on SO2 since adding equipment to 
existing facilities could control these emissions. Neither is the case 
for greenhouse gases. Additionally, controlling emissions of other GHGs 
(such as methane) and carbon sequestration offer the bulk of 
inexpensive reduction opportunities for the U.S. right now--nearly 
twice as much as carbon dioxide emissions according to a recent EPA 
study--making it essential to include them in any cost-effective 
approach. This was not the case for SO2, and many 
uncertainties exist about the relative cost effectiveness of the 
various greenhouse gas reduction opportunities.
    Furthermore, GHG emissions reductions also have the same climate 
change benefits wherever they occur--within a company, across the 
country, and around the world. In sharp contrast to emissions of 
pollutants like sulfur dioxide that have both local and regional health 
consequences, GHG emissions in Asia--or anywhere else--will have 
exactly the same consequences for the United States as GHG emissions 
within the United States. Thus, any framework for any meaningful 
mitigation measures to achieve the long-term objective of the Framework 
Convention on Climate Change must entail global participation.
    Question 2d. Will you please provide this Committee with a 
comparable estimate of the costs of No action--including costs of U.S. 
business of putting off decisions and having to retrofit later?
    Answer. One of the Administration's goals is to stimulate technical 
progress and speed up the technological learning processes so that 
eventually renewable energy technologies may be able to better compete 
with conventional technologies. The President's plan accounts for the 
opportunity cost inherent in any type of private technological 
spending--a dollar invested here leads to one less dollar invested 
elsewhere--by providing important flexibility that is necessary to 
solve the long-term problem of climate change.
    As I noted in my testimony, technological innovation does not occur 
in a vacuum, it occurs because of incentives. Thus using tax 
incentives, giving transferable credits to companies that can show real 
emissions reductions, funding basic scientific research, and the like 
will induce technological innovation. The President has begun an 
aggressive strategy to promote technological change without undermining 
the engineer of that technological advance--productivity growth.
    The President's plan seeks to continue the process of developing 
new energy and sequestration technologies and reducing fundamental 
uncertainties in our current state of scientific knowledge about global 
change, while nurturing the growth of the economy. To this end, the 
President created the National Climate Change Technology Initiative, 
which builds upon America's leadership in technology and innovation 
within the area of climate change. Furthermore, the President's FY03 
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 carbon sequestration technologies. Overall, the 
President's FY03 budget seeks $4.5 billion in total climate spending--
an increase of nearly $700 million. This level of commitment is 
unmatched in the world.
    The Administration has also begun putting in place a number of 
programs that will lower the cost of future emission reductions. For 
example, we are developing a technology strategy that will make 
available cheaper, more effective technologies in the future. At the 
same time, the Administration is enhancing the U.S. scientific research 
program on climate to improve our understanding of precisely what 
emissions reductions may be necessary. The President's program has 
balanced U.S. economic objectives with that of protection of the 
climate system.
    A gradual approach to reducing intensity is likely to be cost-
effective compared to rapid reductions over a short period of time for 
two reasons: (1) because of the capital turnover issue that I have 
already addressed, and (2) because a gradual approach allows firms to 
take advantage of new technologies rather than sinking resources into 
obsolescent methods.
    Question 2e. I'd also like to see you include the cost estimates 
for projected impacts identified in your Report--Members of this 
Committee know first hand that fighting forest fires and moving coastal 
villages is costly. We want to know the cost of adaptation?
    Because much of the discussion of climate change and its impacts 
centers on the use of computer models that attempt to look into the 
future, it is useful to reflect for a moment on these models and how 
they are employed.
     As Dr. Marburger noted in his testimony, ``climate'' is a general 
term for physical properties of the atmosphere, especially air 
temperature and pressure, wind, water vapor, and particle content. Air 
is a substance that obeys laws of motion that can be solved using a 
computer, which is what we do to predict future weather, based on 
current conditions. With the most powerful computers, we can predict 
the weather only a few days ahead, as you know. How then can we hope to 
predict climatic conditions far into the future? Science has developed 
approaches to long term climate modeling that do not attempt to give 
the fine detail we expect in a weather report.
    Long-term climate models are sets of computer programs that attempt 
to simulate all the processes of nature that affect the atmosphere. The 
best current models average these properties over an area roughly the 
size of the State of Connecticut. It is not enough to model just the 
atmosphere, because climate is affected by the vast ocean currents, by 
the presence of atmospheric chemicals and light absorbing or reflecting 
particles, and by the interaction of all these with life processes--
trees, crops, ocean organisms, and human beings. All these processes 
need to be understood quantitatively before they can be modeled. This 
is the ongoing challenge of climate change research.
    Once the models are constructed--a task that is by no means 
complete today--they have to be loaded with current conditions before 
they can be used for prediction. That means the state of the entire 
earth must be determined at a given instant of time by measurements on 
land, sea, and air. Satellite imagery is important but not sufficient 
for this. Since the output of the models depends on the input, 
incomplete knowledge of the state of the earth translates to 
uncertainty in the predictions. And the output is notoriously sensitive 
to the input. This is why the Intergovernmental Panel on Climate Change 
concluded that ``Science cannot predict the climate and its impacts in 
Milwaukee, Mumbai, or Moscow half a century ahead very accurately, and 
it may never be able to do so.''
    Today's climate models cannot be used for definite predictions of 
regional or local conditions. They are typically run many times, for a 
range of input assumptions, and the results are assessed with 
statistical methods. Given our present state of knowledge, it is not 
surprising that the results vary widely, leading to apparently 
contradictory results.
    That is why reports such as the U.S. Climate Action Report 2002 do 
not claim to make predictions about future impacts. This report employs 
``scenarios'' that are invented to capture the range of results of 
multiple runs of different climate models with different ad hoc input 
assumptions. The scenarios are then used to make ``projections,'' a 
word that is carefully defined in an important footnote on page 84 of 
the report: ``. . . prediction is meant to indicate forecasting of an 
outcome that will occur as a result of the prevailing situation and 
recent trends (e.g., tomorrow's weather or next winter's El Nino 
event), whereas projection is used to refer to potential outcomes that 
would be expected if some scenario of future conditions were to come 
about. . . .''
    The President believes, and I strongly concur, that responsible 
implementation of public policy on a scale commensurate with global 
climate change requires the best possible understanding of the 
phenomena we wish to influence. The uncertainties have to be reduced.
    That is why the President has established a new management 
structure to advance and coordinate climate change science and 
technology research. The idea is to accelerate work in areas needed to 
create better tools to provide science based policy guidance, and to 
develop a technology base that matches the climate change challenge. To 
these ends, the President has established a Cabinet-level Committee on 
Climate Change Science and Technology Integration to oversee the entire 
effort. The Secretary of Commerce and Secretary of Energy will lead the 
effort, in close coordination with the Council of Economic Advisers 
(CEA), the Council on Environmental Quality (CEQ), the National 
Security Council (NSC), and the Office of Science and Technology Policy 
(OSTP), and the research program will be coordinated with existing work 
conducted under the Global Change Research Act of 1990. OSTP will 
continue to perform important coordinating functions within this new 
framework. I want to emphasize that the point of the new organization 
is to take advantage of the global change research that already exists, 
and focus it on the current urgent need to improve climate change 
analysis tools.
    If you have any particular models that you would like us to 
examine, please contact me.

                          COUNTING REDUCTIONS

    Question 3. According to the Climate Action Report, greenhouse gas 
intensity decreased by 17 percent from 1990-1999. The President's 
Climate Change initiative states that the U.S. plan will reduce 
greenhouse gas intensity by 18 percent by 2012. Moreover, the Report 
states on page 5 that in the absence of additional proposed policies 
and measures, the greenhouse gas intensity was projected to decline by 
14 percent.
    While it is clear from your testimony that emissions would still 
increase, it seems that a program designed to achieve an 18 percent 
reduction over the next decade is worse than a ``business as usual'' 
scenario.
    (a) Doesn't this suggest that the Administration is counting 
reductions in greenhouse gas intensity that were inevitable to begin 
with?
    (b) If emissions intensity under existing policies achieved an 18 
percent reduction in intensity, why do you project these same policies 
would only achieve a 14 percent reduction in intensity over the same 
period?
    (c) Isn't the answer all in the assumptions and the model? We would 
like to know your assumptions, the type of model used, and the basis 
for inputs to the model.
    Answer. The ``business as usual'' estimate predicts that emissions 
intensity will decrease by 14 percent by 2012. The President's plan 
calls for an 18 percent reduction in greenhouse gas intensity by 2012; 
which is a 4 percent further improvement. The performance of existing 
policies characteristically deteriorates over time because the low-
hanging fruit is usually picked first. To achieve an additional 4 
percent reduction in greenhouse gas intensity will require additional 
policies as outlined in the President's National Energy Policy and in 
his climate change initiative announced on February 14, 2002.
    Why do we project a forward-looking decline in emissions intensity 
of only 14 percent when business-as-usual intensity declined by 18 
percent over the past decade? First, recall that the 1970s and early 
1980s saw extremely high and volatile energy prices. This motivated 
considerable research and investment in energy efficiency--of which 
part was likely realized during the 1990s. Second, there was a 
substantial shift towards less energy intensive, service-oriented 
activities. Third, reaching an ambitious goal tends to be more 
difficult the closer one gets to the target. Furthermore, we recognize 
that there are some sectors, such as combined heat and power, which are 
only beginning to realize their potential.
    You are correct in stating that the projections of any model are 
based on the assumptions employed. This is an especially good point 
because the entire climate change debate is predicated on the 
projections of climate and economic models, whose assumptions--as we 
are all aware--are often challenged.

         ``NO REGRETS'' POLICIES--TRANSPORTATION AND UTILITIES

    Question 4. The Climate Action Report 2002 states that as the 
largest source of U.S. greenhouse gases, CO2 accounted for 
82 percent of total U.S. greenhouse gas emission in 1999. CO2 
from fossil fuel combustion was the dominant contributor, with 31 
percent of CO2 emissions coming from transportation 
activities.
    The Administration's proposal emphasizes the importance of 
technological innovation to address climate change, but is missing some 
great opportunities--forcing the use of technology today will spur jobs 
and reduce emissions right now. For example, the NAS study on corporate 
average fuel economy pointed to existing technologies that would 
accomplish multiple goals in a cost-effective way.
    This is the ultimate ``No Regrets'' action: reducing reliance on 
oil imports while reducing greenhouse gas and other emissions.
    (a) Given the rapid increase in greenhouse gas emissions due to 
transportation, what is being done to curb emissions?
    (b) What action has the Administration taken on developing CAFE 
standards through rule making to address this source of CO2 
emissions?
    (c) Will technical innovation that moves us away from a fossil fuel 
economy occur rapidly enough to prevent ``dangerous climate change'' as 
defined by the UNFCCC's Article II?
    (d) What is the U.S. government's present investment in renewable 
and alternative energies and technologies relative to the last 10 years 
of government investments in the same categories, factoring in 
inflation?
    Answer. The Administration does not necessarily agree that 
``forcing the use of technology'' represents a ``great opportunity.'' 
In contrast to many environmental problems that result from a specific 
chemical or a narrow set of activities located in a confined area, the 
risk of climate change depends on the combined accumulation in the 
atmosphere of many different GHGs emitted from all over the world. 
While the contribution of a given amount of each GHG to climate change 
varies according to its relative potency in trapping energy and how 
long it naturally remains in the atmosphere, emission reductions of the 
various gases, adjusted for these differences, are equally valuable.\7\ 
Moreover, because atmospheric concentration of GHGs matter, not 
emissions, carbon sequestration (e.g., absorption into forests and 
soil) of gases already in the atmosphere provides additional 
opportunities to reduce climate change risks.
---------------------------------------------------------------------------
    \7\ As a result, emissions of greenhouse gases are often measured 
in tons of carbon equivalent, which weights the emissions of each gas 
according to the combined effect of its relative potency and residence 
time in the atmosphere.
---------------------------------------------------------------------------
    The large contribution of carbon dioxide emissions to overall 
increases in the atmospheric GHG concentrations implies that reducing 
the growth in GHG emissions will be important to any long-term strategy 
to address climate change. Other gases comprised only 18 percent of 
total U.S. GHG emissions in 1999, while land-use changes and forestry 
in the United States sequestered the equivalent of roughly 15 percent 
of total emissions.\8\ However, emissions of these other gases and 
carbon sequestration offer the bulk of inexpensive reduction 
opportunities for the U.S. right now--nearly twice as much as carbon 
dioxide emissions according to a recent EPA study--making it essential 
to include them in any cost-effective approach.\9\ These facts 
represent the genesis of the Administration's approach to climate 
change, which is holistic, rather than sector-specific, and stresses 
efficiency and cost-effectiveness.
---------------------------------------------------------------------------
    \8\ Environmental Protection Agency, Inventory of U.S. Greenhouse 
Gas Emissions and Sinks: 1990-1999, (April 2001). See http://
www.epa.gov/globalwarming/publications/emissions/us2001/pdf/table-es-
1.pdf.
    \9\ Environmental Protection Agency, Analysis of Multi-emissions 
Proposals for the U.S. Electricity Sector, Requested by Senators Smith, 
Voinovich, and Brownback. See http://www.epa.gov/oar/
meproposalsanalysis.pdf.
---------------------------------------------------------------------------
    At the sector-specific level, addressing greenhouse gas emissions 
in the transportation sector would include action taken on Corporate 
Average Fuel Economy (CAFE) standards. The Administration is taking 
action on developing new CAFE standards: the National Energy Policy 
recommended that the Department of Transportation review and provide 
recommendations on establishing CAFE standards with due consideration 
of the National Academy of Sciences 2001 study on The Effectiveness and 
Impact of CAFE Standards. The Administration believes that CAFE 
standards should be addressed analytically and based on sound science, 
considering passenger safety and utility.
    In addition, the Administration is proceeding with the FreedomCAR 
program, moving toward a vision of a transportation sector that is not 
reliant on imported oil, and creates no harmful emissions, of either 
criteria pollutants or greenhouse gases. This public-private 
partnership is working to speed development and deployment of the 
advanced technologies needed to use hydrogen in fuel cell-powered 
vehicles to meet our energy service needs in the transportation sector.
    Regarding technological innovation, the IPCC reports an entire 
family of scenarios in which technological change is sufficient to 
maintain CO2 concentration levels between 550-750 ppm 
through 2100 (see IPCC, ``Climate Change 2001, Mitigation'' Report of 
Working Group III, p. 4). The scientific community is as yet unable to 
determine what level of greenhouse gas concentrations or cumulative 
climate change leads to a ``dangerous level'' and this Administration 
is committed to advancing our understanding of climate science. The 
United States will continue to be a leader in science and technology 
under this Administration.
    Below is a table of the Office of Energy Efficiency and Renewable 
Energy's budget for the past 10 years, in real 2002 dollars. EERE is 
the Department of Energy's primary program for research and development 
of energy efficiency and alternative energy sources and technologies, 
and as such represents the bulk of U.S. Government spending in this 
area. The EERE program is responsible for strengthening America's 
energy security, environmental quality, and economic vitality through 
public-private partnerships that enhance energy efficiency and 
productivity to bring clean, reliable and affordable energy 
technologies to the marketplace, and enhancing consumer's energy 
choices.

                               EERE Budget
                    [2002 Real Dollars in Thousands]
------------------------------------------------------------------------
                Year                                Budget
------------------------------------------------------------------------
                   2002                           $1,298,394
                   2001                           $1,198,448
                   2000                           $1,087,759
                   1999                           $1,081,546
                   1998                             $971,667
                   1997                             $907,355
                   1996                             $933,186
                   1995                           $1,262,202
                   1994                           $1,173,037
                   1993                             $986,025
------------------------------------------------------------------------

    It is also important to note that the President's FY03 budget 
proposal seeks $4.6 billion in clean energy tax incentives over the 
next 5 years. These tax credits will spur investments in renewable 
energies such as solar, wind, and biomass, hybrid and fuel cell 
vehicles, cogeneration, and landfill gas.

                 WHAT WILL REALLY SPUR NEW TECHNOLOGY?

    Question 5. The Report indicates that both average electricity 
prices and prices of gasoline are now projected to be lower in 2020 
than they were in 2000, even lower than previously projected, which 
dulls any market-based approach.
    Lower energy prices means both that fewer energy-reduction options 
will be cost-effective and that energy efficiency will be offset by 
increased total use.
    (a) How will low energy prices spur development and adoption of new 
technology?
    (b) Isn't this the classic example of the time for government 
intervention in the market to spur innovation and lower costs?
    (c) Experience has shown that incentives from government 
established goals can spur the development of new technologies--why not 
tap this power and send a strong signal to innovate over the next 20 
years?
    Answer. Sustained investment in scientific research and development 
(R&D) is critical to energy security, environmental quality, and 
economic growth. Because the process of R&D from basic research to 
technology development, and its successful commercialization in the 
marketplace is complex, and the results of R&D expenditures are not 
possible to predict in advance, it is difficult to pinpoint what spurs 
R&D and causes its success. In general, R&D is accelerated by: economic 
incentives, including taxes and subsidies; regulatory constraints, such 
as environmental restrictions; public/private partnerships for sharing 
risks and financial burdens; and public policy objectives, such as 
enhanced national security and environmental quality.
    The Administration is committed to achieving the objectives of 
energy security, environmental quality and economic growth, and to this 
end has recommended a number of policy initiatives as put forth in the 
National Energy Policy. The most significant actions to support R&D 
include:
     Increased funding for R&D programs in renewable and energy 
efficiency, electric transmission reliability and superconductivity.
     Provide tax incentives and streamline permitting to 
accelerate the development of clean combined heat and power technology.
     Provide for alternative fuels tax incentives.
     Provide R&D funding for clean coal technology development.
    The President's FY03 budget proposal seeks $4.6 billion in clean 
energy tax incentives over the next 5 years. These tax credits will 
spur investments in renewable energies such as solar, wind, and 
biomass, hybrid and fuel cell vehicles, cogeneration, and landfill gas.
    In terms of spurring innovation and setting up incentives for 
technological advance, one of the Administration's goals is to 
stimulate technical progress and speed up the technological learning 
processes so that eventually renewable energy technologies may be able 
to better compete with conventional technologies. The President's plan 
critically accounts for the opportunity cost inherent in any type of 
private technological spending--a dollar invested here leads to one 
less dollar invested elsewhere--by providing important flexibility that 
is necessary to solve the long-term problem of climate change.
    As I noted in my testimony, technological innovation does not occur 
in a vacuum, it occurs in response to incentives. Thus using tax 
incentives, giving transferable credits to companies that can show real 
emissions reductions, funding basic scientific research, and the like 
will induce technological innovation. The President has begun an 
aggressive strategy to promote technological change without undermining 
the engineer of that technological advance--productivity growth.
    The President's plan seeks to continue the process of developing 
new technologies while nurturing the growth of the economy. Toward this 
end, the President is creating the National Climate Change Technology 
Initiative, which will confirm that the United States is a leader in 
technology and innovation in climate change. Furthermore, the 
President's FY03 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 carbon sequestration technologies. Overall, the 
President's FY03 budget seeks $4.5 billion in total climate spending--
an increase of nearly $700 million. This level of commitment is 
unmatched in the world.
    The Administration has also begun putting in place a number of 
programs that will lower the cost of future emission reductions. For 
example, we are developing a technology strategy that will make 
available cheaper, more effective technologies in the future. At the 
same time, the Administration is enhancing the U.S. scientific research 
program on climate to improve our understanding of precisely what 
emissions reductions may be necessary. The President's program has 
balanced U.S. economic objectives with that of protection of the 
climate system.

           TIME FRAME AND REDUCTIONS NEEDED FOR STABILIZATION

    Question 6. At one of our hearings on climate change last year, Dr. 
Kevin Trenberth made a point that really resonated with me. He stated 
that--because of the long residence time of CO2 in the 
atmosphere--achieving the Kyoto targets would only buy us 10 years of 
time to figure out how to effectively reduce our emissions.
    His point was that achieving Kyoto targets would only slow the rate 
of carbon emissions loading to the atmosphere--not stabilize or even 
reduce greenhouse gas emissions in the atmosphere. In other words, it 
is only the first step, and more needs to be done to stabilize or 
reduce atmospheric greenhouse gases.
    In your testimony before this Committee on July 11th, you said that 
as a scientist, you agree.
    (a) If achieving Kyoto targets only buys us 10 years to plan and 
does not stabilize greenhouse gases, how can the President advocate 
taking no real action on emissions reductions for 10 years and also say 
he is pursuing stabilization.
    (b) Won't the President's plan doom us to a costly and dangerous 
adaptation scenario because we have bypassed the ``window of 
opportunity'' for action--after which the growth in emissions of around 
40 percent make needed reductions more steep.
    Answer. A first important point that should be considered 
concerning Kyoto is its exemption of 134 developing countries where 
emissions are projected to grow exponentially in the coming decades. 
The fact that Kyoto would have imposed extremely high costs on the 
U.S., to achieve domestic emission reductions that would have been 
canceled out by developing world emissions growth, has been well 
understood.
    It is crucial to emphasize that the U.S. is making headway in 
finding long-term solutions to reduce greenhouse gas emissions. Great 
efficiency improvements are available from combined heat and power, by 
which efficiency can double or nearly triple. Both DOE and EPA are 
exploring how they can best encourage adoption of this technology under 
existing laws. Finally, considerable improvements in greenhouse gas 
emissions can be realized by reducing methane emissions. Although 
methane is not as long-lived in the atmosphere as is carbon dioxide, it 
is more than 20 times as potent in its greenhouse effects. Not only is 
the U.S. beginning to explore how it can reduce its own methane 
emissions, it is also exploring how it might best help other countries 
reduce theirs. There is also some potential for reducing greenhouse gas 
emissions by capturing, rather than burning at the point of emissions, 
the methane that is released from oil wells, coal mines, and dump 
sites.
    As I stressed in my testimony, a distinguishing characteristic of 
climate change is that any successful effort to address the potential 
risk of climate change from most greenhouse gases will stem from 
cumulative efforts over decades, not just a few years. In 2000, for 
example, global CO2 emissions contributed to an increase in 
atmospheric concentrations of less than 0.5 percent,\10\ a small 
increase compared to the 20 percent to 200 percent increase in 
concentrations that researchers often propose as a possible long-term 
stabilization goal.\11\ As substantial changes in concentration result 
only from cumulative emissions over a period of decades, the future 
benefits of efforts to reduce emissions will be nearly the same whether 
the reductions, ton for ton, occur today or years in the future.
---------------------------------------------------------------------------
    \10\ Data Source: C.D. Keeling, T.P. Whorf, and the Carbon Dioxide 
Research Group, Scripps Institution of Oceanography (SIO), University 
of California, La Jolla, California. See http://cdiac.ornl.gov/ftp/
ndp001/maunaloa.co2.
    \11\ Based on increasing from current concentration levels of 
approximately 370 ppmv to future stabilization targets ranging from 450 
to 750 ppmv. See ``Climate Change 2001: The Scientific Basis,'' 
Intergovernmental Panel on Climate Change: Working Group One, Third 
Assessment Report, page 14 (http://www.ipcc.ch/pub/spm22-01.pdf) and 
C.D. Keeling, T.P. Whorf, and the Carbon Dioxide Research Group, 
Scripps Institution of Oceanography (SIO), University of California, La 
Jolla, California. See http://cdiac.ornl.gov/ftp/ndp001/maunaloa.co2.
---------------------------------------------------------------------------
    Accordingly, the Administration's strategy has three-prongs: 
slowing the growth of net greenhouse gas emissions, laying important 
groundwork for both current and future action, and working with other 
nations to develop an efficient and effective global response. This 
strategy builds on the Administration's June 2001 commitment to improve 
our understanding of the causes and potential harms posed by climate 
change, and to develop technologies that offer promise to significantly 
slow the growth of emissions. It is also the first step in a longterm 
commitment to slow and, if the science justifies, stop and then reverse 
the growth of GHG emissions. Importantly, it takes advantage of our 
growing experience with building better and more flexible institutions 
to address environmental problems--a topic discussed at length in this 
year's Economic Report of the President.
    Consequently, the President's plan seeks to continue the process of 
developing new energy and carbon sequestration technologies while 
nurturing the growth of the economy--which will lead to even further 
advances in technology since GDP growth represents an engine to 
technological advance. For example, the President's FY03 Budget 
dedicates $1.7 billion to fund basic scientific research on climate 
change and $1.3 billion to fund research on advanced energy and carbon 
sequestration technologies. Overall, the President's FY03 budget seeks 
$4.5 billion in total climate spending--an increase of $653 million. 
This level of commitment is unmatched in the world. The Administration 
also has developed a broad range of bilateral agreements with other 
countries to work on climate change issues cooperatively.

                        FEDERAL V. STATE ACTION

    Question 7. Within recent years, Congress, individual States, and a 
number of major industries within the United States have taken an 
active role in exploring methods to reduce greenhouse gas emissions. 
For example, Massachusetts established the first CO2 cap and 
trade program, and California is leading the way on auto emissions 
reduction.
    (a) Why have state governments, who are now more than ever 
concerned about economic growth and jobs, embraced emissions reductions 
goals and timetables, but the Bush Administration has not?
    (b) Does the Administration oppose these actions? What is the 
Administration's view?
    (c) Has the Administration underestimated the willingness and the 
potential of the United States to meet the challenge of Climate Change?
    (d) Has the Administration ceded leadership to the States?
    Answer. Although state participation is central to achieving 
greenhouse gas emissions reductions, the Administration still plays the 
crucial role of creating sound environmental policy. On February 14, 
2002, President Bush announced a comprehensive new national plan to 
address the challenge of global climate change. The President's plan 
includes a specific and realistic reduction goal with a timetable--it 
establishes a new greenhouse gas intensity target that reduces the rate 
of emission intensity by 18 percent over the next 10 years (roughly the 
equivalent of removing 1 out of every 3 cars from the road). The plan 
also expands our science and technology research, develops and deploys 
new technologies, and strengthens domestic and international efforts to 
increase energy efficiency and reduce greenhouse gas emissions. It sets 
us on a path to slow the growth in greenhouse gas emissions, and--as 
the science justifies--to stop and reverse that growth. If, in 2012, we 
find that we are not on track toward meeting our goal, and sound 
science justifies further policy action, we 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.
    The Administration has not underestimated the willingness and the 
potential of the U.S. to meet the challenge of climate change. Rather, 
it has stepped forward and challenged U.S. businesses to enter into 
agreements with the Administration to reduce greenhouse gas emissions, 
building upon successful voluntary partnerships with the aluminum and 
semiconductor industries. For example, in February, EPA Administrator 
Whitman launched a new voluntary partnership program between government 
and industry--Climate Leaders. Through Climate Leaders, companies will 
work with EPA to evaluate their greenhouse gas emissions, set 
aggressive reduction goals, and report their progress toward meeting 
those goals. Twenty-one companies representing almost all of the energy 
intensive industry sectors have joined Climate Leaders, including 
Alcoa, Bethlehem Steel, BP, Cinergy, General Motors, IBM, SC Johnson, 
Lockheed Martin, and Miller Brewing. Although U.S. businesses continue 
to improve their energy efficiency and productivity, the 
Administration's goal is to accelerate that trend by an additional 30 
percent.
    Climate change must be recognized as a long-term problem, requiring 
a long-term solution that has broad-based country-level participation. 
The Bush Administration has the strongest, most well funded climate 
change program in American history, devoting $4.5 billion annually to 
climate change programs, a $653 million increase in funding from last 
year. The Administration also has developed a broad range of bilateral 
agreements with other countries to work on climate change issues 
cooperatively.
    The California CO2 legislation could be perceived as a 
CAFE bill. Federal law, not state law, appropriately sets CAFE 
standards, so that cars may be sold and transferred freely among all 50 
states. The U.S. Senate voted on CAFE this year, and decided by an 
overwhelming majority (62-38) not to adopt an arbitrary and dramatic 
increase in CAFE standards. The Bush Administration, however, is moving 
forward with a sound, science-based process at the Department of 
Transportation to review and revise the CAFE standards.
    Regarding the Massachusetts CO2 cap and trade program, 
focusing only on the power sector is an inefficient, costly approach 
that could have a significant, adverse impact on electricity prices, 
and therefore consumers, if applied nationally, as recent studies by 
the independent Energy Information Administration have demonstrated. A 
more efficient approach is to recognize the relatively inexpensive 
greenhouse gas reduction opportunities that are available via carbon 
sequestration and mitigating other gases, such as methane.

                             ENERGY STUDIES

    Question 8. Dr. Hubbard, in your testimony on July 11th, you stated 
that you had never seen an economic analysis showing positive economic 
impacts from policies that place a market value on carbon emissions. I 
believe that you referred to it as ``shadow price.'' A number of such 
studies exist.
    One such study based on a report by DOE labs, published in the 
Energy Journal, found that the GDP gains from energy efficiency would 
exceed the GDP loss of a carbon price by the year 2020 if we implement 
the policies contained in the Scenarios for a Clean Energy Future, an 
extensive report in 2000 by DOE laboratories. The analysis assumed a 
$50 per ton price for tradable carbon allowances.
    Dr. Hubbard, could you review this article and provide me with your 
expert assessment of this analysis and whether you still stand by your 
statements?
    Cites: Sandstad, Alan, Stephen DeCanio, and Gale Boyd, ``Estimating 
Bounds on the Economy-Wide Effects of the CEF Policy Scenarios,'' 
Energy Policy 29 (2001), 1299-1311.
    Interlaboratory Working Group. 2000. Scenarios for a Clean Energy 
Future (Oak Ridge, TN; Oak Ridge National Laboratory and Berkeley, CA; 
Lawrence Berkeley National Laboratory), ORNL/CON-476 and LBNL--4402.
    Answer. Please allow me to direct your attention to the Stanford 
Energy Modeling Forum (EMF), a prestigious group of scholars who have 
independently produced a series of estimated marginal costs (in the 
United States) associated with different levels of emission reductions 
from forecasts levels. The proceedings are published in a 1999 special 
issue of the Energy Journal, a leading peer-reviewed academic journal. 
Thirteen modeling teams from around the world participated in the 
exercise (approximately 50 percent from the U.S.). Table 1 summarizes 
the various model teams while Table 2 contains specifics of the models 
in 5 basic categories.
    Researchers found enormous variation, but the marginal costs 
associated with emissions reductions were always positive. Of course, 
the level of total cost depends on the substitution and demand 
elasticities, the way in which capital stock turnover/energy demand 
adjustments are represented, and the like.
    Again, what one takes from these estimates is the extreme 
variability, which is not only dependent on what trading regime is 
imposed, but on what particular model is chosen.
    In this regard, it is important to note that these cost estimates 
are likely to be more stable when goals are expressed in terms of 
intensity rather than absolute targets. In this respect, the 
President's initiative helps reduce uncertainty.
    With such uncertainty surrounding estimates, it is possible to find 
isolated efforts that support most any claim. For this reason it is 
necessary to rely on the most rigorous models available, as many 
studies are flawed in either the assumptions, or in the ways benefits 
are calculated.
    The Clean Energy Futures Report was prepared by Oak Ridge, Lawrence 
Berkeley, National Renewable Energy, Argonnne, and Pacific Northwest 
National Laboratories and was published in November, 2000. The Report 
examines costs and benefits of alternative sets of policies to 
accelerate clean energy technology. Three scenarios were examined (1) 
business as usual--continuation of current policies (most closely 
aligned to DOE's EIA forecasts), (2) moderate, and (3) advanced. The 
latter two assume increasingly aggressive public commitments to R&D, 
tax credits, and regulatory approaches to clean energy technology 
development and deployment.
    The report describes the various benefits that accrue from the wide 
range of energy policy interventions. The report makes some very 
ambitious assumptions about the rate at which energy efficiency 
advances, and about the availability of new technology even under the 
generous investment levels assumed. These assumptions are crucial to 
the conclusions that emissions and energy use can all be reduced 
without harm to the nation's economic growth. In addition, we find the 
report provides an inadequate economic analysis on how many of the 
policies would impact industry adjustments and consumer behavior.
    While the report provides an assessment of the potential for 
energy-efficient and clean-energy technologies to play a greater role 
in meeting the country's energy challenges, it is not an accurate 
prediction of future energy needs, nor a credible examination of the 
full costs of implementing a market for carbon.
    The conclusions of the CEF study should be taken in context with 
the assumptions made and uncertainty surrounding them as well as in 
comparison to the previous studies:
    Overly Optimistic Assumptions Regarding Policy Implementation.
     Many of the policies indicated in the CEF analysis require 
legislative and regulatory actions, many of which have little chance of 
being implemented. It thus makes sense to conclude that the positive 
effects of the CEF analysis could significantly fall if the proposed 
policies fail to be implemented.
    Overly Optimistic Regarding the Efficacy of Some Policy 
Instruments.
     One must also take into consideration how likely the 
policies hypothesized would accomplish the predicted results. As stated 
by the EIA, the effects on technology cost and quality of research and 
development funding for new technologies are notoriously difficult to 
quantify. For example, ``some of the proposed R&D funding may achieve 
benefits only in a long time frame or may not achieve success at all, 
and predicting which developments will succeed is highly 
speculative.''\12\ Furthermore, the analysis makes the assumption that 
all policies will work seamlessly with one another to encourage 
reductions in CO2.
---------------------------------------------------------------------------
    \12\ EIA, DOE. ``Analysis of Strategies for Reducing Multi-
Emissions from Electric Power Plants with Advanced Technology 
Scenarios.'' Washington, DC: DOE, 2001, p. 14.
---------------------------------------------------------------------------
     Another potential criticism of the study is that it does 
not separate the costs and effects of individual policies, so it is 
nearly impossible to distinguish the relative merits of specific 
policies.
     Many of the gains, which are ascribed to the effect of 
voluntary programs, would probably have occurred even in the absence of 
those programs. These gains are typically captured in ``business-as-
usual'' baseline emissions forecasts. Including such gains in the 
impacts of proposed policies is therefore double-counting efficiency 
improvements.
     CEF projects that voluntary programs, state market 
transformation programs, and regulations (such as a commercial 
transformer standard) will reduce the growth rates for miscellaneous 
electricity uses in both the residential and commercial sectors--a 
significant and growing source of demand. In the residential sector, 
miscellaneous electricity uses include small heating elements, motors, 
and electronic devices, while in the commercial sector it includes a 
multitude of devices such as transformers, ATMS, traffic lights, 
telecommunications equipment, and medical equipment. EIA found that 
these reductions in growth rates appear unrealistic because it is 
unlikely that the use of these categories of equipment will be greatly 
reduced.\13\ Although there is some potential for efficiency 
improvements, EIA found it unlikely that efficiencies could improve 
enough to reach the consumption levels predicted in the CEF.\14\
---------------------------------------------------------------------------
    \13\ Ibid. p. 15.
    \14\ Ibid. p. 15.
---------------------------------------------------------------------------
    Overly Optimistic Regarding the Cost of Adopting New Technology.
     The costs for higher-efficiency equipment included in CEF 
in fact come largely from underlying engineering costs studies 
conducted by the DOE laboratories for the ``Five Labs Study'' and other 
analyses. These cost estimates focus on equipment purchase costs and 
ignore costs and uncertainties associated with transitions to new 
technologies, such as installation, adjustment, maintenance, and 
personnel training costs.
    Concerning the study that you cite in Energy Policy, one should 
recognize that the authors' model takes estimates from two different 
strains of research, which may result in double counting--and, it is 
understood that there is no manner in which one can sign the direction 
of elasticity bias in this case. A model that integrates the concepts 
of technical efficiency and price would be preferable.

     Table 1.--Summary of Models Analyzing Post-Kyoto EMF Scenarios
------------------------------------------------------------------------
      Model Acronym (Full Model Name)            Home Institution(s)
------------------------------------------------------------------------
ABARE-GTEM (Global Trade and Environment    Australian Bureau of
 Model).                                     Agriculture and Resource
                                             Economics (ABARE,
                                             Australia)
AIM (Asian-Pacific Integrated Model)......  National Institute for
                                             Environmental Studies (NIES
                                             Japan)
                                            Kyoto University
CETA (Carbon Emissions Trajectory           Electric Power Research
 Assessment).                                Institute
                                            Teisberg Associates
FUND (Climate Framework for Uncertainty,    Vrije Universiteit Amsterdam
 Negotiation, and Distribution).             (Netherlands)
G-Cubed (Global General Equilibrium Growth  Australian National
 Model).                                     University
                                            University of Texas
                                            U.S. Environmental
                                             Protection Agency
GRAPE (Global Relationship Assessment to    Institute for Applied Energy
 Protect the Environment).                   (Japan)
                                            Research Institute of
                                             Innovative Technology for
                                             Earth (Japan)
                                            University of Tokyo
MERGE 3.0 (Model for Evaluating Regional    Stanford University
 and Global Effects of GHG Reductions       Electric Power Research
 Policies).                                  Institute
MIT-EPPA (EPPA--Emissions Projection and    Massachusetts Institute of
 Policy Analysis Model).                     Technology (MIT)
MS-MRT (Multi-Sector--Multi-Region Trade    Charles River Associates
 Model).                                    University of Colorado
Oxford Model (Oxford Economic Forecasting)  Oxford Economic Forecasting
RICE (Regional Integrated Climate and       Yale University
 Economy Model).
SGM (Second Generation Model).............  Batelle Pacific Northwest
                                             National Laboratory
WorldScan.................................  Central Planning Bureau/
                                             Rijksinstituut voor
                                             Volksgezondheid en
                                             Milieuhygiene (RIVM)
                                             (Netherlands)
------------------------------------------------------------------------


                                     Table 2.--Some Summary Characteristics
----------------------------------------------------------------------------------------------------------------
                                               Energy/Carbon Model
-----------------------------------------------------------------------------------------------------------------
                                       Fuel Supplies & Demands     Energy Technology
            Economy Model                     By Sector                  Detail            Carbon Coefficients
----------------------------------------------------------------------------------------------------------------
Aggregate............................    .....................  CETA...................  .......................
Production/Cost......................    .....................  MERGE3.................  FUND
Function.............................    .....................  GRAPE..................  RICE
Multisector..........................  MIT-EPPA...............  ABARE-GTEM.............
General..............................  WorldScan..............  AIM....................
                                         .....................  MS-MRT  ...............
Equilibrium..........................  G-Cubed................  SGM....................  .......................
Multisector Macroeconometric.........  Oxford.................    .....................
----------------------------------------------------------------------------------------------------------------

               DECISIONMAKING BASED ON MODEL PROJECTIONS

    Question 9. Dr. Marburger took great pains at our hearing to assert 
that impact assessments contained in the U.S. Climate Action Report 
were only ``projections'' and not ``predictions'' of outcomes, and thus 
attempted--unsuccessfully I might add--to downplay concerns about the 
threats posed by likely scenarios of climate change that are likely to 
flow from our current actions. I'd like to note that the NAS Report 
that Dr. Marburger lauded at the hearing specifically referred to the 
outcomes as ``predictions.''
    (a) Do the economic models you utilized in advising the President 
on domestic policy decisions make projections or predictions of 
outcomes?
    (b) How about the modeling you did of emissions intensity 
reductions and associated estimates of ``emissions reductions? '' What 
is your level of certainty for these projections, and the assumptions 
you used?
    (c) In the market, don't you have to assume certain unquantifiables 
in running your models, for example, the response of investors?
    (d) What is more certain--the emotional behavior of investors in 
the marketplace, or the physics of climate science?
    (e) Are you and the President comfortable making important 
decisions based on projected outcomes using these sorts of assumptions? 
What level of certainty do you require of your model projections in 
other contexts?
    Answer. As Dr. Marburger noted in his testimony, long-term climate 
models are sets of computer programs that attempt to simulate all the 
processes of nature that affect the atmosphere. The best current models 
average these properties over an area roughly the size of the State of 
Connecticut. Once the models are constructed--a task that is by no 
means complete today--they have to be loaded with current conditions 
before they can be used for prediction. That means the state of the 
entire earth must be determined at a given instant of time by 
measurements on land, sea, and air. Today's climate models cannot be 
used for definite predictions of regional or local conditions. They are 
typically run many times, for a range of input assumptions, and the 
results are assessed with statistical methods. Given our present state 
of knowledge, it is not surprising that the results vary widely, 
leading to apparently contradictory results.
    That is why reports such as the U.S. Climate Action Report 2002 do 
not claim to make predictions about future impacts. That report employs 
``scenarios'' that are invented to capture the range of results of 
multiple runs of different climate models with different ad hoc input 
assumptions. The scenarios are then used to make ``projections,'' a 
word that is carefully defined in an important footnote on page 84 of 
the report: ``. . . prediction is meant to indicate forecasting of an 
outcome that will occur as a result of the prevailing situation and 
recent trends (e.g., tomorrow's weather or next winter's El Nino 
event), whereas projection is used to refer to potential outcomes that 
would be expected if some scenario of future conditions were to come 
about. . . .''
    The President believes, and I strongly concur, that responsible 
implementation of public policy on a scale commensurate with global 
climate change requires the best possible understanding of the 
phenomena we wish to influence. That is the reason for the use of both 
predictions and projections by economists.
    When measuring uncertainty, it is important to factor in whether we 
have experienced the situation previously or if the situation is novel. 
This point is highlighted in the NAS study, which calls into attention 
a very salient aspect of climate change: the possibility of unexpected, 
rapid, and dramatic changes in the climate. Since many of the ``abrupt 
changes of the past have not been fully explained yet, and [current] 
climate models typically underestimate the size, speed, and extent of 
those changes,'' the ability to predict future climate changes is 
largely stifled. Consequently, the NAS recommends research initiatives 
that fall into two broad categories: (1) implementation of targeted 
research to expand instrumental and paleoclimatic observations, and (2) 
implementation of modeling and associate analysis of abrupt climate 
change and its potential ecological, economic, and social impacts.\15\
---------------------------------------------------------------------------
    \15\ The National Academy of Sciences, ``Abrupt Climate Change: 
Inevitable Surprises,'' (2002), p. 2.
---------------------------------------------------------------------------
    Specifically, the NAS study reinforces the Administration's policy 
on climate change. Recommendation 5 of the Abrupt Climate Change report 
states ``Research should be undertaken to identify ``no-regrets'' 
measures to reduce vulnerabilities and increase adaptive capacity at a 
little or no cost.'' Of course, the same intuition holds for investor 
behavior: consider the vast uncertainty facing securities investors 
when securities markets re-opened after September 11, 2001.

      ECONOMIC IMPACTS OF CAP AND TRADE & PREVIOUS CLIMATE STUDIES

    Question 10. Dr. Hubbard, in your testimony on July 11th, you 
stated that you had never seen an economic analysis showing positive 
economic impacts from policies that place a market value on carbon 
emissions. Additionally, you commented that the U.S. does not currently 
have the proper infrastructure in place for managing a ``cap and 
trade'' program. Therefore, the President's approach of a voluntary 
registry offered a first step.
    However, I am aware of a number of studies that show positive 
economic benefits from an innovation-led climate strategy. One specific 
analysis of a strategy for reducing multi-emissions, including carbon, 
from electric power plants carried out by EPA at the request of 
Senators Jeffords and Lieberman last October, shows that GDP will 
actually increase compared to the reference case for two of the 
technology scenarios modeled on DOE's Clean Energy Future study. 
Furthermore, the EIA and EPA studies done at the request of Senators 
Smith, Voinovich, and Brownback, also from last October, analyzed a 
binding carbon cap on the electric sector and also showed no negative 
impacts on the economy.
    (a) Therefore, I must ask what is the basis for your testimony?
    (b) Were you not aware of these studies, or of the previous 
requests of Congress for this information? I am attaching a list of 
studies for your consideration.
    (c) Did your assessment include the consideration of any of these 
studies?
    (d) Based on this extensive evidence, would you alter your 
assessment in any way?
    Answer. The EIA report, Analysis of Strategies for Reducing 
Multiple Emissions from Electric Power Plants with Advanced Technology 
Scenarios, prepared for Senators Jeffords and Lieberman, analyzed the 
impacts of imposing caps on power sector emissions of nitrogen oxides, 
sulfur dioxide, mercury and carbon dioxide in cases with alternative 
technology assumptions. The results in each case are driven by the 
combination of the emission limits and technology assumptions used. To 
estimate the impacts of imposing the emission caps, EIA compared cases 
that shared the same underlying technology assumptions--with and 
without the emission limits. By doing this, EIA separated the impacts 
of the technology assumptions from the impacts of imposing the emission 
caps.
    EIA found that imposing the emission caps always led to negative 
economic impacts as the market responded to the higher energy prices 
that result. For example, in cases using reference case technology 
assumptions, imposing power sector emission caps were found to lead to 
0.8 percent lower GDP and 32 percent higher electricity prices in 2007. 
Similarly, in cases using advanced technology assumptions, imposing 
power sector emission caps were found to lead to 0.7 percent lower GDP 
and 30 percent higher electricity prices in 2007. It is true that 
projected GDP in the case using advanced technology assumptions with 
power sector emission caps is higher than in cases using reference 
technology assumptions. However, using this as a measure of the 
economic impact of imposing the emission caps is inappropriate because 
it is driven by the different technology assumptions in the cases 
rather than the effects of the emission caps.
    The EIA report, Reducing Emissions of Sulfur Dioxide, Nitrogen 
Oxides, and Mercury from Electric Power Plants, prepared for Senators 
Smith, Voinovich and Brownback, analyzed the impacts of imposing 
alternative caps on power sector emissions of nitrogen oxides, sulfur 
dioxide, and mercury. The impacts of an explicit cap on power sector 
carbon dioxide emissions were not addressed in this study. This 
analysis also projected higher energy prices when power sector emission 
caps were imposed, but the impacts are much smaller than when a carbon 
dioxide emission cap is also required. For example, in 2020, projected 
average electricity prices were between 1 and 6 percent higher than 
reference case levels in the different cap cases examined.
    I also considered numerous studies to arrive at my policy 
recommendation (see Table 1). Let me direct your attention to the 
Stanford Energy Modeling Forum (EMF), a prestigious group of scholars 
who have independently produced a series of estimated marginal costs 
(in the United States) associated with different levels of emission 
reductions from forecasts levels. The proceeds are published in a 
special 1999 issue of the highly-respected Energy Journal. Thirteen 
modeling teams from around the world participated in the exercise ( 50 
percent from the U.S.).
    These researchers found enormous variation, with the marginal costs 
associated with emissions reductions always being positive. Of course, 
the level of total cost depends on the substitution and demand 
elasticities, the way in which capital stock turnover/energy demand 
adjustments are represented, and the like.
    Again, what one takes from these estimates is the extreme 
variability. Not only dependent on what trading regime is imposed, but 
on what particular model is chosen. In this regard, it is important to 
note that these cost estimates are likely to be more stable when goals 
are expressed in terms of intensity rather than absolute targets. In 
this respect, the President's initiative helps reduce uncertainty.
    Of course, it is possible to find isolated efforts that support 
most any claim. For this reason it is necessary to rely on the most 
rigorous models available, as many studies are flawed in either the 
assumptions, or in the ways benefits are calculated.

                          TRANSFERABLE CREDITS

    Question 11. Dr. Hubbard, you testified before the Committee that 
the U.S. greenhouse gas reductions that will result from the 
President's plan are ``comparable to the average reductions required 
under the Kyoto Protocol for countries remaining in the agreement.'' I 
understand that your assessment is based on the notion that countries 
would buy the credits they need through international trading.
    (a) What statutory authority does the President have to recognize 
or give value to ``transferable credits'' obtained through emissions 
reductions?
    (b) How would such reductions be made permanent, so that we're not 
providing credits for actions in one year that are overwhelmed by 
increases in the following year?
    Answer. Section 1605(b) of the Energy Policy Act of 1992, Public 
Law 102-486, contemplates a program whereby voluntary efforts to reduce 
greenhouse gas emissions can be recorded, with the specific purpose 
that this record could be used ``by the reporting entity to demonstrate 
achieved reductions of greenhouse gases.'' (42 U.S.C. 13385(b)(4)). In 
February, President Bush 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 Energy 
Policy Act to enhance the measurement accuracy, reliability, and 
verifiability of reported reductions. The President directed the 
Secretary of Energy to give transferable credits to companies that can 
show real emissions reductions under the improved standards for 
measurement and reporting. The details of these new standards are 
currently the subject of a broad stakeholder process that has been 
convened by the Department of Energy. See, e.g., Notice of Inquiry and 
Request for Comment, Department of Energy, ``Voluntary Reporting of 
Greenhouse Gas Emissions, Reductions, and Carbon Sequestration,'' 67 
Federal Register 30370 (May 6, 2002). Issues related to the 
``permanence'' of credited reductions will be addressed in this 
process.

                           COST AND BENEFITS

    Question 12. Dr. Hubbard, in your written testimony, you said, 
``the future benefits of efforts to reduce emissions will be nearly the 
same whether the reductions, ton for ton, occur today or years in the 
future.'' That statement seems contrary to growing evidence, 
considering the National Academy of Sciences has pointed out the 
potentially severe impacts of abrupt climate change. As the 
Administration's report and testimony before this Committee verify, 
increasing concentrations of greenhouse gases are a problem, and the 
risks increase with growing concentrations of those gases.
    (a) How can you suggest that benefits accrue in a linear fashion 
with reductions regardless of the time frame?
    (b) How can you reconcile the finding of the NAS study on abrupt 
climate change with your assessment of the costs and benefits of the 
President's plan?
    (c) Were the costs of those potentially severe impacts as 
identified in this NAS report considered in the development of the 
President's plan? Or in your assessment reflected by your testimony?
    The essential economic logic behind my statements can be found in 
my response to questions #6 and #9 above. My statement was meant to 
emphasize that greenhouse gases are just one parameter in a very 
complex system that determines how the climate changes. The degree to 
which our actions influence greenhouse gas concentration is subject to 
considerable debate. Furthermore, it is important to highlight that the 
``individual components'' (whether firms or organisms involved in 
economic and ecological systems) interact in ways where ``everything 
depends on everything else.'' \16\ Thus, at this stage, it is prudent 
to act in a manner that will maximize the long-term benefits--continue 
the process of developing new technologies while nurturing the growth 
of the economy. This growth will be the engineer to long term climate 
change solutions. To this end, the President created the National 
Climate Change Technology Initiative, which builds upon America's 
leadership in technology and innovation within the area of climate 
change. Furthermore, the President's FY03 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 carbon 
sequestration technologies. Overall, the President's FY03 budget seeks 
$4.5 billion in total climate spending--an increase of nearly $700 
million. This level of commitment is unmatched in the world.
---------------------------------------------------------------------------
    \16\ Ibid., p. 149.
---------------------------------------------------------------------------
    The NAS study calls attention to a very salient aspect of climate 
change, the possibility of unexpected, rapid, and dramatic changes in 
the climate. Since many of the ``abrupt changes of the past have not 
yet been fully explained, and [current] climate models typically 
underestimate the size, speed, and extent of those changes,'' the 
ability to predict future climate changes is largely stifled. 
Consequently, the NAS recommends research initiatives that fall into 
two broad categories: (1) implementation of targeted research to expand 
instrumental and paleoclimatic observations, and (2) implementation of 
modeling and associate analysis of abrupt climate change and its 
potential ecological, economic, and social impacts.\17\ Specifically, 
the NAS study reinforces the Administration's policy on climate change. 
Recommendation 5 of the Abrupt Climate Change report states ``Research 
should be undertaken to identify `no-regrets' measures to reduce 
vulnerabilities and increase adaptive capacity at a little or no 
cost.''
---------------------------------------------------------------------------
    \17\ Ibid., p. 2.
---------------------------------------------------------------------------
    Generally, the NAS reports have identified projections of possible 
impacts of climate change based on varying scenarios--primarily due to 
the lack of certainty about the causes of climate change. Specifically, 
the NAS study on abrupt climate change states, ``Climate models that 
are used to test leading hypotheses for abrupt climate change, such as 
altered deep-ocean circulation, can only partially simulate the size, 
speed, and extent of the large climatic changes that have occurred.'' 
\18\ Given the fact that we do not have a reliable predictor or what 
will happen, but rather what may happen under a wide range of unstable 
conditions, to put costs to a situation(s) in which the time frame, 
region, location, and other characteristics are unknown is not a 
reliable and sound way to formulate and base policy.
---------------------------------------------------------------------------
    \18\ Ibid., p. 4.
---------------------------------------------------------------------------
                               __________
  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                        to John H. Marburger III

               CLIMATE CHANGE RESEARCH INITIATIVE (CCRI)

    Question 1. Congress has strongly supported global climate change 
research through the federally coordinated U.S. Global Climate Research 
Program established in the Global Change Research Act of 1990. However, 
the Administration has initiated a new Climate Change Research 
Initiative (CCRI) outside of this authorization, which appears ill-
defined as to how it will function in relation to the U.S. Global 
Change Research Program.
    Would you explain how the CCRI proposes to enmesh the USGCRP into 
its proposed framework on a functional level?
    How do these two structures functionally fit together and operate 
to produce a workable and sensible climate research initiative?
    How does the CCRI differ from the USGCRP? Who makes decisions about 
research priorities? How are decisions reached?
    Answer. The USGCRP and the CCRI are managed together within the 
Climate Change Science Program Office (CCSPO). This office, led by a 
representative from the Department of Commerce, is the interagency 
coordinating mechanism for climate change science. The CCRI will 
provide a focused program aimed at reducing key uncertainties in our 
understanding of climate change and providing tools for decision and 
policy makers, while the USGCRP will continue to provide a broad base 
of scientific investigation related to global change. The CCSPO is 
currently coordinating a complete review of climate change science with 
all of the relevant federal agencies in order to ensure key priorities 
are being met and clear goals are being established. The initial plan 
will be the result of an interagency effort; in December, a larger 
workshop is planned that will involve additional stakeholders. The 
coordinated plans of the CCSPO will be presented to and approved by the 
Cabinet-level Committee on Climate Change Science and Technology 
Integration through the Interagency Working Group on Climate Change 
Science and Technology.
    Question 2. Why does the President's 2003 budget proposal request 
new funds for the CCRI only, when you declare that our understanding of 
climate change and its impacts are limited by the existing level of 
scientific knowledge?
    Answer. The President's fiscal year 2003 budget request includes a 
$44 million increase for the USGCRP and an additional $40 million 
dedicated to the CCRI. In addition to these increases, the 
Administration is undertaking a comprehensive review of the current 
climate change science portfolio, in order to ensure that key 
scientific uncertainties are being addressed. In the past, the federal 
climate change research portfolio was not designed or managed to focus 
on key uncertainties or to provide tools for decision and policy 
makers. Thus an important part of the Administration's research plan is 
to provide this focused approach under CCRI while continuing and 
strengthening the broader basic science foundations provided by USGCRP.
    Question 3. The CCRI also entails several layers or filters through 
which all new research information must pass before being disseminated 
more broadly to the general public.
    How long will it take for new information to hit the streets under 
this framework?
    Answer. The question includes an incorrect statement. All the 
research performed under CCRI is expected to be published in the open 
scientific literature. It will not be censored or restricted in any 
way. Official reports produced by CCRI will be subject to review by the 
various federal management entities, just as for any U.S. Government 
agency report.
    Question 4. Who ultimately decides what information goes out the 
door and in what form, for public consumption?
    Answer. See the answer above. All research reports are expected to 
be published immediately through the normal mechanisms of scholarly 
publication (which include peer review by the scientific journals.)
                                 ______
                                 
      Response to Written Questions Submitted by Hon. John McCain 
                     to Hon. John H. Marburger III

    Question 1a. In your statement, you say that ``With the most 
powerful computers, we can forecast the weather reliably only a few 
days ahead, as you know. How then can we hope to predict climatic 
conditions far into the future? '' You also state that today's climate 
models cannot be used for definite predictions of regional or local 
conditions.
    As the Director of the Office of Science and Technology Policy, are 
you suggesting that the government's investment in modeling is not a 
reasonable one?
    Answer. No. The aim of climate modeling is not to make definite 
predictions of regional or local conditions; it is to understand the 
impacts of various natural and anthropogenic mechanisms on the overall 
climate system. These mechanisms are complicated and depend upon basic 
scientific knowledge, computer capabilities, and extensive 
observational data, all of which currently have major gaps and 
shortcomings that undermine confidence in the model projections. The 
purpose of government investments is to improve the capabilities of the 
models, which is reasonable given the magnitude of the potential 
consequences of climate change.
    Question 1b. What are your thoughts on the millions of dollars 
already invested in this area? Was it useful or not?
    Answer. The funds invested to date in this area have indeed been 
useful, and have made the U.S. the world's leader in climate change 
research overall. However, the Climate Research Council of the National 
Research Council issued a report in 1998, Capacity of United States 
Climate Modeling to Support Climate Change Assessment Activities, which 
found that the United States ``lags behind other countries in its 
ability to monitor long term climate change. Those deficiencies limit 
the ability of the United States to predict future climate states. . . 
.''
    Question 2. You have noted the distinction between ``prediction'' 
and ``projection'' in your statement. What would you say the 
President's 18 percent greenhouse gas emissions intensity is based 
upon, prediction or projection?
    Answer. The President's 18 percent intensity reduction figure is 
based on neither a prediction nor a projection. It is a target based 
upon reasonable estimates of economic growth and what accelerated 
improvements in and deployment of technology may produce in the 
immediate future. The target significantly exceeds analyses of 
greenhouse gas intensity reductions for 2012 that have been provided by 
the U.S. Department of Energy's Energy Information Agency.
    Question 3. You have mentioned that the President's fiscal year 
2003 budget request includes $1.7 billion for fundamental scientific 
research on climate change which includes $40 million for the new 
Climate Change Research Initiative. Is the remainder of that ($1.66 
billion) for the existing U.S. Global Change Research Program?
    Answer. Not exactly. Fundamental scientific research on climate 
change and global change is occurring under the USGCRP and the CCRI. In 
the President's fiscal year 2003 budget, the request for the USGCRP is 
$1.714 billion. There is an additional $40 million requested for CCRI. 
A more detailed enumeration of these and related expenditures can be 
found in the Federal Climate Change Expenditures Report to Congress, 
July 2002.
    Question 4a. The National Research Council recently issued a report 
entitled ``Abrupt Climate Change: Inevitable Surprises.'' The report 
states that ``because climate change will likely continue in the coming 
decades, denying the likelihood or downplaying the relevance of past 
abrupt events could be costly.''
    Do you agree with that statement?
    Answer. Yes.
    Question 4b. What plans does your office have in response to this 
report?
    Answer. OSTP does not plan to respond formally to this report. 
However, reports such as the one from the National Research Council 
provide useful input into the process of designing a robust and 
complete research portfolio and of setting research priorities. My 
office will continue to use and consider such reports in our role of 
advising the President and coordinating the federal research effort.
    Question 5. The U.S. Climate Action Report 2002 states that 
evidence is emerging that black carbon aerosols (soot), which are 
formed by incomplete combustion, may be a significant anthropogenic 
agent. What are the implications if these carbon aerosols are found to 
be a significant contributor to climate change?
    Answer. The role of black carbon aerosols, and aerosols in general, 
on climate change in both the global and regional scales is not well 
understood. As you note, there is emerging evidence that these aerosols 
may play a more profound role than has been previously realized. 
Clearly there is a need for more research in this area, which was also 
recognized by the National Academy as a key uncertainty in its 2001 
report, ``Climate Change Science: An Analysis of Some Key Questions.'' 
Climate change response strategies will have to address black carbon 
production. Methane is another significant agent that may be subject to 
human management. The most recent research indicates that black carbon 
and methane together are comparable to CO2 in their 
contribution to climate forcing. The global climate is forced by a 
number of other variables, some anthropogenic and some not. Climate 
change response strategies require a significantly improved 
understanding of the response of the climate system to each of these 
variables.
    Question 6. The U.S. Climate Action Report 2002 identifies one of 
the weakest links in our knowledge about climate science as the 
connection between global and regional projections of climate change. 
Can you comment on what the Administration is doing to address this 
weak link?
    Answer. Regional projections of climate change consist of a wide 
range of scenarios based upon experience with global climate change 
models and additional knowledge of the impact of global variables upon 
local conditions. The ultimate objective of research on regional 
climate change is to narrow the range of future scenarios, if possible, 
for a particular region. The range of projected alternatives may be 
narrowed by improvements in global climate modeling, and by studies of 
mechanisms affecting regional conditions such as water and soil 
management, urbanization, and local weather systems. Research on 
regional conditions is currently sponsored by federal science agencies, 
including NOAA and USDA.
    Question 7. Your testimony emphasizes the distinction between a 
projection of what could happen and a prediction of what will happen. 
Isn't it true that the more heat-trapping gases are released into the 
atmosphere, the more likely that projections of harmful effects on the 
United States will become a reality?
    Answer. When looking at statistical probabilities in complex 
systems like the climate, it is highly unreliable to try and isolate 
one parameter, such as heat trapping gases, and draw a general 
conclusion. Because of this, the best answer to your question in this 
case is ``not necessarily.'' At the present time, science has only 
partial answers to this question. Recall that the actual global average 
surface temperature increases from all sources are projected to be 
rather small. Many ``harmful effects'' occur regionally, and come from 
extreme events that occur randomly about a global average. We do not 
understand how the statistics of these extreme events are affected by 
average climate parameters that our models attempt to calculate based 
on known forcings, including ``heat-trapping gas'' releases. Some 
harmful effects, such as those of sea level rise, are directly 
attributable to global parameters, such as mean surface temperature, 
which are known to be linked to a number of factors. Even for these 
effects, the relative contribution of anthropogenic mechanisms to 
natural variation remains unknown.

     Response to Written Questions Submitted by Hon. John F. Kerry 
                     to Hon. John H. Marburger III

                      ADMINISTRATION VIEW OF IPCC

    Question 1. I understand the Administration recently sent 
representatives to Bonn to participate in technical negotiations under 
the Framework Convention.
    I was shocked to hear from observers that the Administration 
worked, together with developing countries, led by Saudi Arabia--to 
strongly dilute the role played by IPCC scientists and their latest 
``state of the science'' report (the Third Assessment)--including its 
role in helping policymakers consider if concentrations are trending 
toward stabilization.
    A U.S. negotiator even objected to the use of the word ``robust'' 
to characterize this IPCC Assessment, even though our own NAS 
characterized it this way.
    What is the Administration's position on the role of the IPCC under 
the UNFCCC--to which I remind you, the U.S. is a Party?
    Answer. The Administration regards IPCC as an essential 
organization for coordinating international work on climate change.
    Question 2. Does this Administration support the IPCC as the 
appropriate body to assess available information on the science, the 
impacts, and the economics of--and the options for mitigating and/or 
adapting to climate--change; and to provide scientific, technical and 
socio-economic advice to the Parties to the UNFCCC?
    Answer. The Administration does regard the IPCC as an appropriate 
body for these functions.
    Question 3. As discussed during the July 11th hearing, I would like 
a full account of these negotiations as soon as possible.
    Answer. OSTP will continue to keep the committee apprised of its 
involvement with ongoing scientific and technical discussions in the 
international arena.

            DANGERS OF MISSING THE ``WINDOW OF OPPORTUNITY''

    Question 4. A recent article in Science features an article by Dr. 
Michael Oppenheimer, of Princeton University, an authority on climate 
change and a member of the IPCC. Dr. Oppenheimer and his coauthor Dr. 
Brian O'Neill of Brown University show that in order to prevent 
``dangerous anthropogenic interference in the climate system''--or 
``dangerous climate change'' (ranging from elimination of all coral 
reef systems to disintegration of the West Antarctic Ice Sheet)--it is 
necessary to begin reducing total actual emissions within the next two 
decades or so.
    According to these scientists, any delay beyond that timeframe will 
have irreversible effects on our climate system. Furthermore, these 
scientists say that the sooner emissions drop, the easier it will be to 
achieve the concentrations necessary to prevent dangerous climate 
change. If we wait until 2020, we will have to make such drastic 
emissions reductions that it may not be economically feasible to 
prevent dangerous climate change.
    What implication does this latest research have with respect to 
potential impacts of the President's proposal, which has emissions 
rising indefinitely into the future?
    Answer. The paper by Oppenheimer and O'Neill does not in fact 
``show'' that immediate reduction of emissions is a necessary condition 
for avoiding ``dangerous climate change.'' The authors of this article 
raise interesting points worthy of discussion, but they are also very 
clear in the inherent uncertainties and assumptions within their 
analysis:

          ``Dangerous interference can be viewed from a variety of 
        perspectives, and the choice will ultimately involve a mixture 
        of scientific, economic, political, ethical, and cultural 
        considerations, among others. In addition, the link among 
        emissions, greenhouse gases concentrations, climate change, and 
        impacts are uncertain. Furthermore, what might be considered 
        dangerous could change over time.''

    The authors do not present new scientific data in this article, but 
rather use existing impact scenarios and attempt to correlate them with 
atmospheric CO2 levels. This is not possible to do with any 
assurance of accuracy with today's modeling capabilities, but the 
methodology of the authors' approach is interesting and could be useful 
in the future. The authors' discussion of optimal timing for mitigation 
is specifically conditioned by the statement that ``our ability to 
identify this point is constrained by our incomplete understanding of 
the carbon cycle.'' It is precisely this kind of uncertainty that leads 
to the multi-stage approach to mitigation proposed by the President, 
which preserves flexibility to respond to an improved scientific 
understanding of global climate change and the development of advanced 
energy and sequestration technologies. Such flexibility will preserve 
our ability to pursue the most cost-effective trajectory toward 
formulating and achieving long term goals.
    Question 5. How do you reconcile the President's proposal for 
steadily increasing GHG emissions with the reality that emissions must 
drop in the next few decades in order for GHG to be stabilized?
    Answer. Significant reductions in GHG emissions while maintaining 
current levels of economic activity require substantially different 
technologies for producing and using energy than those commonly in use 
today, and they require broad international participation in a coherent 
program. The President's proposal logically slows the projected growth 
in domestic greenhouse gas emissions in the next decade. The 
President's proposal focuses on the means to achieve the reductions 
necessary for long term stabilization, while maintaining the economic 
growth required to fuel technological innovations, which remain the key 
to successfully addressing this long term issue.

           TIME FRAME AND REDUCTIONS NEEDED FOR STABILIZATION

    Question 6. At one of our hearings on climate change last year, Dr. 
Kevin Trenberth made a point that really resonated with me. He stated 
that--because of the long residence time of CO2 in the 
atmosphere--achieving the Kyoto targets would only buy us 10 years of 
time to figure out how to effectively reduce our emissions.
    His point was that achieving Kyoto targets would only slow the rate 
of carbon emissions loading to the atmosphere--not stabilize or even 
reduce greenhouse gas emissions in the atmosphere. In other words, it 
is only a first step, and more needs to be done to stabilize or reduce 
atmospheric greenhouse gases.
    In your testimony before this Committee on July 11th, you said that 
as a scientist you agree.
    If achieving Kyoto targets only buys us 10 years to plan and does 
not stabilize greenhouse gases, how can the President advocate taking 
no real action on emissions reductions for 10 years and also say he is 
pursuing stabilization?
    Answer. The President's plan is more likely to achieve the 
necessary stabilization of greenhouse gases than the Kyoto targets 
because it focuses on increasing knowledge that will inform reduction 
strategies, it funds research that supports and provides incentives for 
necessary technological change, and it seeks broader international 
collaborations. All these steps are necessary for real change.
    Question 7. Won't the President's plan doom us to a costly and 
dangerous adaptation scenario because we have bypassed the ``window of 
opportunity'' for action--after which the growth in emissions of around 
40 percent make needed reductions more steep?
    Answer. No. Immediate substantial reduction of GHG emissions is not 
currently possible, and therefore there is no ``window of 
opportunity.'' The window of opportunity will exist when major changes 
in technology are introduced and widely adopted throughout the world to 
achieve stabilization. Substantial reductions of GHG emissions are in 
fact possible with different technologies such as nuclear power. The 
President's plan to develop these technologies is an important part of 
the pathway to GHG stabilization.

                               __________

  Responses to Written Questions Submitted by Hon. Ernest F. Hollings 
                        to Hon. James R. Mahoney

    Question 1. You said that you are testifying today as the Director 
of the Climate Change Science Program. How does this program differ 
from the U.S. Global Change Research Program?
    Answer. The Climate Change Science Program is responsible for the 
consolidated interagency management of the U.S. Global Change Research 
Program (USGCRP) and the President's Climate Change Research Initiative 
(CCRI). This consolidation ensures internal consistency of the focused 
CCRI research within the larger body of global change research 
conducted by the USGCRP and other supporting programs. The interagency 
Climate Change Science Program retains the responsibility for 
compliance with the requirements of the Global Change Research Act 
(GCRA) of 1990, including its provisions for annual reporting of 
findings and short-term plans, scientific reviews by the National 
Academy of Sciences/National Research Council, and periodic publication 
of a 10-year strategic plan for the program.
    Question 2. In your development of the strategic plan for the U.S. 
Global Change Research Program and the Climate Change Research 
Initiative, will abrupt climate change research be included as part of 
the plan?
    Answer. Abrupt climate change research has been identified and will 
be incorporated in the plan. A report recently published by the 
National Academy's National Research Council highlights the need for 
attention to the possibility of abrupt climate change. This report, as 
well as other Academy reports, will be used as a resource in the 
development of the strategic plan for the U.S. Global Change Research 
Program and the Climate Change Research Initiative.
    Question 3. Can you discuss the value of observation and monitoring 
systems to the verification of computer modeling? Do you feel that a 
National Climate Service within the Department of Commerce, as 
recommended by the National Research Council, is necessary to provide 
the required observations and monitoring?
    Answer. Observing systems provide the ground truth against which 
all model forecasts are measured. Observations from multiple sources 
(land, sea, air, and satellite based) must be combined using 
sophisticated methods to match the time and space scales of interest to 
any particular model. Analyses can also help identify and correct for 
limitations in observing systems, to some degree. (For example, 
combining the wide coverage of satellites with more precise in situ 
observations.) But ultimately observations from reliable, continuous 
(spatially and temporally) observing systems are vital to verification 
and validation of every model. NOAA and other U.S. agencies must 
maintain and upgrade observing systems to serve the needs of the 
climate community and assure data record continuity. We must also work 
with other countries effectively to cover the globe.
    The recent report of the National Research Council did not 
specifically recommend a National Climate Service. The report did, 
however, recommend: effective use of the nation's weather and climate 
observation systems; improved capabilities for research, technology 
infusion, modeling and prediction; and regional interdisciplinary 
approaches to climate services.
    NOAA's recently established Climate Observations and Services 
Program (COSP) is already leveraging the existing infrastructures and 
know-how of NOAA's National Weather Service, National Environmental 
Satellite, Data and Information Service, and Office of Oceanic and 
Atmospheric Research in a way consistent with the NRC's vision. The 
study emphasized a user-centric service to develop regional activities, 
attributes that are already part of NOAA's COSP. Effective national 
climate services can only be delivered through the pooled talents of 
federal, state, local, and private partners.
    The Academy's first recommendation for ``the effective use of . . . 
climate observation systems'' follows earlier National Research Council 
(NRC) reports that identified shortcomings in NOAA observing systems 
built for purposes other than climate monitoring. Such improvements as 
higher measurement accuracy and long-term stability are needed to meet 
climate requirements. NOAA is working to implement the recommendations 
of the NRC articulated in the report Adequacy of Climate Observation 
Systems. NOAA has implemented a U.S. Climate Reference Network, which 
is following the climate monitoring guidelines and principles from the 
NRC report. These guidelines and principles are being integrated into 
that report and the observing systems, as appropriate. In addition, 
coordination among the various observing systems operated by NOAA, as 
well as other federal agencies, is providing more complete data sets 
for coupled climate models and modeling the Earth's climate system, 
including ocean, atmosphere and land processes. Finally, existing 
international partnerships are being leveraged through programs such as 
the Global Climate Observing System. NOAA's COSP is pursuing these 
tasks.
    Question 4. You have identified a number of scientific 
uncertainties that need further research. You have also noted that we 
have spent over $20 billion over the past 13 years on research on 
climate change science. Do you have any idea of how much more will be 
needed to address the many uncertainties you have identified?
    Answer. The research community has made significant contributions 
to our knowledge of climate change issues since the passage of the 
Global Change Research Act. However, substantial uncertainties in our 
knowledge continue to limit our ability to project future climate in 
response to technological (energy use and environmental) scenarios. My 
written testimony contains a list of the key uncertainties.
    While ``more research is always better,'' we believe that effective 
management and research prioritization and sequencing of GCRP/CCRI 
should allow significant reduction of uncertainty at approximately 
stable funding levels. Because of the importance of global climate 
change issues, long-term (5-10 years and beyond) significant funding 
will be needed for all three principal categories of interest: science, 
observations and decision support.
    Question 5. In his written testimony, Dr. Marburger states that the 
U.S. Climate Action Report 2002 employs scenarios based on ``ad hoc 
input assumptions.'' When NOAA scientists run climate modeling 
experiments, how do they generate their assumptions?
    Answer. Two categories of input assumptions have been used by NOAA 
scientists in their future climate projections. For internationally 
coordinated assessment activities, i.e., IPCC, the climate model inputs 
are based on scenarios of future economic growth, population trends, 
and technological change that have been generated and agreed upon by 
the international scientific community. Not surprisingly, there is 
considerable uncertainty, especially beyond a few decades, in 
projecting future economic growth, population trends, and technological 
change. Hence the scenarios are intended to bracket the range of 
possible outcomes. Most climate modeling centers, including NOAA 
Geophysical Fluid Dynamics Laboratory, have made climate projections 
based on at least two of these scenarios. NOAA scientists also use 
simpler approximations of future trends in greenhouse gases and other 
trace constituents of the atmosphere (e.g., CO2 increase of 
1 percent per year) in studies designed to improve their understanding 
of fundamental climate change processes.
    In addition to these ``standard'' types of scenarios, specialized 
scenarios will be run in the future to explore various options for 
reducing the short-lived greenhouse species, such as tropospheric ozone 
and aerosols, where impacts currently are uncertain but progress in 
reducing the uncertainties can be made, as well as emissions strategies 
which are more closely linked to plausible technological advances in 
moving towards cleaner energy sources.
    Question 6. The wider climate research community uses tools, such 
as the Community Climate System Model, to conduct groundbreaking 
research in studying the climate. What steps has NOAA and other 
agencies in the Climate Change Science Program taken to coordinate 
research efforts with the outside community?
    Answer. The Community Climate System Model is a University-based 
effort which is funded by agencies under the Climate Change Science 
Program (or Global Change Research Program), primarily the National 
Science Foundation (NSF), the National Aeronautics and Space 
Administration (NASA), and the Department of Energy (DOE). This is the 
U.S. Government effort to integrate the climate research community. 
Similarly, NOAA's effort is focused at its Geophysical Fluid Dynamics 
Laboratory, which collaborates with and solicits input from Princeton 
University scientists as well as through close collaboration and 
interaction with CCSM scientists. CCSM is increasingly focusing on 
modeling research while GFDL has an evolving focus on applications of 
climate models.
    Question 7. In April 2002, the Earth Simulator computer displaced 
several U.S. military supercomputers as the world's fastest computer. 
Currently, federal agencies are not allowed to buy Japanese 
supercomputers, because of the ``Buy America Act.'' Some scientists 
have alleged that this prohibition has restricted American research in 
the field of climate science. What barriers, if any, has this 
prohibition on foreign supercomputers had on NOAA's climate modeling 
program?
    Answer. For its most recent supercomputer acquisition, NOAA held a 
full and open competition for which all supercomputer manufacturers 
(both U.S. and international) were eligible to compete. NOAA chose the 
best available offer. Decision criteria include cost-performance on 
NOAA weather and climate models, risk, and past performance, among 
others.
    NOAA models have been programmed over the last several years to run 
on all major computer architectures, including the massively parallel 
architectures using commodity processors from U.S. vendors, and the 
vector architectures of NEC and Cray. This has led to a highly 
competitive procurement process that has, in turn, led to the best 
value for the taxpayer.
    For comparison, although they have different missions, the Japanese 
Earth Simulator has a peak performance of 40 trillion instructions/
second for an initial capital cost of $400M plus an unknown operating 
cost. The most recent NOAA supercomputer acquisition from IBM will cost 
$224 million over 9 years, including operating costs, and provide a 
400-500 percent increase in computing speed over NOAA's current 
capabilities. In 3 years, it will have a peak speed of 11.4 trillion 
instructions/second.
    It is unlikely that purchase restrictions will have any significant 
impact on future NOAA climate modeling programs.
                                 ______
                                 
      Responses to Written Questions Submitted by Hon. John Kerry 
                        to Hon. James R. Mahoney

    Question 1a. The U.S. has advocated and supported voluntary actions 
to reduce emissions--including under the Clinton Administration. Yet 
after a decade of such voluntary actions, emissions continue to 
increase rapidly both for the United States and the rest of the world. 
Even those who are supporters of voluntary emissions reductions point 
to the record and observe that in the aggregate, voluntary actions have 
not succeeded at curbing the overall growth in U.S. emissions. And the 
data in the Report support that view.
    Dr. Mahoney, does it make sense to spend another 10 years proving 
what the record already tells us?
    Answer. The Climate Change Science Program focuses on the 
development of scientific analyses, measurements and projections that 
deal with climate science, together with ecosystem and human forcings 
and feedbacks. To maintain scientific credibility, the Program does not 
develop findings or recommendations on policy questions. The likely 
effectiveness of a voluntary emissions reduction program will be 
principally determined by several policy considerations, including the 
long term nature of the challenge of global climate change and the need 
to sustain a strong economy that can continue to develop the energy and 
sequestration technologies that will deliver the most cost-effective 
trajectory toward meeting the long term stabilization objective of the 
Framework Convention on Climate Change. Approaches that disregard the 
expressed and unanimous guidance of the U.S. Senate, such as that 
embodied in Senate Resolution 98, will not likely succeed.
    The Climate Change Science Program is not able to offer 
recommendations on these possible policy outcomes.
    Question 1b. What data does the Administration have to support the 
effectiveness of voluntary measures in reducing actual emissions?
    Answer. In the case of voluntary CO2 and other 
greenhouse gas emissions measures, their effect will be determined 
principally by policy influences rather that scientific findings. 
Comments on such policy influences are beyond the scope of the Climate 
Change Science Program.
    Question 1c. What kinds of ``voluntary measures'' and verifiable 
emissions reductions will be implemented over the next 10 years with 
the two largest sources of emissions and growth in emissions: 
transportation and utilities?
    Answer. The CCSP is unable to comment on these potential measures.

            DANGERS OF MISSING THE ``WINDOW OF OPPORTUNITY''

    Question 2a. A recent article in Science features an article by Dr. 
Michael Oppenheimer, of Princeton University, an authority on climate 
change and a member of the IPCC. Dr. Oppenheimer and his co-author Dr. 
Brian O'Neill of Brown University show that in order to prevent 
``dangerous anthropogenic interference in the climate system''--or 
``dangerous climate change'' (ranging from elimination of all coral 
reef systems to disintegration of the West Antarctic Ice Sheet)--it is 
necessary to begin reducing total actual emissions within the next two 
decades or so.
    According to these scientists, any delay beyond that timeframe will 
have irreversible effects on our climate system. Furthermore, these 
scientists say that the sooner emissions drop, the easier it will be to 
achieve the concentrations necessary to prevent dangerous climate 
change. If we wait until 2020, we will have to make such drastic 
emissions reductions that it may not be economically feasible to 
prevent dangerous climate change.
    What implication does this latest research have with respect to 
potential impacts of the President's proposal, which has emissions 
rising indefinitely into the future?
    Answer. The National Academy of Sciences was asked to provide the 
most up-to-date information about what is known and about what is not 
known on the science of climate change. They reported that the most 
likely scenario in the next century is that the climate will continue 
to warm, but that there is considerable uncertainty in current 
understanding of how the climate system both varies naturally and also 
reacts to emissions of greenhouse gases and aerosols. Current estimates 
of the magnitude of warming (1.5 to 4.5 degrees C by the end of the 
21st Century) should be regarded as tentative and subject to future 
adjustments (either upward or downward). The President has reaffirmed 
America's commitment to the United Nations Framework Convention and its 
central long term 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.
    Global climate change presents a long term challenge with 
alternative trajectories for achieving long term goals, each of which 
has cost implications. Near term, dramatic reductions in emissions such 
as those embodied in the Kyoto Protocol, in the view of most Members of 
Congress and the Bush Administration, represents an unwise and 
unnecessarily costly alternative. Instead, the promise of advances in 
the future development and application of energy and sequestration 
technologies, coupled with our greenhouse gas intensity goal for the 
next decade, represents a more cost-effective approach toward achieving 
our long-term objective, (and one that allows us to reduce the 
scientific uncertainties, with flexibility to assure that our responses 
are appropriately directed.)
    Question 2b. How do you reconcile the President's proposal for 
steadily increasing GHG emissions with the reality that emissions must 
drop in the next few decades in order for GHG to be stabilized?
    Answer. The President has declared his commitment to cutting the 
U.S. greenhouse gas intensity by 18 percent over the next 10 years. He 
has also noted that more stringent greenhouse gas controls can be 
implemented in the future, as the science justifies.
                                 ______
                                 
    Responses to the following questions were not available at the time 
this hearing went to press.

        Questions from Hon. John McCain to Hon. James R. Mahoney

    Question 1. You said that you are testifying today as the Director 
of the Climate Change Science Program. How does this program differ 
from the U.S. Global Change Research Program?
    Question 2. In your development of the strategic plan for the U.S. 
Global Change Research Program and the Climate Change Research 
Initiative, will abrupt climate change research be included as part of 
the plan?
    Question 3. Can you discuss the value of observation and monitoring 
systems to the verification and validation of computer modeling? Do you 
feel that a National Climate Service within the Department of Commerce, 
as recommended by the National Research Council, is necessary to 
provide the required observations and monitoring?
    Question 4. You have identified a number of scientific 
uncertainties that need further research. You have also noted that we 
have spent over $20 billion over the past 13 years on research on 
climate change science. Do you have any idea of how much more will be 
needed to address the many uncertainties you have identified?
    Question 5. In his written testimony, Dr. Marburger states that the 
US. Climate Action Report 2002 employs scenarios based on ``ad hoc 
input assumptions.'' When NOAA scientists run climate modeling 
experiments, how do they generate their assumptions?
    Question 6. The wider climate research community uses tools, such 
as the Community Climate System Model, to conduct groundbreaking 
research in studying the climate. What steps has NOAA and other 
agencies in the Climate Change Science Program taken to coordinate 
research efforts with the outside community?
    Question 7. In April 2002, the Earth Simulator computer displaced 
several U.S. military supercomputers as the world's fastest computer. 
Currently, federal agencies are not allowed to buy Japanese 
supercomputers, because of the ``Buy America Act.'' Some scientists 
have alleged that this prohibition has restricted American research in 
the field of climate science. What barriers, if any, has this 
prohibition on foreign supercomputers had on NOAA's climate modeling 
program?


                                  
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