[Senate Hearing 109-1075]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 109-1075
 
     EXAMINING APPROACHES EMBODIED IN THE ASIA PACIFIC PARTNERSHIP

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 20, 2006

                               __________

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




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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED NINTH CONGRESS
                             SECOND SESSION

                  JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia             JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri        MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio            JOSEPH I. LIEBERMAN, Connecticut
LINCOLN CHAFEE, Rhode Island         BARBARA BOXER, California
LISA MURKOWSKI, Alaska               THOMAS R. CARPER, Delaware
JOHN THUNE, South Dakota             HILLARY RODHAM CLINTON, New York
JIM DeMINT, South Carolina           FRANK R. LAUTENBERG, New Jersey
JOHNNY ISAKSON, Georgia              BARACK OBAMA, Illinois
DAVID VITTER, Louisiana
                Andrew Wheeler, Majority Staff Director
                 Ken Connolly, Minority Staff Director

                                  (ii)


                            C O N T E N T S

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                                                                   Page

                           SEPTEMBER 20, 2006
                           OPENING STATEMENTS

Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri.......................................................     6
Boxer, Hon. Barbara, U.S. Senator from the State of California...     9
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..     5
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
Jeffords, Hon. James M., U.S. Senator from the State of Vermont..     2
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................     8
Lieberman, Hon. Joseph I., U.S. Senator from the State of 
  Connecticut, prepared statement................................    38
Murkowski, Hon. Lisa, U.S. Senator from the State of Alaska......     4

                               WITNESSES

Beisner, E. Calvin, associate professor of Historical Theological 
  and Social Ethics, Knox Theological Seminary; Spokesman for the 
  Interfaith Stewardship Alliance................................    29
    Prepared statement..........................................148-154
    Responses to additional questions from Senator Inhofe........   155
Connaughton, James L., chairman, Council on Environmental Quality    11
    Prepared statement........................................... 40-79
Doniger, David D., policy director, Climate Center, Natural 
  Resources Defense Council......................................    28
    Prepared statement...........................................93-147
Lomborg, Bjorn, adjunct professor, Copenhagen Consensus Center...    25
    Prepared statement........................................... 80-92

                          ADDITIONAL MATERIAL

Letters:
    Clergy and Religious Leaders, A Time for Bold and Immediate 
      Action on Global Warming: An Urgent Appeal from Religious 
      Leaders for Mandatory Limits on Greenhouse Gases, September 
      19, 2006..................................................156-163
    Faith Community Leaders: The Episcopal Church, USA; 
      Evangelical Lutheran Church in America; Friends Committee 
      on National Legislation; Maryknoll Office of Global 
      Concerns; Mennonite Central Committee, US, Washington 
      Office; National Council of the Churches of Christ in the 
      USA; The United Methodist Church-General Board of Church 
      and Society; Union of Reform Judaism, September 19, 2006..164-170
    Interfaith Stewardship Alliance: An Open Letter to the 
      Signers of ``Climate Change: An Evangelical Call to 
      Action'' and Others Concerned About Global Warming........171-203
Paper, Interfaith Stewardship Alliance, A Call to Truth, 
  Prudence, and Protection of the Poor: An Evangelical Response 
  to Global Warming, 2006.......................................179-203
Press Release, MKR & Associates, Global Warming Mainly Natural 
  and Not Catastrophic, Says New Study From Interfaith 
  Stewardship Alliance...........................................   204
Report, Christian Aid, The Climate of Poverty....................   101


     EXAMINING APPROACHES EMBODIED IN THE ASIA PACIFIC PARTNERSHIP

                              ----------                              


                     WEDNESDAY, SEPTEMBER 20, 2006

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 4 o'clock p.m. in 
room 406, Dirksen Senate Office Building, the Hon. James M. 
Inhofe (chairman of the committee) presiding.
    Present: Senators Inhofe, Jeffords, Lautenberg, Bond, 
Boxer, Carper, Murkowski.

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

    Senator Inhofe. Our meeting will come to order. We have a 
policy of starting on time, but I am going to refrain from any 
opening statements until Senator Jeffords arrives. Any word on 
that? He is here. All right, here we go. You see, I wasn't 
going to start without you.
    Today's hearing is on the Asia Pacific Partnership and the 
underlying approaches embodied in this Administration's 
initiative. Before we proceed, let me just once again state my 
belief that global warming is an alarmism and it is a type of a 
hoax. You watch the new science come in. It is something new 
almost every day. Most recently, the geophysical research 
letters, that was about 3 days ago, finally came to the 
astounding conclusion that climate change has something to do 
with the sun. I am sure that shocked a lot of people.
    Recent projections of the Russian Academy of Sciences is 
that we are about to enter a global cooling phase. Earlier this 
week, a study of the research letters found that the sun is 
responsible for about 50 percent of the observed warming since 
1900. So today's hearing should not be misconstrued as a global 
warming hearing.
    The climate alarmism that we hear in the media about 
impending planetary doom has taken on a striking resemblance to 
the classic story of Chicken Little. As you would recall, the 
ending is not pleasant, not because the sky fell, but because 
Chicken Little and his followers reacted unwisely out of fear.
    The lesson? Having the courage and wisdom to act wisely 
when faced with fear, but this lesson appears to have been 
forgotten in the modern sky is falling alarmism of global 
warming. One proposed, yet unwise, course of action is to 
impose hard caps on carbon dioxide. It is wisely recognized 
that these are feel good proposals that would do little to 
seriously address manmade climate change, even assuming the 
alarmists are right about the science, which they are not.
    The Kyoto Protocol, even if the United States had joined 
and every nation complied, would have only reduced global 
temperatures by 0.07. This is a very interesting chart here, 
Senator Carper. This is a chart that was put together that said 
if everybody complied, and I am talking about India, China, the 
United States and everyone else, this would be the effect by 
the year 2050, hardly even a measurable effect. Yet all but two 
of the EU 15, the European Union 15 countries who signed, all 
but two of them have not reached their targets because the 
reality is that a cap on carbon is a cap on the economy through 
the rationing of energy.
    In the United States alone, the costs of complying with 
Kyoto would have cost $2,700 per household, and 2.4 million 
jobs, according to the Horton Econometric Survey. Any approach 
to climate change must begin with the realization that energy 
growth is essential to pursuing our many competing priorities, 
and any approach which threatens that is unsustainable.
    I look forward to the testimony of our witnesses at today's 
hearing on how to pursue notable goals and how to prioritize 
them in the context of the Asia Pacific Partnership. Abundant 
growing energy has been and will continue to be a major driving 
force behind our economy here in the United States. Our stock 
market is nearly record highs today. The wages and salaries are 
increasing 10 percent annually. The gross domestic production 
is expanding faster than any other major industrialized nation, 
up 20 percent since President Bush's 2003 tax cut. And our 
energy use is also quickly expanding. The fact is, energy and 
economic growth go hand in hand.
    The Asia Pacific Partnership is not about climate change, 
but about working to achieve an energy abundant future that 
looks at the whole picture. Through technology transfers, 
information sharing, and other aspects of the partnership, the 
members will work toward growing their energy supplies, while 
reducing the serious problem of air pollution, such as SOx, 
NOx, and mercury in some of these countries. They will work 
toward cost-effective energy efficiency projects, which reduce 
the amount of fuel necessary to generate the same amount of 
power, and incidentally, reduce carbon dioxide, along with real 
pollutants.
    And that is why I support full funding for this important 
Administration initiative. I am particularly interested in the 
testimony of our two witnesses who will examine why increasing 
technology is superior to a carbon cap approach. Bjorn Lomborg 
will examine today's topic from an economic perspective, and 
Cal Beisner will examine it from an ethical perspective.
    We will also welcome Jim Connaughton as our first panelist.
    Senator Jeffords.

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

    Senator Jeffords. Thank you, Mr. Chairman, for holding this 
hearing.
    When President Bush announced the need for the Asia Pacific 
Partnership, he made the following statement in the fact sheet: 
``We know the surface of the earth is warmer and increased 
greenhouse gases caused by human activity is contributing to 
the problem.'' As that statement demonstrates, the debate 
regarding the existence of global warming is largely over. We 
need to now turn to solutions to global warming, rather than 
questioning established facts.
    Global warming is here and every day we learn more about 
the severe consequences it can have for all of us. These 
effects range from the sea level rise and the dangerous weather 
patterns, to species extinction and increased disease vectors. 
In Vermont, our maple syrup production is threatened, as is our 
ski industry, just to name two of the impacts.
    The sooner we act to address climate change, the better off 
we will be in terms of reducing the environmental harm and 
overall costs of control. That is why I have introduced the 
Global Warming Pollution Reduction Act. Based on the latest 
science, my bill sets out a series of mandatory requirements, 
as well as research and development programs that would provide 
a road map for addressing climate change over the next 50 
years.
    If enacted, my legislation would make it possible for us to 
address the global warming problem. If, however, we continue to 
delay, it may come too late. We may go beyond the tipping point 
and be forced to confront the reality of irreversible climate 
change.
    Unfortunately, the Asia Pacific Partnership is little more 
than an excuse for further delay. It does too little, too late, 
and would commit us to many more years of talk with no binding 
commitments. In the meantime, emissions will increase and it 
will be nearly impossible for us to avert some of the worst 
effects of global warming.
    Experts tell us that we can act now, using available 
technologies to reduce carbon emissions cost-effectively. 
However, without a system of mandatory limits, research and 
technology deployment alone is not enough. A recent report from 
the Congressional Budget Office confirms that both mandatory 
limits and technology-based approaches are required.
    We know that neither the Asia Pacific Partnership nor the 
Administration's voluntary intensity reduction goal will lead 
to emission decreases. The report commissioned by Australia 
shows that even under the best-case scenario for the 
partnership, emissions will still double by the year 2050. 
Under the Bush Administration's voluntary goal, emissions will 
increase by 14 percent per decade.
    We cannot afford such increases, which will result in years 
of additional impact. We cannot afford delay and we cannot 
afford to rely entirely on technology-based approaches such as 
climate change technology programs. These approaches will not 
get us where we need to be fast enough.
    If this Administration were really serious about climate 
change, it would propose a system of economy-wide limits on 
carbon emissions. That would show real leadership worldwide, 
which is what we need to address this immensely important 
issue.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Jeffords follows:]

      Statement of Hon. James M. Jeffords, U.S. Senator from the 
                            State of Vermont

    Mr. Chairman, thank you for holding this hearing.
    When President Bush announced the Asia Pacific Partnership, he made 
the following statement in a fact sheet: ``We know the surface of the 
earth is warmer and an increase in greenhouse gases caused by human 
activity is contributing to the problem.''
    As that statement demonstrates, the debate regarding the existence 
of global warming is largely over. We need to turn now to solutions to 
global warming, rather than questioning established facts.
    Global warming is here, and everyday we learn more about the severe 
consequences it can have for all of us. These effects range from sea 
level rise and dangerous weather patterns to species extinction and 
increased disease vectors. In Vermont, our maple syrup production is 
threatened, as is our ski industry, just to name a few impacts.
    The sooner we act to address climate change the better off we will 
be, in terms of reducing the environmental harm and overall costs of 
control. That is why I have introduced the Global Warming Pollution 
Reduction Act.
    Based on the latest science, my bill sets out a series of mandatory 
requirements, as well as research and development programs, which would 
provide a roadmap for addressing climate change over the next 50 years. 
If enacted, my legislation would make it possible for us to address the 
global warming problem.
    If, however, we continue to delay, it may become too late. We may 
go beyond the tipping point and be forced to confront the reality of 
irreversible climate change.
    Unfortunately, the Asia Pacific Partnership is little more than an 
excuse for further delay. It does too little, too late and would commit 
us to many more years of talk with no binding commitments.
    In the meantime, emissions will increase and it will be nearly 
impossible for us to avert some of the worst effects of global warming. 
Experts tell us that we can act now, using available technologies, to 
reduce carbon emissions cost-effectively. However, without a system of 
mandatory limits, research and technology deployment alone is not 
enough.
    A recent report from the Congressional Budget Office confirms that 
both mandatory limits and technology-based approaches are required. We 
know that neither the Asia Pacific Partnership, nor the 
Administration's voluntary intensity reduction goal, will lead to 
emissions decreases. A report commissioned by Australia shows that even 
under the best case scenario for the partnership, emissions will still 
double by the year 2050.
    Under the Bush Administration's voluntary goal, emissions will 
still increase by 14 percent per decade. We cannot afford such 
increases, which will result in years of additional impacts. We cannot 
afford further delay, and we cannot afford to rely entirely on 
technology-based approaches, such as the Climate Change Technology 
Program. Those approaches will not get us where we need to be fast 
enough.
    If this Administration were really serious about climate change it 
would propose a system of economy-wide limits on carbon emissions. That 
would show real leadership, worldwide, which is what we need to address 
this immensely important issue.

    Senator Inhofe. Thank you, Senator Jeffords.
    Senator Murkowski.

OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM THE 
                        STATE OF ALASKA

    Senator Murkowski. Thank you, Mr. Chairman.
    I am not going to take this opportunity to give a speech on 
climate change or global warming. I think I have made my 
position clear. We can see in Alaska that our climate is 
changing, whether it is the impact to some of our forest areas 
with the spruce bark beetle infestation or the thinning of some 
of the ice that we are seeing, the increased release of methane 
gases from permafrost that is melting. We can see it, but what 
I am here to do today is to listen to some of the comments that 
we will hear from Mr. Connaughton on how the Asia Pacific 
Partnership on Clean Development and Climate is actually 
working.
    I happen to believe that if we are to address climate 
change, we must start first with the technology, and that 
technology is not going to do us any good if that technology is 
held just unto ourselves. There has to be a collaboration. 
There has to be a sharing. There has to be a unity of purpose 
in what we do.
    While it may not be the only answer to how we might reduce 
our emissions in this country, I do believe that it is part of 
the answer and so I am anxious to hear if there are any updates 
from the recent meetings, and to know what progress we are 
making with some of our neighbors and cooperating countries in 
this effort.
    I appreciate you calling this hearing, Mr. Chairman, and I 
will look forward to the testimony. Thank you.
    Senator Inhofe. Thank you, Senator Murkowski.
    Senator Carper.

 OPENING STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM 
                     THE STATE OF DELAWARE

    Senator Carper. Thank you, Mr. Chairman.
    Mr. Connaughton, welcome. It is good to see you. We welcome 
you and other guests as well.
    As you well know, we are here today to discuss the Asia 
Pacific Partnership, and as my friend Senator Murkowski said, 
to learn more about that partnership, touted I think as the 
latest voluntary action by the Administration to address 
climate change.
    Skeptics believe that this is just the latest action by the 
Administration to keep from having to address climate change. 
My hope is that time will prove they are wrong, but time will 
prove whether they are right or wrong. Our country is the 
world's largest emitter of greenhouse gases. We know that. We 
account for something like 20 percent of the world's manmade 
greenhouse gases. We also account for about one quarter of the 
world's economic output. I believe that we have a 
responsibility to reduce our CO2 emissions and, to 
sort of paraphrase a friend of mine who is testifying today, to 
slow the growth of those emissions, to stop the growth of those 
emissions, and then to reduce those emissions.
    Unfortunately, to date our country has not demonstrated, at 
least in my view, the leadership on the Federal level that we 
need to demonstrate, and my hope is that we will begin to do 
that.
    Luckily, though, some others have filled the void. One of 
those is Tony Blair, the Prime Minister of England at least for 
another year. Among the others are elected Governors from East 
Coast to West Coast, not all of them, but a bunch of Governors, 
Democrat and Republican. One of them is the fellow out in 
California, Governor Schwarzenegger. One of the things that he 
said as he has looked at this issue is, this is his quote, 
``The debate is over. We know the science. We see the threat 
and we know the time for action is now.''
    Governor Schwarzenegger has decided to be, along with a 
number of our other Governors and colleagues, to be a leader 
and to back up his statement not with words, but with real 
action. Last month, California passed, as we know, something 
they call the Global Warming Solutions Act, which will require 
Californians to reduce their emissions from today's level to 
2000 level by 2010, and I think by the year 2020, to reduce 
their emissions down to what they were in 1990.
    Additionally, some seven Northeastern and Mid-Atlantic 
States are moving forward with their own regional greenhouse 
gas initiative to reduce carbon dioxide emissions in their 
region.
    Now that others have chosen to lead, I am hopeful that our 
Administration will at least choose to follow, and then 
eventually to lead. I am glad the Administration has 
acknowledged the reality of climate change. I am glad that they 
have acknowledged that it is being caused by manmade emissions, 
in large part. I think it is now time to acknowledge that it is 
going to take mandatory action to address the issue.
    I believe we can do that at the same time without ruining 
our economy, and frankly without wreaking havoc on consumers as 
well. I agree that the development and deployment of new 
technologies are important parts of any carbon reduction 
strategy, but without a mandate I am afraid, without a target, 
what is going to drive the technology? By last year, there were 
a handful of ethanol and biodiesel plants in the country and 
they were mainly located in the Midwest. After passing a 
renewable fuels mandate, though, we have seen investment in 
ethanol and biodiesel refineries across the country. In fact, 
we have just opened one just north of Dover in our State, where 
we take soybean oil and turn it into biodiesel fuel.
    We see a significant increase in research of new renewable 
fuels such as holistic ethanol and bio-butanol. The same holds 
true for clean coal and other climate-friendly technologies. 
Today, we are seeing a handful of IGCC plants being built in 
the United States. But without a mandate for the level of 
deployment necessary, I am afraid it will never be achieved.
    So I am anxious to hear today what actions the 
Administration plans to take to not only encourage deployment 
of new technologies in other countries, but what they are going 
to do, really what you are going to do, to aid the deployment 
of those technologies right here at home, right here in 
America.
    Thanks, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Carper.
    Senator Bond.

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

    Senator Bond. Thank you, Mr. Chairman. I have been looking 
forward to this hearing today on the Asia Pacific Partnership. 
I think the APP represents a very workable vision for the 
future. We know that any successful global warming strategy 
must include China and India. One of the reasons that the Kyoto 
Protocol was doomed to failure was because it didn't include 
India and China. The Senate recognized that when almost 10 
years ago we voted not to accept it, 97 to nothing. Obviously, 
the very real and very important second reason was the cost of 
mandatory controls was so burdensome. It wasn't just going to 
be costs to corporations that everybody likes to think we can 
stick with the costs of global warming. The costs would be to 
the people who are served by and employed by corporations.
    The alternative is services and goods that would not be 
produced. So until we develop the technology, until we develop 
better abilities to control it, which we obviously should work 
on, I don't see us, I certainly hope we don't change our view. 
We know that Chinese industrialization will add over 100 new 
coal-fired powerplants over the next few years. China soon will 
surpass the United States in carbon dioxide output. I was in 
India this spring, and India is right behind China in using 
industrialization to lift hundreds of millions of poor out of 
their misery.
    What they are trying to do is one of the visions of the 
future for APP, and that is to bring technology to the benefit 
of China and India and others. I talked with the leaders of 
India when I was there, about the potential for things like 
coal gasification, which they have large coal resources. If we 
can help them with their energy problems, their pollution 
problems, and their employment problems by assisting them in 
setting up coal gasification and liquefaction, that makes a 
tremendous amount of sense. We should be doing that.
    China and India, and many nations across the Third World, 
need industrialization to improve the lives of their people. 
They use industry to bring electricity, clean water, 
transportation, communications to families who have only known 
hardship. But current technologies mean each one of those 
poverty-ending advances produce carbon dioxide. We can't tell 
them to halt their efforts and reverse their efforts. They are 
not going to cap their industrial outputs until we can provide 
the technology that will allow them to cap the outputs without 
depriving their people of the benefits they seek.
    Western environmental moralism won't feed billions. 
Precautionary principles won't electrify villages. GYA will 
provide no jobs for the teeming masses of the Third World poor. 
Just as we will not impoverish segments of our own society 
through job-killing energy cost-exploding plans, we can hardly 
expect India and China to prolong their own impoverishment in 
the name of global warming.
    Only affordable technologies that allow new growth, new 
jobs, new life will be accepted by the East. Indeed, only 
affordable technologies will be accepted by America and 
Australia. Global warming solutions that call for the immediate 
restructuring of industrial economies are fantasy. They are 
impossible. Calls to replace payroll taxes with pollution taxes 
are fantasy. No better advocates of affordability rely upon the 
assumption of $1 natural gas or quadruple the LNG imports, 
especially when those advocates themselves block new LNG ports 
for receiving LNG.
    So with its Asian partners and its development of new 
affordable technologies, APP may not provide the solution to 
global warming fears, but it provides a direction and a sound 
basis to proceed. I look forward to the testimony of you, Mr. 
Chairman, and I was proud to support funding for APP and look 
forward to its success. I thank you for your leadership.
    Senator Inhofe. Thank you, Senator Bond.
    Senator Lautenberg.

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

    Senator Lautenberg. Thanks, Mr. Chairman. I understand I 
missed an opportunity to hear some views dealing with our 
environmental problems, and that in fact it kind of in some 
ways was dismissed as being a ruse or even a hoax. Mr. 
Chairman, with all due respect to my colleagues and you here as 
the Chairman, the fact of the matter is that the evidence is 
pretty damning around us that things are changing in a not 
positive way.
    I am happy that we are here to discuss the Asia Pacific 
Partnership and the idea of partnership always has merit. But I 
think we have to decide whether we are going to lead this chase 
for a cleaner environment and to reduce the climate changes 
that are ominous in their condition, or whether we are going to 
find reasons why we don't because others won't, which I think 
is a bad idea.
    Today should be a day of action on climate change, and 
perhaps the most serious environmental threat our Nation and 
our world faces. But it is not happening. As the weeks and the 
months pass, a steady stream of reports from scientists 
continue to document the current and potential impacts of 
climate change, including loss of Arctic Sea ice. I have been 
to Antarctica. I have been to the South Pole. I went to visit 
with the National Science Foundation and found the alarm down 
there that they were registering because of the loss of sea ice 
there.
    We note the retreat of glaciers and record temperatures. 
What does it take, for God's sake, to understand that there is 
something afoot here? Well, while do we do nothing about it in 
this Congress, others are acting. California, and we are joined 
here by our colleague who is I am sure going to say something 
about what has happened there, has passed legislation to cut 
carbon dioxide emissions 25 percent by 2020.
    Seven Northeastern and Mid-Atlantic States, including my 
State of New Jersey, participate in the Regional Greenhouse Gas 
Initiative, which aims to reduce carbon dioxide emissions from 
powerplants by 10 percent by the year 2020. Nearly 200 Mayors 
who represent almost 50 million people have signed the U.S. 
Mayors Climate Protection Agreement. Are they also part of a 
hoax? This is going to help them meet the Kyoto targets in 
their own cities.
    On this issue of climate change, we need to get on with it. 
Scientists want it. The people want it. I hear in fact that 
places like India and China are going to just throw more 
pollution up and affect the climate. Well, I don't know if that 
is going to save us, so therefore if it is going to happen 
anyway, why don't we do our part in creating an unsuitable 
climatic condition?
    Instead of the leadership that I think we ought to have in 
this country, I fear that Congress will only follow on, follow 
the oil industry, the automobile industry. Don't ask anything 
of these people. Ask nothing of them, and provide a little 
incentive here or there. But when we compare the loss of the 
business opportunity to the loss of health and well being for 
future generations, including my grandchildren and everybody 
else's grandchildren, it makes me wonder about what we are 
doing here with our time.
    So I hope that we will all think of those who succeed us, 
our children, grandchildren. And this committee and this 
Congress will give them a world that is cleaner and better, and 
not in decline. Mr. Chairman, I worry about the economy. I was 
in business. I ran a big company before I came here. I know 
what it is like to create a job, pay the expenses that come 
along with that, and the difficulties in obtaining market 
entrance. But for goodness sake, when I look at what happens in 
terms of family health and well being, and suddenly finding 
that we are sweating all over the place and things are changing 
and we see fish down here in the Potomac River, male fish 
carrying female eggs, it tells us that there is something wrong 
out there, everybody, and we ought to get on with doing 
something about it.
    Senator Inhofe. Thank you, Senator Lautenberg.
    [The prepared statement of Senator Lautenberg follows:]

     Statement of Hon. Frank R. Lautenberg, U.S. Senator from the 
                          State of New Jersey

    Mr. Chairman, we're missing an opportunity today. We are scheduled 
to discuss the Asia Pacific Partnership. The idea of the Partnership 
has merit. But I am concerned that today's hearing is merely a 
diversion. Today should be a day of action on climate change--perhaps 
the most serious environmental threat our Nation--and our world--faces. 
But it's not. As the weeks and months pass, a steady stream of reports 
from scientists continues to document the current and potential impacts 
of climate change, including loss of Arctic sea ice, retreat of 
glaciers and record temperatures.
    While we do nothing about this problem in Congress, others are 
acting: California has passed legislation to cut carbon dioxide 
emissions 25 percent by 2020. Seven Northeastern and Mid-Atlantic 
states including New Jersey participate in the Regional Greenhouse Gas 
Initiative which aims to reduce carbon dioxide emissions from 
powerplants by 10 percent by 2020. Nearly 300 mayors who represent 
almost 50 million people have signed the U.S. Mayors Climate Protection 
Agreement, which will help them meet Kyoto targets in their own cities.
    On this issue of climate change, we need action. Scientists want 
it. And the people want it. Instead of leading, I fear Congress will 
only follow_follow the oil industry, the auto industry and other 
opponents of real action, down a path of environmental destruction. 
When I think about the environment, I think of my grandchildren, and my 
desire to leave them a cleaner, safer, healthier world. I hope we all 
will think of our own children and grandchildren. And I hope this 
committee and this Congress will give them a world that is on the rise, 
not in decline. Thank you Mr. Chairman.

    Senator Inhofe. Senator Boxer.

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

    Senator Boxer. Mr. Chairman, thank you very much for 
holding this hearing. Every day we learn more about the 
potentially catastrophic effects of climate change. We know the 
National Academies of Science for 11 nations, including the 
United States, Great Britain, and France, have stated that 
``there is strong evidence that global warming is occurring; 
that most of the warming in recent decades can be attributed to 
human activities, and that nations are justified in taking 
prompt action to address climate change.''
    NASA's lead climate scientist, Dr. Jim Hansen, has said we 
may be approaching a tipping point beyond which we can no 
longer avoid long-term changes that could constitute 
practically a different planet.
    Climate change could trigger a devastating rise in sea 
level, increase the spread of infectious disease, harm 
agriculture. In California, climate change could dramatically 
reduce the Sierra Nevada snowpack, decreasing our State's 
precious water supply. It could also increase our already 
serious air pollution problems, hurt our wine industry, and 
dramatically increase extreme heat waves that Senator 
Lautenberg talked about.
    The United States is the world's largest greenhouse gas 
emitter. We have a responsibility to act now by setting 
mandatory targets to reduce greenhouse gas emissions. The 
California legislature recently enacted AB 32. It sets a target 
of reducing greenhouse gas emissions to 1990 levels by 2020, a 
25 percent reduction. Senator Jeffords, bless his heart, S. 
3698, the Global Warming Pollution Reduction Act, shares the 
same goals as AB 32.
    These bills are responsible. They will lead our country in 
the right direction. They address a serious problem. But 
unfortunately, we don't see enough action here. You and I got 
into it the other day about this issue. I was hopeful we could 
come together. I am still hopeful we can come together. Today's 
hearing is a good start, but I want to make a point that here 
we have a situation with this agreement where there really are 
no real goals. There is nothing mandatory about it, and it is 
just not going to save us or help us, or resolve the problem.
    I would ask unanimous consent to place into the record two 
letters from my religious communities in California and 
religious communities all over the country, Mr. Chairman. May I 
do that? They are not long.
    Senator Inhofe. Without objection. And at the same time 
immediately following that, I ask unanimous consent that I 
enter into the record the four-page letter from the Interfaith 
Stewardship Alliance, which is approximately 200 it looks like 
groups, with opposing views.
    Without objection, so ordered.
    [The referenced documents follow on page 156.]
    Senator Boxer. Well, of course. And I would ask that I be 
given the minute it took you to say that, because I am running 
out of time.
    Senator Inhofe. I object.
    Senator Boxer. You object?
    [Laughter.]
    Senator Inhofe. No, I don't. Go ahead.
    Senator Boxer. Thanks.
    A Time For Bold and Immediate Action on Global Warming, an 
urgent appeal from religious leaders for mandatory limits on 
greenhouse gases is extraordinary. This is from every single 
religion you can think of is in this. They say we are clergy. 
We are religious leaders of many faith traditions from across 
the country. We are watching with alarm as the pace of climate 
change quickens, and our leaders do nothing in Washington.
    Concrete measures must be put in place. We appeal to you, 
they write, from a position of faith. Every major religious 
tradition calls on us to be stewards of creation. We have a 
responsibility, moral, to protect the Earth for our children 
and future generations. As religious leaders, we recommit 
ourselves today to do our part.
    On and on it goes, and I don't want to take up too much 
more time. That is the first letter. The second is from the 
Episcopal Church, the Evangelical Lutheran Church in America, 
Friends Committee on National Legislation, Maryknoll Office of 
Global Concern, Mennonite Central Committee, National Council 
of Churches of Christ, United Methodist General Board of Church 
and Society, Union of Reformed Judaism. This is the second 
letter.
    God has called each of us to protect the poor, the 
voiceless, and creation itself. Our faith traditions and 
denominational policies make clear that this call is a mandate 
requiring action.
    So, I am excited about this. I think the people are waking 
up to this, and they are way ahead of us. You know, I am sure 
they are pleased that we have this agreement that is going on. 
It is better than nothing, but at the end of the day, nothing 
could happen. Essentially the goal is so weak it doesn't move 
us forward. It doesn't take us where we have to go.
    So thank you for this hearing. I am very happy you are 
doing it, but we have more work to do.
    Senator Inhofe. Thank you, Senator Boxer.
    As we announced earlier, because of the changes, first of 
all, we changed it from 2:30 today to tomorrow, then back to 
today at 4 o'clock. We will dispense with any further opening 
statements of members who are not here right now.
    At this time, we will recognize Jim Connaughton.

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

    Mr. Connaughton. Thank you, Mr. Chairman and members of the 
committee. It is a pleasure to be here today to testify about 
the Asia Pacific Partnership on Clean Development and Climate.
    I think to put this in its context, this is the heart of 
the portfolio strategies in which we are all interested. It is 
not the solution all standing alone, but I would submit that it 
is a very consequential one and hopefully it is one, 
notwithstanding differences of opinion on some of these issues 
else-wise, this is one I hope we can all agree on. It is a very 
important tool in the broader tool kit we need to address a 
basket of issues.
    The partnership was launched in January 2006 by President 
Bush and the leaders of Australia, China, India, Japan and 
South Korea. This initiative establishes an innovative public-
private collaboration for addressing what the world leaders now 
agree are interconnected challenges of assuring economic growth 
and development, eradicating poverty, addressing energy 
security, reducing pollution, and mitigating climate change.
    We can't work on one without considering the other. They 
come together. The partnership's six members are consequential 
because they represent about half of the world's economy, 
population and energy use now and into the future. Together, 
they produce about 65 percent of the world's coal, 61 percent 
of its cement, 40 percent of its net electricity generation, 48 
percent of its steel, and 35 percent of its aluminum.
    The partner countries are also responsible for significant 
amounts of air pollution, and around 50 percent of the world's 
carbon dioxide emissions from fossil fuels. The partnership is 
working initially in eight major sectors that matter to these 
issues in order to share technologies and practices, open up 
markets, and reduce barriers to markets, significantly increase 
the profitable investment in the best of today's technologies, 
and accelerate the development and use of promising new ones.
    The initial areas of focus are straightforward: No. 1, 
cleaner and lower carbon emission fossil power technology; No. 
2, renewable and distributed energy systems; No. 3, power 
generation and transmission efficiency; No. 4, steel; No. 5, 
aluminum; No. 6, cement; No. 7, coal mining; and No. 8, very 
importantly, buildings and appliances.
    Mr. Chairman, I would like to thank you and members of this 
committee and the Senate for your broad bipartisan support for 
the Asia Pacific Partnership. The partnership is a key means of 
implementing the strong bipartisan Senate amendment that became 
Title XVI of the Energy Policy Act of 2005. The partnership is 
also consistent with the clean energy technology exports 
initiative that was discussed in the fiscal year 2001 Senate 
Energy and Water Development Appropriations bill.
    Many aspects of the CETA initiative are now found in the 
Energy Policy Act of 2005 and are being implemented through the 
partnership.
    The partnership is a team effort. To that end, it requires 
a team budget to administer. Reflecting the philosophy of the 
partnership in taking an integrated approach to these 
challenges, funding its implementation is necessarily spread 
over four agencies. We need the help of the Department of 
State, the Department of Energy, the Environmental Protection 
Agency, and the Department of Commerce.
    I look forward to using this opportunity today to discuss 
the benefits of the partnership and the urgent need for 
Congress to support the President's $52 million budget request, 
which we expect will help leverage billions of dollars in both 
public and private investment in a more secure, more efficient, 
cleaner and lower greenhouse gas energy future.
    A few aspects of the partnership, just to give you a flavor 
that I hope will inspire some good questions. We are placing a 
strong emphasis on identifying opportunities for what I call 
mass producible outcomes that are using tried and true 
technologies and practices. So rather than the more 
conventional approach of taking a large sum of taxpayer money 
and building one project, we want to use the power of the 
networks we will create among the private sector partners, the 
government officials, as well as the financiers, to leverage 
some of these market-opening opportunities.
    Let me give you one example, and I have dozens more, but 
let me give you one. Recently China entered into agreement with 
Caterpillar to purchase $58 million of methane capture 
equipment for use at China's largest coal mine. Now, why is 
that an important agreement? Well, methane gases are released 
into the atmosphere from mining operations. It is the gas that 
actually kills miners when it is not managed appropriately. It 
is a very strong contributor to ozone, and it is also a 
greenhouse gas that is 20 times more potent than 
CO2.
    As it happens, when you capture it, you can convert it into 
a clean-burning energy source at a profit. It is just that we 
don't do it very much. We know we can do it. It is just not 
done very much. What we have been able to do in America through 
a program that the EPA has been implementing is install methane 
capture equipment on 20 what we call gassy coal mines. As a 
result, we are improving mine safety, cutting an air pollutant, 
cutting a greenhouse gas, and delivering a clean energy source.
    Well, this same philosophy we are taking to the 
international sphere. So with this new deal between China's 
largest coal company and Caterpillar, they are going to produce 
120 megawatts of power from the mine. This is methane that 
otherwise would have gone into the atmosphere. This will save 
the carbon equivalent of about 4.5 million tons of carbon 
dioxide. To put that in perspective, the Kyoto Protocol would 
seek to achieve about a 500 million-ton reduction. So just with 
one $58 million deal, we will get 1 percent of what the Kyoto 
is expecting to achieve at a profit in a way that contribute to 
economic growth and human development.
    Now, the potential for doing more of this in America is 
quite strong. We have several dozen more, maybe more than that, 
in America. In China, there are perhaps 100 opportunities to 
replicate the same kind of arrangement. Once we do it right 
once, we can do it again and again and again. So that just 
gives you one flavor of what we are trying to achieve. My 
testimony lists a number of additional examples.
    I look forward to talking to you about this because again, 
notwithstanding differences in the climate sphere, the 
development sphere, what is happening on air pollution, this is 
the core of something we can all work together on and achieve 
real results.
    Thank you very much.
    Senator Inhofe. Thank you very much, Mr. Connaughton.
    I am going to give you the opportunity to go ahead and 
expand a little bit on that. The Caterpillar story is 
fascinating, and you said the potential for others are very 
good, but you didn't have time. Do you want to take a little 
time and talk about some of the potential that other companies 
or other industries out there have?
    Mr. Connaughton. Sure. Let me look to aluminum. In America, 
the aluminum sector has initiated a very aggressive program on 
eliminating what are called PFCs, perfluorocarbons. These are 
substances that actually are a thousand times more potent than 
CO2 in contributing to the greenhouse gas effect. 
Our domestic sector, in a partnership with EPA over the last 
several years, has made a commitment to reduce, and they are on 
their way to eliminating PFCs in aluminum manufacturing.
    As it happens, having made the commitment, they figured out 
that it is a money-saver. It is one of those until you go 
looking, you don't find, and it is a money-saver. Now, with 
that experience, we can take that to each of the other partner 
countries. China, currently their aluminum production is going 
through the roof. The same is true, there is an expanding 
aluminum sector in India.
    This is an opportunity as they invest in their new 
facilities, and as they try to make the old ones more 
efficient, we can take those skills, the financing 
arrangements, take them into those marketplaces and try to get 
many more deals cut to make that same result.
    Senator Inhofe. That is good, Mr. Connaughton. That is a 
good example.
    Now, in the written testimony that was submitted by Mr. 
Lomborg, who is going to be on the next panel, suggests every 
nation committing 0.05 percent of GDP on research and 
development of non-emitting technologies. I would like to ask 
you, what is the United States already spending and how does it 
compare to the amount being spent by other countries?
    Mr. Connaughton. In climate science and technology, our 
budget is in the vicinity of $5 billion to $6 billion a year.
    Senator Inhofe. Now, how does that equate, then, to other 
countries?
    Mr. Connaughton. We spend more on climate science and 
technology than any other country, more than many of them 
combined. I don't have the precise figure on the world total.
    Senator Inhofe. All right. I had heard that it was more 
than all other countries combined, but that is a good enough 
answer.
    In your testimony, you talk about leveraged outcomes with 
the governments doing what they do best and the private sector 
doing what it does best. To me, leveraging means getting a lot 
more bang for the buck. Is that accurate? And what exactly 
would be the result of leveraging? And how does this differ 
from financial aid programs?
    Mr. Connaughton. Leveraging is trying to use the offices of 
the government to connect people with technologies, practices, 
financing arrangements, and then also using the power of 
government to remove barriers. So for example, each of the Asia 
Pacific countries currently imposes tariffs on each other in 
terms of energy efficiency equipment and environmental 
technologies, goods and services. That is senseless. They 
impose about the same level of tariff on each other. If we 
remove those tariffs, we would be able to increase and open 
market access to those technologies. By the way, California is 
one of the world's leaders in these technologies. We would be 
able to open up billions of dollars worth of access into these 
markets that is currently precluded just because of a tariff 
barrier. We are trying to move beyond that.
    So there is an example of leveraging. The other one is 
there are still many ways to reduce air pollution, improve 
energy efficiency and cut greenhouse gases at a significant 
profit. The more we can bring education to those opportunities, 
those opportunities are replicable fast. It is only when we 
want to try to impose a net cost that people begin to get 
skittish.
    So one of the avenues of leverage is to show to India some 
of the most efficient practices we have been able to enjoy here 
in America, for example, in coal power generation. And then 
apply that as India begins to reinvest in this infrastructure.
    Senator Inhofe. Mr. Connaughton, I think it was Senator 
Bond who said in his opening statement, he talked about what 
was passed unanimously 96 to nothing here in terms, it was 
worded this way, we would not accept anything that developing 
countries would have to share the responsibility with developed 
countries.
    Now, do you have anything since that that would give you 
reasonably that China and India are ready to accept carbon 
targets?
    Mr. Connaughton. There is no question that China and India 
are not ready to accept carbon targets. I think the G-8 leaders 
at the Gleneagles Summit, where President Bush worked 
cooperatively with Tony Blair. You know, they recognized that 
countries like China and India have some very fundamental 
priorities, because they were our priorities not too long ago. 
Energy security is paramount and access to affordable energy.
    Currently in China, their air pollution is at a higher 
level today than America was at its height, and China only has 
one sixth of America's economy. So they have very real 
challenges that are right in front of them. Now, as it happens, 
we can work with them on those high domestic priorities, and 
add the greenhouse gas mitigation piece to that conversation, 
and they are very welcoming of it.
    But I also indicate they, like us, are not shy of mandates 
where they are appropriate. Their new 5 year plan actually 
mandates a reduction in air pollution of 10 percent, and then 
when it comes to efficiency, and then the related benefits of 
greenhouse gases, they are pursuing an approach similar to 
ours. It is an efficiency goal based, calibrated to their 
economic growth, but it is a strong goal. It is a 20 percent 
efficiency objective by 2010. That is a big step for them for 
the first time.
    Senator Inhofe. All right. Thank you, Mr. Connaughton. My 
time has expired. We are going to try to adhere to our time 
limitations due to the late hour starting this.
    I do have a letter from the Republic of Korea's Ambassador 
to the United States stating support for the Asia Pacific 
Partnership. Without objection, that will be made a part of the 
record.
    [The referenced document was not available at time of 
print.]
    Senator Inhofe. Senator Jeffords.
    Senator Jeffords. Mr. Connaughton, in 1990, Congress 
enacted the Global Change Research Act. Under that act, the 
climate change science program is to prepare every 4 years a 
comprehensive scientific assessment of its national global 
change research, commonly called the national assessment. The 
Administration missed its 2004 deadline and the GAO has found 
that the Administration attempt to substitute 21 smaller 
reports does not meet the requirements of the law. When will we 
see the new national assessment that meets the requirements of 
the law?
    Mr. Connaughton. The 21 assessment products you referred 
to, Senator, are the combined work by which we will not only 
meet the requirements of the law, but we are actually engaging 
in a number of activities that go beyond that. That was the 
product of a massive international collaboration among 
scientists as we set out our 10 year climate research plan so 
we could begin to organize the priorities better and were 
consistent with the advice we obtained from the National 
Academy of Sciences.
    So it is our expectation that by coming up with, and the 
scientists gave a very strong indication of the key synthesis 
and assessment products we needed. We are now going to do 
those, but we will do those in real time, and the schedule we 
have is actually on a 4-year schedule to product that series of 
documents.
    So we look forward to sharing that with you, walking you 
through how that lines up with the requirements of the 1990 
act. We hope that you will be as eager as we are for these 
products, the first one of which was the temperature change 
report which was an outstanding piece of work. I would commend 
it to you if you haven't read it yet, that helped us 
understand. We have narrowed some of the uncertainties on 
temperature trends, and that was a very important document to 
get out. It is good to get it out now, rather than wait for 4 
years. It was ready. A few others will take a little bit more 
time, but we will get them out in as timely a fashion as we 
can.
    Senator Jeffords. I sent you a letter earlier this month 
asking questions about the Asia Pacific Partnership and other 
climate change issues. I understand you have promised staff 
that you would come prepared to answer the questions posed in 
that letter here. One question that I asked of you, and that I 
will repeat now, is: How much of the $52 million budgeted by 
the Administration for the partnership will be spent on actual 
technology transfer?
    Mr. Connaughton. First, let me say I did get a chance to 
read all the questions yesterday in preparing for this session, 
so I appreciate them. Actually, they indicate a lot of very 
good thought by your staffs, who are really capturing the 
various dimensions of the partnership. I look forward to 
providing you written responses to all the questions.
    On that particular question, actually, I guess the bulk of 
it is going to be spent on sharing technologies and practices 
and diffusion of technology. For example, there are Energy 
Department experts working with some of the experts from the 
utility sector that are going to be able to go into a session 
with their counterparts in China, India and Japan and actually 
put on the table the various technologies they are now 
evaluating for use and installation at their own facilities. It 
is through that kind of an exchange that we are going to 
actually broaden the market understanding of some of these 
efficiency opportunities.
    What it will not be doing is this is not like an aid 
program. So we are not going to take $5 million out of the $52 
million and build a project someplace. The goal is each country 
is setting national objectives, and the goal is how do we use 
this money to leverage the awareness of the best opportunities 
for efficiency gains, pollution reductions and greenhouse gas 
reductions. So that is how this will be used.
    It is very different than, for example, building the $1 
billion FutureGen plant. By the way, China, India, and South 
Korea are contributing tens of millions of dollars to that 
effort. So actually we are getting money into the partnership 
from our partners. It is not a question of our giving money to 
them.
    Senator Jeffords. Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Jeffords.
    Senator Murkowski.
    Senator Murkowski. Thank you.
    Mr. Connaughton, following up on Senator Jeffords' question 
about the $52 million proposed by the President, I understand 
in looking at your testimony here that the government of 
Australia is going to contribute about $75 million to the 
partnership over 5 years, and you state that discussions are 
underway regarding financial support from other partners. What 
is the current situation, then, with say South Korea and Japan 
in terms of funding participation?
    Mr. Connaughton. Actually, I think the figure for Australia 
is $100 million, unless they started to pull back on it. So 
that is $20 million a year. We have been able to already 
identify some of the areas of work we are ready to commit to 
these networking arrangements we talked about. Japan has a 
different structure for how they deal with financing. A lot of 
this work is going to occur through their JBED, their Japan 
Investment Corporation that does a lot of this kind of work, 
this technology transfer work.
    And so exactly how they structure it is what they are 
working on. The task forces have just submitted their work 
plans that are going to be consolidated and reviewed in a month 
in Seoul. Once those work plans are in place, I think we will 
get a clearer indication of the level of investment that will 
be coming from each of the other countries. Australia and the 
United States thought it was important that we front-load the 
conversation to show what we wanted to achieve. The other 
partners I think, when we agree on a work plan, the partners 
are agreeing to fund the work, and so we will be able to give 
you a better sense of that after the work plans are approved.
    Senator Murkowski. So the fact that we don't have dollars 
identified or an amount of funding identified from these 
countries doesn't indicate any lack of commitment to the 
partnership in proceeding?
    Mr. Connaughton. No. In fact, I would note to the contrary 
that if commitment is measured in rank, the level of rank of 
official that is spending time on these meetings, pushing the 
public-private conversations, is unprecedented in my experience 
in government. I met with the Vice Premier of China. I was just 
meeting with the head of the National Development Reform 
Commission. These are individuals who typically do not 
participate in the climate change discussions. These are 
individuals who typically are not out working one on one with 
EPA on air pollution programs.
    So I think if you want the best indicator of commitment, it 
is that indicator. It is the high-level engagement of the 
highest levels of these governments.
    Senator Murkowski. That is good to hear. You keep using the 
term ``leveraging'' and how we are going to leverage the 
government dollars; how we are going to just leverage this 
partnership and the relationship. I have been visited by some 
constituents, several in just this past week that we have been 
back, each one of them looking for whatever money they can find 
for their renewable energy projects. A couple of them are in 
geothermal. One of them is wind, but certainly things that we 
want to be supporting as we look to finding some alternatives.
    Our reality is that the dollars are just tough to find when 
we are looking to bring on this new technology, particularly 
when the projects are smaller projects. You just don't have the 
economies of scale. We were talking about how we build a level 
of interest so that we get more private financing dollars to 
the technology that we are going to need to really make a 
difference, whether it is in addressing the issues in Alaska or 
whether it is addressing the issues that you all are faced with 
in the partnership.
    I know that after the Energy Act of 2005, we had a great 
deal of interest with private dollars looking to invest in 
ethanol ventures. How do we get that same level of excitement 
and enthusiasm in some of this other technology that we have to 
get moving forward? How do we leverage that? How do we find it?
    Mr. Connaughton. Two aspects of that. One is on the large-
scale research is a leveraging question among governments. 
FutureGen is the best example of that. Now, it is about a $1 
billion research effort. It is a big, complicated project to 
try to figure out how to get zero-emission coal. We leveraged 
that because there is a private side to it for, I forget, I 
think it is half-and-half. There is a private side and a 
government side.
    What we are getting is a number of governments are 
contributing to the government pot, and then the private sector 
entities. So for example, our major utilities are all 
contributing significant portions, plus our technology vendors, 
to the base-build for this plant. China, one of their largest 
utilities, the Wanan Group, has just committed to join the 
private sector side of this discussion, and I think South Korea 
has as well.
    They will then share in the intellectual property that is 
generated by this project. So whoever puts money in will share 
the benefits of the technologies coming out. That is very 
powerful, because now they have an incentive because they will 
actually own the economics of success. So that is how we deal 
with the research side.
    On the non-research side, it has been exciting for me, and 
I know it has been exciting for all the members on this panel, 
because I see reports out of all of your States. The level of 
private sector capitalization toward green technologies is 
growing at an exponential rate, whether it is Goldman Sachs' $3 
billion fund; the Carlyle Group is raising a major fund. The 
amount of money being raised in green energy now is 
accelerating at the rate we saw on IT back in the 1990's.
    So there is a lot of capital now looking for the highest 
yield outcomes. We can introduce those sectors through the 
partnership and other mechanisms to, again, a vast pool of 
investment opportunity, not the least of which is something 
like methane. Even more simply, we are trying to create new 
policy design here, and with our partner countries, so the 
private sector itself will invest on its own in energy 
efficiency.
    So for example, at Federal facilities, we have an energy 
management plan where under new authority from Congress, the 
private sector will pay to install efficiency equipment at 
government facilities. We will share the savings with the 
investors, so the taxpayer saves money and then the private 
sector people make a reasonable rate of return, and we never 
have to get an appropriation.
    Senator Inhofe. Thank you, Mr. Connaughton.
    Thank you, Senator Murkowski.
    Senator Lautenberg.
    Senator Lautenberg. Mr. Chairman, thank you.
    Senator Inhofe. Excuse me. I am sorry.
    Senator Carper? I apologize. Senator Carper.
    Senator Lautenberg. I thought I had gotten a promotion.
    [Laughter.]
    Senator Carper. Thanks, Mr. Chairman.
    Mr. Connaughton, I am going to ask you to respond to my 
questions briefly, if you would. One of the goals of the 
partnership you have been describing, as I understand it, is to 
encourage the use of higher energy-efficient appliances. This 
year, as you know, the Department of Energy's SEER 13 standard 
for air conditioners went into effect. The SEER 13 standard 
will alleviate, I am told, the need for building maybe as many 
50 fewer powerplants by the year 2020 in this country. For 
reasons I don't understand, the Bush administration actually 
tried to weaken that standard, and instead of having a SEER 13, 
to have a SEER 10 standard. Fortunately, the courts went the 
other way and the Administration decided not to fight the court 
ruling.
    Let me just ask, what kind of efficiency goals for 
appliances is the Administration trying to develop within the 
Asia Pacific Partnership? Again, I would ask you to be brief.
    Mr. Connaughton. On the energy efficiency standards, 
actually we are pleased to push for the legislative standards 
that were set in EPAC 2005, and we are moving forward with the 
schedule to implement all of those. So to the extent there were 
issues around the SEER standard, those have been overtaken by 
legislation, and we are strongly pushing to achieve those. The 
one issue that always comes into play as it applies to 
efficiency standards is----
    Senator Carper. My question, OK. My question was, what kind 
of efficiency goals for appliances are you trying to develop 
within the Asia Pacific Partnership? That is my question.
    Mr. Connaughton. We will then be sharing each of our 
countries' current portfolio of energy efficiency standards and 
seeing what we can do to, again, get all of this to a new place 
on those. At the same time, we are pushing to make the Energy 
Star program, which is energy efficiency labeling, we are 
trying to make that international. That program alone has been 
responsible in 2005 for 35 million metric tons of carbon-
equivalent reductions. That is savings of a pretty big sum. We 
think it will be $12 billion that would double in 10 years. So 
these are great opportunities, strongly support them.
    Senator Carper. OK, good. And now, to give you a chance to 
answer the question you started to answer, I think, and that is 
now that the Administration appears to realize the kind of 
benefits of energy efficiency and is pushing for those higher 
standards that you just alluded to for some other countries, 
what kind of new efficiency standards can we look for within 
our own country and the kind of appliances? You were just 
starting to say that, and I will ask you to go ahead and 
address that. Again, briefly.
    Mr. Connaughton. The Department of Energy has a schedule 
for that. Some were set by statute for the numbers pick. Others 
were set for them to develop. The piece I wanted to highlight 
that is important to understand is in some of these areas, you 
can pick the most efficient, but if it is a lot more costly, 
then nobody buys it and therefore you don't get the efficiency 
and environmental outcome you are looking for. Often it is the 
second-best that has the broadest uptake. So when we do the 
math on this, we are trying to produce the biggest efficiency 
outcome in terms of real purchases, rather than theoretical 
purchases.
    It is like computers. You sell a lot of the second-best 
computer because the leading one is really expensive. And that 
is what happens. Efficiency standards then go up on that kind 
of a ladder. So that is at the heart of the disagreement over 
whether it is 15 or 14. It has to do with what will get the 
broadest purchase.
    Senator Carper. OK, thanks. Thanks very much. As an aside 
to my colleagues, we bought our house about 20 years ago and 
did a lot of work on it. One of the things we did was we bought 
a new air conditioning unit for our central air. Earlier this 
year we replaced it. We replaced it with a SEER 18. I got my 
electric bill last month, this is for the months of July and 
August. It was $157, roughly half of what the electricity bill 
had been in the summer before.
    I think before we had like maybe a SEER 8 or SEER 10 from 
20 years ago, but it was really remarkable the kind of 
reduction we have seen in our electric bill.
    My third question, Mr. Connaughton, is, I understand today 
CBO has stated that they believe that technology development 
needs to be done alongside a carbon cap. I just learned this, 
and that may be breaking news to you. Last year, the EPA 
concluded in response to our request that they model the 
Administration's proposal, the Jeffords proposal and our 
bipartisan proposal, and the EPA concluded a carbon cap like 
the one that was offered in the legislation that you and I have 
discussed, would cost basically about $1 per ton, and it would 
not cause a significant surge in electricity costs.
    I just wanted to ask here today if you had a chance to look 
at that, and if so, if you agree with the EPA's conclusions 
with regard to $1 a ton for carbon. You may recall, a lot of 
that is out of sector and would look to reductions through a 
lot of our agriculture sector as well.
    Mr. Connaughton. I have not seen that report. I just saw a 
very short news item on it.
    Senator Carper. It is a good one. It is one worth reading.
    Mr. Connaughton. As I underlined first and foremost, there 
is a lot of CO2 reductions that can come at a 
profit. So a lot of this talk about cost-per-ton, there is a 
lot that can come at a profit. The policy design is what 
matters. As ever with the carbon mandate, one of the core 
questions is are you overheating the mandate such that you are 
merely moving the pollution to another location. So you have to 
calibrate against that.
    The other one is the issue of design that is based on 
offsets and an assumption of a lot of offsets. By the way, 
offsets are good in terms of carbon reduction. Offsets are bad 
in terms of technology development. For example, when we did 
the SO2 program, we didn't do offsets because we 
wanted to advance SO2 capture and control 
technology. So SO2 is limited to the sector.
    If you then allow for offsets, it is always going to be 
cheaper to go do it someplace else and not advance the 
technology. So it is all in policy design. I have to confess I 
am not fully up to date on all the aspects of where your bill 
currently resides, but it is an important part of the ongoing 
conversation. I think the work that Senator Domenici did, which 
had to do with variance on what you were doing. I think there 
is a lot of good thought into addressing these unintended 
consequences, and that is a worthwhile conversation to 
continue.
    Senator Carper. Thank you.
    Thanks, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Carper.
    Senator Lautenberg.
    Senator Lautenberg. Thank you very much, Mr. Chairman.
    Mr. Connaughton, recent studies have shown the accelerated 
melting of glaciers. We know that these glaciers in most 
instances are the reservoir for fresh water to be distributed 
throughout the atmosphere and irrigation for crops for millions 
of people. Is this global warming as the Administration sees it 
a potential threat to national security, as well as a 
humanitarian crisis?
    Mr. Connaughton. There is no question that the current 
temperature change projections show a projection upward, so 
increased surface warming. That potentially has many different 
effects depending on how much the temperature goes up. So there 
is a lot of discussion of that.
    To the extent there are vulnerabilities such as on 
shorelines, the most interesting science as I understand it 
right now is the science on glacier melting. There are good 
reasons to consider how we deal with community exposure to the 
rising sea level that are related not just to long-term 
projections of climate, but the very real threats they face 
today with typhoons and tsunamis and hurricanes. So there is a 
lot of work we can do that is clearly justifiable.
    Senator Lautenberg. Is it a threat to national security, 
Mr. Connaughton?
    Mr. Connaughton. I wouldn't be equipped to offer a judgment 
on that.
    Senator Lautenberg. Really?
    Mr. Connaughton. Yes.
    Senator Lautenberg. So you don't think a diminution of 
fresh water stored in Antarctica matters an awful lot in terms 
of how we conduct life in the future?
    Mr. Connaughton. When you look at the projections of water 
supply in America and our sources of water, I am not aware of a 
connection between what is occurring in Antarctica and what is 
occurring in the States. There are projections of increased 
drought in some areas of the country with long-term temperature 
trends and there are also some projections of increased 
rainfall. So that is what our science program is trying to 
better understand so we can better plan for those effects.
    Senator Lautenberg. Yes, OK. We don't have enough time for 
very long responses.
    NOAA studies show that global warming is making our oceans 
more acidic. A change in the chemistry of our oceans could harm 
coral and plankton fish and could place a large part of the 
ocean food chains at risk. Is that something that concerns you 
and the Administration? Or is that just casual evidence of 
nothing really important?
    Mr. Connaughton. Yes, it is something that concerns us.
    Senator Lautenberg. So are there any plans to address this 
particular threat, to change what we see happening on a regular 
basis?
    Mr. Connaughton. The first element of addressing that is 
engaging in the research that the National Academy told us to 
do is to understand these phenomenon in the oceans, because it 
is one of the least well-developed areas of research. I know, 
Senator, you have strongly supported that line. As we gain 
information from that, we have to pursue management strategies 
and then it is also one of the reasons that justifies the quite 
substantial investment being made on the public side and on the 
private side to slowing the growth of greenhouse gases on its 
way to stopping it, and then reversing it.
    Senator Lautenberg. I think I may have asked you this 
before. There was a study done for the Navy by a contractor on 
what the Navy's needs might be in the last half of this 
century, the later half. The one warning about flooding and 
people trying to get here from lands that are virtually now 
underwater in many places, including Holland and Bangladesh and 
across the world, and the Navy is trying to prepare itself to 
deal with that kind of a situation, to keep those people 
seeking higher land off our shores.
    So it said something that is really ominous there. We still 
don't want to resort to mandating changes in emissions and 
things of that nature, and we are going to wait until science 
catches up with us. When do we run out of time, Mr. 
Connaughton? Aren't there long-term threats that are going to 
impair life as we know it in the not too distant future?
    Mr. Connaughton. The Navy set of studies you are talking 
about are in the same category of the studies they do on 
contingency planning for any of the host of risks. They spin 
out scenarios. They are hypothetical scenarios. It is very 
important planning, you know, whether it is for tsunamis or for 
long-term climate change. So it is important work. It is not a 
scientific outcome. It is scenario planning, a hypothetical 
discussion. Very important.
    In terms of how far how fast, the nations as a whole of the 
world right now, if you look at the portfolio of their 
strategies, we are making about the same rate of progress, as I 
have outlined in my written testimony. So if you leave aside 
some of the grand commitments and some of the dissension over 
how far how fast, when you look at what is actually occurring, 
we are improving our greenhouse gas intensity. Europe is 
improving its greenhouse gas intensity and China and the rest 
of Asia are improving their greenhouse gas intensity. And we 
are doing it about in the same ballpark of speed.
    So as a collective judgment, if you look at what actually 
is happening, we are making good progress. It is reasonably 
ambitious, but it still assures for continued human welfare, 
and those are the issues we have to constantly try to balance.
    Senator Inhofe. Thank you, Mr. Connaughton.
    Senator Boxer.
    Senator Boxer. Thanks so much, Mr. Chairman.
    Sir, where do you think we ought to be in America by 2020 
vis-a-vis what percent reduction are you looking for in 
greenhouse emissions in America by 2020?
    Mr. Connaughton. We have not set a target for 2020.
    Senator Boxer. What about 2050?
    Mr. Connaughton. We have set a target for 2012.
    Senator Boxer. Well, what is that?
    Mr. Connaughton. It is an 18 percent improvement in 
greenhouse gas intensity, and we are currently, and my written 
testimony outlines it, we are currently on-track to meeting 
that goal, which I would note is a goal that exceeded what the 
EIA said we could achieve.
    Senator Boxer. I am not asking you. I am just trying to get 
somewhere here. So for 2012, you want to see an 18 percent 
reduction in the percent that we are emitting?
    Mr. Connaughton. No. It is an 18 percent improvement in 
greenhouse gas intensity.
    Senator Boxer. I don't know what that means, sir. So you 
don't have any goal as far as where you want to take it.
    Mr. Connaughton. No, that would be incorrect, Senator.
    Senator Boxer. Yes, OK. That is important, because that is 
why I think----
    Mr. Connaughton. That would be incorrect. That would be 
incorrect, I was saying, Senator. We have a goal. The President 
set a national goal.
    Senator Boxer. You have goal for 2020 as to where we would 
be in 2020, because, for example, in California and in our bill 
here, we are saying we want to see a 25 percent reduction and 
get us back to 1990 levels. What level do you think we ought to 
be at by 2020? You don't have a goal.
    Mr. Connaughton. Senator, when we set our goal in 2002----
    Senator Boxer. Do you have a goal for 2020 as to how much 
you want to cut? If you want to be back to 1990 levels, 1994 
levels, you don't have a goal. And you don't have a goal for 
2050. Now, you have a lot of tools in your tool chest, quoting 
you. We have a lot of tools in our tool chest. What are your 
best tools in your tool chest?
    Mr. Connaughton. Actually, as all the leaders of the world 
has recognized, Senator, there is no silver bullet in making 
meaningful progress on greenhouse gases, nor on energy security 
nor on pollution.
    Senator Boxer. You said, I have a lot of tools in my tool 
chest. I am asking you, what is your biggest tool in your tool 
chest.
    Mr. Connaughton. I will give you a few.
    Senator Boxer. Good.
    Mr. Connaughton. The $11.5 billion in tax credits and 
incentives in EPAC for 2005 that you did not support in voting 
against that bill, that is a huge opportunity. A billion of 
that will go to the purchase of highly fuel-efficient vehicles. 
Several billion will go toward cleaner, more efficient energy 
systems for home use.
    Senator Boxer. OK, let me set the record straight. I have 
led the fight, along with several of my colleagues on both 
sides of the aisle, for fuel-efficient vehicles and for tax 
credits for purchase of same. I don't believe in taxpayer 
dollars being wasted if there is no firm set goal.
    Now, decreased intensity can still result in increased 
total emissions. Is that not fact?
    Mr. Connaughton. As the first step, yes. Around the world, 
greenhouse gases will continue to increase. The goal is to do 
so at a much slower rate. So for example, our economy grew 4.2 
percent last year, while greenhouse gases only went up 1.3 
percent.
    Senator Boxer. So you want to increase greenhouse gases, 
but at a lower rate of increase.
    Mr. Connaughton. That is the first step.
    Senator Boxer. And Senator Jeffords in his great bill is 
basically saying we want to deal with this and we want to 
reduce. I just have to say, with your plan, we are headed for a 
crisis. I mean, you know it is like saying to my children, if 
they are doing five bad things, do them a little less bad. You 
can do the five bad things, but do them a little less bad. You 
are staying up 3 hours after curfew; stay up 2 hours after.
    Mr. Connaughton. Senator, that is the same approach we took 
with air pollution. We slowed the growth of air pollution 
first, then we stopped it and then we reversed it.
    Senator Boxer. I have a minute. I am sure you are thrilled. 
Here is the deal. We did send you this letter. You did offer to 
answer it. We are very grateful. I want to explain why we sent 
this letter. It was signed by Senator Lautenberg, Senator 
Lieberman, myself and Senator Jeffords took the lead in getting 
us to sign it.
    We asked a number of questions, one of which is, please 
detail by actual spending by agency and program what you claim 
you are spending on climate change, which as you said, $29 
billion between 2001 and 2006, and you also indicated 2007, 
$6.5 billion has been budgeted. Please provide a breakdown of 
actual spending for fiscal year 2005 for climate change-related 
activities.
    So you are going to get this in writing, sir?
    Mr. Connaughton. Senator, you already have that.
    Senator Boxer. Oh, I guess my staff has not received it.
    Mr. Connaughton. It is called Our Changing Planet. It is 
the annual report to Congress that we have to submit every year 
with the budget.
    Senator Boxer. Well, let me tell you what the GAO said 
about that, and I don't know whether you know it.
    Mr. Connaughton. On that one, you have the bulk of that 
information.
    Senator Boxer. OK. But the GAO has criticized the way you 
present the information, that it is very unclear. So what I am 
saying is we don't want to go through one of your reports. We 
want you, at our request, to answer us in very clear terms.
    Well, Mr. Chairman, I am on the one hand very pleased you 
are having the hearing because you before were sort of hostile 
to having any hearings on this. On the other hand, I have to 
say what I am hearing is very, very, very discouraging. I am a 
very optimistic person. I look at the problems of the world and 
I want to fix them.
    At the rate you are going, you are not fixing them. You are 
just talking. But if you are telling me you are so proud you 
are going to have decreased intensity and then you admit that 
it can result in higher emissions, we are just going nowhere 
fast. So I am hopeful we can do better than this.
    Thank you.
    Senator Inhofe. Thank you, Senator Boxer. Let me correct 
the record, though, because I have never objected to having 
hearings. In fact, ever since the 96 to nothing vote, I have 
said that I wanted to have hearings on this partnership 
alliance.
    Senator Boxer. OK, let me correct it. That is a fact and I 
apologize. You have never admitted that there is global 
warming.
    Senator Inhofe. That is exactly right.
    Senator Boxer. Yes.
    [Laughter.]
    Senator Inhofe. I have said that climate is increasing. 
However, there is a division in the science behind it as to 
whether or not anthropogenic gases is causing that change.
    I thank the panel very much. Jim, thank you for coming 
down.
    We would like to invite our second panel to take their 
places.
    Mr. Connaughton. Thank you, Mr. Chairman.
    Senator Inhofe. Our second panel will be Bjorn Lomborg, 
Adjunct Professor, Copenhagen Consensus Center, Copenhagen 
Business School. I would say you are probably a little bit 
tired right now. Let me say to my second panel that this time 
has been changed because we understand there was a problem in 
your getting here, and we appreciate it. You are probably 
pretty tired now, but you can handle it.
    We also have David Doniger, policy director, Climate Center 
for the Natural Resources Defense Council; and Calvin Beisner, 
Dr. Beisner is the associate professor of Historical Theology 
and Social Ethics, Knox Theological Seminary, and spokesman for 
the Interfaith Stewardship Alliance, which I had put in as a 
part of the record.
    So we will start, and we are going to ask you folks, and I 
am sorry to do this, but your entire statement will be made 
part of the record, but if you would withhold your statement to 
about 5 minutes, we would appreciate it very much.
    We will start with you first, since you came the furthest, 
Dr. Lomborg.

   STATEMENT OF BJORN LOMBORG, ADJUNCT PROFESSOR, COPENHAGEN 
                        CONSENSUS CENTER

    Mr. Lomborg. Mr. Chairman, thank you very much. I apologize 
to the committee for being late, but you know what it is like 
flying these days. Thank you very much. I will be brief. I also 
have some slides up here.
    Global warming has become one of the most preeminent 
concerns of our time, and this often clouds our judgment and 
makes us suggest inefficient remedies. As a result, we risk 
losing sight of tackling the most important global issues 
first, as well as missing the best long-term approach to global 
warming.
    Yes, global warming is real, and it is caused mainly by 
carbon dioxide from fossil fuels. The total cost of global 
warming is $5 trillion to $8 trillion, which ought to make us 
think hard about how to address it.
    However, the best climate models show that immediate action 
will do little good. The Kyoto Protocol, which I have brought 
along, the first slide, will cut carbon emissions from 
industrialized countries by about 30 percent below what they 
would have been in 2010, and by 50 percent in 2050. Yet, even 
if everyone, including the United States, lived up to the 
protocol's rules and stuck to it throughout the rest of the 
century, the change would be almost immeasurable.
    Senator Inhofe. Now, let me interrupt you just for a moment 
here, not on your time, but this is the same chart that I used 
in my opening statement. So you are saying you are in agreement 
with this chart?
    Mr. Lomborg. Well, this is one of the elite offers from the 
U.N. climate panel. Everybody would say the Kyoto Protocol in 
and of itself will do very little good. Essentially, it will 
postpone global warming for about 6 years in 2100.
    Senator Inhofe. Thank you. You can continue.
    Mr. Lomborg. So the point here is to say that is fairly 
little, and likewise economic models tell us that the costs 
would be substantial, at least $150 billion a year. In 
comparison, the United Nations' estimate is half of that amount 
could permanently solve all of the world's major problems. It 
can ensure clean drinking water, sanitation, basic health care 
and education for every single person in the world now.
    And so, global warming will mainly harm developing 
countries because they are more exposed and poorer, and 
therefore more vulnerable to the effects of climate change. 
However, even the most pessimistic forecast from the U.N. 
projects that by 2100, the average person in the developing 
world will be richer than the average person in the developed 
countries now.
    So early action on global warming is basically a costly way 
of doing very little for much richer people far into the 
future. Therefore, I think one of the things we have to do is 
we need to ask ourselves if this should in fact be our first 
priority.
    If I could just show you the next slide. We have actually 
conducted two, sorry. That is what we have already talked 
about. So I will show you the next one. We actually ran two 
Copenhagen Consensus priority-setting roundtables with some of 
the world's top economists and the top U.N. Ambassadors. They 
similarly found that Kyoto comes far down the list of global 
priorities. As you can see, they actually told us, and this is 
from the top economists, including four Nobel laureates, 
looking at all the different things we can do in the world. 
What they told us was that Kyoto Protocol was actually a bad 
investment, simply because it costs more than it does good. 
Whereas, they told us there are many other things we can do in 
the world that would do much more, as I try to show here, such 
as prevent HIV-AIDS, micronutrient malnutrition, free trade and 
prevention of malaria.
    So it gives a sense of what it is that should be our top 
priorities. However, we still need to think about doing 
something about global warming. It doesn't mean doing nothing, 
but it does mean doing the clean, clever and competitive thing. 
Climate change should be addressed where effect is high and 
cost limited.
    Such an example is the Asia Pacific Partnership, which you 
have talked about here today, which focuses on energy 
efficiency and the fusion of advanced technologies and 
electricity transport in key industry sectors. Because it 
focuses on some of the century's biggest emitters, including 
China, India and the United States, it is forecast to reduce 
global emissions by 11 percent in 2050. For reference, the full 
Kyoto would only reduce emissions by 9 percent in 2050.
    In essence, the AP6 is picking up the smart, low-hanging 
fruit. Good examples would include the many Chinese coal plants 
that have heat rate deficiencies of around 25 percent, compared 
to U.S. coal plants which have efficiencies of 33 percent to 36 
percent. The United States has a lot of expertise in retrofits 
and improving the efficiency of coal plants in China would not 
only reduce fuel inputs and air pollution, but also carbon 
dioxide.
    The cost of the AP6, however, is unclear at the moment. It 
is seen as cheap and voluntary, but it is doubtful that 
entirely voluntary measures will achieve all of the AP6 
potential. And certainly, in the long run, more clever measures 
will be needed.
    For the future after 2012, we need not propose more Kyoto-
style immediate cuts, which would be prohibitively expensive, 
do little good, and cause many nations to abandon the entire 
process. We should rather, as I show in the next slide, be 
focusing on investments in making energy without carbon dioxide 
emissions viable for our descendants. This would be much 
cheaper and ultimately much more effective in dealing with 
global warming.
    I would suggest, and I would present to this committee, a 
treaty following up on the Kyoto Protocol, binding every nation 
to spend, say, 0.05 percent of GDP on research, development and 
demonstration of non-carbon-emitting energy technologies. This 
would worldwide provide some $25 billion in RD&D that would 
constitute an almost 25 fold increase over just what is right 
now used on renewables, and certainly a two and a half fold 
increase in the total RD&D.
    This approach would be five times cheaper than Kyoto and 
many times more cheaper than a potential Kyoto II. It would 
involve all nations, with richer nations naturally paying the 
larger share. Perhaps developing nations should be phased in or 
mechanisms put in place to assist them financially and 
technically as in the AP6. It would let each country focus on 
its own future vision of addressing the energy and climate 
challenge, whether that means concentrating on renewables, 
fission, fusion, conservation, carbon storage, or searching for 
new and more exotic opportunities.
    Such a massive global research effort would also have 
potentially huge innovation spinoffs. In the long run, such 
actions are likely to make a much greater impact than Kyoto-
style responses. Researches at Berkeley actually envision that 
such a level of R&D could solve global warming in the medium 
term.
    In a world with limited resources, where we struggle to 
solve just some of the challenges that we face, caring more 
about some issues means caring less about others. We have a 
moral obligation to do the most good that we possibly can with 
what we spend, so we must focus our resources where we can 
accomplish the most first.
    I would suggest that rather than investing hundreds of 
billions of dollars in short-term ineffective cuts in carbon 
dioxide emissions, we should be investing tens of billions in 
research, leaving our kids and grandkids with cheaper and 
cleaner energy options.
    Thank you very much, Mr. Chairman.
    Senator Inhofe. Thank you, Dr. Lomborg.
    Mr. Doniger.

STATEMENT OF DAVID D. DONIGER, POLICY DIRECTOR, CLIMATE CENTER, 
               NATURAL RESOURCES DEFENSE COUNCIL

    Mr. Doniger. Thank you, Mr. Chairman.
    The Asia Pacific Partnership is symptomatic of the current 
Administration's failure to take meaningful action either at 
home or abroad. The United States has limited the terms of 
engagement strictly to voluntary measures with token government 
funding. On these terms, the partnership can't make any 
difference. I will expand on that in a minute.
    But first, I want to talk about how time is running out. 
These are not my views. This is the view of the National 
Academy of Sciences. We need significant emission reductions in 
a very short window of time, and delay only makes the job 
harder. I quote the National Academy in a report last year: 
``Despite remaining unanswered questions, the scientific 
understanding of climate change is now sufficiently clear to 
justify taking steps to reduce the amount of greenhouse gases 
in the atmosphere,'' and it went on to say, ``failure to 
implement significant reductions in net greenhouse gases will 
make the job much harder in the future, both in terms of 
stabilizing their atmospheric abundances and in terms of 
experiencing more significant impacts.''
    The evidence of impacts continues to pile up, Mr. Chairman: 
stronger hurricanes, melting ice caps, killer heat waves, 
severe droughts. NASA reported last week that the Arctic ice 
cap is melting at an unprecedented rate. By the way, a major 
scientific report published in Nature last week confirms that 
solar radiation changes cannot explain any substantial fraction 
of global warming; that the bulk of it is from human causes.
    Scientists have recently detected accelerated melting of 
the Greenland and Antarctic ice sheets. If either one of those 
ice sheets goes, we are talking about a sea level rise of 20 
feet, with utterly disastrous implications for coastal areas 
around the world and for poor people who live in them around 
the world.
    There is only a short window of time to stop this from 
happening. Since the start of the industrial revolution, we 
have had carbon dioxide concentrations rise from about 270 ppm 
to 380 ppm. If we want to keep from experiencing more than a 
two degree increase in temperature, worldwide average, we have 
to keep the concentration from rising much above 450 ppm. We 
can do this if we start to act in the next 5 or 10 years, 
together, the United States and other countries. And that is 
the choice: Act now.
    If I could draw your attention, please, to the chart on 
page 4 of my testimony. I was not able to project this here. I 
didn't bring a poster-board because I was led to believe a 
PowerPoint would be acceptable, Mr. Chairman. I draw your 
attention to page 4, a chart called Slow Start Means Crash 
Finish.
    If we start now on reductions, together with other 
countries, we can achieve the goal of staying below 450 parts 
per million, with an annual reduction in emissions at an 
ambitious, but achievable, level of 3.2 percent per year. But 
if we wait 10 or 15 years to start on this, the job becomes 
immeasurably harder, and we are talking then about having to 
make reductions of over 8 percent per year in the out years, 
something which simply can't be imagined. So the cost of Mr. 
Lomborg's proposal to wait and just invest in future 
technologies is to make the job immeasurably harder to stay 
within any concentration objective.
    Here is a commonsense illustration. Imagine that you are 
driving a car at 50 miles an hour. You see a stop light ahead 
of you and a busy intersection. If you apply the brakes early, 
you can easily stop your car at that intersection with a gentle 
deceleration. The longer you wait to start braking, the harder 
the deceleration. There is some room for choice, but the higher 
your speed, the earlier you must start braking. If you wait too 
long, you will find yourself in the middle of the intersection 
with your forehead through the windshield.
    The advocates of the Asia Pacific Partnership's voluntary 
approach argue that it is still cheaper to delay because 
somehow we will find breakthrough technologies and they will 
enable faster reductions later. Well, we do need investment in 
breakthrough technologies, but without a market signal, the 
breakthrough technologies end up on the shelf with nobody 
applying them. It is the market signal that motivates private 
sector investment and it is so odd to hear so many advocates of 
the free market steer away from sending a market signal to 
motivate change in global warming emissions. This is the 
market-friendly way to do it, and everyone else in the world 
has got it except us here in the United States.
    The constituency for dealing with global warming is 
broadening. I would point out in particular that there is a 
very large religious constituency for dealing with global 
warming. As we speak here today, there is a conference going on 
elsewhere in Washington, the World Climate Summit, and the 
panel this afternoon is addressed to religious voices on global 
warming. There are Mormon, Catholic, Presbyterian, Evangelical, 
Jewish and Islamic speakers, all speaking toward the need to 
deal with global warming, and largely because the threat of 
global warming falls heaviest on the poor.
    I agree that we need to tackle malaria, HIV, bad water, and 
all the things that Mr. Lomborg mentioned. But we don't have 
such a stark choice. This is a rich world, with a large gross 
domestic product around the world. If we hack off a very small 
amount of that in a market-friendly way, we could tackle all of 
these problems. That is why groups like Christian Aid, and I 
would like to submit this report for the record, believe that 
climate change is a great threat to the world's poor, and 
dealing with this is a service to the world's poor. If I may 
submit this for the record?
    Senator Inhofe. Yes, without objection.
    [The referenced document follows on page 101.]
    Senator Inhofe. Your time has expired.
    Mr. Doniger. Thank you very much.
    Senator Inhofe. Dr. Beisner.

    STATEMENT OF E. CALVIN BEISNER, ASSOCIATE PROFESSOR OF 
  HISTORICAL THEOLOGICAL AND SOCIAL ETHICS, KNOX THEOLOGICAL 
  SEMINARY; SPOKESMAN FOR THE INTERFAITH STEWARDSHIP ALLIANCE

    Mr. Beisner. Mr. Chairman, members of the committee and 
distinguished guests, thank you for inviting me to speak to you 
today. Having never before this year been significantly 
involved in politics, other than to vote in elections, it is 
strange to find myself here. But my moral convictions as a 
Christian persuade me that I must speak out on an issue on 
which literally millions of lives hang in the balance.
    As a professor of Christian ethics, I distinguish 
principles and motives from applications. God, through his 
word, has given us absolute moral principles: You shall have no 
other gods before me; you shall not worship idols; you shall 
not take the name of the Lord in vain; remember the Sabbath day 
to keep it holy; honor your father and mother; you shall not 
murder, commit adultery, steal, bear false witness, or covet. 
As for motives, he says: Do justice, love mercy, and walk 
humbly with your God.
    These 10 commandments and these three motives apply to all 
people everywhere in all circumstances. But it isn't always 
obvious how principles apply. Even with the best motives, we 
may unintentionally do great harm. It is easy to look at an 
apparent threat and think, we can solve that this way. But 
sometimes, we misunderstand the nature, the causes or the 
extent of the threat, or fail to compare one threat with others 
that might be more significant.
    And so we prescribe solutions that won't work, that 
unintentionally cause more harm than they prevent, or that, 
particularly relevant to today's discussion, divert investment 
from more helpful measures. What would have happened, for 
example, had Congress legally mandated the use of DES, a drug 
widely thought in the 1950s to reduce the risk of miscarriage, 
but later found to be ineffective for that, but to raise the 
risk of cervical and uterine cancer for women exposed to it in 
utero? Great harm instead of the good intended, and reversing 
its use would have taken far longer than it did without the 
legal mandate.
    For 18 years, I have been studying the ethics, the 
economics, and the science of environmental stewardship, 
especially global warming. I have read major books on global 
warming by leading scientists on all sides of the controversy. 
I studied the IPCC assessment reports and read hundreds of 
scholarly and popular articles. My study convinces me that 
there is a major disjunct between the best science and 
economics in the field, on the one hand, and popular media and 
public opinion on the other.
    Time forbids me to go into detail in my oral testimony, but 
I have submitted fuller written testimony and request, Mr. 
Chairman, that it be included in the record.
    Senator Inhofe. Without objection, so ordered.
    Mr. Beisner. Popular opinion is that human emissions of 
carbon dioxide are the majority cause of current warming, which 
is greater than any in history and will become catastrophic by 
the middle of this century, and that we can and must prevent 
this catastrophe by reducing CO2 emissions. In 
contrast, as climatologist Roy Spencer, environmental economist 
Ross McKitrick, energy policy analyst Paul Driessen and I 
argued in A Call to Truth, Prudence and Protection of the Poor: 
An Evangelical Response to Global Warming, submitted herewith, 
and again I would ask that it be made part of the record.
    [The referenced document follows on page 179.]
    Mr. Beisner. The best science and economics indicate that 
current warming is within the range of natural variability. 
Human emissions of CO2 are a minor cause of global 
warming, but they enhance plant growth and so contribute to 
feeding the human population and all other species.
    Global warming is unlikely to become catastrophic in the 
foreseeable future. No achievable reductions in CO2 
emissions would reduce future temperatures detectably, let 
alone enough to avert catastrophe. And such efforts would 
fruitlessly divert scarce resources from other endeavors that 
would be of far greater benefit to humanity.
    Rather than focus narrowly on a single problem, we must 
choose carefully of where to invest our limited resources. The 
hundreds of billions of dollars per year it would cost the 
global economy to significantly reduce CO2 emissions 
would be of little or no benefit to humanity because they would 
cause little or no decrease in future temperatures.
    When the scholars at the Copenhagen Consensus ranked 17 
challenges facing humanity, the three best investments were 
fighting communicable diseases, fighting malnutrition and 
hunger by providing micronutrients, and liberalizing trade. 
While the three worst investments all had to do with reducing 
CO2 emissions to mitigate global warming. Money 
would be far better spent on AIDS and malaria prevention, water 
sanitation and nutrition.
    A clean, healthful environment, being a costly good, 
wealthier communities better afford it than poorer ones. And 
affordable energy is crucial to creating wealth. Electrifying 
the billion or more homes that use wood and dung as their chief 
fuels for heating and cooking would eliminate most of the 1.6 
million premature deaths per year that the World Health 
Organization attributes to indoor smoke. It would also leave 
the dung on the land to fertilize it, and it would leave the 
wood growing in the forests.
    Sharing technology with rapidly growing economies like 
India and China would speed both their adoption of cleaner 
fuels and their economic development. The strong correlation 
between economic development and improved health and life 
expectancy underscores the morality of such a policy. It would 
be morally unconscionable to force the world's developing 
countries to delay their climb out of poverty by denying to 
them, as would any serious cuts in CO2 emissions, 
the cheap, abundant energy available from carbon fuels.
    The Bible tells us to remember the poor. We need not, in 
order to identify the morally preferable global climate policy, 
resolve the enormously complex controversy over the causes and 
extent of global warming or the possibility of mitigating it. 
There is one thing we already know quite well: a richer society 
endures any catastrophe better than a poorer one. If we want to 
help the world's poor, we shall do so far better by helping 
them become wealthy and able to adapt to whatever temperature 
the future holds, than by slowing their economic development, 
condemning them to additional generations of poverty and its 
attendant suffering, and depriving them of the wealth they need 
to triumph over any future catastrophe.
    I urge you, therefore, to support policies that will 
promote economic development for the sake of the world's poor 
and the world's environment.
    Senator Inhofe. Thank you, Dr. Beisner.
    Let me start off by saying, and asking you a question 
because you may not have been here when I put into the record 
the letter signed by over 140 of the evangelical groups and 
individuals representing those groups, and scientists who have 
studied this. The letter that was submitted for the record on 
the other side did single out nine organizations.
    So I will start with a question with you. What is your 
response to those who imply that there is a broad consensus 
among religious leaders to impose mandatory caps?
    Mr. Beisner. Senator, in the past year and a half or so, a 
group of people tried to persuade the National Association of 
Evangelicals to adopt a statement that would take a position 
along what we would say would be the majoritarian popular 
opinion on this. The Interfaith Stewardship Alliance contacted 
the National Association of Evangelicals and made a case to its 
board that there was not adequate scientific consensus about 
that, and I document that in the paper that we have submitted 
today.
    Also, more importantly to the NAE, that there was not 
consensus among Evangelicals about it, and the NAE's board 
agreed with us and issued a letter January 26 saying that that 
was not a consensus issue among evangelicals, and that 
therefore NAE would not do so.
    The Southern Baptist Convention in July adopted a statement 
that also refused to do this, and our statement, A Call to 
Truth, Prudence and Protection of the Poor, has been endorsed, 
as you noted, by about 140 people, including especially 
evangelical scientists and economists with expertise relevant 
to this issue. We didn't simply go after big name religious 
leaders. We went for people who had actual expertise, rather 
than those who would answer, for instance, World Magazine, 
saying, you know, I have to admit I really didn't know anything 
about the science, but I wanted to make it clear that I care 
about the poor, I care about the environment.
    We think you have to both care and know the science.
    Senator Inhofe. I appreciate that, Dr. Beisner. I also when 
this first idea came out to try to get a bunch of evangelicals, 
they were using people's names without their permission, such 
as Mr. Dobson, Chuck Colson and others.
    Mr. Beisner. That is correct.
    Senator Inhofe. Dr. Lomborg, I looked up in the written 
statement of Mr. Doniger, and I couldn't find this, where he 
used the term immeasurably harder, but I notice you perked up 
when he was referring to your approach. Is there anything you 
would like to do to respond to his statement?
    Mr. Lomborg. Well, I would tend to say that what Mr. 
Doniger was trying to argue was that it would be really great 
if we could do all good things. He was actually suggesting we 
can do all things. Of course, we being a rich society, in 
principle we could do a lot of good things. But I do think we 
have to come down to the fact that we don't. And so it does 
seem to me that we have to make these kinds of decisions.
    He is telling us it is going to be hard to stop at 450 ppm. 
That is absolutely true. But I again have to ask, why stop at 
450? I would actually like to stop at 380, but again, of 
course, we have to ask ourselves, where should we stop at how 
many people die from HIV-AIDS? It seems to me that the right 
number if zero. How many people should die from malaria? It 
seems to me the right number should be zero.
    The point is, we would like to do all good things. And so 
we come back to the discussion of saying if we live in a world 
where we don't actually do all good things, we have to ask at 
least where should we start; where would we do the most good.
    I do agree with Mr. Doniger that we have to also think 
about climate change. I do believe that it is true it is 
happening, but it is one of the many things we need to figure 
out. I am simply suggesting one way of dealing with this would 
be to say there are many great investments, as I tried to point 
out with the Copenhagen Consensus, where we can do a lot of 
good. HIV-AIDS and malaria, as Mr. Doniger also agreed that we 
should do, and we can also look at the long-term impact of 
climate change and say at least we can probably stabilize it. 
That was what I was referring to would be OK.
    Senator Inhofe. OK. That is very good.
    Dr. Beisner, you are familiar, some of the others aren't, 
of my activities in Africa over the last 10 years. I have made 
more trips there than all Senators in the history of America 
combined. I am very sensitive to the problems that are there.
    So what I would like to ask you is, if carbon caps were 
imposed what impact this would have on the efforts to bring 
electricity to some of these African countries, which they 
consider to be the most urgent need that they have?
    Mr. Beisner. There are a number of different ways, Senator, 
that that question could be approached. Let me just focus on 
one. Economic development is necessary for making the 
investments that are required to provide electrification. 
Obviously, it being a costly thing to do, the wealthier you 
become, the more you can afford to do it.
    One very important part of economic development in Africa 
and in other developing areas of the world is trade with the 
external world. Because caps on energy use, caps on carbon 
would at this point practically also be caps on energy use, in 
wealthier countries would curtail economic growth, and in fact 
probably even cause some negative economic growth in those 
countries. Those countries' demand for imports from developing 
countries would decline. That would cause a net loss of income 
to those developing countries which would have a negative 
effect on their economic development, which in turn makes them 
less able to afford electrification.
    It slows the electrification that they need to deliver them 
from the various diseases that come from vectors that enter 
their homes because they can't close up and air condition, and 
so on.
    Senator Inhofe. My time has expired. They do burn such 
things as the very dirtiest type of coal and dung and other 
things. This would somehow preclude them from getting 
electricity as a substitution.
    Mr. Beisner. Yes.
    Senator Inhofe. Anyway, thank you very much for your 
response.
    Senator Jeffords.
    Senator Jeffords. Mr. Doniger, do you have any comment on 
the testimony of the other witnesses? In particular, what do 
you think of the suggestion of Mr. Lomborg's written testimony 
that we create an international research and development fund?
    Mr. Doniger. Senator, I think that having a higher level of 
research is essential. But the reason the research has dropped 
off to such a low level on energy technologies is that there 
are no market signals to make it important. The primary 
research comes from the private sector. So we have the 
government now spending $100 million, I think I heard Mr. 
Connaughton say, to build one FutureGen plant with carbon 
storage.
    While they plan that and while they pass the hat to South 
Korea and China and so on to join in that project, we have 
private sector companies setting up their own projects without 
government support. We have carbon storage technology being 
implemented underneath the North Sea. It is being implemented 
soon in Africa. It is being implemented in Southern California 
by private sector consortiums working on their own. They are 
betting there will be a market signal. If there is market 
signal, you will see I would say trillions of dollars flow to 
the clean energy technologies just by the workings of the 
market.
    The research and development is important, but a little 
tiny pool of research and development, even at $25 billion, 
looks like nothing compared to the $6 trillion in energy 
infrastructure investments that are coming in the next 30 
years. That is what we need to steer in a cleaner direction.
    It is not about preventing anyone from getting electricity. 
It is about hastening the energy development, but in a cleaner 
path.
    Senator Jeffords. The Bush administration argues that a go 
slow approach, using research and development, be the least 
costly approach to the climate problem. But waiting would mean 
that more emissions go into the atmosphere and more coal-fired 
powerplants would be built that can only be controlled through 
expensive retrofitting. Does it make sound economic sense to 
continue to wait for actually reducing emissions? Or is that a 
false economy?
    Mr. Doniger. I think it definitely is a false economy. What 
is happening is a new generation of coal-fired powerplants is 
being built. Every year, millions of new vehicles are built and 
put on the roads. Each of these things have lifetimes. Cars 
have a lifetime of a decade. Powerplants have a lifetime of 
five or six decades.
    If we build a new generation of dirty technologies that 
have high carbon dioxide levels, we just buildup the burden in 
the atmosphere and make the job of reducing emissions so much 
more difficult, so much more expensive later. So this is a 
false economy to go slow.
    The true economy is to get on this and do it smoothly and 
do it over a period of years, a period of decades where you 
still have some time to do this at rates that don't disrupt the 
economy.
    Senator Jeffords. Thank you.
    Senator Inhofe. Thank you, Senator Jeffords.
    Senator Lautenberg.
    Senator Lautenberg. Mr. Chairman, a very interesting 
discussion taking place here. Some of it is hard to comprehend 
when we see how different the views are. Among the conditions 
that Mr. Lomborg recommended that we pay some attention to, he 
included HIV-AIDS et cetera. All of you saw it.
    We don't discuss cancer research. We don't discuss reducing 
automobile gas consumption. We don't discuss war. You are aware 
of our war costs, Mr. Lomborg? They are pretty significant. We 
don't discuss those things. How are they left out when we talk 
about prevent HIV-AIDS? By the way, there is a new product out 
called Gardasil. It will protect women against cervical cancer, 
if it were to be given at an early stage of perhaps sexual 
activity. It can eliminate that, the largest killer of women in 
Third World countries.
    So we are making progress in these things, but why do we 
have to choose between the threat that global warming brings to 
us, when NASA, National Science Foundation, it is a subject of 
great interest to me. I see what is happening with the polar 
bear population. I see what is happening with other animal 
species populations. It is dwindling down.
    Part of the ecology that sustains life as we know it now, 
those things instead, I mean, I think you are remarkably casual 
about the fact that we shouldn't be spending money on Kyoto; 
that the value isn't there. And we hear from Mr. Doniger and 
the NASA report that the ice melt is proceeding at an alarming 
rate. I have been to the South Pole. I take a deep interest in 
that. I went there to visit with the National Science 
Foundation.
    How does that square, Mr. Lomborg, with other agencies who 
are saying, hey, let's get on with these things. Let's mandate 
that we make changes that are possible to make, if we had 
better performance in our automobile engines. Do you think we 
ought to change our tax structure and maybe have the richest 
among us pay more in taxes? Because I am amazed, frankly, and 
you will forgive me sir, your relatively simplistic choice of 
what it is we can do with investing in the world health.
    Mr. Lomborg. Mr. Senator, I think there are three questions 
in there. First, the tax one, I am not going to presume to tell 
you how you could figure taxes. I come from Denmark where we 
tend to think, like you were suggesting.
    Senator Lautenberg. No, I didn't suggest it. I asked what 
you thought about it.
    Mr. Lomborg. Yes. But the other two issues, global warming 
is important. Yes, there are a lot of problems accumulating 
from global warming. I think Mr. Doniger is right in pointing 
out those issues are there as well.
    I think we need to, just as you were pointing out the polar 
bears, we should also point out that a lot of people die from 
indoor air pollution. A lot of people die from all these other 
kinds of issues.
    Then you rightly point out that we have a lot of other 
concerns. We talk about cancer research. We talk about military 
expenditure. The reason why we looked at just some of those 
issues was because we said global warming and investment in 
HIV-AIDS and some of these other issues are typically about 
helping other people. It is about being altruistic. Mostly what 
we do when we think about cancer research, and certainly when 
most people think about military expenditure, it is about 
national interests.
    Senator Lautenberg. No, I think about my family. I think 
about my son going to war, as I did some years ago.
    Mr. Lomborg. Yes.
    Senator Lautenberg. I think about my daughter's exposure to 
breast cancer, and things of that nature.
    Mr. Lomborg. Yes, and that is what I mean. That is much 
more a national issue, so that is perhaps arguably much better 
dealt with in a democracy like the American. But when we talk 
about international failure, that is both in carbon dioxide 
pollution, but also in HIV, malnutrition, and some of these 
other things. The, you might say, 1 percent that we do spend 
altruistically just trying to do good in the rest of the world, 
that is the argument that we said at least we want to make sure 
that we spend that well.
    I am all for spending more on trying to do altruistic good 
in the rest of the world, but we should still look at what are 
the benefits and costs, and what the Copenhagen Consensus, some 
of the world's best economists told us, was if we spend $1 on 
prevention of HIV-AIDS, we end up doing $40 of social good. If 
we spend $1 on the Kyoto Protocol, end up doing about 2 cents 
worth of good. And so the argument is simply do the $40 before 
you do the 2 cents.
    Senator Lautenberg. Mr. Chairman, forgive me, just for a 
word more on that. We spend a lot in research on HIV-AIDS, not 
enough. We spend it on cancer. We spend it on other health 
conditions. But we don't spend a lot on preventing global 
warming directly.
    Thank you.
    Senator Inhofe. Thank you, Senator Lautenberg.
    Senator Boxer.
    Senator Boxer. Thanks, Mr. Chairman.
    Well, this has been certainly very interesting for me. I 
think, Mr. Doniger, you speak for me. I am not going to ask you 
questions because I think you get it. You understand it. It 
makes sense. If you have a problem, you go to solve it. We are 
going to solve it together. We know what to do.
    And Mr. Lomborg, I don't quite get where you are coming 
from. I mean, you say let's spend billions and billions of 
dollars on energy efficiency. I agree. That is going to help 
us. Then you say we have to figure out essentially how we can 
spend our dollars better. That is absolutely right. Why don't 
you figure out what we are spending on more in the world? 
Figure it out. I can guarantee you, it is trillions and 
trillions.
    That is a false choice you are setting up. We have to do 
everything. That is our job. God put us on this earth to solve 
the problems and protect the people. Whether it is foreign 
policy, domestic policy, whatever challenge we have, we can do 
it. It is a matter of making smart choices.
    Now, that leads me to you, Mr. Beisner. Is that the way you 
say it?
    Mr. Beisner. Beisner.
    Senator Boxer. Mr. Beisner, you said you just came into 
politics, but I have you quoted in newspapers from 1994, making 
these same arguments that the religious people shouldn't get 
involved in this. And you have lost because now they are 
getting more and more involved. I am going to quote to you 
again from a letter we put in the record from a group including 
Evangelical Lutherans in America: ``God has called each of us 
to protect the poor, the voiceless in creation itself. Our 
faith traditions and denominational policies make clear that 
this call is a mandate requiring action. Just as a scientific 
consensus has emerged about the need to address atmospheric 
concentrations of greenhouse gases, so too a broad consensus 
among religious leaders and organizations has emerged to 
respond to our shared understanding of God's call for 
environmental stewardship and the care of our sisters and 
brothers around the world.''
    So I think that your leadership on this, and bless your 
heart, you worked hard. You warned them not to do it. They 
didn't listen to you, and they are taking this up. I couldn't 
be more excited as a member of this committee. I am going 
around the country meeting with religious leaders, and it is 
most exciting.
    Now, you make a point, it is better to be rich to help the 
poor. I am not sure I exactly get that, but let me put it this 
way: It is hard to help poor people or any people if the 
warnings are correct and we face the type of catastrophes is we 
do nothing. It is hard to help people, for example, if they are 
under water. It is hard to help people if the worst happens.
    So I think it doesn't make sense. I am sorry. I have tried 
every which way to understand you. And then, I guess the 
questions I have for you, you wrote a letter, Mr. Beisner, on 
July 7, 2006, a letter to the editor: ``More than 17,000 
scientists have signed a petition denying that human action is 
the main cause of global warming.'' Right?
    Mr. Beisner. Correct.
    Senator Boxer. When was that letter signed by those 
scientists?
    Mr. Beisner. That was I believe 1998.
    Senator Boxer. Yes, 1998. Well, the world has moved on, 
sir. We know a lot more now, sir, and we have been doing 
research on this. So you are referring to an 8-year old 
petition which is absolutely obsolete. Now, we have 11 National 
Academy of Sciences. We have all these religious people. So, I 
mean, as I say, bless your heart for what you do. I know you 
volunteer for a lot of these things. But I just wonder, do you 
know that some of the organizations you volunteer for are 
funded by Exxon-Mobil?
    Mr. Beisner. Yes, I do.
    Senator Boxer. OK.
    Mr. Beisner. I also know that adding an argument in ad 
hominem circumstantial is a logical fallacy.
    Senator Boxer. Look, I am just trying to put something on 
the record here. I think it is important, and I am putting it 
in the record, and you can give me your intellectual answer to 
it, but it doesn't phase me one bit. You are volunteering for 
an organization that is funded by Exxon-Mobil. I think that 
they have a certain bias.
    You know what? They are allowed to. It is a free country. 
Good for them. But I just feel we ought to know when witnesses 
come here who they are actually representing. So I just want to 
say to my Chairman, I am a little feisty today because I have 
worked seven straight days without any time off, and so if I am 
extra feisty, please forgive me.
    This is an issue that is so important to us. I am excited 
that we have had this hearing today. I am glad that my Chairman 
is willing to have more hearings. I am just hopeful that we can 
in fact reach across the aisle. We are working. We are trying 
to get support for cellulosic fuels. We are working together on 
that and some other things that maybe at the end of the day we 
do what Mr. Lomborg says, that we do the right thing, and we 
don't have to discuss our disagreements. We will just do 
something that is going to help, and that is where I am at at 
this point.
    Thank you.
    Senator Inhofe. Thank you, Senator Boxer.
    I want to thank our witnesses. This was not supposed to be 
a hearing on global warming. It was on the Asia Pacific 
Partnership. I apologize to my witnesses there that it turned 
into this. I would have to say, too, if you had one that we 
would want to talk about the most, a lot of the recent science. 
Just in the last week, the geophysical research letters came 
out with 50 percent of them stating that 50 percent of the 
warming we are experiencing over the last 100 years is due to 
solar activity. Oddly, I think that is one of the more obvious 
things that we should know. The sun does have something to do 
with it. They are predicting now that is going to be followed 
by a cooling period.
    The 60 scientists in Canada have written the prime 
minister, Prime Minister Harper, saying, ``If we had known in 
1997 what we know today about Kyoto, we would not have 
signed.'' But again, that would come in a debate on this 
subject, which this is not.
    So I thank very much the witnesses, all three of you, for 
coming and for enduring this. It has been very helpful, and I 
think we have an idea here that will work and will reduce 
CO2 if that is necessary, but at the same time, SOx, 
NOx, mercury and real pollutants.
    Senator Lautenberg. Mr. Chairman, I will take the liberty 
of speaking out here and saying to you that, you know, I have 
been on other committees where the rules and the subject 
weren't so precisely evolving. You have to get sometimes obtuse 
roots to get to the subject.
    Senator Inhofe. Yes, and I love all of you dearly.
    Thank you very much. We are adjourned.
    [Laughter.]
    [Whereupon, at 6 o'clock p.m. the committee was adjourned, 
to reconvene at the call of the chair.]
    [Additional statements submitted for the record follow.]

     Statement of Hon. Joseph I. Lieberman, U.S. Senator from the 
                          State of Connecticut

    Thank you, Mr. Chairman, for holding this hearing.
    Since 2002, the Bush administration has acknowledged that global 
warming threatens our nation's well being, and that the United States 
accordingly should slow, stop, and reverse the current growth in its 
greenhouse gas emissions.
    Unfortunately, the Administration's policies will not slow or stop, 
much less reverse those emissions in time to avoid the shame of leaving 
our grandchildren a world of flooded coastlines, increased drought, 
more destructive storms, rampant disease, and more armed conflict.
    The only specific target President Bush has endorsed is reducing 
the ``greenhouse-gas intensity'' of the U.S. economy by 18 percent in 
the decade between 2002 and 2012. What that adds up to is actually a 14 
percent increase in the nation's annual greenhouse-gas emissions over 
that same period. That is the identical rate of increase that we have 
seen over the past 15 years. So even if President Bush's policies live 
up to his commitment, they will not slow the growth in U.S. greenhouse-
gas emissions at all.
    As it happens, the Administration's existing policies are 
insufficient to meet even President Bush's inadequate commitment. The 
centerpiece of those policies, the Asia-Pacific Partnership that is the 
subject of today's hearing, is nothing more than a series of meetings 
in which representatives from the United States, Australia, China, 
Japan, Korea, and India will discuss ways in which they might work 
together to promote cleaner, more efficient technologies to address 
pollution reduction, energy-security, and climate-change concerns. 
There is nothing binding about the Asia-Pacific Partnership, and its 
charter does not even set any targets for reducing greenhouse-gas 
emissions.
    The most tangible step the Administration has taken toward meeting 
its inadequate commitment is to launch ``FutureGen,'' a public-private 
partnership that is spending ten years to build a facility that will 
make electricity and hydrogen from coal without emitting any greenhouse 
gasses. As laudable as this single project is, it will not change the 
fact that, in the absence of the real climate policies that the 
Administration still opposes, the U.S. private sector will spend the 
next ten years building more than a dozen new coal-fired powerplants 
that will release all of their global warming pollution into the 
atmosphere.
    The Administration's half-measures reflect a mentality that now 
lags behind the views of many of the large American businesses that 
emit greenhouse gasses. More and more of those companies acknowledge 
that the United States can and must institute a mandatory, economy-wide 
emissions cap to curb this nation's negative influence on the world's 
climate.
    The country's business leaders are coming around to the position 
that John McCain and I staked out in 2003, when we introduced the first 
bill to institute a mandatory, economy-wide greenhouse-gas emissions 
cap and allow companies to trade emissions allowances beneath that cap. 
By literally mandating that U.S. global warming pollution actually be 
cut, our bill attaches a price to emitting global warming pollution. By 
instituting a market-based system with plenty of built-in flexibility, 
and by investing heavily in technology deployment, the bill gives 
industry the tools it needs to limit its emissions in affordable ways 
that end up creating jobs and increasing the competitiveness of 
American businesses in the global marketplace.
    As you all know, John and I forced the Senate to vote on our 
Climate Stewardship Act in 2003 and again in 2005. The bill that we 
will reintroduce early next year, hopefully again with the co-
sponsorship of my fellow committee member Senator Obama and of Senate 
Snowe, will adhere to the core principles I have already mentioned.
    It will also include improvements designed to further reduce 
compliance costs; further protect American workers; further fund the 
early deployment of safe, zero-emissions energy technologies; 
accelerate the spread of products and techniques that reduce energy 
usage without compromises; and reward the early action that some of the 
nation's most climate-responsible businesses are taking already.
    This past July, my fellow committee members, Jim Jeffords and 
Barbara Boxer, introduced a bill to mandate aggressive reductions in 
the U.S. economy's greenhouse-gas emissions. Senator Feinstein has 
announced her intention to do the same in the next Congress. In May, my 
friend Tom Carper reintroduced his bill to cap the U.S. power sector's 
greenhouse-gas emissions.
    While John and I will push for enactment of our bipartisan, 
economy-wide, cap-and-trade bill in the next Congress, we welcome our 
colleagues' bills as highly-productive contributions to the Senate's 
work on this crucial issue, and I for one look forward to working with 
them.
    The Bush Administration, however, has some serious catching up to 
do.
    Thank you, Mr. Chairman.
      
  Statement of James L. Connaughton Chairman, White House Council on 
                         Environmental Quality

                              INTRODUCTION

    Mr. Chairman, I am pleased to testify today on the Asia-Pacific 
Partnership on Clean Development and Climate (the Partnership), 
announced last year and launched in January 2006 by President Bush and 
the leaders of Australia, China, India, Japan and South Korea. This 
Presidential initiative establishes an innovative public-private 
collaboration for addressing the interconnected challenges of assuring 
economic growth and development, poverty eradication, energy security, 
pollution reduction, and mitigating climate change. The Partnership's 
six members represent about half the world's economy, population, and 
energy use. Together they produce about 68 percent of the world's coal, 
61 percent of its cement, 50 percent of its net electricity generation, 
54 percent of its steel, and 40 percent of its aluminum. Partner 
countries also emit significant amounts of air pollution and around 50 
percent of the world's carbon dioxide emissions from fossil fuels. As I 
will explain in greater detail below, the Partnership is working 
initially in eight major sectors to share technologies and practices, 
open up markets and reduce barriers, to significantly increase 
investment in the best of today's technologies and accelerate the 
development and use of the best technologies working their ways through 
public and private research. We are focused on achieving practical 
outcomes in the areas of: cleaner and lower carbon emission fossil 
power technology, renewable and distributed energy systems, power 
generation and transmission efficiency, steel, aluminum, cement, coal 
mining, and buildings and appliances.
    Mr. Chairman, I would like to thank you, and members of this 
committee and the Senate, for your broad bipartisan support for the 
Asia-Pacific Partnership. The Partnership is a key means of 
implementing a strong, bi-partisan Senate amendment that became Title 
XVI of the Energy Policy Act of 2005 (EPAct 2005). The Partnership is 
consistent with the Clean Energy Technology Exports Initiative (CETE) 
discussed in the FY'01 Senate Energy and Water Development 
Appropriations Bill. Many aspects of the CETE initiative are now found 
in EPAct 2005 and are being implemented through the Partnership. The 
Partnership targets the kind of fast-growing, middle-income 
industrializing countries on which EPAct asks us to focus.
    The Partnership is a team effort and requires a team budget to 
administer. Reflecting the Partnership's philosophy of taking an 
integrated approach, funding for implementing the initiative is spread 
over four agencies: the Department of State (State), the Department of 
Energy (DOE), the Environmental Protection Agency (EPA), and the 
Department of Commerce (DOC). I look forward to using this opportunity 
to discuss the benefits of the Partnership and the urgent need for 
Congress to support the President's $52 million fiscal year 2007 budget 
request, which will help leverage billions of dollars in private and 
public investment in a more secure, more efficient, cleaner and lower 
greenhouse gas energy future.

                    UNITED STATES POLICY OBJECTIVES

    The Asia-Pacific Partnership will help bring into the international 
arena U.S. policy objectives for improved energy security, improved air 
quality and public health, and reduced greenhouse gas intensity. At the 
same time, our partners share these objectives and will share with us 
their complementary national strategies.
Improve Energy Security
    In order to improve our nation's energy security, the 
Administration is focusing on the development and deployment of new, 
clean technologies to reduce our reliance on foreign sources of energy 
and, ultimately, to diversify away from a hydrocarbon society. The 
Administration is implementing policies to advance these objectives in 
both the power generation and transportation sectors.

            Electricity Generation
    To secure our long term electric power generation needs, we are 
working to strengthen and increase the availability of domestic 
sources--abundant renewable energy, clean coal, and emission-free 
nuclear power, as well as what I would describe as our massive 
``reserves'' of energy efficiency and conservation. We are implementing 
and developing policies that ensure current and future energy supplies 
will meet our more stringent requirements for air quality improvement 
and the need for greenhouse gas mitigation.
    Advanced Energy Initiative.--In his State of the Union Address this 
year, the President announced his new Advanced Energy Initiative (AEI). 
The AEI includes programs promoting the use of technologies that reduce 
oil use by improving efficiency, expansion of alternative fuels from 
homegrown biomass, and development of fuel cells that use hydrogen from 
domestic feedstocks; and programs to change the way we power our homes 
and businesses, such as addressing the high costs of natural gas and 
electricity by generating more electricity from clean coal, advanced 
nuclear power, and renewable resources such as solar and wind.
    One of the core objectives of the AEI is to change how we power our 
homes and offices through increased investment in revolutionary solar 
and wind technologies. To fulfill solar energy's promise, the President 
proposed a new Solar America Initiative. The Solar America Initiative 
will accelerate the development of advanced photovoltaic (PV) materials 
that convert sunlight directly to electricity, with the goal of making 
solar PV cost-competitive with conventionally generated electricity 
such as coal and nuclear by 2015. As the per-unit cost for these 
advanced PV technologies falls, sales volume will go up, driving 
innovation and further cost reductions. Globally, attempts to bring 
electricity to the developing world will frequently employ solar PV as 
an alternative.
    Wind energy is one of the world's fastest-growing energy 
technologies. In 2005, the U.S. wind energy industry installed more 
than 2,300 megawatts (MW) of new wind energy capacity--or over $3 
billion worth of new generating equipment--in 22 states. That capacity 
is roughly equivalent to four typical coal powerplants. Areas with good 
wind resources have the potential to supply up to 20 percent of the 
electricity consumption of the United States.
    To expand the generation of clean energy from wind, the President 
has committed to advance the use of wind technology. We are working to 
help improve the efficiency and lower the costs of conventional wind 
turbine technologies, and help develop new small-scale wind 
technologies for use in low-speed wind environments. Combined with the 
ongoing efforts to expand access to Federal lands for wind energy 
development, our efforts could help dramatically increase the use of 
wind energy in the United States.
    EPAct 2005 provides a number of tools to help assure that renewable 
energy will become a viable, affordable source of energy to power our 
homes, businesses, and industries. A few of the most significant 
provisions deal with tax credits and research and development. The 
Renewable Electricity Production Credit (REPC) is a 1.5 cent per 
kilowatt-hour tax credit with a multi year extension that may last for 
up to 10 years. This credit is adjusted annually for inflation. 
Qualifying electricity generating resources includes wind, open-loop 
and closed-loop biomass, geothermal energy, small irrigation power (150 
kW-5 MW), municipal solid waste, landfill gas, and hydropower.
    EPAct 2005 also establishes a 30 percent tax credit up to $2,000 
for the purchase and installation of residential photovoltaic (solar 
electric) and solar water heating property. An individual can take both 
of these credits for a total of up to $4,000. A 30 percent tax credit 
up to $500 per 0.5 kW is also available for fuels cells.
    Another important EPAct initiative is the Renewable Energy 
Production Incentive (REPI). REPI provides financial incentive payments 
for electricity produced and sold by new qualifying renewable energy 
generation facilities that are not eligible for tax credits. Qualifying 
facilities include publicly owned utilities, not-for-profit electric 
cooperatives, and tribal entities that produce electricity from 
renewable sources. These facilities are eligible for annual incentive 
payments of 1.5 cents per kilowatt-hour for the first ten year period 
of their operation, subject to the availability of annual 
appropriations in each Federal fiscal year of operation.
    Recognizing that additional research and development is still 
critical to improve the market penetration of renewable power 
generation, EPAct authorized $2.2 billion for renewable energy sources 
including hydro, wind, geothermal, and solar.
    Complementing these incentives for renewable energy, EPAct provided 
for loan guarantees to spur investments in projects employing renewable 
technologies. Secretary Bodman recently unveiled DOE's guidelines for 
the loan guarantee program which included providing for leveraged 
funding opportunities up to $2 billion.
    Clean Coal.--The United States has vast coal reserves and about 
half of its electricity is generated from this fuel. Because coal has 
great potential to provide domestically secure, cost-efficient 
electricity, advanced coal-based power generation is vital to energy 
security while meeting air quality needs and setting a foundation for 
greenhouse gas mitigation. The goal of the Coal Research Initiative 
(CRI) is to remove technological market obstacles and produce public 
benefits by conducting research, development, and demonstration of 
coal-related technologies that will improve coal's competitiveness in 
future energy supply markets. As part of the CRI, the Clean Coal Power 
Initiative (CCPI) is a cost-shared program between the government and 
industry to demonstrate emerging technologies in coal-based power 
generation, thus accelerating their path to commercialization. The 
FutureGen project, also a part of CRI, is a 10 year, $1 billon 
government-industry effort to design, build, and operate the world's 
first near-zero atmospheric emission coal-fired powerplant. This 
project, which cuts across many areas, will incorporate the latest 
technologies in carbon sequestration, oxygen and hydrogen separation 
membranes, turbines, fuel cells, and coal gasification. The governments 
of India and South Korea have recently committed to join and contribute 
financially to FutureGen. The FutureGen Alliance also includes Chinese 
and Australian companies contributing to the private sector cost-share. 
As an important complement to this effort, we are aggressively pursuing 
the promise of cost-effective techniques for CO2 
sequestration through the Carbon Sequestration Leadership Forum, 
comprising 21 countries and the European Commission. Ten projects have 
been recognized by the Forum, including four with U.S. participation. 
The United States also leads the Regional Carbon Sequestration 
Partnerships project, which began in September 2003, and is a broad-
based collaboration of industry and the research community to help 
identify and test the most promising opportunities for implementing 
sequestration technologies in the United States and Canada.
    Nuclear Power.--Nuclear power provides an abundant, affordable, 
clean, and safe source of energy. The United States has 103 commercial 
nuclear powerplants operating in 31 states. Nuclear powerplants supply 
approximately 20 percent of America's electricity. The clean air 
benefits of nuclear energy are enormous. Last year, the domestic use of 
nuclear energy prevented the release of up to 3 million tons of sulfur 
dioxide and 1 million tons of nitrogen oxide. The use of nuclear power 
has also avoided the emission of 700 million tons of carbon dioxide per 
year, an amount nearly equal to the annual emissions from 136 million 
passenger cars.
    While nuclear plants have had dramatic increases in their 
efficiency, offsetting the need to build several new plants fueled by 
other sources, no U.S. power company has constructed a nuclear plant in 
about 30 years. However, nuclear energy is making a resurgence. In the 
past year about 12 companies have expressed an interest in building new 
plants.
    The EPAct 2005 included a number of nuclear related provisions that 
address both existing nuclear energy facilities and set the stage for a 
nuclear renaissance. EPAct 2005 was successful in giving the Nuclear 
Regulatory Commission the tools it will need to meet its challenges as 
we look to them to permit new nuclear facilities. EPAct also provided 
additional incentives such as loan guarantees, production tax credits 
and federal risk insurance for the builders of new plants. This new law 
also addresses the issue of security at our commercial nuclear 
facilities, giving the public the confidence that these sites are well 
protected. Mr. Chairman, I want to congratulate you and the full EPW 
Committee on your action to pass many of these important nuclear 
provisions.
    The Nuclear Power 2010 program is focused on reducing the 
technical, regulatory and institutional barriers to deployment of new 
nuclear powerplants based on expert recommendations. The Nuclear Power 
2010 Program is designed to work with the nuclear industry in a cost-
shared arrangement to establish a market-driven, public-private effort 
to address the technical, regulatory and institutional challenges to 
new plant construction. The program's basic missions are to demonstrate 
the new Nuclear Regulatory Commission licensing processes, identify 
suitable sites for new plants, and certify state-of-the-art (or 
``Generation III+'') designs for new nuclear powerplants. The goal of 
the Nuclear Power 2010 program is to facilitate an industry decision to 
build and operate at least one new advanced light-water reactor plant 
in the United States early in the next decade.
    We are also committed to more effective international cooperation, 
which will produce strong benefits here at home. The Global Nuclear 
Energy Partnership (GNEP) seeks to develop worldwide consensus on 
enabling expanded use of economical, emission-free nuclear energy to 
meet growing electricity demand. By working with other nations under 
the Global Nuclear Energy Partnership, we can provide the less 
expensive, safe, clean energy that growing economies need, while 
ensuring nuclear nonproliferation. America will work with nations that 
have advanced civilian nuclear energy programs. GNEP will use new 
technologies that effectively and safely recycle spent nuclear fuel. 
Re-processing spent nuclear fuel for use in advanced reactors has the 
potential to significantly reduce storage requirements for nuclear 
waste. It will also allow us to extract more energy from fissile 
materials in spent fuel that would otherwise be sent directly to a 
geologic repository. Through our partnership, we can help developing 
countries meet their growing energy needs by providing them with small-
scale reactors that will be secure and cost-effective. We will also 
help ensure that developing nations have a reliable nuclear fuel 
supply. In exchange, these countries would agree to use nuclear power 
only for civilian purposes and forego uranium enrichment and 
reprocessing activities that can be used to develop nuclear weapons.

            Vehicles
    We are also working to improve the way we power our transportation 
through improvements in vehicle fuel economy, greater availability and 
use of current and next generation renewable fuels, and ultimately 
through zero-emission hydrogen.
    Corporate Average Fuel Economy (CAFE).--Since 2003, the Bush 
Administration has finalized two sets of Corporate Average Fuel Economy 
(CAFE) regulations requiring a combined 15 percent increase in the fuel 
economy of light trucks, including for the first time, large and very 
heavy Sport Utility Vehicles, such as the Hummer H2. The 
Administration's latest CAFE regulation reforms the structure of the 
program and implements improvements recommended by the National 
Research Council of the National Academy of Sciences that will not only 
help save fuel, but also lives and American jobs. These actions are 
projected to save more than 14 billion gallons of gasoline over the 
lifetime of these trucks, and correspondingly avoid over 100 million 
metric tons of carbon dioxide emissions. The President has strongly 
urged Congress to give us authority to establish new rules on passenger 
car fuel economy based on these concepts.
    Tax Incentives for Efficient Vehicles.--The President proposed, and 
Congress enacted, tax incentives of up to $3,400 per vehicle to 
encourage purchase of highly efficient hybrid and clean diesel 
vehicles, which offer near-term potential to reduce demand for fuels 
made from crude oil. The President has called on Congress to reconsider 
certain limitations that EPAct placed on the availability of these tax 
credits to allow for their broadest use.
    Renewable Ethanol and Biodiesel.--Biofuels can be produced either 
by the conversion of sugar, starch, or cellulosic feedstocks to 
ethanol, or by conversion of animal fats or soybean or other plant oils 
to produce biodiesel. These clean-burning fuels are currently either 
mixed with gasoline or diesel fuel in small amounts (up to 10 percent 
for ethanol and up to 20 percent for biodiesel) and used in 
conventional vehicles to help reduce petroleum demand, or in the case 
of ethanol, blended in larger amounts (up to 85 percent ethanol to make 
E85 fuel) and used in specifically-designed flexible-fuel vehicles 
(FFVs). In 2005, the 4 billion gallons of ethanol blended into gasoline 
amounted to about 3 percent by volume of all gasoline sold in the 
United States.
    The EPAct 2005 established a renewable fuels standard to require 
the use of 7.5 billion gallons of renewable fuels such as ethanol and 
biodiesel by 2012. Because of higher crude oil prices, producer tax 
incentives, and the phasing out of MTBE, however, we are likely to 
exceed the EPAct's target by a significant margin. The EIA projects 
renewable demand in 2012 of 9.6 billion gallons for ethanol and 300 
million gallons for biodiesel, assuming crude oil prices forecast at 
$47 per barrel.
    Alternative Fuel Facilities.--The EPAct 2005 also provides a 30 
percent tax credit for installation of alternative fuel stations, up to 
a maximum of $30,000 per year. Currently only about 700 public ``E85'' 
(85 percent ethanol) fueling stations exist in the United States. The 
increased availability of E85 will mean that more FFVs can use ethanol. 
Of the approximate five million FFVs on our roads today, most are 
currently fueled with conventional gasoline rather than E85, in part 
due to the limited availability of E85.
    Cellulosic/Ethanol.--The President's goal is to make cellulosic 
ethanol cost-competitive by 2012, enabling greater use of this 
alternative fuel to help reduce future U.S. oil consumption. Virtually 
all domestically produced ethanol currently comes from corn. However, 
corn and other starches and sugars are only a small fraction of biomass 
that can be used to make ethanol. A recent DOE/USDA study, using 
aggressive technology and land use assumptions, suggests that the 
United States could produce or harvest biomass resources capable of 
being converted into 60 billion gallons of biofuels per year--30 
percent of current U.S. gasoline consumption--in an environmentally 
responsible manner without affecting future food production. Although 
the study does not consider cost and sustainability, it provides an 
estimate of our significant biomass resource potential. To achieve 
greater use of ``homegrown'' renewable fuels, we will need advanced 
technologies that will allow competitively priced ethanol to be made 
from cellulosic biomass, such as agricultural and forestry residues, 
material in municipal solid waste, trees, and grasses. Advanced 
technology can break those cellulosic materials down into their 
component sugars and then ferment them to make fuel ethanol. To help 
reduce the costs of producing these advanced biofuels and ready these 
technologies for commercialization, the President's 2007 budget request 
increases DOE's biomass applied research funding by 65 percent, to a 
total of $150 million. In accordance with Section 932(d) of the EPAct, 
a Funding Opportunity Announcement was made by Secretary Bodman on 
February 22, 2006 for the commercial demonstration of integrated 
biorefineries. Total amount of these multi-year awards is $160 million 
(not including 60 percent cost-share). The projects are currently in 
the review process with notification of 2-4 winners anticipated late in 
2006.
    Hydrogen Fuel Initiative.--In his 2003 State of the Union Address, 
President Bush launched the Hydrogen Fuel Initiative, which seeks to 
work in partnership with the private sector to accelerate the research 
and development required for a hydrogen economy. The President's 
Hydrogen Fuel Initiative and the FreedomCAR Partnership combined are 
providing nearly $1.7 billion over five years, from fiscal year 2004 to 
2008, to develop hydrogen-powered fuel cells, hydrogen infrastructure 
technologies, and advanced automobile technologies. The President's 
Initiative will enable the commercialization of fuel cell vehicles in 
the 2020 timeframe. Through this initiative, the cost of a fuel cell 
has been cut in half, and the expected life of an automotive fuel cell 
has been doubled since 2003. I have driven several prototypes of such 
vehicles. Private sector interest and investment remains high.
Improve Air Quality and Public Health
    Air pollution in the United States has declined by 53 percent since 
1970. During the same time period, the economy increased by 195 
percent, energy use increased by 48 percent and the population 
increased by 42 percent. Between 2000 and 2005 alone, U.S. air 
pollution declined by 12 percent. The success of declining emissions as 
the economy grows is due, in part, to the remarkable progress American 
innovators have had in developing and deploying emission control and 
efficiency technologies and practices. The President's clean air 
initiatives are designed to build on and significantly accelerate this 
progress, in both the power generation and transportation sectors.
    Cleaner Power Generation--Both Old and New.--The Clean Air 
Interstate Rule (CAIR) will require powerplants in the eastern part of 
the United States to cut their emissions of sulfur-dioxide, nitrogen 
oxide and, for the first time, mercury by nearly 70 percent. Coupled 
with EPA's rule to decrease emissions from heavy-duty on-highway and 
non-road diesel engines, and other existing state and federal control 
programs, CAIR will help bring most of the country into attainment with 
more stringent ozone and PM2.5 air quality standards. 
Attainment of the standards will provide room for economic growth as 
manufacturers seek permits to expand their operations and to build new 
facilities. The broadly distributed and relatively minimal impact these 
regulations will have on natural gas, coal and electricity prices will 
also provide economic advantage by achieving the environmental benefits 
in the most cost effective manner. By providing a clear, long-term, 
market-based regulatory framework, CAIR will help improve stability of 
electricity prices for consumers and manufacturers.
    The President's Clear Skies legislation would improve on these 
outcomes by expanding the powerplant controls under CAIR nationwide. 
Clear Skies would cap emissions from more than 1,300 powerplants 
nationwide, reducing pollution by as much as 9 million tons annually at 
full implementation. Utilities will achieve this by spending more than 
$52 billion to install, operate and maintain new, primarily clean coal 
pollution abatement technology on both old and new powerplants. The 
Clear Skies legislated cap-and-trade program, using the same mechanism 
as the highly successful Acid Rain Trading Program, will require only a 
few dozen government officials to operate and will assure almost 100 
percent compliance through a system that is easy to monitor and easy to 
enforce.
    Cleaner Transportation.--The Administration is also implementing 
new rules regulating emissions from both highway and non-road diesel 
engines and fuels. The Ultra Low Sulfur Diesel rule will go into effect 
nationwide in October. This rule will dramatically reduce emissions 
from both highway and non-road diesel engines by more than 90 percent. 
Removing the sulfur from the fuel, paves the way for the 
Administration's new rules cutting nitrogen-oxide and particulate 
matter (PM) emissions by 90-95 percent from the diesel engines on new 
heavy duty trucks, school buses, and non-road vehicles such as 
construction and farm equipment, and ultimately certain ships and 
locomotives. This program will also reduce non-methane hydrocarbons 
(NMHC), sulfur dioxide (SO2), carbon monoxide (CO) and air 
toxics emissions. These new rules are the result of an EPA-led 
collaborative process that had wide support from industry--fuel 
refiners and distributors, engine and equipment manufacturers--
environmental groups and other stakeholders. Together these rules will 
make that familiar ``black puff of smoke'' a thing of the past.
    The technological breakthrough of a new generation of clean diesel 
fuels and engines opens up a dramatic new opportunity for fuel savings 
and greenhouse gas reductions in the high volume and turnover market of 
passenger cars and light duty vehicles. In part because of stringent 
tailpipe pollution standards, only a very small percentage of passenger 
cars, SUVs, delivery vans and pickup trucks are diesel. By contrast, in 
Europe, with less stringent tailpipe standards and higher gasoline 
prices, the percentage of diesel passenger and light duty vehicles is 
quite high. With the availability of new diesels than can meet our new 
clean air standards, even a modest increase in the diesel fleet 
percentage can produce enormous savings. Clean diesel engines 
reportedly are about 25 to 35 percent more fuel efficient than gasoline 
engines. These gains are achieved throughout the driving cycle, in 
contrast with hybrids which produce their gains primarily in city 
driving. Clean diesel engines also substantially reduce the amount of 
CO2 per mile traveled. At the same time, clean diesels offer 
greater performance (especially pulling heavier loads), lower 
maintenance costs, longer engine life, and the capability to use 
biodiesel, a fuel that can be produced from a wide variety of biomass 
sources, without losing as much of the fuel economy benefit as ethanol 
does. That is why DOE has helped initiate an accelerated process to 
establish national and international bio-diesel fuel standards, which 
should further enable the design of high-performing and reliable clean 
diesel engines for both the U.S. market and global market.
Reduce Greenhouse Gas Intensity
    Our Climate Approach.--The President is firmly committed to taking 
sensible action on climate change--at home and abroad. Climate change 
is a serious, long-term challenge that requires an effective, 
sustainable policy. The Administration's climate change policy is 
science-based, encourages research that leads to technological 
innovation that is cleaner and more efficient, and takes advantage of 
the power of markets to bring those breakthrough technologies into 
widespread use. Our inclusive strategy brings all stakeholders to the 
table and encourages meaningful global participation through actions 
that will reduce greenhouse gas emissions, improve energy security and 
cut air pollution that is harmful to human health and natural resources 
while ensuring continued economic growth and prosperity for our 
citizens and for citizens throughout the world. Economic growth enables 
investment in the technologies and practices we need to burn our vast 
reserves of coal more cleanly and efficiently and reduce our dependence 
on imported fossil fuels.
    Progress Toward the President's Goal.--The President has set an 
ambitious target of cutting our greenhouse gas intensity by 18 percent 
through the year 2012. When announced, this commitment was estimated to 
achieve about 100 million additional metric tons of reduced carbon-
equivalent emissions in 2012, with more than 500 million metric tons of 
carbon-equivalent emissions in cumulative savings over the decade. Our 
objective is to significantly slow the growth of greenhouse gas 
emissions and, as the science justifies, stop it and then reverse it. 
While measuring progress in absolute terms is important, the most 
useful measure for policy management purposes is the relative 
improvement in greenhouse gas emissions intensity--a point that our 
Asia-Pacific Partners recognize. The intensity measure appropriately 
recognizes reductions that are achieved through increased investment in 
efficiency, productivity and economically valuable outcomes that 
require less energy or otherwise lead to lower emissions. The intensity 
measure sharply discounts reductions produced by economic decline, job 
loss, or policies that simply shift greenhouse gas emitting activity 
from the United States to another country--in which case the desired 
emissions reduction did not actually happen.
    To meet help our intensity target, further our understanding of 
climate science, and help reduce our emissions in the long-term, the 
Administration has committed more than $29 billion for climate change 
related activities since 2001, helping fund numerous related to climate 
change. The President's 2007 Budget includes an additional $6.5 billion 
for climate change related activities--an increase of 12 percent from 
the previous year. Because of this aggressive strategy, we are well on 
our way to meeting our target. According to EPA data reported to the 
UNFCCC, U.S. greenhouse gas intensity declined by 2 percent in 2003, 
and by 2.5 percent in 2004.\1\ Put another way, from 2003 to 2004, the 
U.S. economy increased by 4.22 percent while greenhouse gas emissions 
increased by only 1.7 percent. This rate of progress exceeds the 
progress in most other major developed countries. A June 2006 EIA 
preliminary estimate of energy-related carbon dioxide emissions--which 
account for over four fifths of total greenhouse gas emissions--
suggests an improvement in carbon dioxide emissions intensity of 3.3 
percent in 2005.
---------------------------------------------------------------------------
    \1\ Using a slightly different methodology, the Energy Information 
Administration estimated improvement in greenhouse gas emission 
intensity of 1.6 percent and 2.1 percent in 2003 and 2004, 
respectively.
---------------------------------------------------------------------------
    Progress in the United States compares favorably with progress 
being made by other countries. Trends in GHG Emissions: 2000-2004 
(Attachment 1) and Trends in GHG Emissions Intensity: 2000-2004 
(Attachment 2) show how emission trends in the United States compare to 
other industrialized countries based on national data reported to the 
UN Framework Convention on Climate Change. The data in Attachment 1, 
which includes countries that have obligations under the Kyoto 
Protocol, indicate that from 2000 to 2004 the major developed economies 
of the world are at about the same place in terms of actual GHG 
emissions. In some countries, emissions are increasing slightly, in 
others they are decreasing slightly. Contrary to some popular 
misconceptions, no country is yet able to decrease its emissions 
massively. Note that the United States has seen its actual emissions 
increase by 1.3 percent, a lower percentage than the European Union 15 
increase of 2.4 percent.
    Trends in GHG Emissions Intensity: 2000-2004 shows progress in 
emissions intensity for the same countries over the same period. Major 
industrialized countries are all in the 10 percent range for emissions 
intensity improvement, showing that these economies, with very 
sophisticated infrastructure and systems, are in the process of turning 
over capital stock to more productive and efficient technologies and 
practices. The ongoing focus is to take actions to help accelerate that 
turnover to cleaner and more advanced technologies.
    Our climate approach includes a broad array of strategies to bring 
cleaner energy technologies to the market. The Administration is now 
implementing numerous federal programs--including partnerships, 
consumer information campaigns, incentives, and mandatory regulations--
that are directed at developing and deploying cleaner, more efficient 
energy technologies, conservation, biological sequestration, geological 
sequestration and adaptation. The President attaches great importance 
to creating incentives for our industries, companies, and citizens to 
take actions that will have a real impact on greenhouse gas emissions. 
For example, the DOE's Climate VISION program and the EPA's Climate 
Leaders and SmartWay Transport Partnership programs work in voluntary 
partnership with specific commitments by industry to verifiably reduce 
emissions. In terms of incentives, little attention has been paid in 
the climate change context to the massive benefits of the new, more 
favorable tax rules on expensing and dividends, which helping to 
unleash substantial new capital investment, including purchases of 
cleaner, more efficient equipment and facilities.

                        ASIA-PACIFIC PARTNERSHIP

    Last January, the United States and our Asia-Pacific Partners 
announced that we would be better able to meet our increased energy 
needs and associated challenges, including those related to energy 
security, air pollution, and greenhouse gas intensity, by working 
together. We recognized that it is critical that we cooperate on 
developing, demonstrating, and implementing cleaner and lower emissions 
technologies that allow for the continued economic use of fossil fuels 
while addressing air pollution and greenhouse gas emissions. We are 
using the Partnership's platform to promote the deployment of promising 
technologies that offer greater energy efficiency and lower air 
pollution and greenhouse gas intensities. After reviewing the extensive 
range of existing national programs and projects our governments are 
pursuing with regard to clean development and climate, we recognized 
that together we can pool our resources and meet a range of diverse 
development and climate objectives simultaneously.
    Emerging Economies.--The Asia-Pacific Partnership engages key 
emerging economies, particularly important in the context of climate 
change, even as they grapple with their more immediately pressing 
energy security and air quality efforts. The Energy Information 
Administration (EIA) is predicting that by 2010 energy-related carbon 
dioxide emissions from non-OECD emerging economies, including India and 
China, will exceed those produced by the mature OECD market economies 
of North America, Europe and Asia. By 2030, the EIA estimates that 
global carbon dioxide emissions will rise 60 percent compared to 
today's levels, with two-thirds of the increase driven by developing 
country emissions. (See Attachment 3: World Carbon Dioxide Emissions by 
Region: 2003-2030). These EIA projections are consistent with recent 
projections from the International Energy Agency. Its World Energy 
Outlook 2004 suggests that well over two thirds of the projected 
increase in energy-related carbon dioxide emissions between now and 
2030 will be from developing countries. Absent the participation of all 
major emitters, including developing countries, the UN Framework 
Convention's ultimate goal of stabilizing greenhouse gas concentrations 
will remain elusive. By working together, however, EIA projections 
suggest that reasonably ambitious strategies to improve greenhouse gas 
intensity can produce meaningful progress in offsetting the 
accumulation of greenhouse gases. (See Attachment 4: Carbon Dioxide 
Intensity Improvement Projections).
    The Asia-Pacific Partnership is a significant breakthrough. A 
successful international response to climate change requires active and 
meaningful developing country participation, which includes both near-
term efforts to slow the growth in emissions and longer-term efforts to 
build capacity for future cooperative actions. We need to pursue our 
international efforts in a spirit of collaboration, not coercion, and 
with a true sense of partnership. This is especially true in our 
relations with developing countries, which have an imperative to grow 
their economies and provide for the welfare of their citizens. 
Experience has shown these countries to be quite skeptical of climate 
mitigation approaches that they think will divert them from these 
fundamental goals. It is also true that many of the largest greenhouse 
gas emitters are also among our most significant trading partners. They 
have rapidly advancing--in many cases, world class--industries and 
considerable technical expertise.
    Nationally Defined Outcomes.--The Partnership will work within the 
context of nationally defined outcomes to identify needed methods, 
technologies, and financial arrangements to assure success. The Asia-
Pacific Partners, for example, will share their experiences with China 
to assist its government, wherever possible, in meeting its commitment 
to improve its energy intensity by 20 percent and cut its sulfur-
dioxide emissions by 10 percent by 2010 from 2005 levels. For our part, 
we have much to gain from the Partnership as well. For instance, we are 
learning from Japan, which has a highly-evolved, partnership program of 
greenhouse gas mitigation goal-setting and implementation involving 
each of its major emitting sectors. DOE's Climate VISION and EPA's 
Climate Leaders programs share common elements with the Japanese 
program, and closer alignment and amplification of these approaches, 
while ensuring their relevance to each country's national 
circumstances, will be very valuable.
    Industrial and Commercial Private Sector Involvement.--The Asia-
Pacific Partners recognize that working closely with private sector and 
other stakeholders is crucial to our success in addressing energy and 
climate issues. And the private sector has recognized the potential 
that the Asia-Pacific Partnership brings to their businesses. Senior 
executive leadership of some our Nation's most successful businesses 
are actively engaged in the Partnership. Personal time and focus are 
among the most valuable commodities that a CEO can give any venture. 
CEOs do not get personally involved unless they believe there is a real 
potential for tremendous success, and they are very involved in the 
Partnership. The fact that several CEOs and other senior executives 
have made multiple trips to Asia to participate in Partnership meetings 
strongly demonstrates enthusiastic private sector engagement about the 
Partnership's value. Success for the private sector translates into 
energy security, cleaner air and reduced greenhouse emission.
    The U.S. Departments of State, Energy, Commerce, the Environmental 
Protection Agency, and other agencies and financing institutions, such 
as the Export-Import Bank and Asian Development Bank, are actively 
discussing ways of ensuring that the private sector is effectively 
plugged into the Partnership at every stage of its work. Government-to-
government discussions held under the auspices of the Partnership bring 
together economic, energy, and environment ministries which enable the 
governments to build a more effective and sustainable effort to tackle 
climate change.
    Leveraged Outcomes.--The Partnership enables public and private 
entities to do what they do best. Government to government action is 
focused on addressing barriers and making it easier to address market 
opportunities and potential projects. The private sector then delivers 
on energy efficient pollution and greenhouse gas emissions reduction 
projects that create jobs in the United States, a policy preferable to 
direct subsidies which burden our taxpayers with these expenses. In 
other words, $50 million of U.S. taxpayer money can be leveraged into 
billions of dollars of private sector investment instead of just 
producing one project worth $50 million. What this means in 
environmental terms is that for the cost of one moderate sized clean 
energy project, one could see a reduction in emissions from hundreds of 
new energy efficient projects. We are placing a strong emphasis on 
identifying opportunities for near-term outcomes that can be ``mass-
produced'' using tried and true technologies and methods.
    A recent methane capture agreement in China represents an 
environmentally conscious and profitable deal. Methane gas is released 
into mines or the atmosphere during coal mining operations. It can be 
very hazardous and can contribute to fires and explosions if not 
properly vented. Methane is also a greenhouse gas over 20 times more 
potent than carbon dioxide. It can also be used as a clean burning 
fuel. Methane capture during coal mining operations nets significant 
benefits in terms of worker safety, reduction of harmful pollution, and 
mitigation of greenhouse gas. It is a well-established and highly 
profitable practice now in place at 21 mines in the United States. In 
2003, U.S. mines with methane drainage systems in place produced about 
56 billion cubic feet of methane (22.62 MMTCO2E). About 40 
billion cubic feet of the drained gas, or 71 percent, was recovered and 
utilized for energy. To date, the majority of coal mine methane 
recovered in the United Staets has been injected into natural gas 
pipelines. However, with higher energy prices in recent years, other 
options such as electric power generation for on-site use are becoming 
more viable. Two power generation projects are currently operating at 
active U.S. underground coal mines: CONSOL Energy in Virginia (88 MW) 
and Peabody Coal/NW Fuels Development in West Virginia (1.35 MW).
    Under the auspices of the multilateral Methane to Markets 
Partnership, a precursor to the Asia-Pacific Partnership, Caterpillar 
and Shanxi Jincheng Anthracite Coal Mining Group Co., Ltd. in China 
signed a $58 million contract to provide 60 methane-gas-powered 
generator sets to produce power at a Chinese coal mine. Once complete, 
this project is expected to be the largest of its kind in the world. 
Caterpillar will be capturing methane gas, instead of venting it into 
the atmosphere, and burning it to provide 120 megawatts of electricity 
to Jincheng City. It is estimated that the project will reduce 
greenhouse gases by 4.0 million tons of carbon dioxide equivalent over 
its 20-year lifetime. This is an example of the type of initiative that 
the Asia-Pacific Partnership is trying to duplicate. The potential 
number of projects similar to this in other Partner countries is quite 
high.

                       STRUCTURE AND TASK FORCES

    I will now summarize the Partnership's technical structure, the 
nature of the results it can produce, and the path forward. This past 
January, I was privileged to join Energy Secretary Sam Bodman and Under 
Secretary of State Paula Dobriansky at the first Ministerial meeting of 
the Partnership in Sydney, Australia. The meeting was hosted by 
Australian Prime Minister John Howard and chaired by Australian Foreign 
Minister Alexander Downer. In addition to involving high-ranking 
government official representation, the meeting also included a 
substantive dialogue with heads of industrial organizations from each 
country representing some of the most significant, energy-intensive and 
emitting sectors.
    The Ministers agreed to a Partnership Communique, Charter, and Work 
Plan, which I have attached to my testimony. Concurrently, they 
established a Policy and Implementation Committee and the Partnership's 
first set of Task Forces covering actions in eight areas: Cleaner 
Fossil Energy, Renewable Energy and Distributed Generation, Power 
Generation and Transmission, Steel, Aluminum, Cement, Coal Mining, and 
Buildings and Appliances.
    The Policy and Implementation Committee (PIC) sets the overall 
policy direction and outreach strategy for the Partnership. It also 
serves as the mechanism for introduction of new projects and 
participants in Partnership. Since the Partnership is heavily reliant 
upon a ``bottom up'' approach, the PIC relies on the eight Task Forces 
as the foundation for its strategic planning.
    Each Task Force has a government chair and co-chair (See Attachment 
5). Initial details about the objectives and work plans for each Task 
Force are outlined in the accompanying charts. Each Task Force consists 
of two senior government officials and two private sector leaders from 
each country to enable a relatively manageable planning and 
implementation dialogue of about 24 people per Task Force.
    The U.S. is chairing the Policy and Implementation Committee and 
chairing or co-chairing three of the Task Forces. The U.S. Task Force 
members include participants from government agencies, major companies, 
trade associations, and non-profit organizations.
    In April of this year, the U.S. hosted the first Task Force working 
meetings in Berkeley, California. Approximately 300 senior 
representatives from the public and private sectors attended the nearly 
week-long event. The eight Task Forces met for two full days and 
identified actions covering several dozen activities.
    All eight Task Forces have drafted Action Plans, documents that 
describe objectives and initial project ideas. The Policy and 
Implementation Committee is reviewing the Action Plans now.
    The Policy and Implementation Committee is meeting from October 
11th to 13th in Jeju, South Korea. Participants will focus on:
     Coordinating the reporting projects in the Task Force 
Action Plans;
     Developing guidance on a mechanism for introducing new 
projects to the work program;
     Communicating with and reaching out to the private sector;
     Discussing how to more fully utilize the technology and 
the internet for project coordination and outreach;
     Recommending ``flagship'' projects from current lists of 
projects; and
     Providing an opportunity for participating countries to 
discuss expanded participation by other Pacific Rim nations.
    The eight Asia-Pacific Partnership Task Forces are making progress 
in advancing the Partnership's goals. In the following paragraphs I 
summarize each Task Force's goals and objectives, and potential 
projects. The names of the lead Federal agency or agencies appear next 
to the Task Force names.
    Aluminum (U.S. Co-Chair; DOC, EPA).--The Aluminum Task Force seeks 
to: advance the development and deployment of new aluminum production 
using ``best practice'' processes and technologies; enhance sector-
related data, including recycling and performance; and facilitate 
increased aluminum recycling rates across the Partnership economies. 
The Aluminum Task Force has seven projects outlined in support of these 
goals.
    In its proposed flagship project, the Task Force will advance the 
management of perfluorocarbon (PFC) emissions in primary aluminum 
smelters. Reduction in PFC emissions would substantially reduce the 
global contribution of greenhouse gas emissions. PFCs are potent 
greenhouse gases with a very long atmospheric lifespan. Under the U.S. 
EPA Voluntary Aluminum Industrial Partnership (VAIP), and under the 
expanded efforts of the more recent Climate Vision agreement, the U.S.' 
primary aluminum industry has reduced PFC emission intensity by about 
77 percent, from 1.31 tons of carbon equivalent emissions per ton of 
production in 1990 to 0.3 tons per ton of production in 2004. The PFC 
management project under the Asia-Pacific Partnership seeks to transfer 
this progress to the other Partner countries. Initial workshops have 
been held in Beijing, and a training workshop is under development for 
2007 in India. Given that China is now the world's largest aluminum 
producer, and India is rapidly expanding its production, this project 
has a large potential to reduce current and future aluminum smelting 
greenhouse gas emissions.
    Buildings and Appliances (U.S. Co-Chair; DOE, EPA).--The Buildings 
and Appliances Task Force seeks to increase levels of private 
investment in energy efficient buildings and appliances in support of 
broader national efforts that support sustainable development, increase 
energy security, and reduce environmental impacts. The Task Force is 
using existing tools, such as Memoranda of Understanding and bilateral 
agreements, to expand cooperation and collaboration. It is developing 
and employing new tools, such as best practice guidelines and market 
transformation strategies, to increase the energy efficiency of 
buildings and appliances in Partner countries. Members of the Task 
Force believe that abundant opportunities exist to do so cost-
effectively, and have agreed to: cooperate in the development of 
demonstration technologies, advance building design principles that 
increase energy efficiency; and identify barriers to the implementation 
of energy efficient practices and technologies.
    Through the Buildings and Appliances Task Force, the U.S. is 
working with the Chinese government and private companies to implement 
no-cost or low-cost practices and cost-effective retrofits that can 
reduce energy use by as much a 15 percent. EPA's eeBuildings program, 
which shares the lessons learned from Energy Star, launched a major new 
partnership with Savills, a premier property services firm with 14,500 
employees worldwide. Savills has offices in six key Chinese cities and 
manages over 90 large buildings in China. Through this collaborative 
venture, EPA will train several hundred Savills building managers, 
provide input for a new portfolio management system, and grant 
technical assistance to improve the operations of 85 government-owned 
buildings.
    Cement (EPA).--The Cement Task Force is developing energy 
efficiency and emission reduction benchmarks to allow for standardized 
measurement of the energy and environmental performance of 
participating countries' cement sectors. This is an important policy 
tool to set voluntary energy efficiency targets and evaluate progress. 
The Task Force uses this information to help prioritize investments in 
energy efficient technologies. The Cement Task Force will also analyse 
the legal frameworks in the Asia-Pacific Partnership nations and 
identify incentives for and barriers to implementing energy efficient 
and clean manufacturing technology.
    The Asian Development Bank (ADB) is working with EPA to conduct 
pilot projects in China to quantify energy cost savings and pollution 
and carbon dioxide reductions resulting from the installation of clean 
technology, and identify finance mechanisms for promoting private 
sector investments in clean technology in China. A conference is 
scheduled to take place in Beijing on September 26, 2006 to engage key 
ministries. ADB is poised to extend the project to other Partnership 
countries if it is successful in China. Cement production plays a 
significant role in the rapidly expanding economies of China and India. 
This initiative holds great potential to improve the energy efficiency 
of and reduce emissions from China's cement production.
    Cleaner Fossil Energy (DOE, EPA).--The Cleaner Fossil Energy Task 
Force seeks to accelerate the demonstration and deployment of cleaner 
fossil energy technologies in Partnership countries by: building 
capacity and expertise to support cleaner technology development; 
identifying and addressing barriers to expansion of cleaner fossil 
energy technologies including technical barriers, site approvals and 
licensing constraints, infrastructure limitations, and inter-country 
market structures; and assessing and promoting CO2 capture 
and storage opportunities.
    Earlier this month, the Japan Coal Energy Center (JCoal) and the 
European Parliaments Research Initiative co-sponsored a workshop in 
Tokyo on Integrated Gasification Combined Cycle (IGCC) clean coal 
technology and Carbon Capture and Storage. All six Asia-Pacific 
Partnership countries sent representatives to this event.
    India and South Korea have recently joined the FutureGen 
Initiative, a $1 billion, 10-year long, public-private partnership to 
build the world's first coal-based, near-zero emissions electricity and 
hydrogen powerplant. It is designed to dramatically reduce air 
pollution and capture and store greenhouse gas emissions through carbon 
sequestration. The two countries have each pledged $10 million; the 
member companies have collectively committed $250 million including 
international companies in Australia and China.
    Coal Mining (U.S. Chair; DOE, DOI).--The Coal Mining Task Force 
seeks to: meet the increasing energy demand using sustainable coal 
mining practices; ensure an adequate, competent workforce; accelerate 
the deployment of technologies and practices that can improve resource 
recovery, including coal mine methane; and improve the economics and 
efficiencies of coal mining, reclamation, and coal processing while 
continuing to improve mine safety and reduce environmental impacts.
    The U.S. is playing a large role in the Task Force's submissions to 
Australia's ``Leading Practice Sustainable Development Program for the 
Mining Industry'' project, which is publishing four volumes on best 
practices in coal mining. The first of four books will be completed by 
the end of the year. The U.S. delegation added content from a newly 
published book on ``Managing Coal Combustion Residues in Mines'' by the 
National Research Council of the National Academies 2006 to this 
program.
    The Methane to Markets Partnership is another highly practical 
major element in the Bush Administration's series of international 
technology partnerships. Launched in November 2004, the Methane to 
Markets Partnership focuses on advancing cost-effective, near-term 
methane recovery and use as a clean energy source from coal mines, oil 
and natural gas facilities, landfills, and agricultural waste 
management systems. The Methane to Markets Partnership, in coordination 
with the Asia-Pacific Partnership, will hold a coal mine methane 
development workshop in Brisbane, Australia on October 4th and 5th. The 
workshop will address opportunities and impediments to coal mine 
methane project development by focusing on case studies and experiences 
in Australia, the United States, and internationally. A Coal Mine 
Subcommittee meeting will follow on October 6th. The Asia-Pacific 
Partnership builds upon the principles of Methane to Markets and is 
actively leveraging its resources in the interagency process.
    The Coal Mining Task Force will hold a mine safety workshop in 
Washington, DC this fall. The Australian delegation will assist. 
Planning is now underway, with National Mining Association taking the 
lead.
    Power Generation (U.S. Chair; DOC, DOE).--The Power Generation and 
Transmission Task Force seeks to significantly improve the efficiency 
and environmental performance of power generation, transmission and 
distribution, and end use. The Task Force will assess opportunities for 
practical actions to develop and deploy power generation, transmission 
and demand side management technologies that can aid development and 
mitigate climate concerns. The Task Force is also facilitating the 
deployment of practices, technologies and processes to improve 
efficiency of power production and transmission. We have demonstrated 
that simple and inexpensive improvements in Indian powerplants can 
increase efficiency by more than 1.5 percent. Replicating these 
improvements at over 130 small coal powerplants could reduce India's 
CO2 emissions by over 100 million tons/year and reduce fuel 
costs by over $150 million/year. Communicating efficient practices and 
sharing knowledge is a cornerstone of the Power Generation Task Force's 
Action Plan. Plans are in place through the Partnership to engage 
Indian officials and engineers.
    Over 20 U.S. utilities have agreed to engage the Partnership. Under 
the auspices of the Partnership, the American Electric Power 
Corporation (AEP) hosted representatives from the Indian National 
Thermal Power Corporation, the largest power utility in India, where 
senior Indian officials and engineers observed opportunities for 
efficiency and environmental improvements. As a follow-up, this 
September, AEP and other U.S. companies are planning to host meetings 
and plant visits to share ``best-practices'' on techniques and 
processes to operate power facilities more efficiently and to control 
emissions. A parallel track co-hosted by AEP, Southern Company, and 
Tampa Electric Company will allow participants to examine and discuss 
advanced Integrated Gasification Combined Cycle (IGCC) technologies. 
Over 100 participating engineers representing all Asia-Pacific 
Partnership member countries are expected to attend. This event will be 
the first in a series of events focused on Identification and 
Implementation of Applicable Best Practices for Power Generation. Both 
government and industry in China and India have shown strong interest 
in the return visit and plan to send engineers to participate.
    Renewable Energy and Distributed Generation (DOC, DOE).--The 
Renewable Energy and Distributed Generation Task Force is focused on 
taking concrete actions to achieve real, measurable outcomes toward the 
accelerated deployment of renewable energy over the next five years. 
Members of the Task Forces recognize they must close the remaining gap 
between the cost of renewable energy and conventional generation.
    U.S. Commercial Service (CS) trade specialists from New Delhi and 
the East Asia Pacific region have organized a reverse trade mission 
from India to Chicago, California, and Washington, DC for August 5th to 
16th. The delegation, consisting of 16 Indian business and government 
decision-makers in the renewable energy and energy efficiency sectors 
first attended the U.S. Department of Energy-sponsored Energy 2006 
conference in Chicago where CS organized 45 one-on-one meetings with 
representatives from U.S. renewable energy product manufacturers. In 
California, the delegation met with local municipalities, regional 
authorities, and private companies involved with the industry, with 
whom the delegation members had another 130 one-on-one meetings. 
Preliminary results of the mission already show projected U.S. exports 
in the short term of biomass, biodiesel, combined heat and power, 
bioplasma technology, photovoltaic solar panels, inverters, and 
financial services worth almost $12 million.
    Steel (DOC, DOE).--The Steel Task Force is developing a plan for 
sector-relevant benchmark and performance indicators. The Task Force's 
plan will include new developments in steel production and the transfer 
of these developments along with current state-of-the-art ``best 
practices'' in steel technologies. The Task Force will also encourage 
and increase recycling across the Partnership.
    For the first time the steel industries in China and India are 
cooperating on new technologies and processes that will make their 
steel production cleaner and more energy efficient. Both China and 
India are significantly increasing steel production to support their 
rapid construction. China is projecting that their steel production 
will soon be approximately four times the steel production of the 
United States. By implementing new technologies and best practices used 
in Japan, Australia, and the United States, the new production in South 
Korea, India and China will be much cleaner, more energy efficient, and 
have lower greenhouse gas emissions.

                       CROSS-CUTTING POLICY NEEDS

    The Asia-Pacific Partnership provides a framework for tackling 
policy issues that can advance the objectives of all or a group of the 
Task Forces. For example, most of the Task Force Action Plans will 
include an emphasis on energy conservation, improved energy efficiency 
and air pollution control. Partnership countries account for roughly 50 
percent of global trade in these goods. However, each country currently 
imposes tariffs that impede diffusion of many technologies, goods and 
services to advance these objectives. Where imports occur, the tariffs 
make the products more expensive, cutting into efforts to make such 
technologies more widely available. Possible inconsistent application 
by some of our Partners may further obstruct the transfer of the best 
of currently available technology by creating an opaque process for 
exporters and increases transaction costs for their customers.
    By eliminating these tariff barriers and leveling the playing field 
for all vendors, we will encourage the flow of more energy efficient 
and cleaner technology. For example, given the long life span of 
powerplants, deploying the best efficiency technology upfront ensures 
that we enjoy the greatest possible amount of reductions in energy 
demand, air pollution, and greenhouse gas emissions. At the outset of 
the Doha Round of World Trade Organization negotiations and during the 
World Summit on Sustainable Development in Johannesburg, South Africa 
in 2002, world leaders recognized this issue and committed to address 
it. The Asia-Pacific Partnership should provide leadership in 
eliminating tariffs and other trade barriers for these technologies.

                                FUNDING

    As I mentioned earlier, the Partnership is a team effort and 
requires a team budget. The President's FY'07 budget calls for $52 
million to support the work of the Partnership. The Partnership is a 
key means of implementing Title XVI of the recently enacted Energy 
Policy Act of 2005. The request is divided among the Departments of 
State, Energy and Commerce, and the Environmental Protection Agency. 
Other agencies, such as the Departments of Transportation and 
Agriculture, will also be participating. The following represents a 
brief description of the areas of work each agency is undertaking:
    State Department: $30 million
     Fossil fuel thermal powerplant operational improvements 
and technology retrofits
     Hydropower and other renewable energy technology 
deployment
     Cleaner energy technology deployment in rural areas
     Industrial and mining sector strategic planning, 
efficiency and emission intensity reductions
     Efficiency and emission improvement in rail transport, 
aviation and urban public transportation
     Policy and institutional development
     Administrative support for technical meetings, 
conferences, and public communication
    Department of Energy: $15 million
     Advanced clean coal technology research and development
     Industrial technology strategic planning and energy 
efficiency best practices
     Energy efficiency best practices for public and private 
buildings
    The EPA: $5 million
     Enhanced methane recovery
     Data development for emissions inventories and modeling
     Appliance energy efficiency labeling and energy efficiency 
best practices for buildings
    Department of Commerce: $2 million
     Expanded export promotion for cleaner energy technologies
     Identification of barriers to deployment of clean energy 
technologies
     Assessment of existing standards related to clean energy 
and energy efficient technologies
    In addition to U.S. funding, the Government of Australia has 
announced that it will contribute 100 million AUD (approximately $75 
million U.S.) to the Partnership over 5 years. Discussions are underway 
regarding financial support from other partners.

                               CONCLUSION

    The President and his Administration are firmly committed to 
improving economic and energy security, alleviating poverty, improving 
human health, reducing harmful air pollution, and reducing the growth 
of greenhouse gas emissions levels. The Administration has advanced 
policies that encourage research breakthroughs that lead to 
technological innovation, and take advantage of the power of markets to 
bring those technologies into widespread use. Our growth-oriented 
strategy encourages meaningful global participation through actions 
that will help ensure the continued economic growth and prosperity for 
our citizens and for citizens throughout the world. Economic growth 
enables investment in the technologies and practices we need to address 
these important issues.
    Mr. Chairman and Members of the committee, I look forward to 
continuing to work with you on this innovative new effort to accelerate 
the development and deployment of clean energy technologies. Thank you 
for the opportunity to testify. I look forward to answering any 
questions you may have.

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       Statement of Bjorn Lomborg, Adjunct Professor, Copenhagen 
                            Consensus Center

    Global warming has become one of the preeminent concerns of our 
time, and this often clouds our judgment and makes us suggest 
inefficient remedies. As a result, we risk losing sight of tackling the 
most important global issues first, as well as missing the best long-
term approach to global warming.
    Yes, global warming is real, and it is caused mainly by 
CO2 from fossil fuels. The total cost of global warming is 
$5-8 trillion, which ought to make us think hard about how to address 
it.
    However, the best climate models show that immediate action will do 
little good. The Kyoto Protocol will cut CO2 emissions from 
industrialized countries by 30 percent below what it would have been in 
2010 and by 50 percent in 2050. Yet, even if everyone (including the 
United States) lived up to the protocol's rules, and stuck to it 
throughout the century, the change would be almost immeasurable, 
postponing warming for just 6 years in 2100.
    Likewise, economic models tell us that the cost would be 
substantial--at least $150 billion a year. In comparison, the United 
Nations estimates that half that amount could permanently solve all of 
the world's major problems: it could ensure clean drinking water, 
sanitation, basic health care, and education for every single person in 
the world, now.
    Global warming will mainly harm developing countries, because they 
are more exposed and poorer and therefore more vulnerable to the 
effects of climate change. However, even the most pessimistic forecasts 
from the U.N. project that by 2100 the average person in developing 
countries will be richer than the average person in developed countries 
is now.
    So early action on global warming is basically a costly way of 
doing very little for much richer people far into the future. We need 
to ask ourselves if this should, in fact, be our first priority.
    Two Copenhagen Consensus priority setting roundtables, with some of 
the world's top economists and the top U.N. Ambassadors similarly found 
that Kyoto comes far down the list of global priorities (see attached 
priorities).
    This does not mean doing nothing, but doing the clean, clever and 
competitive thing. Climate change should be addressed where effect is 
high and costs limited. Such an example is the ``Asia-Pacific 
Partnership'', which focuses on energy efficiency and diffusion of 
advanced technologies in electricity, transport and key industry 
sectors. Because it focuses on some of this century's biggest emitters, 
including China, India and the United States, it is forecast to reduce 
global carbon emissions with 11 percent in 2050--for reference, a full 
Kyoto would only reduce emissions by 9 percent in 2050.
    In essence, the AP6 is picking up the smart, low-hanging fruits; 
good examples would include the many Chinese coal plants that have heat 
rate efficiencies around 25 percent, compared to U.S. coal plants, 
which have efficiencies of 33-36 percent. The United States has a lot 
of expertise in retrofits and improving the efficiency of coal plants 
in China would not only reduce fuel inputs and air pollution, but 
CO2 as well.
    The cost of the AP6, however, is unclear at the moment. It is seen 
as cheap and voluntary, but it is doubtful that entirely voluntary 
measures will achieve all of the AP6 potential. And certainly, in the 
long run, more clever measures will be needed.
    For the future after 2012 we need not to propose more Kyoto-style 
immediate cuts, which would be prohibitively expensive, do little good, 
and cause many nations to abandon the entire process. We should rather 
be focusing on investments in making energy without CO2 
emissions viable for our descendants. This would be much cheaper and 
ultimately much more effective in dealing with global warming. I would 
suggest a treaty binding every nation to spend, say, 0.05 percent of 
GDP on research, development and demonstration of non-carbon-emitting 
energy technologies. This would, worldwide provide some $25 billion in 
RD&D--an almost 25-fold increase.
    This approach would be five times cheaper than Kyoto and many more 
times cheaper than a potential Kyoto II. It would involve all nations, 
with richer nations naturally paying the larger share. Perhaps 
developing nations should being phased in or mechanisms put in place to 
assist them financially and technically as in the AP6. It would let 
each country focus on its own future vision of addressing the energy 
and climate change challenge, whether that means concentrating on 
renewables, fission, fusion, conservation, carbon storage, or searching 
for new and more exotic opportunities.
    Such a massive global research effort would also have potentially 
huge innovation spin-offs. In the long run, such actions are likely to 
make a much greater impact than Kyoto-style responses. Researches at 
Berkeley actually envision that such a level of R&D could solve global 
warming in the medium term.
    In a world with limited resources, where we struggle to solve just 
some of the challenges that we face, caring more about some issues 
means caring less about others. We have a moral obligation to do the 
most good that we possibly can with what we spend, so we must focus our 
resources where we can accomplish the most first.
    Rather than investing hundreds of billions of dollars in short-
term, ineffective cuts in CO2 emissions, we should be 
investing tens of billions in research, leaving our children and 
grandchildren with cheaper and cleaner energy options.
    Bjorn Lomborg is the organizer of Copenhagen Consensus, adjunct 
professor at the Copenhagen Business School, and author of How to spend 
$50 billion to make the world a better place and The Skeptical 
Environmentalist.

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Statement of David D. Doniger, Policy Director, Climate Center Natural 
                       Resources Defense Council

    Thank you for the opportunity to testify today on science and 
policy issues related to the Asia Pacific Partnership. My name is David 
Doniger, and I am climate policy director at the Natural Resources 
Defense Council (NRDC). NRDC is a national, nonprofit organization of 
scientists, lawyers and environmental specialists dedicated to 
protecting public health and the environment. Founded in 1970, NRDC has 
more than 1.2 million members and online activists nationwide, served 
from offices in New York, Washington, Los Angeles and San Francisco. I 
have worked for NRDC in two separate stints for nearly 20 years. I also 
served in the Environmental Protection Agency in the 1990s, where I 
helped direct the Clinton administration's domestic and international 
policy on global warming.
    The Asia Pacific Partnership is symptomatic of the current 
administration's failure to take meaningful action to curb global 
warming either at home or abroad. The United States has limited the 
terms of engagement with the other participating countries to strictly 
voluntary measures and technology cooperation backed by what can only 
be described as token governmental funding. On these terms, the 
Partnership cannot make a difference. It is simply an exercise in 
looking busy while other nations engage in real efforts internationally 
and while business leaders, elected officials, and others work toward 
real policies here at home.

                          TIME IS RUNNING OUT

    Most serious climate scientists now warn that there is a very short 
window of time for beginning serious emission reductions if we are to 
avoid truly dangerous greenhouse gas concentrations without severe 
economic impact. The science debate is over.
    Significant emission reductions are needed, and delay only makes 
the job harder. As the National Academy of Sciences stated last year:
      Despite remaining unanswered questions, the scientific 
understanding of climate change is now sufficiently clear to justify 
taking steps to reduce the amount of greenhouse gases in the 
atmosphere. Because carbon dioxide and some other greenhouse gases can 
remain in the atmosphere for many decades, centuries, or longer, the 
climate change impacts from concentrations today will likely continue 
well beyond the 21st century and could potentially accelerate. Failure 
to implement significant reductions in net greenhouse gases will make 
the job much harder in the future--both in terms of stabilizing their 
atmospheric abundances and in terms of experiencing more significant 
impacts.\1\
---------------------------------------------------------------------------
    \1\ National Academy of Sciences, Understanding and Responding to 
Climate Change: Highlights of National Academies Reports, p. 16 
(October 2005), http://dels.nas.edu/dels/rpt--briefs/climate-change-
final.pdf (emphasis added).
---------------------------------------------------------------------------
    The evidence continues to pile up that we are already suffering 
dangerous climate impacts due to the buildup of carbon dioxide that has 
already occurred: stronger hurricanes, melting ice caps, killer heat-
waves, and severe droughts. NASA reported last week that the Arctic ice 
cap is melting at an unprecedented rate. Scientists have recently 
detected accelerated melting of the Greenland and West Antarctic ice 
sheets--much faster melting than anyone had expected. If either of 
these ice sheets melt away, sea levels will rise more than 20 feet, 
with utterly disastrous implications for Louisiana, Florida, and other 
low-lying regions of the country and around the world.
    There is only a short window of time to stop this from happening. 
Since the start of the industrial revolution, carbon dioxide 
concentrations have risen from about 270 parts per million (ppm) to 
more than 380 ppm today, and global average temperatures have risen by 
more than one degree Fahrenheit over the last century. A growing 
scientific consensus is forming that we face extreme dangers if global 
average temperatures are allowed to increase by more than 3.5 degrees 
Fahrenheit. We have a reasonable chance of staying within this envelope 
if atmospheric concentrations of CO2 and other global 
warming gases are kept from exceeding 450 ppm CO2-equivalent 
and then rapidly reduced. We still can stay within this 450 ppm 
target--but only if we stop U.S. emissions growth within the next 5-10 
years and cut emissions by at least half over the next 50 years. U.S. 
action on this scale--together with similar cuts by other developed 
countries and limited emissions growth from developing countries--would 
keep the world within that 450 ppm limit.
    So here is our choice. If we start cutting U.S. emissions soon, and 
work with other developed and developing countries for comparable 
actions, we can stay on the 450 ppm path with an ambitious but 
achievable annual rate of emission reductions--one that gradually ramps 
up to about 3.2 percent reduction per year. (See Figure 1.)
    But if we delay a serious start and continue emission growth at or 
near the business-as-usual trajectory for another 10 years, the job 
becomes much harder--the annual emission reduction rate required to 
stay on the 450 ppm path jumps between two- and three-fold, to 8.2 
percent per year. In short, a slow start means a crash finish--the 
longer emissions growth continues, the steeper and more disruptive the 
cuts required later.

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    Here's a commonsense illustration of what this means. Imagine 
driving a car at 50 miles per hour, and you see a stop light ahead of 
you at a busy intersection. If you apply the brakes early, you can 
easily stop your car at the light with a gentle deceleration.
    The longer you wait to start braking, the harder the deceleration. 
There's some room for choice. Within some limits, you can brake late 
and still stop in time. But the higher your speed, the earlier you must 
start braking. If you wait too long, you'll find yourself in the middle 
of the intersection with your forehead through the windshield.
    The captain of the Titanic learned a similar lesson. If he had 
started turning just a couple of minutes earlier, he would have missed 
the iceberg. But traveling at full speed, by the time he saw the 
iceberg, it was too late to miss it. He lost his ship. Will we repeat 
the same mistake?
    Advocates of the Asia Pacific Partnership's voluntary approach 
argue that it is still cheaper to delay mandatory emission cuts because 
(somehow) we will develop breakthrough technologies in the interim and 
these will enable faster reductions later at lower cost. But this 
argument is implausible for two reasons. First, as already 
demonstrated, delaying the start of reductions dramatically increases 
the rate at which emissions must be lowered later. Reducing emissions 
by more than 8 percent per year would require deploying advanced low-
emission technologies at least several times faster than conventional 
technologies have been deployed over recent decades. Second, delay 
means that a whole new generation of capital investment will be made in 
billions of dollars of high-emitting capital stock--conventional 
powerplants, vehicles, etc., that will be built or bought during the 
next 10-20 years in the absence of meaningful near-term limits. Under 
the delay scenario, our children and grandchildren would then have to 
bear the costs of prematurely retiring an even bigger capital stock 
than exists today. Even taking discounting into account, it is 
virtually impossible that delaying emission reductions is cheaper than 
starting them now.
    Limited as it is to voluntary measures, the Asia Pacific 
Partnership has no hope of preventing the ``crash finish'' scenario. 
Indeed, the Asia Pacific Partnership approach will only guarantee that 
we reach extremely dangerous CO2 concentrations. This is 
demonstrated by an analysis done for the Australian government (an APP 
partner) by the Australian Bureau of Agricultural and Resource 
Economics (ABARE).\4\
---------------------------------------------------------------------------
    \4\ Technological Development and Economic Growth, ABARE research 
report 06.1 (January 2006).
---------------------------------------------------------------------------
    The ABARE analysis assumed that the Asia Pacific Partnership meets 
its stated goal that all new powerplants built after 2015 in the United 
States, Australia, and Japan, and after 2020 in China, India, and South 
Korea are equipped with carbon capture and storage (CCS) technology and 
deposit their CO2 emissions underground. ABARE further 
assumed that this technology gradually diffuses around the world. The 
analysis also included modest improvements in efficiency and some other 
zero-emission generation (renewables and nuclear). No limits are 
placed, however, on existing powerplant emissions, or on other sectors. 
With these assumptions, ABARE finds that even if the Partnership's 
goals are met, CO2 emissions and concentrations keep rising 
above 650 ppm--well over a doubling of pre-industrial levels. See 
Figures 2 and 3. This would lock in devastating climate impacts.
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            VOLUNTARY MEASURES AREN'T WORKING AT HOME EITHER

    The Asia Pacific Partnership is only the latest manifestation of 
the president's ``voluntary'' policy. That approach, however, is not 
working at home either. The inadequacy of a voluntary program is plain 
to see for a growing number of business leaders, state and local 
elected officials, and a majority of the U.S. Senate, as well as to 
nearly all other nations.
    In 2002, President Bush recommitted the United States to 
``stabilization of greenhouse gas concentrations in the atmosphere at a 
level that would prevent dangerous anthropogenic interference with the 
climate system''--the objective of the climate change treaty (the U.N. 
Framework Convention on Climate Change) adopted and ratified by his 
father. The president said his goal was to ``slow, stop, and reverse'' 
U.S. global warming emissions growth. He set a purely voluntary target 
of reducing the emissions intensity of the U.S. economy--the ratio of 
emissions to GDP--by 18 percent between 2002 and 2012.
    But emissions intensity is a deceptive measure, because what counts 
for global warming is total emissions. Even if the president's target 
were met (and recent reports indicate that it may not be), total U.S. 
emissions will still increase by 14 percent between 2002 and 2012--
exactly the same rate as they grew in the 1990's. (See Figure 4.)

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                     THE NEED FOR MANDATORY LIMITS

    While the administration clings doggedly to the voluntary fiction, 
most political, civic, and business leaders in the United States are 
moving on. A majority of the Senate voted last year for a Sense of the 
Senate resolution endorsing the need for ``mandatory, market-based 
limits'' that will ``slow, stop, and reverse the growth'' of global 
warming pollution. The resolution affirms that U.S. mandatory action 
can be taken without significant harm to the economy and that such 
action ``will encourage comparable action by other nations that are 
major trading partners and key contributors to global emissions.''
    State and local governments are leading, with mandatory limits on 
powerplant emissions in the northeast and in California. California and 
10 other states have adopted limits on global warming emissions from 
motor vehicles. Last month, California--the 12th largest emitter in the 
world--enacted the most far-reaching state plan to reduce the state's 
global warming pollution to 1990 levels by 2020. The state's new law 
enjoys wide support from businesses and other constituencies, going 
well beyond the usual environmental suspects: PG&E Silicon Valley 
Leadership Group; Bay Area Council; Sacramento Municipal Utility 
District; Waste Management; Calpine; California Ski Industry 
Association; the cities of Los Angeles, San Francisco, Oakland, and 
Sacramento; the American Academy of Pediatrics; the California Nurses 
Association; CDF Firefighters; and Republicans for Environmental 
Protection.
    Many other states have adopted standards to increase the percentage 
of renewable power generation. Stakeholder processes to address global 
warming are underway or in development in a growing number of states in 
all regions of the country. More than 200 cities have announced plans 
to reduce their global warming pollution.
    The constituency for real action is broadening and growing. Earlier 
this year, more than 80 evangelical leaders called for mandatory limits 
on global warming pollution, citing their duty to care for God's 
creation.
    In April, appearing before the Senate Energy Committee, some of the 
largest electric utilities, suppliers of generating equipment, and 
electricity customers called for mandatory limits. Huge companies such 
as Duke Energy, Exelon, and GE said that voluntary programs won't work 
and that they need certainty and clear market signals in order to make 
sensible investments in new powerplants that will last 50 years. Big 
electricity consumers like Wal-Mart endorsed mandatory limits and 
committed to cut their energy use and emissions through investments in 
energy efficiency and renewable energy.
    They all get it. Voluntary programs and tax incentives are 
insufficient to get these technologies deployed at a sufficient scale 
and speed to avoid a climate catastrophe. The market conditions for 
these new investments will not be created without a limit on 
CO2 emissions.

                        MANDATORY LIMITS ABROAD

    Other countries get it too. Not just the Europeans, but developing 
countries as well. In December 2005, more than 180 countries committed 
to new negotiations on mandatory steps to follow and supplement the 
current Kyoto Protocol after 2012. What struck me most was the near 
consensus--save only our own government--on the market logic of 
mandatory requirements. The European Union, of course, has taken the 
tools of emissions trading pioneered in this country and implemented a 
mandatory cap-and-trade program for CO2. China and India now 
understand the market-based framework offers them the potential for new 
flows of capital to finance cleaner energy development--with obvious 
benefits for them in terms of cleaning up their awful local pollution 
problems, in addition to reducing their CO2 emissions.
    We need to recognize that key developing countries are also already 
taking actions to reduce their global warming emissions growth. For 
example:
     China's GHG emission intensity has improved due to macro 
economic reforms and energy sector liberalization. China's Eleventh 
Five-Year Plan, which goes into effect this year, calls for a 20 
percent reduction in energy use per unit of GDP by 2010. China's 
renewables sector is the world's fastest growing, at more than 25 
percent annually. China has enacted a new Renewable Energy Law and 
vowed to meet 15 percent of its energy needs with renewable energy by 
2020.\5\
---------------------------------------------------------------------------
    \5\ ``Gov't demands more focus on green energy,'' China Daily (Jan. 
13, 2006).
---------------------------------------------------------------------------
     China has far surpassed the U.S. fuel efficiency standards 
for vehicles of all classes. China's new fuel efficiency standards 
require vehicle classes to achieve on average 34.4 mpg by 2005 and 36.7 
mpg by 2008 (normalized for the CAFE test cycle). American fuel 
efficiency standards are calculated using the average fuel use of the 
entire fleet sold by an automaker. However, in China, as well as Japan, 
the standards require that each model sold meet the criteria. China's 
Standardization Administration finalized fuel economy standards for 
light-duty vehicles--cars and light trucks, including sport utility 
vehicles (SUVs)--that are up to 20 percent more stringent than U.S. 
CAFE standards. The standards will save 60 million tons of carbon in 
2030, displacing 517 million barrels of oil in that year--equivalent to 
removing 35 million cars from the road. China's leaders are serious 
about enforcing the standards--vehicles that don't meet the standards 
cannot be certified for sale or operation--and intend to broaden them 
to include heavy duty trucks.\6\
---------------------------------------------------------------------------
    \6\ An and Sauer, Comparison of Passenger Vehicle Fuel Economy and 
GHG Emisson Standards Around the World, Prepared for the Pew Center on 
Global Climate Change, December 2004
---------------------------------------------------------------------------
     Brazil's GHG emission intensity levels have risen in 
recent years because of increased gas use, which increases emissions 
relative to hydropower, on which Brazil has traditionally relied. 
However, in the transportation sector Brazil has saved 574 million tons 
of CO2 since 1975 through its development of ethanol, which 
is roughly 10 percent of Brazil's CO2 emissions over that 
period.\7\
---------------------------------------------------------------------------
    \7\ Baumert, Herzog, and Pershing, Navigating the Numbers: 
Greenhouse Gases and International Climate Change Agreements, World 
Resources Institute 2005, ISBN: 1-56973-599-9
---------------------------------------------------------------------------
    Even though they have already begun to act, other countries (both 
developed and developing) are likely to take U.S. action or inaction 
heavily into account in deciding on their future actions. Our 
leadership is fundamental.
    Chinese and Indian officials are working with the Europeans and 
others on serious steps to make the market-based system work--for 
example, developing limits or benchmarks for emissions in key sectors, 
in order to set the baseline for earning emissions credits that can be 
sold through the marketplace to raise funds for cleaner energy 
development. The stage is set, over the next several years, to develop 
a win-win deal that helps cut emissions, opens markets for firms in 
industrial countries while cutting their domestic compliance costs, and 
draws all key nations into a global effort to prevent global warming.

                     U.S. ON THE SIDELINE, OR WORSE

    Where does the Asia Pacific Partnership fit into this? First, in 
principle, it is not a bad idea to work with a smaller set of key 
countries. That is what Prime Minister Tony Blair set out to do last 
year in forming a group known as the ``G-8 plus 5''--the major 
industrial nations plus China, India, Mexico, Brazil, and South Africa. 
A consensus on a new market-based agreement among under 20 countries--
including Europe, the United States, Japan, and those five developing 
countries--would cover the bulk of world emissions and go a long way to 
solving the global warming problem.
    But the United States has refused to play ball in this ballpark. 
Instead, the Bush Administration has sought to manufacture another 
ballpark--cutting out the Europeans--and run the game on its own 
voluntary rules.
    The results of the Asia Pacific Partnership process so far are 
truly meager. Limited by the U.S. ``voluntary only'' approach, the 
meetings thus far have been nothing more than a gabfest about process 
and studies. The participants released a grab bag of announcements 
about sharing technology experiences and agreeing to meet again. The 
United States put a measly $50 million on the table--not even enough to 
build one clean electricity plant.
    China, India, and the United States are planning to build hundreds 
of new powerplants powered by coal. If nothing is done, these plants 
will emit huge amounts of CO2 for 50 years and foreclose any 
chance to stave off a climate catastrophe. But if we act at home and 
work with them abroad, we can change this future, by investing in a new 
generation of coal plants that dispose of their CO2 
underground, not in the atmosphere, as well as by increasing 
investments in energy efficiency and renewable power. This will not 
happen under the voluntary Asia Pacific Partnership as presently 
structured. We need more than that.
    This is not to say that the solution lies in more government 
funding. It does not. The solution lies in embracing the market. But as 
the companies testified last April to the Energy Committee, without 
mandatory limits on emissions, there is no market.
    Without mandatory limits, the Asia Pacific Partnership is just 
theater--theater that does not meet the interests of China, India, and 
other countries in constructing a real system that fuels cleaner 
development and cuts emissions. And it is theater that does not protect 
the American people from stronger hurricanes, heat-waves, drought, and 
coastal inundation that is coming from global warming.
    If we are to prevent catastrophic global warming, we have to take 
mandatory action--both at home and internationally. No serious 
environmental challenge was ever solved by voluntary action alone. 
American business gets it. American leaders at the state and local 
level get it. Our partners and competitors abroad get it. It's time for 
our national leaders to get it, and to act. 

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      Responses by E. Calvin Beisner to Additional Questions from
                             Senator Inhofe

    Question 1. You said in your testimony that ``sharing technology 
with rapidly growing economies like India and China would speed their 
adoption of cleaner fuels and economic development.'' Why do you 
believe that a technology-based approach is better than a Kyoto-style 
cap and trade method?
    Response. First and most fundamentally, the cap-and-trade method is 
useless because its aim is to reduce future global average temperature 
by reducing CO2 emissions. There are three problems with 
that. (a) It is meaningless because ``global average temperature'' is a 
meaningless statistic; it is not really a temperature but a statistic 
achieved by averaging unrepresentative samples according to an 
arbitrarily chosen averaging method, as explained brilliantly in 
Christopher Essex and Ross McKitrick's Taken By Storm: The Troubled 
Science, Policy and Politics of Global Warming. (b) Even if cap-and-
trade or any other method of reducing CO2 emissions were 
possible, its impact on future temperatures would be minuscule, 
detectable only as an equally meaningless statistic that vanishes in 
the noise of natural variation. (c) The cost of achieving that 
minuscule and non-experiential reduction not in temperature but in a 
meaningless statistic would be enormous, ranging from a low around $200 
billion to a high around $1 trillion per year to the global economy, 
for which cost no significant difference in future climate or climate 
impacts is achieved. Second, a technology-based approach is preferable 
because it leads to improved energy efficiencies regardless whether we 
want or are able to achieve any hypothetical reduction in future 
temperatures.

    Question 2. During the hearing, I asked ``if carbon caps were 
imposed, what impact would this have on efforts to bring electricity to 
Africa's remote regions, and what significance would this have on 
efforts to combat poverty there?'' Could you provide further 
elaboration on your answer?
    Response. One of the most obvious impacts would be a reduction in 
trade between developing nations (whether in Africa or elsewhere) and 
advanced economies. Just last month news stories appeared discussing 
the intention of European legislators to raise tariffs on imports from 
countries not covered by Kyoto, in order to protect their own more 
highly paid workers from competition from workers in the developing 
countries. The notion has also been proposed of taxing agricultural 
products for the distance they must travel to end purchaser. That would 
not only raise the cost of food for end purchasers in developed 
countries but also depress demand for those agricultural products in 
the developing countries where they are grown--thus diminishing the 
income of agricultural and other workers in those countries. If we are 
to care about the poor, we must reject such policies. A second obvious 
impact is simply that diminished fossil fuel use will not be achieved 
without raising the price of fossil fuel worldwide--which will delay 
for decades or generations the economic development of poor countries 
deprived of the cheap energy presently developed countries used to fuel 
their own development.

    Question 3. Al Gore says that global warming is a moral issue. Will 
you comment on this statement?
    Response. Yes, it is a moral issue. It is an issue of telling the 
truth instead of falsehood. It is an issue of not scaring people 
needlessly about statistical fictions that represent no reality. It is 
an issue of not depriving developing countries of the cheap energy 
developed nations used to grow prosperous and deliver their people from 
hunger, malnutrition, disease, pollution, and the millions of premature 
deaths that result from these. It is an issue of telling the public 
clearly that the best science says that human contribution to global 
warming is at most minute while the main causes are natural and utterly 
unstoppable. It is an issue of telling the public clearly that 
historically a warmer world has been a healthier and wealthier world 
and that a colder world has seen more severe weather events than a 
warmer world. It is an issue of turning to good science instead of 
movies for the technical information necessary to guide sound policy. 
It is an issue of not spending hundreds of billions of dollars a year 
in a quixotic quest to fight the statistical fiction of human-induced 
global warming when that money could deliver thousands of times as many 
people from disease and death if it were spent to provide pure drinking 
water, sewage sanitation, residential and commercial electrification, 
eradication of disease-bearing pests, improvement of food production 
and distribution, or reduction of the spread of communicable diseases. 
Yes, it is a moral issue--but not at all the moral issue Gore thinks it 
is. It is an issue of Mr. Gore's needing to stop his demagoguery, which 
threatens to continue wasteful policies that keep millions of people's 
lives at risk.

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