[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]





              HEARING ON CLIMATE CHANGE: COSTS OF INACTION

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

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON ENERGY AND AIR QUALITY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 26, 2008

                               __________

                           Serial No. 110-133


      Printed for the use of the Committee on Energy and Commerce
                        energycommerce.house.gov





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                    COMMITTEE ON ENERGY AND COMMERCE

                  JOHN D. DINGELL, Michigan, Chairman

HENRY A. WAXMAN, California          JOE BARTON, Texas
EDWARD J. MARKEY, Massachusetts          Ranking Member
RICK BOUCHER, Virginia               RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York             FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            BARBARA CUBIN, Wyoming
BART STUPAK, Michigan                JOHN SHIMKUS, Illinois
ELIOT L. ENGEL, New York             HEATHER WILSON, New Mexico
GENE GREEN, Texas                    JOHN SHADEGG, Arizona
DIANA DeGETTE, Colorado              CHARLES W. ``CHIP'' PICKERING, 
    Vice Chairman                    Mississippi
LOIS CAPPS, California               VITO FOSSELLA, New York
MIKE DOYLE, Pennsylvania             ROY BLUNT, Missouri
JANE HARMAN, California              STEVE BUYER, Indiana
TOM ALLEN, Maine                     GEORGE RADANOVICH, California
JAN SCHAKOWSKY, Illinois             JOSEPH R. PITTS, Pennsylvania
HILDA L. SOLIS, California           MARY BONO MACK, California
CHARLES A. GONZALEZ, Texas           GREG WALDEN, Oregon
JAY INSLEE, Washington               LEE TERRY, Nebraska
TAMMY BALDWIN, Wisconsin             MIKE FERGUSON, New Jersey
MIKE ROSS, Arkansas                  MIKE ROGERS, Michigan
DARLENE HOOLEY, Oregon               SUE WILKINS MYRICK, North Carolina
ANTHONY D. WEINER, New York          JOHN SULLIVAN, Oklahoma
JIM MATHESON, Utah                   TIM MURPHY, Pennsylvania
G.K. BUTTERFIELD, North Carolina     MICHAEL C. BURGESS, Texas
CHARLIE MELANCON, Louisiana          MARSHA BLACKBURN, Tennessee
JOHN BARROW, Georgia
DORIS O. MATSUI, California

                                 ______

                           Professional Staff

                 Dennis B. Fitzgibbons, Chief of Staff

                   Gregg A. Rothschild, Chief Counsel

                      Sharon E. Davis, Chief Clerk

                 Bud Albright, Minority Staff Director

                                  (ii)






                 Subcommittee on Energy and Air Quality

                    RICK BOUCHER, Virginia, Chairman
G.K. BUTTERFIELD, North Carolina,    FRED UPTON, Michigan
    Vice Chairman                         Ranking Member
CHARLIE MELANCON, Louisiana          RALPH M. HALL, Texas
JOHN BARROW, Georgia                 ED WHITFIELD, Kentucky
HENRY A. WAXMAN, California          JOHN SHIMKUS, Illinois
EDWARD J. MARKEY, Massachusetts      JOHN B. SHADEGG, Arizona
ALBERT R. WYNN, Maryland             CHARLES W. ``CHIP'' PICKERING, 
MIKE DOYLE, Pennsylvania                 Mississippi
JANE HARMAN, California              ROY BLUNT, Missouri
TOM ALLEN, Maine                     MARY BONO MACK, California
CHARLES A. GONZALEZ, Texas           GREG WALDEN, Oregon
JAY INSLEE, Washington               MIKE ROGERS, Michigan
TAMMY BALDWIN, Wisconsin             SUE WILKINS MYRICK, North Carolina
MIKE ROSS, Arkansas                  JOHN SULLIVAN, Oklahoma
DARLENE HOOLEY, Oregon               MICHAEL C. BURGESS, Texas
ANTHONY D. WEINER, New York          MARSHA BLACKBURN, Tennessee
JIM MATHESON, Utah                   JOE BARTON, Texas (ex officio)
DORIS O. MATSUI, California
JOHN D. DINGELL, Michigan (ex 
    officio)
                                 ------                                

                           Professional Staff

                     Sue D. Sheridan, Chief Counsel
                        John W. Jimison, Counsel
                   Rachel Bleshman, Legislative Clerk
                    David McCarthy, Minority Counsel






                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Rick Boucher, a Representative in Congress from the 
  Commonwealth of Virginia, opening statement....................     1
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     2
Hon. Tammy Baldwin, a Representative in Congress from the State 
  of Wisconsin, opening statement................................     4
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     5
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................     6
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     7
Hon. Doris Matsui, a Representative in Congress from the State of 
  California, opening statement..................................     8
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................     9
Hon. Charlie Melancon, a Representative in Congress from the 
  State of Louisiana, opening statement..........................    10
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................    10
Hon. John Barrow, a Representative in Congress from the State of 
  Georgia, opening statement.....................................    12
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................    13
Hon. Jane Harman, a Representative in Congress from the State of 
  California, opening statement..................................    13
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................    14
Hon. Tom Allen, a Representative in Congress from the State of 
  Maine, prepared statement......................................   183
Hon. John B. Shadegg, a Representative in Congress from the State 
  of Arizona, prepared statement.................................   184

                               Witnesses

Lord Nicholas Stern of Brentford KT, FBA, IG Patel Professor of 
  Economics and Government, London School of Economics and 
  Political Science..............................................    15
    Prepared statement...........................................    20
Sherri W. Goodman, General Counsel, CNA, Executive Director, CNA 
  Military Advisory Board........................................    58
    Prepared statement...........................................    61
Anthony C. Janetos, Director, Joint Global Change Research 
  Institute, Pacific Northwest National Laboratory, University of 
  Maryland.......................................................    64
    Prepared statement...........................................    67
    Answer to submitted question.................................   184
Jim Lyons, Vice President, Policy and Communications, Oxfam 
  America........................................................    84
    Prepared statement...........................................    87
    Answer to submitted question.................................   184
Ross McKitrick, Associate Professor and Director of Graduate 
  Studies, Department of Economics, University of Guelph.........    99
    Prepared statement...........................................   101
    Answers to submitted questions...............................   186
Roger A. Pielke, Sr., Senior Research Scientist (CIRES), Senior 
  Research Associate (ATOC), University of Colorado, Boulder.....   121
    Prepared statement...........................................   123

 
              HEARING ON CLIMATE CHANGE: COSTS OF INACTION

                              ----------                              


                        THURSDAY, JUNE 26, 2008

                  House of Representatives,
            Subcommittee on Energy and Air Quality,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:04 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Rick 
Boucher (chairman) presiding.
    Members present: Representatives Boucher, Melancon, Barrow, 
Markey, Harman, Gonzalez, Inslee, Baldwin, Matheson, Matsui, 
Dingell (ex officio), Upton, Whitfield, Shimkus, Blunt, Walden, 
Burgess, Blackburn, and Barton (ex officio).
    Staff present: Lorie Schmidt, Laura Vaught, Bruce Harris, 
Chris Treanor, Rachel Bleshman, Alex Haurek, Erin Bzymek, David 
McCarthy, Amanda Mertens-Campbell, Andrea Spring, and Garrett 
Golding.

  OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF VIRGINIA

    Mr. Boucher. The subcommittee will come to order. Much has 
been said about the costs that are associated with mandatory 
federal actions to reduce greenhouse gas emissions. In fact, 
concerns about the costs of regulation were raised during this 
subcommittee's hearing 1 week ago today which focused on the 
various cap-and-trade measures that are now pending in both 
houses of Congress. While the costs of action are relevant 
concerns, underpinning our goal of producing a regulatory 
program that confers the maximum environmental benefit at the 
least cost to society, we should also recognize that failing to 
regulate emissions also carries a cost, and in fact, it is a 
quite substantial one. The avoidance of enacting a mandatory 
greenhouse gas control program does not mean that we avoid 
cost, and the cost of inaction may well be greater than the 
cost of acting.
    Today, we focus on the cost of failing to act on the effect 
of climate change for our national security, for land and water 
resources, for agriculture, and for biodiversity. Our 
discussions today are guided by three reports, which evaluate 
various consequences of Congress failing to act.
    We are pleased to have as a witness this morning Lord 
Nicholas Stern, author of ``Stern Review: the Economics of 
Climate Change,'' a thorough analysis of the costs of inaction, 
which was prepared at the request of the government of the 
United Kingdom. Lord Stern concluded that while the cost of 
reducing emissions can be limited to approximately one percent 
of global gross domestic product, the cost of not acting would 
equate to as much as 5 percent of global gross domestic 
product. While his conclusions are not without controversy, his 
report is authoritatively cited in the United Kingdom and 
elsewhere, and we are pleased to welcome Lord Stern as our 
first witness this morning.
    Another report which is the subject of today's hearing is 
the National Security and the Threat of Climate Change, 
prepared by the Military Advisory Board, an entity that is 
comprised of retired United States admirals and generals. That 
report notes that while there is some disagreement about the 
extent of future effects that are due to climate change, risks 
are such that action is justified, and that projected, 
uncontrolled climate change poses a serious threat to national 
security.
    We will also receive a review of the United States Climate 
Change Science Program Agricultural Report, which assessed the 
effects of climate change on U.S. land and water resources, on 
agriculture and on biodiversity. This report finds that it is 
very likely that climate change is already affecting United 
States natural resources and will continue to have significant 
effects over the next decades.
    An exact estimation of the cost which will be incurred as a 
result of unmitigated climate change is difficult to make, and 
efforts to do so, such as the Stern Review, are often subject 
to some extent of controversy because of the economic and 
scientific assumptions that necessarily must be made. While 
these predictions are difficult to make, the reports that we 
examine today and other reports in the field leave very little 
doubt that the effects of climate change will result in cost. 
As sea levels rise, as storms become more severe, as ecosystems 
are altered and drought and other climate effects occur, it is 
inevitable that there will be a cost of our responding. And 
examination of these effects is essential to our effort to 
achieve a balance in the legislation that this subcommittee 
will draft, between environmental benefit and the cost of 
conferring that benefit.
    We will turn to our first witness shortly, but prior to 
that, I want to recognize other members for their statements, 
and at this time, the gentleman from Michigan, Mr. Upton, the 
ranking member of the subcommittee, is recognized for 5 
minutes.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you Mr. Chairman, and I want to 
start off by conceding that I believe there is a cost for 
inaction. There is, however, also a cost for certain actions. 
Not every policy action will yield the same results. In every 
decision we make here in the Congress, we must properly weigh 
the costs versus the benefits.
    The underlying purpose of the hearing today is to 
demonstrate that the cost of inaction is so high that even the 
most costly and least action, cap and trade, perhaps, is 
worthwhile, and some may disagree. Given the complexities 
involved and the many moving parts involving far more than just 
science and economics, accurately determining the cost of 
inaction is more difficult to predict than the cost of various 
actions. In fact, a large number of highly regarded economists 
have criticized the Stern Review on the Economics of Climate 
Change as perhaps being outside of the mainstream. One noted 
Harvard economist wrote that the Stern Review consistently 
leans towards assumptions and formulations that emphasize 
optimistically low expected costs of mitigation, and 
pessimistically high expected damages from warming. Stern's 
analysis sees increasing hurricane damage in the U.S. as a 
costly result of global warming; yet, according to NOAA's 
physical fluid dynamics laboratory, findings do not support the 
notion that human-induced climate change is causing an increase 
in the number of hurricanes. While I have a great deal of 
respect, certainly, for Sir Nicholas Stern, I have doubts about 
the accuracy of the report, based on some scientific and 
economic grounds.
    The British-sponsored fast-track assessment of global 
climate change, a major input in the Stern Review, indicates 
that through the year 2100, non-climate-related threats to 
human health and welfare will greatly overshadow climate 
change, so for the next 100 years or so, climate change will 
not be the greatest threat facing our planet. For arguments' 
sake, if we were to halt climate change by 2085, we could 
reduce mortality from hunger, malaria, and costal flooding by 4 
to 10 percent. However, if we are to focus specifically and 
directly on reducing those risks, I believe that mortality 
could be cut by as much as 50 to 75 percent at a fraction of 
the cost of the approach aimed at reducing greenhouse gasses.
    As one who believes that climate change must be dealt with 
on a global scale, I have advocated no-regrets policies that 
will achieve the same, if not better results than arbitrary 
cap-and-trade, at perhaps a fraction of the cost. In fact, 
there are policy options available that would have a net 
economic and societal benefit. We have lost too many jobs 
already, certainly in my State of Michigan, and the energy 
costs have already reached alarming levels, and we are all 
paying the costs. Just ask Al Gore what his monthly power bill 
is now. We can pursue options that won't make matters worse.
    At last week's hearing I outlined five straightforward 
principals, climate change policy that it must adhere to, and 
they are worth repeating today: one, provide a tangible 
environmental benefit to the American people; two, advance 
technology to provide the opportunity for export; three, 
protect American jobs; four, strengthen U.S. energy security; 
and five, require global participation. These principals deal 
with the issues of cost versus benefit, the cost of action, as 
well as the cost of inaction. Any action on climate change must 
achieve meaningful environmental benefits and should rely on 
technological advancements and consumer choices rather than, 
perhaps, mandates and bureaucracy. We won't need costly 
mandates if we invest in clean-coal technology, remove the 
regulatory barriers for nuclear power, and provide tax 
incentives for renewable power. We won't need the developing 
world to remain in the stone age if we export American 
technology, and we won't need to lose hundreds of thousands, if 
not millions, of jobs if we help our energy-intensive 
industries and domestics and domestic auto manufacturers with 
their R&D investments. Climate change is a global problem, and 
it requires a global solution. Without joint international 
action, jobs and emissions will simply shift overseas to 
countries that require few, if any, environmental protections, 
harming the global environment as well as the United States 
economy.
    The sky, I don't think, is falling, but we can work 
together in a thoughtful way to collectively ensure our 
economic energy and environmental security. I yield back my 
time.
    Mr. Boucher. Thank you very much, Mr. Upton. The gentlelady 
from Wisconsin, Ms. Baldwin, is recognized for 5 minutes.

 OPENING STATEMENT OF HON. TAMMY BALDWIN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF WISCONSIN

    Ms. Baldwin. Thank you, Mr. Chairman. I am delighted to 
have Lord Stern and our subsequent panel of expert witnesses 
before us today. It is your work and your studies that have 
framed the discussion on climate change, and you have conveyed 
a message of urgency on us to act to lower greenhouse gas 
emissions in a quick and meaningful manner, and it is now up to 
us to heed your advice and rise to this challenge.
    We know that climate change comes with a very large price 
tag, and costs are not just economic. Our emissions have also 
put our environment, social structure, and national security at 
risk, and according to the analysis, if we fail to act 
comprehensively, the impacts will be felt through the loss of 
human lives and health, species extinction, the loss of 
ecosystems, and social conflict.
    As Members of Congress, especially as member of the 
People's House, we are generally prone to design and pass 
legislation that will provide immediate or near-term relief to 
our constituents. It is seemingly a challenge for us to even 
fathom enacting consequential legislation that may raise near-
term costs with benefits not reaped for a generation or more, 
benefits that some of us may not live to see. Yet this is the 
predicament in which we now find ourselves. Do we make the 
investments now to avoid the worst impacts of climate change? 
According to Lord Nicholas Stern, the cost of acting today is 
about 1 percent of global GDP each year. Or do we wait, leave 
this issue for future generations, and watch the costs and 
risks rise at a rate of up to 20 percent of global GDP per 
year?
    I am of the opinion that the risks are far too great for us 
to fail to act in the very near term. Just last week, the U.S. 
Climate Change Program released a report that provides the 
first comprehensive analysis of observed and projected changes 
in weather and climate extremes in North America. Among the 
extremes predicted are more frequent and intense heavy 
downpours. The report concludes that the increases in 
precipitation are consistent with the observed increases in 
atmospheric water vapor, which has been linked to human-induced 
increases in greenhouse gases.
    I have seen firsthand the intense rain, flooding, and 
devastation that people in the district that I represent in 
Wisconsin, and across the Midwest, are experiencing as a result 
of intense rainfall this month. We lost homes, businesses, and 
farmland, not to mention millions of dollars in lost 
productivity. I can only hope that we will do everything in our 
power to ensure that these storms do not become the norm in the 
future.
    Mr. Chairman, the scientific community has come together on 
this issue, and now it is up to us, all of us, to educate the 
cynics and the naysayers that climate change is real. It 
threatens our economy, our environment, and our national 
security, and we will pay a much greater cost in the future if 
we fail to act. Thank you, Mr. Chairman, again, for holding 
this very important hearing, and I yield back the balance of my 
time.
    Mr. Boucher. Thank you very much, Ms. Baldwin. The 
gentleman from Kentucky, Mr. Whitfield, is recognized for 5 
minutes.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Mr. Whitfield. Well, Chairman Boucher, thank you very much 
for conducting this important hearing on Climate Change: the 
Cost of Inaction. Obviously, this subject matter is vitally 
important to not only our country but the entire world.
    I would say that cap-and-trade systems have come into vogue 
because many people say they are politically palatable more 
than imposing carbon taxes. I am pleased to say that Chairman 
Boucher, Ranking Member Barton, Mr. Upton, Mr. Shimkus, and I 
have introduced bipartisan legislation to create a fund for 
research, development, and deployment of the carbon capture-
and-store technology that is so vitally important to help solve 
this problem. These types of initiative, I believe, will put 
our country on the road to reducing carbon emissions, rather 
than implementing overly ambitious, expensive, and maybe 
unworkable proposals that could damage our economy and do very 
little to reduce carbon emissions globally.
    I am delighted that Lord Stern is with us today, because I 
was reading an article in the New York Times just a couple of 
days ago, and the whole article was featured on the carbon 
markets in Europe, and it says Europe has had trouble handling 
its carbon market. And it specifically pointed out that 
CO2 emissions have risen each year since the 
European cap-and-trade system went into effect, and that there 
are major problems that they are still struggling with in this 
issue in Europe. And one of the major concerns that I have 
about adoption of a strong cap-and-trade system to set 
progressive targets to reduce carbon dioxide and greenhouse gas 
emissions here in the U.S. is we don't have the technology 
available to meet it, and so that presents a major problem.
    So I know that many people refer to the cap-and-trade 
system that was implemented to deal with acid rain, and that 
was and has been successful because the technology was 
available to reduce NOx and SOx 
emissions.
    And then another major concern that I have when we talk 
about cap-and-trade systems is that there seems to be a bias by 
many people that coal can no longer be an important part of the 
United States energy picture. And I would remind everyone that 
coal still produces 51 to 52 percent of all of the electricity 
produced in America, and I think it is unrealistic to think 
that we can go to alternative energy sources without 
dramatically increasing the cost of electricity, which 
increases the cost of production, which makes us less 
competitive with other economies around the world and 
ultimately can damage our economy.
    So we have this important balancing act that must be done, 
and these types of hearings will help us focus on those issues 
and hopefully make the right decision. And I yield back the 
balance of my time.
    Mr. Boucher. Thank you, Mr. Whitfield. The gentleman from 
Michigan, Mr. Dingell, the Chairman of the full Energy and 
Commerce Committee, is recognized for 5 minutes.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    The Chairman. Mr. Chairman, thank you for holding this 
hearing today. It is a very important one, and your leadership 
in the matter of global warming and other things under the 
jurisdiction of this committee has been exemplary, and I want 
to commend you and thank you.
    The hearing today addresses a very important topic, the 
risks we face if the world fails to address climate change. And 
I would begin my statement by observing that we will move 
forward as fast as we can in achieving good legislation, which 
will address the concerns and the problems of this nation and 
the world in a responsible, thorough, and thoughtful fashion.
    At last week's hearing, and in the Senate, we have heard a 
lot about how much reducing greenhouse gas emissions is going 
to cost us, including projected changes in gas prices, 
electricity rates, and gross domestic product in 2050. It is 
undoubtedly true that there will be costs associated with this. 
It is also obviously true that there will be costs associated 
with inaction, and so that leads us to the point of finding 
what is the best way to address this concern, and I intend to 
see to it that we do so, but we do so in a vigorous fashion.
    The basic point my colleagues are making is correct and one 
that we must not lose sight of: reducing greenhouse emissions 
will cost us money. But the projections of the costs of climate 
change programs as observed here today are only half the story. 
We must understand the costs of inaction, how much we will have 
to spend if we refuse to reduce greenhouse gas emissions. That 
is the important focus of today's hearing. It is also an unsaid 
and unstated matter that we have to address this problem 
because of the cost of imported oil and the simple fact that 
this country can no longer have that particular expenditure.
    Understanding the costs of both action and inaction is 
necessary for us to design fair and reasonable climate 
legislation. One economist suggests that all we have to do is 
set up a program where the marginal costs of actions equal the 
marginal costs of inaction; following a simple, mathematical 
formula, we will then solve our problems. I wish it were so, 
but I don't believe it will be that easy. First we cannot 
easily put a dollar value on many of the costs of inaction, 
such as the loss of wildlife habitat, species extinction, loss 
of quality of life. Second, there is a strong scientific 
consensus that human-caused greenhouse gas emissions are 
warming the planet. Scientists cannot tell us precisely what 
will happen at different greenhouse gas levels, such as how 
much more people will suffer or how many more people will lose 
homes and farms to flooding. It is said that we need to 
understand that the best they can do is to tell us what the 
risks might be and the possibilities or probabilities that 
physical changes will occur, and the costs that we will incur 
to address those changes.
    Third, the global warming problem and climate change means 
that we will need to act in concert with other countries. The 
fact that we lack certainty and precision about future costs of 
climate change does not mean we should not act. When faced with 
even low risk of a catastrophic event, we regularly buy 
insurance policies to avoid, cover, or reduce those risks. 
Reducing greenhouse gas emissions could be thought of as 
protecting against risk of this magnitude in a similar and 
thoughtful way.
    I would prefer to legislate with more certainty from the 
scientists who tell about the dangers we face in the future, 
but unhappily we do not have that luxury. Scientists are 
already observing effects now of climate change. Our witnesses 
today will tell us that our failure to act could put the planet 
and our country at risk for even bigger and graver 
consequences. Today's hearing is going to help us understand 
the potential severity of those consequences. Thank you, Mr. 
Chairman, and I yield back the balance of my time.
    Mr. Boucher. Thank you very much, Mr. Dingell. I understand 
that Mr. Markey intends to waive his opening statement, and 
instead have 3 minutes added to his question time for the first 
witness. I am assuming that is correct.
    Mr. Markey. I request that. Thank you.
    Mr. Boucher. We will note the gentleman's waiver. Now, now, 
now. I am going to recognize somebody else while I still have a 
measure of control here. The gentleman from Oregon, Mr. Walden, 
is recognized for 5 minutes.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Thank you very much, Mr. Chairman. I appreciate 
this hearing and the others that you have held. They have been 
most informative with really expert witness, and while I have 
to step out for another meeting here in a few minutes, I do 
have the testimony and plan to return.
    Obviously, we have heard a lot about climate change. And 
Lord Stern, we are delighted to have you here, and I know your 
report has been the basis upon which a lot has been written, 
both pro and con, and that is the way it is with any issue of 
this magnitude and certainly scientists and economists are 
disagreeing on the magnitude of this issue.
    I represent a district of 70,000 square miles. We have home 
of ten national forests, and my passion has been the role that 
forestry can play, in a very positive sense, in dealing with 
greenhouse gas emissions, and there are studies that show 
actively managed forests could lead to 50- to 60-percent 
reduction in wildfires, which equates to about a million tons 
of greenhouse gas annually. It could be reduced in California 
alone, for example. Even though I am from Oregon, there was a 
report done by Finney and others that indicates that in 
California alone, if you had properly managed forests, you 
could reduce greenhouse gas emissions by a million tons a year. 
Managed forests sequester carbon at 1.25 tons per acre per 
year, and yet our federal forests sequester less than half a 
ton per acre per year. If you use a ton of bone-dry biomass in 
a biomass power plant to generate electricity as opposed to 
natural gas, you can reduce a one-ton net reduction in 
greenhouse gas, compared to natural gas, for every ton.
    And so I think there is an enormous opportunity here to 
review federal policies in this country as they relate to 
proper managements of forests. I have met with the U.S. Forest 
Service on multiple occasions. They have done a long-term look 
at climate change and its effects on forestry and indicate to 
me that the forest cannot keep pace with the change in 
temperature, in terms of northward migration. And as a result, 
we will have more drought, more bug infestation, more disease, 
overstocked stands, and as a result, higher fire ratios. In 
fact, in the last couple of years, we have set records for the 
number of lands burned, not all of it forests, some of it 
grasslands. I think it is upwards of 9 million acres a year. 
Forty-seven percent of the Forest Service's budget is now spent 
for fighting forest fires.
    And so I conclude with this comment that those who argue 
for change in other sectors of federal law cannot any longer 
ignore the need to change forest-management law so that we can 
more aggressively get in, get these stands back in balance, so 
that when fire occurs, it burns naturally and actually can be 
good for the environment, as opposed to these unnatural, 
catastrophic, high-emission releasing fires that are very 
costly to society and to the climate. And I hope at some point 
this committee will be able to look at those issues as well. 
Lord Stern, thank you for being here. Mr. Chairman, my time has 
expired, and I appreciate the opportunity to be here.
    Mr. Boucher. Thank you very much, Mr. Walden. The 
gentlelady from California, Ms. Matsui, is recognized for 3 
minutes.

  OPENING STATEMENT OF HON. DORIS MATSUI, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Matsui. Thank you, Mr. Chairman. I am very pleased to 
be here today, and thank you for calling a hearing on such an 
important issue. I would also like to thank today's panelists 
for coming today to share their expertise and add to our 
understanding of the risk and potential cost of climate change.
    All of us here today represent different areas of the 
country with different climates. We have seen the very impact 
climate change is having on our diverse landscapes, and the 
threat of new challenges and dangers if this issue is left 
unaddressed. My district of Sacramento, California exhibits 
many of the risks we face. We are surrounded by ecosystems that 
are already beginning to see significant changes. Sitting at 
the confluence of two great rivers, Sacramento is considered to 
have the highest flood risk of any major metropolitan city in 
the United States. Over 500,000 people, 110,000 structures, the 
capital of the State of California, and up to $58 billion are 
at risk. Rising temperatures could mean earlier and more rapid 
Sierra snowmelt, yielding disastrous consequences. Earlier 
snowmelt and varying rainfall patterns may also lead to serious 
drought and water shortages, already a constant worry in my 
State. Currently, California is rationing water, and farmers 
are losing their crops. We simply can't afford to see the 
Western United States with even less water. Wildfires, heat 
waves, the spread of tropical disease, and rising sea levels 
can also affect the future of my constituents, their children 
and grandchildren.
    We must take into account the cost of any legislation that 
would touch so many aspects of our country and our economy, but 
we can't get stuck on the challenges; we must find the ways to 
build consensus. We heard last week about some of the possible 
costs of potential legislation, but it is clear that if we fail 
to act, the cost to our country, economy, and environment will 
reach far beyond just the monetary. The fact is that inaction 
is not an option. Investing our time and resources now will 
mean saving our children and grandchildren much greater costs 
in the future.
    Mr. Chairman, I thank you for your leadership and your 
commitment to these issues, and I yield back the balance of my 
time.
    Mr. Boucher. Thank you very much, Ms. Matsui. The 
gentlelady from Tennessee, Ms. Blackburn, is recognized for 3 
minutes.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Ms. Blackburn. Thank you, Mr. Chairman. I do want to thank 
you for holding the hearing, and I want to thank our witnesses 
who are taking their time to come and testify before us today.
    Assuming for the moment that climate change is happening, 
then the questions before this committee and in this hearing 
would be what should we do about it, if anything, and what 
would happen if we fail to act? And climate change activists' 
basic argument is that current emissions of greenhouse gasses 
must be reduced by 80 percent. We hear that regularly. They 
claim that if not, then CO2 concentration in the 
atmosphere will cause an increase of 18 degrees Fahrenheit 
around the world and cause massive floods, famine, hurricanes, 
and drought that humans have never seen before. Essentially, 
what they predict is a Doomsday scenario.
    But history has quite a different perspective on this. When 
the Earth was warmer 1,000 years ago, colonies and farms dotted 
the landscapes in the upper latitudes, but the little ice age 
occurred, and disaster befell most of those. Then warming ended 
this ice age, and plants began to grow faster and larger and 
live in drier climates, providing diversity and enhanced 
sustainability of animal life. But now, recent data shows that 
the Earth is cooling significantly and could reverse that 
stated progress. And if current CO2 omissions are 
further reduced, these two factors could lead to another ice 
age, with drastic reductions in food production. The earth 
would become a less hospitable and less green planet.
    Well, how about that for a Doomsday scenario? Well, Mr. 
Chairman, I urge my colleagues, I urge all of us to apply a 
little bit of common sense and not go down expensive and 
dangerous paths that some would advocate. These globalw arming 
scares only exacerbate society problems and offer no meaningful 
solutions. Costly emissions regulations to mitigate global 
warming will not solve the world's major problem and could 
actually cause a reverse in the world's temperature gauge. But 
investment in simple, straightforward solutions, such as clean 
drinking water, sanitation, basic healthcare can, for a 
fraction of the cost. These investments will provide a 
significant economic boost to developing nations, enabling them 
to adapt to any climate change, whether it is cooling or 
warming. These countries could flourish without suffering the 
financial devastation caused by drastic, unwise carbon-
reduction policies, promoted through skewed political agenda.
    I am looking forward to the discussion today. I do have to 
step to another meeting, Mr. Chairman. I yield the balance of 
my time.
    Mr. Boucher. Thank you very much, Ms. Blackburn. The 
gentleman from Texas, Mr. Gonzalez, is recognized for 3 
minutes. The gentleman waives his opening statement and will 
have 3 minutes added to his questioning time.
    The gentleman from Washington State, Mr. Inslee, is 
recognized for 3 minutes. He also waives his opening statement.
    The gentleman from Louisiana, Mr. Melancon, is recognized 
for 3 minutes.

OPENING STATEMENT OF HON. CHARLIE MELANCON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF LOUISIANA

    Mr. Melancon. Thank you, Mr. Chairman. I appreciate you 
holding this hearing.
    I come from south Louisiana, and we have one of the fastest 
sinking coastlines in the world. When we hear of the cost of 
climate change legislation, it is easy to forget what it will 
cost to do nothing. The State of Louisiana has crafted its own 
impressive master plan to determine how best to protect our 
communities, and the infrastructure that supplies some 30 
percent of oil and gas, flyways for the migratory bird, and the 
nation's seafood. Our master plan calls for close to $60 
billion in hurricane protection and costal restoration. Imagine 
these costs after decades of inaction, leading to higher sea 
levels and stronger storms.
    We are just one state in one country. The detrimental 
effect of climate change affects the entire world, oftentimes 
hitting the poorest countries the hardest. I find it ironic 
that last night there was a report where the EPA sent to the 
White House several years back compelling evidence of climate 
change and global warming and the White House chose to not open 
the email, but in fact just sat on it. I think that this 
information could have helped compile additional data which 
would help give him a better view of what is going on.
    I want to thank him for being here today, again, I thank 
the chairman, and hope that we have some information that can 
help us ferret through his whole process. Thank you.
    Mr. Boucher. Thank you, Mr. Melancon. The gentleman from 
Texas, Mr. Burgess, is recognized for 3 minutes.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Mr. Chairman, and thank you for 
holding this hearing. I always appreciate the opportunity to 
discuss these measures in committee.
    Climate Change: the Cost of Inaction: it is a curious 
title. I used to be a student of medical irony, and now I have 
branched out into legislative irony. I suppose the title is 
referring to the inaction of the House of Representatives to 
come together as a body and make a decision on climate change. 
The Senate has already produced action, and it seems, at least 
on this topic, the lower chamber now has become the more 
deliberative body. In fact, this morning's Washington Post 
article by Bjorn Lomborg, who has testified before this 
committee in the past, makes a statement by itself. Lieberman-
Warner, by itself, would postpone the temperature increase 
projected for 2050 by about 2 years.
    So I appreciate Chairman Boucher's and Chairman Dingell's 
sensible approach to this issue. It is thoughtful and 
warranted, given the complex nature, and the number of affected 
industries and constituencies involved in this very broad 
potential action. Ultimately, the question before us, does 
changing American behavior today save lives in the future, and 
the word inaction assumes that nothing is being done, but I can 
tell you that the behavior of the American public in my 
district is already in motion. In my part of Texas, people are 
already acting. They are acting like fuel is expensive. They 
are acting like it is affecting their livelihood. As a result, 
the American demand for petroleum and petroleum-based products 
has declined, and emissions in the United States have followed 
suit. It turns out the economists were right, if you make 
something more expensive, people will use less of it. I realize 
the issue of climate change is not that simple, but I also 
realize that change is painful with many results, some 
beneficial, and some not, but all consequential.
    Now, the Stern Review concludes that taking strong action 
now to reduce emissions should be viewed as an investment in 
the future. Page 15: ``the benefits of strong, early action on 
climate change outweigh the cost, with returns not realized for 
a few decades.'' We must keep in mind the nature of this 
problem is long-term, and the hearing today does not address 
the immediate problems of $4-a-gallon gas and what is happening 
to our commodity and food prices. But rather, we are here today 
to find out how we can put money in the bank for the future 
environmental effects on our planet.
    Securing our natural resources and sustaining our 
environment are not mutually exclusive goals. They are actually 
mutually dependent. Much of this debate comes down to an issue 
as to how we discount future harm. In traditional finance, we 
understand that we would rather owe $100 ten years from now 
than today because of what is happening to the dollar. Money 
will be worth less in the future. Lord Stern's analysis refuses 
to apply this concept to the cost of climate change, and the 
argument is that harm on future generations should not be 
discounted. This type of assumption does lead to undervaluation 
of the costs imposed on our citizens today and risks over-
evaluating the benefits gained by future generations, and I 
hope our discussion this morning will shed some light on that 
issue.
    The hearing will also address the impact of climate change 
on our national security. Congress must take a hard look at the 
potential national security risks we face when a struggling 
government caves under stressors and gives way to authoritarian 
and radical leadership. That is true not only for energy 
prices, but it would also be true for prices of food and 
commodities. It certainly makes no difference if we are more 
environmentally responsible in the future if we sacrifice our 
democracy in the process.
    I would argue that economies that are strong have done more 
to protect and are less apt to lead to risky behavior. The 
preface to the book ``Contract with the Earth,'' written by 
former Speaker Newt Gingrich, makes the statement 
``environmental leadership requires the ability to look beyond 
stereotypes. Environmentalists are not exclusive to one 
political philosophy. It is quite possible to be a green 
conservative.''
    Business is no longer regarded as an adversary to a clean 
environment. Rather, global industries are the source of 
brilliant, workable solutions to vexing environmental problems. 
I do believe in the entrepreneurship, and I do believe in the 
inventiveness of the American people, and I will yield back the 
balance of my time and submit the remainder of my statement for 
the record, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Burgess. The 
gentleman from Georgia, Mr. Barrow, is recognized for 3 
minutes.

  OPENING STATEMENT OF HON. JOHN BARROW, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Barrow. Thank you, Mr. Chairman. I want to thank you 
for having this hearing, and I want to thank the witnesses for 
participating in this hearing.
    I detect a certain pattern in the almost two dozen hearings 
this committee has had over the course of this last Congress on 
this subject. We seem to get the sobering facts as to whether 
or not there is a problem and whether or not we are 
contributing to the problem and need to do something about 
them. And then the folks who know the most about that receded 
and they start talking about the constituents and the economy 
at large about what to do about it. Folks tend to fall off the 
wagon. They tend to get back on some ideas about whether or not 
there really is a problem or not.
    I don't know whether or not short-term swings in our 
environment with historical record that were characteristic of 
a carbon balance, a carbon cycle that was in balance for a much 
longer period of time than those short-term swings, is any 
indication that things are fine today. I do know this: if the 
same causes can produce dramatically different results, and 
each is very disturbing and disquieting, then we ought to be 
addressing these causes.
    And I think I know something else. God Almighty had a 
carbon sequestration of his own, millions and millions of years 
of biomass sequestered in the Earth, under his good time, under 
his good purpose, and we are busting that carbon-sequestration 
program all to Hell in the last couple of years. We have made 
dramatic changes in the carbon cycle that we have inherited, 
and we need to recognize that. It is not the wonderful self-
regulating miracle that I was taught in elementary school 
because we have been doing things to alter that dramatically, 
and I just hope we will stay focused on the reality that there 
is a problem, we are contributing to it, the fact that it can 
produce dramatically different and dramatically unpleasant 
consequences is no indication that we have a problem on our 
hands and we have to deal with it.
    So Mr. Chairman, thank you for your leadership and keeping 
us focusing on the mission of this committee and what we are 
all about here, and with that I yield back the balance of my 
time.
    Mr. Boucher. Thank you very much, Mr. Barrow. The gentleman 
from Texas, Mr. Barton, the ranking member of the full 
committee is recognized for 5 minutes.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Thank you, Mr. Chairman. I am delighted to have 
this hearing. I think it is important to put as many of the 
facts, or at least what people perceive to be the facts, on the 
record as possible, and I think you are doing an excellent job 
of that. I am very pleased to see the witnesses that here 
today. I have read abstracts and summaries of some of their 
material and hopefully will have some time to ask some 
questions, especially our first witness.
    I am going to focus on some of the methodology questions, 
and I still think that you can have an honest debate about the 
science, and I will have a little bit of that. I tend to agree 
with what my good friend from Georgia just said. I don't 
quarrel too much about what he said about the carbon cycle 
being disrupted. I mean it is obvious if you are bringing 
hydrocarbons up from down in the Earth that were deposited 
hundreds of millions of years ago, that you put more carbon 
into the atmosphere than we would otherwise, and that is a 
fact. You have got to admit that. I think you can debate the 
impact of that.
    So I am glad to have witnesses. I am glad to have some of 
them talk about their methodology and the science and the 
consequences. I think we will have a good hearing, and it will 
continue to build a record that this committee is noted for 
doing over the years: let us get the information before we 
decide on the solution. With that, I yield back.
    Mr. Boucher. Thank you very much, Mr. Barton. The 
gentlelady from California, Ms. Harman, is recognized for 3 
minutes.

  OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Harman. Thank you, Mr. Chairman, and welcome to our 
witnesses. I am pleased to participate in yet another careful 
learning experience on this subcommittee. It is important that 
we have as much information as possible before we go forward. 
In that connection, I want to commend Mr. Burgess for his 
opening comments, and I look forward to reading the rest of 
them that he inserted in the record, because I think he pulled 
together a lot of material that this subcommittee needs to 
think about.
    An area he mentioned that I am most keenly interested in, 
which is not in the sweet spot of our jurisdiction, but 
nonetheless a critical issue for us as Members of Congress, is 
the national security implications of climate change. 
Yesterday, the House Intelligence Committee, on which I no 
longer serve--I did serve there for 8 years--received a 
National Intelligence Estimate on the relationship of climate 
change and national security. It is a very important subject. 
Careful work is finally being done. There is absolutely no 
question of the effect on immigration and on food and on 
stability of governments caused by dramatic climate change. We 
need to learn more about it, and at least to this member, we 
need to act as promptly as we can, responsibly, on this issue, 
because destabilized governments and massive famine and huge 
changes in immigration patterns are bad for our short-term, let 
alone longer-term security.
    So I appreciate the fact that that is part of this 
conversation. I also want to say that a witness on the next 
panel, Sherri Goodman, from the executive general panel--she 
has got a lot of different titles in this memo that I am 
reading--but at any rate, connected to CNA, is someone I have 
known for a long time, and I think she brings great expertise, 
and I think our subcommittee will benefit from her testimony.
    And once again, Mr. Chairman, this is an activity we do 
need to explore in this committee. It gives us a fuller picture 
of the context in which we legislate. I believe we can add some 
real value. I believe that the bipartisan tradition of this 
subcommittee will help us add value. And just based on the 
opening comments this morning, there are some very interesting 
bipartisan comments. Thank you, I yield back.
    Mr. Boucher. Thank you very much, Ms. Harman. The gentleman 
from Illinois, Mr. Shimkus, is recognized for 3 minutes.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Shimkus. Thank you, Mr. Chairman. I want to welcome, 
also, our panelists. This is a great committee, because the 
members do their homework. They are very diligent, so we are 
going to ask hard questions, hopefully, and we shall get hard 
answers back, and I think it will help us through the process. 
I have great respect for the chairman of this, and the full 
committee, with their challenging work ahead. I like to keep 
things light a lot of times, but this is a pretty heavy and a 
deep subject for many of us.
    A big picture, I do feel that there is--I am a Republican, 
so I am not using an elephant for that--but one of the 
elephants in the room is there a worldwide movement to have a 
centralized standard of living around high energy prices and 
environmental policies? I actually do believe that there are a 
lot of people who like high energy prices, and I do believe 
there is a movement to equalize the world standard around 
living in the same sized homes, driving the same sized cars, 
consuming the same type of food, and that is really 
antithetical to the great American mindset of westward 
expansion, explore discover, work hard, keep the benefits of 
your home. So there are people who love these high prices, and 
if they are out there, they are going to love even higher 
prices. We have established in this committee that climate 
change legislation will increase costs. This is looking at the 
other end of the debate. But we have established that at the 
last hearing we had. The first panel, I asked everybody on 
liquid fuels, and they all said, yes, higher costs; electricity 
generation, they all concurred, higher costs. The cost on this 
end of what it does to the poor in the rural areas of the world 
is the cost-benefit analysis that we are going to have to 
discuss and work through.
    I tend to be a promoter of the industrial revolution, the 
great benefits, and how it created a great middle class. In 
fact, Chairman Boucher and I sat across the table with a major 
Chinese official. He was asked twice, would you ever go into a 
climate change agreement, and they said no. And their response 
was you had your chance to modernize and develop a middle class 
using fossil fuels. Now it is ours. That type of mindset, no 
matter what we do in the industrialized West will never fix and 
cap carbon, so that is all part of the cost-benefit analysis, 
for the small, the poor, the middle class, rural American, and 
climate change will be devastating to them.
    Mr. Chairman, I yield back.
    Mr. Boucher. Thank you very much, Mr. Shimkus. All members 
have now had an opportunity to make opening statements, and we 
welcome our first witness to the hearing today.
    Lord Nicholas Stern is the IG Patel Professor of Economics 
and Government at the London School of Economics and Political 
Science. He serves as an advisor to the United Kingdom 
government on the economics of climate change and development, 
and is author of the Stern Review on the Economics of Climate 
Change. His report has been authoritatively cited in the United 
Kingdom and elsewhere, and we are very pleased to welcome him 
this morning and to receive his testimony.
    Without objection, your prepared written statement will be 
made a part of the record, and we would welcome, at this time, 
your oral summary.

STATEMENT OF LORD NICHOLAS STERN OF BRENTFORD KT, FBA, IG PATEL 
    PROFESSOR OF ECONOMICS AND GOVERNMENT, LONDON SCHOOL OF 
                ECONOMICS AND POLITICAL SCIENCE

    Mr. Stern. Thank you very much. Chairman Boucher, Ranking 
Member Upton, distinguished members, thank you very much for 
the opportunity to discuss with you today. And thank you for 
the opportunity to listen to your very thoughtful statements at 
the opening of this discussion.
    I speak to you today as an academic, as you have 
underlined, Mr. Chairman, not as a servant of Her Majesty. I 
did work for Her Majesty, in particular through her government, 
as a civil servant, up to about 1 year ago. But I am speaking 
to you, today, as an individual, Nick Stern, not as a 
representative of the U.K. in any sense.
    This is a story about managing risk. We don't know for 
certain what will happen under different kinds of outcomes, but 
the science has given us information about the risks, and we, 
as people who work on and discuss policy, have to analyze those 
risks and see which we think is the best way to go. These risks 
concern, in terms of the actions we can and should take now, in 
my view, the long term. Most of what is going to happen in the 
next 30 to 45 years has already been shaped by what we have 
done in the past and what we are about to do over these next 4 
or 5 years. So we have to see this as the long-term issue and 
risk-management issue, which it clearly is.
    Now, if we go on under business as usual, we will move from 
the concentration of greenhouse gasses in the atmosphere, which 
we now find around 430 parts per million of CO2 
equivalent to something like 750 parts per million of 
CO2 equivalent, possibly a good bit more than that 
by the end of this century. Now, what would that imply? It 
would give us a roughly 50/50 chance sometime next century of 
being 5 degrees or more above preindustrial times, dating 
roughly from 1850. We are now about 0.8 degrees centigrade. So 
scientists tell us, and this is the modeling that the best 
scientists in the world tell us, and it is quite conservative 
in the sense of the risks that it leaves out, that is a roughly 
50/50 change of being more than 5 degrees centigrade above 
preindustrial times.
    If we hold the concentrations, if we stabilize around 500 
parts per million, we would hold that probability down to just 
3 percent. If we stabilized at 500, we would hold it down to 
around 7 percent. So whichever of these you choose, you can see 
that the benefit of action or the cost of inaction is a huge 
change in the probability of very high temperatures, given the 
best science that we have available. Now, the consequences of 
these actions come in water in some shape or form: storms, 
floods, droughts, sea level rise, as well as, of course, the 
direct consequences of the heat. I could have told the story in 
4 degrees centigrade, 6 degrees centigrade. Five degrees 
centigrade keeps it simple, and there is a 50/50 chance of 
getting there sometime next century under business as usual.
    Now what does this mean? The last time we were 5 degrees 
above centigrade about these kind of levels was 30 or 50 
millions years ago in the Eocene period. The world was covered 
in swampy forests, and there were alligators at the North Pole. 
Now, I am not particularly worried about alligators at the 
North Pole. That is not the point. The point is that it 
radically redraws where species, including humans, can live. 
The last time we were 5 degrees centigrade below where we are 
now, going back the other way, was very recent, the last ice 
age, about 10,000 years ago, when the ice sheets came down, 
roughly, to London and New York? Where were people then? Of 
course, there were people 10,000 years ago. They were much 
nearer to the Equator than that.
    The clear message is that changes of this kind involve very 
big movements of the population, and we know that very big 
movements of population mean not only the hardship around the 
movements themselves, but also conflict. If the last couple of 
hundred years has taught us anything, it is that big movements, 
forced movements of population of that kind lead to conflict. 
So we can reduce the probabability of being 5 degree centigrade 
up from preindustrial times, around 1850, by 14 or more percent 
by strong action, and the cost of inaction is the cost of not 
doing that. That is one way of looking at it.
    The second way of looking at it is to try to apply economic 
models to these types of risks, to try to quantify the 
different kinds of risks. I started off as I did because I 
wanted to illustrate the nature of the risks, the kinds of the 
risks involved, and that, of course, underlines the difficulty 
of putting economic numbers to them. But we try as best we can. 
We try to be analytical about that, and if you do some simple 
modeling of those risks, in our calculations in the Stern 
Review, we estimated that averaged over space, averaged over 
outcomes, averaged over time, the cost would be 5 to 20 percent 
of GDP. We were cautious about taking these models over 
literally for the reasons of the description of the risks that 
I just described. But if you do the best you can, those are the 
kinds of numbers that you come up with.
    Averaging over time does involve discounting. I have dealt 
with that issue of discounting quite carefully in the Stern 
Review and at greater length in my Richard Ely lecture to the 
American Economic Association in January of this year. The 
concept may worry you, but you have about 5,000 economists 
getting together to talk to each other, and that is the biggest 
meeting in the world, and it was the main invited lecture. And 
those of you who would like to look at the issue of discounting 
can see my views there. I am more than happy to discuss this 
issue as we go on later this morning. We did discount in the 
Stern Review. It is not true to say we did not.
    Looking back now, I think we underestimated the risks. 
Emissions are growing faster than we thought. The carbon cycle 
is weakening more quickly than we thought. The climate's 
sensitivity, the amount by which temperature is likely to go up 
for a given stock of greenhouse gasses looks to be more 
worrying than we thought, and the speed of change of the planet 
as a result of global warming, for example thawing of the ice, 
seems to be happening faster than we thought. So if anything, I 
think we underestimated the risks, but there is quite a bit of 
sensitivity analysis given in the Stern Review. You can see how 
different assumptions affect the results.
    So that is the second way of looking at the cost of 
inaction, 5 to 20 percent of GDP, averaged over space, 
outcomes, and time, with due caution about what those models 
can tell you.
    Essentially, then, and this is the third way of looking at 
the cost of inaction, we have to recognize that low carbon 
growth in the medium term is the only growth story. If we try 
to continue for a long period with high carbon growth, the 
disruption that we will cause will undermine growth, so that is 
a third way of looking at the cost of inaction, that you are 
trading off low carbon growth with action against, eventually, 
undermining and stopping growth through the disruption the 
environment causes by trying to proceed with high carbon 
growth.
    Finally, on seeing this in terms of risks, I think you can 
look at the commonsensical view of the kinds of errors you can 
make. If we act as though the science is right, and it turns 
out to be wrong, we have wasted a bit of money. I will come 
back to how much in a moment. But we will have more clean 
technologies. We will have a more biodiverse world. We will 
have stronger forests and so on. It will be a cleaner, safer 
place. So if we act as though the science is right and it turns 
out to be wrong, nevertheless, we are going to have quite 
strong benefits.
    On the other hand, if we act as though the science is 
wrong, and it turns out to be right, the stock of greenhouse 
gasses through our failure to control the flows will have built 
up to a level from which it is very hard to back away. We will 
have put ourselves, painted ourselves into a corner, or 
admitted ourselves into a corner from which it is very 
difficult to extricate ourselves because carbon dioxide lasts 
such a very long time in the atmosphere.
    So a simple, commonsense attitude to risk, I think, points 
to acting as if the science is right. And of course, you add to 
that the very high probability that the science is right. You 
have heard the very powerful statements of the scientists here. 
I am not a scientist. I am an economist using the science.
    Now, I am not sure how long I have left, Mr. Chairman. 
There is a minute or so more I would like to take with your 
permission.
    Mr. Boucher. Another minute or two would be fine, Lord 
Stern.
    Mr. Stern. That is very kind. Thank you very much, Mr. 
Chairman.
    The cost of action: 1 or 2 percent of GDP, around 1 percent 
if we try to control at 550 parts per million as the eventual 
stabilization, a bit more, say 2 percent, if we try to control 
at 500. Others have confirmed these estimates since the Stern 
Review was published, International Energy Agency, McKinsey, 
the Potsdam Institute on Climate Change. Quite a few studies 
have pointed quite strongly in that direction.
    But I do want to emphasize that these cost estimates 
require good policy. This is a market failure. We have to fix 
the market failure. We have to rely on the markets. This isn't 
just about control. It is about making markets that are 
failing, work better. That is why people discuss a carbon tax. 
It is fixing a market failure. That is why people discuss cap-
and-trade. It is fixing a market failure, and relying on the 
markets to give us efficient outcomes.
    Good policy means making it clear to people where we are 
going so those in the private sector who have to make the long-
term investments have the time to adjust, have the time to 
reject their replacements to adopt the new technology. There 
will be many gains to offset against this cost. I have already 
mentioned, biodiversity, energy security, and so on. We will 
have new markets for these new technologies which could well 
trigger an exciting new set of opportunities for investment. We 
do have to encourage technologies. We do have to invest 
strongly, public and private money in technological 
development, but we can do a great deal with the technologies 
which we recognize now or can develop quite quickly.
    Competitiveness is, of course, an issue, but 1 or 2 percent 
on your cost doesn't destroy your competiveness when you have 
got relative wage rates of 5, 10, 15 times that of some of the 
competititors. It is good productivity that overcomes those 
kinds of costs. It is like a one-off, 1 or 2 percent increase 
in prices. Some industries, it is more difficult, and direct 
action there will of course be important.
    Now, finally on the global deal, and I can only say a word 
or two here and leave the rest of this for questions, but let 
me emphasize very strongly that acting on development, acting 
on world poverty, and acting on climate change come together. 
If we don't act on climate change, we will derail development. 
If we try to act on climate change in a way that undermines 
development, we will never get a global deal. We will never 
work together. So the world is now looking to the United States 
of America. I do believe that the big countries of the 
developing world could make a big response if the United States 
takes the lead now. I am more than happy to ask questions and 
answer questions as to just how that might happen.
    Thank you very much for your indulgence, Mr. Chairman.
    [The prepared statement of Mr. Stern follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Boucher. Lord Stern, thank you very much for that very 
thoughtful testimony and for expanding this subcommittee's 
understanding of the costs of climate change, both the cost of 
acting and also, important to your points, the costs of not 
acting. You note in your report that fossil fuels, by the year 
2050, will continue to comprise a very large portion of the 
world's energy supply. In fact, I think you estimate that 
fossil fuels, collectively, will remain at more than 50 percent 
of global energy supply. And in view of those realities, how 
important do you believe it is that carbon-capture and -
sequestration technologies be developed as part of an overall 
strategy to control greenhouse gases?
    Mr. Stern. Basically, economists do believe in the market 
mechanism. I think it is important to get the incentives right 
and let the market come up with the best technologies. But I do 
think that carbon capture and storage for coal, in particular, 
is of enormous importance.
    Coal is responsible, around the world, for 40 or 50 percent 
of electricity generation. India and China, countries growing 
very rapidly, will be using about 80 percent coal for the next 
two or three decades, probably longer, for the good reason that 
they have it themselves. They are not dependent on outsiders. 
And at the moment, it is quite low cost, and of course, 
important to them, they can use it very quickly, and speed is 
of the essence. So we know that coal is going to be used. Some 
people might wish that it wasn't, but it will be. So it seems 
to me that wise policy is to act on what you see to be the 
reality, not to wish the reality as something different.
    Within 7 or 8 years, if we as a world develop, say, 30 
carbon capture and storage plants for coal, you need a spread 
of these things, because there are different kinds of coal. 
There are different kinds of geology and so on. But we could, 
as a world, get those examples up and running quite quickly, 
within 10 years, and that would give us the examples that we 
need to test out whether this very promising technology is 
really going to work on scale. If it doesn't work on scale, 
then the problem is going to be much more difficult. But I 
think the indications are that it really could work on scale.
    Mr. Boucher. Thank you very much.
    You mentioned in your testimony the importance of 
international collective action to address the global problem 
of greenhouse gas emissions, and I know that in the course of 
your work, you have had extensive conversations in developing 
countries and China, and perhaps most of the point of this 
question in India. I understand that you have had extensive 
conversations with the Prime Minister of India concerning these 
matters.
    My question to you is how important is action by the United 
States to establish a mandatory problem to control greenhouse 
gasses, as a motivator for corresponding action by the major 
developing countries, China and India. What kind of response do 
you think we could expect from those countries, once the United 
States by its own example has controlled greenhouse gas 
emissions through a mandatory program here?
    Mr. Stern. I am much more optimistic, Mr. Chairman, on a 
strong response than I would have been 2 years ago. I have been 
working in India for 35 years and living there for quite 
extended periods. Both on policy and in rural areas, I have 
been working and living in China for nearly 20 years on and 
off. Two years ago those countries would have said you rich 
countries caused this problem with your high-carbon growth in 
the past. Seventy percent of the greenhouse gasses are down to 
you. You sort it out.
    They, now, I think see this in a very different way. That 
resentment is still there. It is a political reality that we 
all have to recognize, but they say it in a different way. In 
2050, 8 billion out of the 9 billion people that there will be 
in the world, will be in the currently developing countries. We 
hope many of them, of course, are better off by then, but they 
will be in the currently developing countries. They realize 
that you can't get action for a world of 9 billion just through 
the action of the 1 billion in the rich world. It just 
obviously doesn't stack up. So they realize that the world is 
shaped by their actions looking forward.
    They recognize very clearly just how vulnerable they are. 
The major rivers of Asia, just to give one very important 
example, rise in a few hundred square kilometers of the 
Himalayas. The glaciers in the Himalayas have retreated about 
15 percent in the last 40 years. No surprise, the floods in 
Bahia in India last year were record floods on a scale never 
seen before. The Chinese people and authorities are very much 
concerned about the way in which the water behaves in their 
great rivers, for example, the Yellow River and the Yangtze. 
Much of China is struggling with problems with transferring 
water from South to North, and for them the disruption of the 
flow of the Himalayas is the big issue. Many cities, of course, 
in India and China are on the sea and vulnerable to sea-level 
rise and to the increased intensity of typhoons. This is a very 
clear indication to them that they are vulnerable.
    So they recognize, first, that they are 8 billion out of 
the 9 billion of people in the developing world, second that 
they are vulnerable, and third that they are potential deal-
breakers, which they are. So if you put those three things 
together, it really focuses the mind.
    And China is already taking quite strong action. It is 
reforesting. It is not deforesting. You can't sell an American 
car in China. It doesn't satisfy the emissions requirements. 
China has an export tax on energy-intensive industry, 
equivalent to roughly $50 a ton of CO2 equivalent, 
since the end of 2006. It has a 5-year plan of 20 percent 
reduction targets for energy-to-output rations. But it is still 
opening one or two major coal-fire stations every week.
    But I think we have to see, as it were, a growing 
understanding of this problem and the challenge. India is about 
to publish its climate change action plan. It should be out in 
the next week or so. And I have talked at some length with the 
Prime Minister and the head of the planning commission, the 
Finance Minister, and the Minister of Science and Technology in 
India on those issues. I spent an extended period there in 
March and April.
    They are very much concerned with those issues. I think it 
is fair to say that India is a bit behind China in 
understanding and action, in a very broad sense, on these 
issues, but changing very fast in both countries. But that 
resentment that I described at the beginning is still there and 
it won't go away. So I think we have to see this as a whole 
package, respect the people that we are talking to as a rich 
world, just as when I am in China, I try to explain the great 
strides United States is making in technology, for example.
    So my own assessment is that the probability of response is 
much higher than it was a couple of years ago. If we all 
approach this in a collaborative way, then I think the response 
could be very large. But it is absolutely clear that the world 
is looking to the United States for leadership on this issue.
    Mr. Boucher. Thank you very much, Lord Stern. The gentleman 
from Michigan, Mr. Upton, is recognized for 5 minutes.
    Mr. Upton. Well, thank you, Mr. Chairman, and I appreciated 
your testimony, Lord Stern, and I too am one who wants to see 
us reduce greenhouse gas emission, and I think as a Nation we 
have made some pretty good strides proving that it is not 
business as usual over the last couple of years.
    I would note that Ms. Harman and I passed successful 
legislation, enacted last year, that is going to change light 
bulb standards for the entire United States. We are going to 
phase out the 100-watt incandescent bulbs. And let us say for 
the record that those bulbs are already being built and are 
already in our stores and are without mercury or lead, a great 
stride by a number of manufacturers, and they happen to be 
making them in America, which I think is a really good thing.
    I am from Michigan, which you may know is called the Auto 
State. Mr. Stupak and Mr. Dingell are members of committee, and 
myself, are all from Michigan and made a pretty tough vote last 
year to increase mileage standards for automobiles, and we saw 
that happen for the first time since the '70s.
    There are a number of us on this subcommittee, certainly 
including chairmen Boucher and Dingell and others, Barton, on 
promoting nuclear energy. As you know, our about 20 percent of 
our Nation's power is generated from nuclear. We know to 
address our energy needs by the year 2030 we are going to need 
to put online more than 50 new reactors to just maintain that 
20 percent. We want to see that happen. We also know that we 
have to address the issue of waste, and I think you are going 
to be seeing, I hope, some bipartisan legislation moving in 
both the House and Senate, long term, that can deal with that.
    We have seen changes in appliance standards, not only in 
electricity, but also on water, housing standards. We need to 
renew the R&D tax incentives for wind and solar, and I actually 
believe that we come to an agreement on a renewable portfolio 
standard that makes sense in this Nation, which we were not 
able to do this last year.
    I have a plant, a company in my district called Eaton that 
is developing a new hybrid engine for diesel vehicles. And as 
an example, this last year I saw, whether it be a Fed-Ex or a 
UPS truck, they believe it can save literally a thousand 
gallons of diesel a year on the mileage they usually drive. So 
we are making some good steps.
    You talked a little bit about carbon capture and 
sequestration. Mr. Boucher, myself, Mr. Barton, Mr. Shimkus, 
Mr. Whitfield here, and others, are promoting a bill that will 
literally generate a billion dollars into a fund to make sure 
that we can see that technology come about and help the coal 
industry across the country move forward.
    Earlier this week I sat down with Lord Turner who I think 
you know is developing a plan by December 1 to show where the 
U.K. is to hit the various targets by 2020, 2025, 2050. I know 
our subcommittee is anxious to see that report, see how the 
U.K. intends to meet the targets that it establishes and what 
that political reality will be.
    I will ask you a question, as you spent extensive time in 
both India and China. The hearings that we held last year I 
don't think telegraphed very well what those two countries 
intend to do. To summarize, I would say that the gentleman from 
India said that it would in essence be political suicide for 
them to put on any new controls in the generation of 
electricity. Coal, as you noted, they are putting a new coal 
plant online literally every week in China. Where are we in 
terms of what you think the political reality is of both those 
two countries as it relates to climate change?
    Is that clock moving too fast?
    Mr. Boucher. You are doing that.
    Mr. Upton. Let me stop and let you respond to that, and 
then, I guess I am going to be out of time.
    Mr. Stern. Thank you very much.
    The potential in the United States for technological 
progress all of us non-Americans have great respect for. We 
will still have cars as we go to 2050 and we try to cut back on 
carbon emissions. We will still have electricity, but we have 
electricity which is generated in a close to zero-carbon way, 
and we will have cars, which in large measures, are run in 
other ways than fossil fuels, whether it be electricity from 
zero-carbon electric sources, whether that is stored as 
hydrogen in some shape or form. And I am confident that those 
kinds of technological advances can be made quite quickly.
    France went from very small to around 75 percent nuclear in 
about 20 years after the oil-price shocks. The Brazilians, 
whatever you think about ethanol from sugar, the Brazilians 
went very quickly to all of their cars being flexible as to 
which kind of fuel that they can use, and if you go to a 
Brazilian gas station, it is like going to a bar. You choose 
whatever pump you want, and you have got a big choice of what 
you drink or what you put in your tank. So they developed the 
cars, the infrastructure, the techniques, very quickly.
    Big parts of Germany, in a period of 5 years, have gone to 
50-percent wind, and I understand that wind in this country is 
very, very prominent in new investment in electricity 
generation.
    Some of these things with the right kind of support for 
technical progress with the clear signals from government about 
where the economy is going can get very rapid responses. So it 
sounds sort of dramatic to talk about close-to-zero carbon 
electricity, close-to-zero carbon transport by 2050, but that 
is 40 years away, and we can also already see, as you have 
described, the kind of technologies that might be used. I think 
we have to have a very open mind about those technologies. It 
would not make sense to rule out nuclear, carbon capture, and 
storage for coal, ethanol, or whatever. We have to find the 
best ways, and we have to do it in a way that fits with the 
market and is also socially responsible.
    On India and China, the public face is often the 
negotiating face, and the political realities that our friends 
from India and China pointed to are political realities. That 
is why it has to be a collaborative response. My friends in 
senior decisionmaking bodies in the planning commissions now 
say to me, look, Nick, you have got my cell phone number. Just 
as soon as that carbon capture and storage plan is working in 
the U.K., give me a call and we will go and visit it together, 
and then we will talk about whether we, in India, should be 
using carbon capture and storage, how you are going to help us 
with the technologies, whether you are going to allow carbon 
markets that allow us to sell you the carbon reductions.
    That is why I think it is so important, the advance of 
technology in the rich world, and the political realities 
throughout the world, that we push ahead with these 
technologies as rapidly as possible. The only one I underlined 
was carbon capture and storage for coal for the reasons I 
described before. I think we have to push ahead with all of 
them. But if we do that, if we show strong targets ourselves, 
we show low carbon growth, we show the sharing of technology, 
and we involve the whole world in the carbon markets so the 
reductions can be done where it is as cheap as possible, then, 
I think that we will get a big response. And if we commit 
ourselves to that path, I think we will get a big response.
    Mr. Boucher. Thank you very much, Mr. Upton and Lord Stern. 
The gentlelady from California, Ms. Matsui, is recognized for 5 
minutes.
    Ms. Matsui. Thank you, Mr. Chairman. Lord Stern, you 
describe greenhouse gas emissions as the biggest market failure 
the world has seen, and I ask you as an economist, if we 
address this failure by applying a price to carbon, how can we 
best make sure the price is felt by those most able to adopt 
the necessary corrections, while not punishing those unable to 
afford it?
    Mr. Stern. It is clear that if you ration by price, then 
the people who are poorer find it more difficult than the 
people who are richer. That is true, whether we think of apples 
or cars or greenhouse gas emissions. So what do we conclude 
from that? We conclude that governments have to think about 
efficient markets to fix this very big market failure, and they 
have to think about the distribution policies, the tax and 
transfer systems, for example. So I think the right way to 
attack poverty and changes in the poverty is through the tax 
and transfer systems, not by distorting the markets. So I think 
we have to do both. Fix the market failure, and think about the 
distributional aspects of all government policies, not just 
this one.
    And we also have to get, I think, a fix on the size of the 
problem. Forty dollars per ton of CO2 is the kind of 
ballpark that would promote many of these technologies. It is 
equivalent to about 40 cents on a gallon of gasoline. Now, that 
is significant. It is not small. But neither is it big, 
relative to the kind of increase in the price of gasoline we 
have seen.
    So I think we must in our polices recognize the 
distributional implications. The right way to do that is not to 
abandon pricing. It is to think through, as we do every day in 
making public policy, about our tax and transfer systems.
    Ms. Matsui. You touched on developed countries, and you 
described some of the ways of how countries might take 
leadership on the issue of climate change. As you see from your 
interactions around the world, and you addressed it to a 
certain degree about how, for instance, India and China have 
basically said they are looking to us, but also being very 
resentful of what we are not doing, in essence. Do you see a 
situation where the developing countries and the United States 
might have a situation where we are able, in essence, to look 
broadly? We are looking at market things in this country, but 
across the world, in essence, because we are counting many 
problems in as far as balancing this out, that we could take 
one country or two countries and establish some sort of 
relationship where we can actually come to some sense of what 
we are doing and what they are doing and try to address some of 
the basic concerns we might have. I realize that is very 
broadly speaking, but it seems to me that we are always looking 
at China and India. Maybe we should look at India to see what 
their concerns are and what our concerns are and move forward 
on maybe one aspect of that. I always like to see where we can 
find some commonalities, where we can find some things that we 
agree on, and have the other things that we disagree on put to 
the side of it.
    Can you see in your travels and your interactions what we 
might be doing with, for instance, India?
    Mr. Stern. I think the collaborative spirit that you 
describe is of enormous importance, and it would get a good 
response. Just to give you one example of the way in which 
Indian thinking has developed, the Prime Minister, last year, 
around the G-8 Summit which took place in Germany in June, 
indicated that India, in terms of emissions per capita, would 
never be above the OECD average. So that was actually saying, 
well, let us put history to one side. Let bygones be bygones. 
Our emissions per capita will never be above yours.
    Now, India is currently around two tons per capita. Europe, 
just to take that example, is 10 to 12 tons per capita. Europe 
will probably be down to seven or eight sometime before 2030, 
and India could be close to that without much strong action by 
them.
    So it is an indication that that offer that was made is one 
that actually becomes directly relevant quite soon, because you 
can't turn down in a moment. You have to plan ahead to turn 
down. So I felt that that was one example of openness on quite 
a major scale from India, which is essentially saying bygones 
are bygones. We do feel strongly about them, but let us look 
forward. Let us act together.
    Technology, I think, is an absolute key area of 
collaboration. I think collaboration with both India and China 
on carbon capture and storage for coal would be one example 
that is extremely important. But they will be looking to the 
rich nations to do some proving first, as well as trying things 
out in those countries. But we have to set that in the context 
of a global deal. This kind of collaborative behavior in the 
specifics is terribly important, but we have to keep our eye on 
the global deal, and we have not got much time, because that 
needs to be settled in Copenhagen at the end of next year.
    Ms. Matsui. OK, thank you, Lord Stern.
    Mr. Boucher. Thank you, Ms. Matsui. The gentleman from 
Texas, Mr. Barton, is recognized for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman. This is our week for 
British Lords. We had Lord Reed on the oil speculation hearing 
on Monday in the Oversight Subcommittee, so we have had two 
Lords in one week. I guess that is a good thing. Anyway, we are 
glad to have you.
    Lord Stern, you said in your introduction that you are here 
as an academic, and I accept that your academic credentials are 
impeccable. I do think, though, that it is fair to point out 
that in your nonacademic endeavors you have economic interests 
that benefit if we adopt some of these carbon-reduction 
methodologies in the United States and worldwide. Is that true 
or not true?
    Mr. Stern. I work one day a week as a special advisor to 
the chairman of HSBC on climate change and development issues, 
and I work half a day a week as vice chairman of the IDEA 
group, which is looking at carbon market ratings, so that is 
the involvement.
    Mr. Barton. And those are good things. I am not being 
negative, but you would tend to benefit, financially, which is 
not a bad thing, if some of these things that you predict, if 
we implement policies to try to prevent some of the things that 
you predict from coming true.
    Mr. Stern. I am getting involved in things which I think 
are very good ideas. I have described exactly what my interests 
are.
    Mr. Barton. Totally acceptable. I just want the record to 
show that you have economic interests outside of the academic 
interest.
    Mr. Stern. They are indeed on record in the House of Lords.
    Mr. Barton. I understand that. Now, I want to ask you about 
this 5 degree centigrade increase from preindustrial levels. 
The first question is just very, very mathematical. What is 5 
degrees in Fahrenheit? Is it about 10 degrees?
    Mr. Stern. No, it is 9. Multiply by 9/5.
    Mr. Barton. OK, 9 degrees. Now, what is magic about 
preindustrial level temperature? Is the assumption that is the 
perfect temperature?
    Mr. Stern. Not at all. I was trying to describe--should I 
ignore this?
    Mr. Barton. We are not trying to irritate you. That says we 
have got a series of votes.
    Mr. Stern. I thought it might have been something I said.
    Mr. Barton. No, sir.
    Mr. Stern. There is nothing magical about preindustrial 
times. It is just a marker against which you can measure 
change. So when I was talking about 5 degrees centigrade above 
preindustrial times, I was saying imagine a world at that 
particular temperature, what does that world look like?
    Mr. Barton. But you are not stipulating that that is the 
perfect temperature?
    Mr. Stern. Not at all, no.
    Mr. Barton. OK, now, is 5 degrees centigrade or 9 degrees 
Fahrenheit increase universal? I mean are we going to have 
temperatures increase 9 degrees Fahrenheit in southern Virginia 
and also in northern Wales, or does it vary around the world, 
and is the impact identical, or is there a different impact in 
certain regions?
    Mr. Stern. There are different impacts around the world. 
These global averages across land and sea, so one difference 
would be you would expect rather bigger increases over land 
than over sea. You would expect bigger increases toward the 
poles, for example. You would see very differential impacts. 
Some parts of the world would dry right out. It seems that 
Southwest Africa is drying out, and the eastern part of Africa 
is getting wetter.
    Mr. Barton. But is it fair to say that assuming there is a 
temperature increase, and I will stipulate that we have 
certainly proven that there has been a temperature increase, 
that the temperature difference is going to vary by region and 
the impact is going to be different by region. Is that a fair 
statement?
    Mr. Stern. It is a fair statement, but it is also important 
to recognize that the impact of temperature increases are 
largely through water in some shape or form--storms, floods, 
droughts, sea level rise--and that is dependent on the whole 
structure of the planet's atmosphere. You can't look at the 
impact by just looking at temperature in one place, but there 
is no doubt that that will vary by place.
    Mr. Barton. OK, now I am down to 3 seconds, so my next 
question: the economists that have criticized your economic 
analysis, which I stipulate that you are an expert--I am not 
casting any doubts about your economic background--have 
primarily centered on two things. They have centered that you 
either had no net present-value-discount rate, or if you had 
one, it was very low; and number two, that most of the negative 
consequences in your own work are fairly far out, if I remember 
correctly, after 2200, and if you had the proper discount rate, 
the net present value of that today wouldn't be nearly as large 
as you show it to be. Can you comment on those criticisms of 
your economic methodology?
    Mr. Stern. Certainly, the attitude that we bring to the 
evaluation of benefits in the long term, relative to benefits 
now is clearly a key issue here, because precisely the way in 
which I opened up my testimony and much of what we have done in 
the past is going to determine what happens in the next 30 or 
40 years, so our actions now have the consequences, and I have 
argued very big consequences, rather further down the tracks. 
It is quite clear from the logic of the exercise that the way 
you treat future consequences relative to consequences now is 
very important.
    It is not true to say there was no discounting. That is 
simply false. What I did not have, and gave explicit arguments 
for, is pure time discounting. Now, this is a technical 
subject, but I would like to try to explain what pure time 
discounting means.
    Mr. Barton. You have got my permission. I am all for being 
technical. I love being technical.
    Mr. Stern. Let me try to explain it without being too 
nerdish and heavy. Suppose we had a pure time discount rate of 
2 percent. That would mean that if you run that forwards, say, 
for 35 years, it would mean that we would give a weight to 
somebody born in 2005 half of that of somebody born in 1970. 
Given by assumption for this part of the argument that we 
suppose they have exactly the same pattern of consumption over 
their lifetime, it is not an issue of one group being rich or 
one group being poor. Pure time discounting is actually to 
discriminate by date of birth, to attach directly lower weight 
to somebody born in the future, and 2 percent per year is big. 
It means half the weight. So those of us who have children----
    Mr. Barton. But that is what we do in most economic 
analysis.
    Mr. Stern. No, not necessarily. We discount in many ways 
because we think that future generations will be better off 
than we are, unless we take the ethical view that an increase 
in a real dollar to them, forgetting about inflation, would be 
worth less than now to us because they are richer. That is 
central to the analysis of the Stern Review. It also means, of 
course, that if we take action now to make that generation much 
worse off, then on that logic, we should have a higher weight 
on an extra dollar that occurs to them. So what that underlines 
is we have to think through those ethical issues, because what 
we are dealing with is changes in the long-term future, and 
very big changes.
    And this is the second technical point I would like to make 
about discounting: discounting usually refers to small 
movements around the path. In other words, you build a bridge. 
It costs you a bit now. It gives you benefits down the track. 
And you try to compare the cost now and the benefits down the 
track. But essentially, you have not rewritten the American 
economy or the British economy. It is a small change from the 
perspective of the economy as a whole. This is not such an 
issue. This is an issue about very big differences, potentially 
in growth rates, and very big risks, and you have to build that 
directly into your analytical framework.
    Now, there is a third point here, which is also technical, 
which is this not about simply an aggregate consumption good. 
We are talking about environment and other sorts of 
consumption, and there are many more dimensions that we should 
think about. What we are talking about is we hope rising 
consumption, we hope, and you would discount for that reason. 
But you may also, and we fear, have strongly deteriorating 
environment. If you then said, well, I could invest in things 
other than climate change, and as to when these problems 
manifest themselves, I am going to spend the money, the returns 
on that investment, in sorting out those problems when they 
happen, what would you find? You would find that the price of 
taking action would have moved up against you very sharply for 
the kind of reasons that I described. So a third logical 
problem, an error that many people have made in this analysis, 
is to see this as just a one-good problem, as opposed to key 
aspects of the problem having different goods.
    Now, I am sorry to have been slightly technical. And the 
paper, the American Economic Review, that was published in May 
of this year is even more technical. But I did want to explain 
that these issues have their complexities. We can tackle them. 
But I also have my view that some of the discussion in the 
literature has not really recognized the big studies, analyses, 
and literature on this issue, and has taken a very simplistic 
approach.
    Mr. Barton. My time has expired. I want to commend you for 
trying to be technical and trying to quantify. I happen to 
disagree with your methodology, but at least you have attempted 
to put it into a substantive form that there can be a debate 
on. And I think that is very important because the consequences 
of actions that we are asked to take at the governmental level, 
both domestically and internationally, are huge. And so at 
least you have tried, using your economic background, to put 
some parameters on it. And while I disagree with the way that 
you have done it, I totally respect that you are trying to do 
It, and I commend our chairman for asking you to be a witness. 
And at some point in time, I would love to have off-camera, a 
very technical discussion with you because I think it would be 
illuminating, at least for me. Thank you, Mr. Stern.
    Mr. Boucher. Thank you very much, Mr. Barton.
    Mr. Stern. I would be very happy to have that. Thank you.
    Mr. Boucher. The subject of discounting future harm to 
present value was sufficiently important that it was worth 
taking this extra time in order to illuminate it.
    We have a series of three recorded votes that are currently 
pending on the floor of the house. We have approximately 4 
minutes for the members to respond to those. The response will 
take a little more than one half-hour. And as much as I regret 
having to recess the subcommittee for that purpose, and ask 
Lord Stern to stay with us, I am afraid we have no alternative.
    And so the subcommittee does stand in recess, pending the 
completion of the third vote, and we will reconvene immediately 
thereafter.
    [Recess.]
    Mr. Boucher. We will at this time reconvene, and I am 
please to recognize, at this time, the gentleman from Texas, 
Mr. Gonzalez, for 5 minutes of questions.
    Mr. Gonzalez. Thank you very much, Mr. Chairman. Welcome, 
Lord Stern. We truly are appreciative of the insight that you 
provide us. A couple of observations, and I think I do want to 
stay, probably, in pretty general terms in my questioning to 
you.
    I think that one of the biggest challenges that you and 
others that believe as you do have when you come before members 
of Congress, especially the House of Representatives, is that 
we are simply hardwired to think in 2-year cycles. And if you 
can overcome that, and have us look beyond that, and sometimes 
political interests and such, you may be successful. Few people 
have been able to succeed in that. And it also seems that any 
of our efforts that we have initiated, even here on the Hill, 
and I will give you a couple of examples that you might find 
rather interesting, have been somewhat frustrating experiences.
    FutureGen, were you familiar with that particular project, 
Department of Energy and such? Well, it seemed we had a lot of 
competition for that. That was a way, obviously, that we were 
going to have coal-fired plants and such, sequestration, and 
capture and such. We gave up on that because of the cost. Here 
on the Hill, we have our own power plant, and we thought we 
would try to increase the use of natural gas to cut down on 
emissions, but if I remember, we operated about 42-percent 
natural gas and maybe increasing it all the way to 15 to 16 
percent more natural gas. It is costing us anywhere from $1 to 
$1.8 million. And that is easy for Capitol Hill to absorb some 
of that costs for the obvious reasons, but if I went back to 
San Antonio and told my municipally owned utility to do the 
same thing, and that is utilize natural gas in a greater degree 
than they use now, and to pass on that kind of cost to the 
ratepayers, I understand that, politically speaking, that is a 
difficult thing to do. We try to buy carbon credits and such 
here on the Hill, because we think that somehow it is going to 
encourage better habits out there that will reduce carbon 
emissions, and we find out that it probably didn't change 
behavior at all.
    So we have some very real-life experiences here that have 
been somewhat frustrating. But on top of all of this is 
something that you observed, and I think some of the members 
here are very sensitive to it, and that is why the United 
States, why Great Britain, when we have the other countries 
such as India and China, in essence, saying, well, we are going 
to wait until you do it.
    And I know that you have advanced this basis and reason for 
discounting, present costs now, future savings later, which is 
a very difficult principal many times in the political arena, 
and I am going to agree with you. I really do believe that. The 
question to you is if we adopted certain of the practices that 
you are advancing that will demand tremendous investment by our 
government, maybe altering, to some degree, a lifestyle of the 
citizen, some sacrifice, some pain, and the same is true of 
Great Britain, is it an economic suicide pact to our people? 
Because that is basically what people are advancing to counter 
what you have to say today, what is the implication? How dire? 
How serious?
    Mr. Stern. We have to be analytical, and we have to look at 
the difficulties. When you do look at the costs of cutting 
back, and you think about how to do it well, energy efficiency, 
of course, saves you money. Avoiding deforestation, if it is 
done well, need not be costly. Investing in new technologies, 
using the technologies we have better, that is, in very general 
terms, the kind of things that you can do. Some of them do save 
money.
    But many of them cost, and I and many others have to, as 
best we can, make an estimate of the cost of cutting back on 
emissions to a degree that would allow stabilization at 500 
parts per million, and we, it is not just me, have come up with 
numbers around two percent of GDP per annum for stabilizing at 
500, perhaps one percent of GDP per annum stabilizing at 550, 
if we have good policies. And there are quite a few ways to 
mess this up and make the costs higher.
    So I think the first attempt to grapple with your question, 
which is a very important one, is just to try to be 
quantitative about the costs, and in being quantitative, to be 
specific and realistic about the potential of different kinds 
of technologies. McKinsey's have done that since the report was 
published, the International Energy Agency in Paris has done a 
lot of work on that. The IPCC has done a lot of work on that. 
And we did try to do it ourselves in the Stern Review.
    So working bottom-up, looking at the kinds of measures you 
would have to take in cutting back on the scale that we 
described, those are the kinds of numbers that we came up with. 
Is 1 or 2 percent of GDP economic suicide? The answer is no. It 
is 1 or 2 percent of GDP, which is real resources, and I don't 
want to dismiss it or say it is insignificant. It is not 
insignificant. The argument is that it is a small insurance 
premium to pay relative to the risks you remove in the future. 
Or if you want to get quantitative about the costs of the 
inaction, it is relatively small relative to those costs.
    You have to be careful with words like suicide, but I think 
it is much more dangerous not to do these things than it is to 
try to do them. But policy matters enormously, and good policy 
matters enormously. I think that people will understand why it 
is being done, and I think that if you design these things in a 
way that, for example, return revenues from taxes or return 
auctioning of permits back to people in different ways, and you 
can concentrate those on research, you can concentrate them on 
compensating poorer parts of the population for the price 
increases, then, I think that you can put together policies 
that will make it easier to bring people along. But I do not 
think that an increase in cost of 1 or 2 percent, like a one-
off, permanent increase in costs of 1 or 2 percent, I don't 
think that can be described as economic suicide. Real 
resources, resources that matter, but not economic suicide.
    Mr. Gonzalez. Thank you very much, Lord Stern, and I yield 
back.
    Mr. Boucher. Thank you, Mr. Gonzalez. The gentleman from 
Kentucky, Mr. Whitfield, is recognized for 5 minutes.
    Mr. Whitfield. Thank you, Mr. Chairman and Lord Stern. We 
appreciate very much your being with us here today.
    First of all, I wanted to make a comment about this New 
York Times article that talks about the European cap-and-trade 
system, and it said implicitly in 2006 and 2007, the first 2 
years of operation of the European cap-and-trade system that 
CO2 emissions were higher than they were prior to 
that. So the purpose of the cap-and-trade system was to reduce 
CO2 emissions, and in fact, they have been higher. 
Would you make a comment about that?
    Mr. Stern. The cap-and-trade system in Europe is young. The 
first phase ended at the end of 2007, and the second phase has 
already started. The price of carbon dioxide in the second 
phase now is around 25 Euros or $30 a ton.
    Mr. Whitfield. Forgive me for interrupting. I don't want to 
be rude. We have these time constraints. But would I be correct 
in saying that, yes, the CO2 emissions were higher 
in 2006 and 2007 than they were before?
    Mr. Stern. Yes, they gave away too many permits and that is 
one lesson which I think has been learned.
    Mr. Whitfield. And you hope in the future that you will be 
able to correct those problem and be able to make the 
CO2 emissions less.
    Mr. Stern. Yes, you can recognize the problems and see how 
to correct them: give away less permits.
    Mr. Whitfield. Now, recently we met with a group of 
Chinese, and I know we had a lot of discussion about China and 
India, and they indicated that within the last 3 years, in each 
of the last 3 years, the amount of electricity produced in 
China from a new coal technology, producing electricity, new 
coal plants coming online in each of the last 3 years, exceeded 
all of the total electricity produced in Great Britain in each 
one of those years, which is an unbelievable figure. And I was 
just curious, in Great Britain, what percent of electricity is 
produced from coal?
    Mr. Stern. The Chinese population is 20-something times 
that of the U.K., and it is growing very much faster, so that 
figure isn't particularly surprising. I don't have the U.K. 
coal figure in my head. I guess it is around 25, 30 percent, 
but I would prefer to communicate that later, because I don't 
have it.
    Mr. Whitfield. Would you have any idea about Europe as a 
whole, what percent of all of Europe's electricity is produced 
from coal?
    Mr. Stern. I am guessing 35, 40 percent. But again, I would 
want to be a little careful about that and would not want those 
numbers, particularly, on the record. I would prefer to come 
back to you.
    Mr. Whitfield. The purpose of this hearing and series of 
hearings is looking at the costs of not doing anything versus 
the cost of doing something, and I was reading this article, 
they said you had quoted in your review Professor Richard Tol 
63 times, who is supposedly one of the leading environmental 
scientists in the world, and he said that you really did 
overstate the damage of not taking action. He said that you 
really cherry-picked and picked the very worse choice out of 
every opportunity. And then Robert Mendelssohn, the economist 
up at Yale said that you were way too optimistic, that the cost 
of taking action to solve this problem would be only one 
percent of gross domestic problems. How would you react to 
their criticism?
    Mr. Stern. I think both of those gentlemen are wrong. And 
when we worked out the cost of action, we did it in a bottom-up 
way, in looking at the different kinds of actions you could 
take, in carbon capture and storage, going into the future, 
wind and so on, renewables, and we built it up as best we can. 
Subsequent work, as I said, McKinsey's work, has actually come 
out pretty well where we have, so that is on the Mendelssohn 
criticism. I just have to refer you to the other studies after 
ours.
    On the Tol criticism: it is completely wrong. I have 
explained in my testimony why it was I think we underestimated. 
The emissions are growing faster than we assumed. The carbon 
cycle seems to be getting weaker. The absorptive power of the 
planet is less than we thought. I think that the idea that 
somehow we overstated that case by cherry-picking is shown by 
subsequent experience, analysis, and evidence to be completely 
false.
    Mr. Whitfield. Well, you understand the dilemma that we are 
in. We get different views on the damages of not doing 
anything, versus the costs of doing things. Here in America, 52 
percent of our electricity is produced from coal, and what is 
going on in China and elsewhere and most of these cap-and-trade 
systems are biased against coal. But one question I would like 
to ask you, what is your best guess as to when the technology 
will be available to have an effective carbon-sequestration 
program?
    Mr. Stern. The answer for that is very much in our own 
hands, and if we are slow, then it will take much longer. I 
think the fastest we could get really strong evidence and 
experience and show what works and what doesn't on a commercial 
scale is probably 7, 8, 10 years, but only if we move ahead 
very strongly and get those demonstration plants at commercial 
scale up and running, and I think public money has to get 
behind that in order to share the risk and share the cost. It 
will be much longer if we don't get on with it.
    Mr. Whitfield. And you do think it is absolutely necessary 
that we do it?
    Mr. Stern. I do. It is a reality that coal will be used, 
and we have to try to use that in as clean, efficient, safe way 
as possible.
    Mr. Whitfield. Thank you.
    Mr. Boucher. Thank you very much, Mr. Whitfield. The 
gentleman from Massachusetts, Mr. Markey, is recognized for 8 
minutes.
    Mr. Markey. Thank you, Mr. Chairman, very much, and thank 
you, Lord Stern, for your outstanding analysis and your service 
to the planet. You are one of the world's great citizens. Thank 
you.
    You have worked to quantify the economic impacts of failing 
to address global warming, which are staggering. Can you expand 
on the human face of these costs? What do the impacts mean in 
terms of lives lost, human suffering, both in places like 
Africa and Asia, but also here in the United States? Can you 
put a human face on this?
    Mr. Stern. It is difficult to put a quantitative human 
face, but we can describe the kinds of events and get a feeling 
for how big they are. I mentioned in the discussion earlier 
today the consequences of the retreating glaciers on the 
Himalayas for flooding in Bahia, where the death toll last year 
was very high. I am sorry I don't have the number in my head, 
but again, that is available. The potential consequences of the 
disruption of the North Indian monsoon would be really 
devastating to hundreds of millions of people in North India. A 
meter or so of sea level rise would be extremely difficult for 
cities ranging from New York to Cairo, Dhaka and so on, around 
the world. It is flooding, it is droughts, it is the intensity 
of storms and hurricanes. We saw in Myanmar recently the human 
cost of the recent typhoon, sadly magnified by the 
inappropriate reaction. It is these kinds of events which 
completely disrupt people. And ultimately desertifying, some 
parts of the world submerging, some parts of the world subject 
to uncontrollable floods, you would see massive movements of 
populations.
    The examples I gave at 5 degrees centigrade are about 
rewriting where people can live and the cost of that movement 
and the conflict that history has told us would likely ensue. 
That is the kind of human cost. You can talk about malaria and 
other water-borne disease and so on. You can talk smaller 
things like the need to air condition the London Underground. 
That is not to be a big deal, although it happens to be rather 
expensive. You can talk about the snows disappearing off the 
Rockies and what that means for California's water. There are a 
whole range of things like that, which are very important in 
human terms, but less traumatic than the ones I described.
    Mr. Markey. Thank you. My colleague Mr. Upton and others 
have argued that it would be more cost-effective to address the 
symptoms of global warming instead of the disease. In effect, 
they say we should adapt our way out of this. Can you respond 
to that argument?
    Mr. Stern. Adaptation is going to be important. We are 
already seeing the consequences of 0.8 degrees centigrade, and 
however responsible we are, it is rather likely that we are 
going to experience another one-and-a-half or two degrees 
centigrade, and you can see that the adaptation cost of that 
will be very important.
    So adaptation is a fundamentally important issue. But adapt 
your way out of it, if I understand that term, and it is a term 
that is often used, seems to suggest that somehow by pulling a 
few levers, you can get back to something like the lifestyle 
that you used to have. Well, the kind of big movements of 
population that I have described, and the conflict that could 
ensue, I think it is clear that adaptation is not the kind of 
thing that you would describe as easily getting back to the 
lifestyle that you had before. So in that sense, there are 
limits to adaptation, but it is absolutely clear we will have 
to adapt. I don't want to mitigate this or that. We are going 
to have to do a lot of both.
    Mr. Markey. But adaptation is not a substitute for 
mitigation?
    Mr. Stern. Absolutely not. You could not seriously describe 
the kind of migration and conflicts that are likely to result 
from getting to 5 degrees centigrade as simply adapting to 
changing circumstances. It doesn't seem to be a very good 
description.
    Mr. Markey. And now that the scientific debate over climate 
change is largely over, although there are outliers out there 
still battling, like Japanese soldiers still on islands in 1952 
or 1953, but the scientific debate is largely over, the debate 
is turning to largely discussion over the costs of dealing with 
this issue. The Senate debate on the Lieberman-Warner bill 
largely devolved into a battle of economic models, but these 
models have consistently overstated the costs of environmental 
and consumer protection and underestimated or ignored the costs 
of doing nothing. What prospect is there for improving these 
economic predictions, that is the cost of actually inventing 
these new devices, these methods of energy that fuel our 
economy and as a result lowering the overall economic 
projections of the harm to the economy?
    Mr. Stern. First, I agree with you that the scientific 
debate is essentially over, in the sense that I think it is 
very clear that climate change generated by humans is there, 
and it is a major issue. Obviously, there would be debates and 
there should be, how big are the risks? But in terms of what 
humankind is doing and the magnitude of the risks, I think that 
debate is over. I am sure that you and I would both defend the 
rights of people to join the Flat-Earth Society and speak up 
and say that the Earth is flat. It is a free country, and that 
is their right to do it. They just don't happen to be terribly 
convincing, and I think that is the same position now on the 
climate change story.
    On how good are we at economic forecasting, broadly, the 
answer is not very, but that doesn't mean that we have nothing 
to say. I think the costs of action, the analytical basis of 
the cost of action, through close examination of the kinds of 
technologies we have, what they cost and so on, I think that is 
reasonably well founded. We do know quite a lot about the cost 
of wind power. We have more to learn, but we are learning about 
the cost of carbon capture and storage. We know quite a lot, 
from experience, about the cost of nuclear. So I think that 
scenario, where we can actually be quite confident the estimate 
that we have, provided, of course, we offer a range, so when I 
say one percent of GDP for 550, I think that stabilizing at 
550, you know, you are going to have to take plus or minus one 
or two, higher if policy is bad and technically progress goes 
slowly, lower if it is the other way around. So I think we can 
start to get a feel for where these ranges are and the kinds of 
errors that are likely to be made.
    Also, I want to underline that this kind of analysis is 
quite young. It is only really over the last 3 or 4 years that 
there has been tremendous focus in the political and the 
analytical arena on this area. There has been, in the past, 
quite a lot of work, but the intensity has leapt up in the last 
3 or 4 years, so I am optimistic, in answer to your question, 
that we will get rather better over the next 5 years.
    Mr. Markey. I think you are right, and I appreciate the 
chairman's indulgence. AT&T, in 1980, believed that there would 
be one million people using cell phones in the year 2000 in the 
United States. I think that there tends to be an 
underestimation of the ability of technology to transform 
society over the long run, and we are seeing that.
    But on the other hand, it took until 1990 for the Vatican 
to apologize to Galileo, so I don't know how long we will have 
to wait for apologies to Jim Hansen, another scientist, and 
move on, then, to what the consequences are to these scientific 
discoveries. I thank you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Markey.
    We are honored to have as a member of the subcommittee the 
Minority Whip of the House of Representatives, the gentleman 
from Missouri, Mr. Blunt, and he is recognized now for 5 
minutes.
    Mr. Blunt. Thank you, Mr. Chairman. I will admit the Flat-
Earth Society comment got my attention. Since we are there on 
that topic, was there ever a time that there wasn't climate 
change that you are aware of? Haven't we always had climate 
change?
    Mr. Stern. Yes, indeed. There are lots of factors involved, 
oscillations in the solar energies coming in, explosions of 
volcanoes, these kinds of things. There are many natural 
effects which are important.
    Mr. Blunt. And I think you don't have to be particularly 
perceptive to accept the fact that we have always had climate 
change, nor do you have to be particularly knowledgeable to 
know that a generation ago, everybody was talking about the 
climate cooling in the '70s. That has not turned out to be the 
case. I agree with you that it ought to be dealt with in the 
best way, but it also ought to be seen as part of the cycle of 
the Earth, as it is, and how you deal with that is an important 
thing.
    I only really had one question Mr. Chairman. I don't think 
I will take my 5 minutes. Looking at your report, today world 
oil prices is around $140 a barrel. What was the price point 
when you did your report?
    Mr. Stern. We published at the end of 2006. I would guess 
it would be $50, $60 a barrel then.
    Mr. Blunt. And in talking about what it takes to induce 
technological chance, how would you factor in the price-point 
factor, now, differently than when you wrote you report, the 
impact of $60 a barrel oil on all of these issues, versus the 
impact of $140 a barrel oil, how do you see that Lord Stern?
    Mr. Stern. In some ways, it makes the cost of switching 
over away from fossil fuels to other kinds of things cost less, 
because you are comparing a higher cost of doing it through 
fossil fuels with the cost of doing it in other ways which has 
not moved so much. I haven't redone the numbers, but that 
effect would be to push down the cost.
    It does, of course, make some of the politics more 
difficult, because you are talking about carbon taxes and cap-
and-trade in the context of prices for fuel that have gone up. 
So I think there are, in some respect, greater political 
difficulties, but the economic argument for switching over to 
other things is strengthened by that.
    Mr. Blunt. Would I be right in assuming that the economics 
of a cap-and-trade system to where you use that system to 
encourage technological shifts, some of that should be offset 
by what has happened now in the economy to the cost of oil and 
other fuels? Would that be correct?
    Mr. Stern. That is absolutely right. It does have the 
momentum in that direction, but there is still the case that 
there is market failure. There is a damage that they are doing 
when they consume those fuels, which, unless there is policy, 
the market doesn't face them with, and that is why a cap-and-
trade scheme is important, because it is correcting a market 
failure, even in the context of high fuel prices.
    Mr. Blunt. I will ask one more question because I am 
learning some things here that I need to know. Why would it be 
that the cap-and-trade penalty would produce a behavioral 
change difference than just the marketplace penalty of fuel 
costs that are two-and-a-half times as high as when you wrote 
you report?
    Mr. Stern. They have quite strong effects in similar 
directions, but let me just differentiate the two, because in 
many ways they are the same, but they are not exactly the same. 
If you think of carbon capture and storage for coal, coal 
prices will go up with the other fossil-fuel prices, and to 
that extent, other fuels will become more attractive relative 
to coal. But it will still be true that carbon capture and 
storage for coal will be more expensive than not doing carbon 
capture and storage for coal. So in order to induce people to 
switch from ordinary coal to carbon capture and storage for 
coal, you do need a price for CO2, and that could 
not be achieved simply----
    Mr. Blunt. By the marketplace?
    Mr. Stern. Yes.
    Mr. Blunt. Thank you.
    Mr. Boucher. Thank you very much, Mr. Blunt. The gentleman 
from Washington State, Mr. Inslee, is recognized for 8 minutes.
    Mr. Inslee. Thank you, Lord Stern, and thank you for your 
international service. It is very much appreciated.
    I want to make three points. First, the European 
experience, you noted that there were too many permits issued, 
and our study in Europe indicated that they essentially had 
some bad data, because they got some bad data from the 
applicant, if you will, and I want to point that out to some of 
my colleagues, because Tammy Baldwin and myself are endeavoring 
to pass a bill this year that will start the registration 
process this year so that we can gather good data even before 
we implement the cap-and-trade system, hopefully in 2009. And I 
just want to emphasize your testimony in that regard about the 
importance for us to get good data when we start, and we want 
to start that process this year, so thank you for bringing that 
up.
    In your report, you talked about a couple of mechanisms for 
increasing clean technology research and development, and you 
addressed something we call a renewable portfolio standard, and 
a second something you call in Europe a feed-in tariff. I just 
want to let you know, I am introducing, with some of my 
colleagues today a bill that will essentially implement a feed-
in tariff system in the United States. It is a called the 
Renewable Energy Jobs and Security Act, because we think that 
will promote jobs and security. I noted in your report that in 
evaluating those mechanisms, you concluded that both had been 
proven effective in the European experience, and concluded that 
the feed-in tariff, which essentially is a guaranteed price for 
clean electricity, was the most economically beneficial, most 
efficient mechanism. That is heartening, because you were here 
today, and we are introducing our bill today, so it is a happy 
coincidence. I just wondered if you may comment on why that is 
and what your findings were in that regard.
    Mr. Stern. I think it is largely to do with the importance 
of clarity in long-term planning for investment decisions, and 
a feed-in tariff does give the person making the decision, for 
example to invest in solar, competence in the long-term price 
that they will get in return on their investment. In 
electricity, they will get their investment. Of course, there 
will be revision clauses in those contracts, but the revision 
clauses are transparent, too, or else there will be some 
uncertainty resulting from that. The investor has an 
understanding of what that is.
    I think when you have renewable portfolio standards, that 
isn't quite so clear. The price you are going to get, a lot 
depends on exactly how those standards function, and I think 
there is greater uncertainty involved for the investor in that. 
So from the point of view of transparency and clarity for all 
of those involved I would share your preference for feed-in 
tariffs. And on your previous point, I would strongly recommend 
that in putting your policies on cap-and-trade in place, you 
learn from some of the mistakes we made in Europe.
    Mr. Inslee. We intend to go to school, and I would love to 
add your name as a cosponsor of my bill, but we just don't 
allow Lords to cosponsor bills in the House, so that is the one 
handicap we have.
    I want to test-drive a theory that I have on the ultimate 
benefits of a cap-and-trade system. There really are two parts, 
in my view, of a cap-and-trade system. One is it is a self-
restraint on one's own national contributions to CO2 
loading, which is beneficial. But I really believe it is a more 
important of industrialized nations, particularly the United 
States' adoption of one to the extent of which it drives clean 
energy research and development, because ultimately, even if 
the United States restrains itself to zero CO2 
emissions, unless the Chinese and the Indians of the world have 
access to new technology, solar-thermal, enhanced geothermal, 
sequestered coal, you name it, unless they can have access to 
that technology, we are all toast. And so I really believe that 
the more important part of a cap-and-trade system is to drive 
investments to develop these clean-energy technologies, which 
frankly we can sell, to the extent that they are not pirated to 
the developing world.
    So my view is we get a self-restraint, but a self-
development is actually a more important reason for having a 
cap-and-trade system, ultimately, when it comes down to the 
world's CO2 loading. That is a theory I wan to throw 
out. I just appreciate your comments on the thoughts.
    Mr. Stern. Cap-and-trade with auctioning permits and with 
carbon taxes are in some ways quite close, but there are 
important differences. Cap-and-trade gives you clarity on the 
quantity. You are much more sure about the overall emissions 
you are going to be making, but of course, there is some 
uncertainty on the price. A tax gives you the greater certainty 
on the price of carbon by the tax, but it gives you greater 
uncertainty on the quantity, and I think uncertainty on the 
quality is worrying in this context where we have to move 
quickly.
    Secondly, on cap-and-trade, you have the advantage that if 
you open up to trade elsewhere, you not only bring your costs 
down or get more emissions reduction for the money, for the 
usual reasons that international trade allows you to buy where 
the product is produced most cheaply; but also, you have a 
chance to bring the developing world much more strongly into 
the story because they will recognize if they have very cheap 
ways on cutting back on emissions, they can get resources on 
the carbon market to help make that happen.
    So I think it will be a very important part of the glue of 
a global deal. So cap-and-trade, if opened up in the right way 
to international trade, does enhance the prospects of the 
global deal in a way that I don't think carbon tax does. You 
could fix it so that a certain amount of the revenue is 
promised and so on, but I am not sure that that would be 
credible, because that would be the government transfers, 
rather than the private sector buying those reductions on the 
market. So those two reasons, clarity and quantity and their 
role in international trade, I think cap-and-trade does have 
some advantages.
    I think, in its driving of R&D you could argue that tax on 
carbon drives R&D also, but I do think a cap-and-trade with 
clearly announced future reductions of the kind that you have 
been discussing in your bills does actually give the greater, 
and I think people have greater confidence in that environment 
about what they have to plan for. Now, governments under 
pressure can change taxes. Long-term plans, which everybody in 
the industry is plugged into, where everybody knows where they 
are going, I think, are more robust to short-term political 
pressures, and that is very important in this context.
    Mr. Inslee. Well, you just reminded me about another lesson 
from Europe. When we talked to the European folks, they 
repeatedly stressed that a cap-and-trade system was not a 
silver bullet and had to be a part of a coalition of other 
mechanisms, including feed-in tariffs, including efficiency 
standards, including good public transportation systems, 
including good public planning of our growth and the like. And 
their message to us was don't think a cap-and-trade system is 
going to be the only thing. You have got to have a panoply of 
these things to address the issue. Would you share in that?
    Mr. Stern. I definitely would, and I would add to that list 
strong public support for research and development.
    Mr. Inslee. Wholeheartedly. Ours is pathetic. We are going 
to increase it dramatically, I hope. Thank you for your 
testimony and your work.
    Mr. Boucher. Thank you very much, Mr. Inslee.
    Well, Lord Stern, this has been most illuminating for us. I 
am sorry. Mr. Shimkus has arrived. I didn't see you.
    Mr. Shimkus. I know you were trying to sneak away.
    Mr. Boucher. We are delighted by your arrival, and you are 
now recognized for 5 minutes, the gentleman from Illinois.
    Mr. Shimkus. And I apologize. I can give you a fair 
accounting of my locations since I left. Ninety members of the 
Future Farmers of America had to get into the Capitol, and that 
with one of our NASA astronauts just in the office, and of 
course we cast three votes, so that is the life of a member of 
Congress here, and we apologize because we do appreciate your 
attendance here.
    Let me ask you a question that has been bothering me. Sir 
Isaac Newton established the fact of gravity. And all of this 
debate on climate change, and Chairman Dingell mentioned it 
today, it is the consensus of the scientific community. Why is 
it not a fact?
    Mr. Stern. I have great respect for Sir Isaac Newton, but 
he established a law of physics that holds under certain 
circumstances. It doesn't hold at the level of nuclear physics, 
so I think any law of physics applies to a description of 
certain kinds of circumstances. I don't want to be a linguist 
logic chopper, but I wouldn't call it a fact. I would call it a 
law of physics, applicable to certain kinds of circumstances.
    Now, the laws of physics for climate change, and please, I 
did math and physics as undergraduate: I am not a scientist. I 
am here as an economist.
    Mr. Shimkus. There are very few scientists here either.
    Mr. Stern. I listened to the scientists very carefully in 
doing the work, but I am not a scientist. But if I understand 
this well, the science at this story started with Fourier in 
the 1820, the famous French mathematician and physicist, and he 
did a heat balance of the world, looking at what was coming in 
and what was going out, and he was puzzled because the world 
turned out to be rather warmer than he thought, and that led 
him to the idea of something being trapped. In the middle of 
the 19th Century, they worked out, a British scientist, 
particularly, Tyndall, worked out what it was that was doing 
the trapping, and by the end of the 19th Century, Arrhenius, a 
Swedish chemist, got the Nobel Prize, really, in part for his 
work, did some calculations on how big these effects were.
    So what I want to emphasize here in response to your very 
important question is this is 19th Century simple science. Now, 
what we have had since then is much greater quantification, 
more detailed modeling of the very complex structure of the 
atmosphere and so much, which has added greatly to that work, 
and in recent years has given us a feel for the probabilities, 
and it is only if you got a feel for the probabilities that you 
can start to get quantitative on the risk.
    So that is the way in which I understand that the science 
has developed and the way in which the laws of physics and 
chemistry have been folded into this, but I am not a scientist.
    Mr. Shimkus. And I appreciate that. I think that part of 
the problem for a lot of us is that it is a consensus of the 
scientific community that it is manmade emissions that is the 
primary driver of this when there are so many other variables 
that are really never discussed or talked about. Ranking Member 
Barton always talks about the evaporation aspects.
    Are you familiar with the Argus buoys that are measuring 
the temperature of the ocean through different depths as they 
have been deployed over the past years?
    Mr. Stern. I am aware of that work, but I am sorry, sir, I 
don't really know much about it.
    Mr. Shimkus. The Argus buoys have disappointed global-
warning alarmists in that they have failed to detect any signs 
of eminent climate change, from measuring the change of the 
ocean through the currents at the different levels.
    There are a couple other things, and I want to be quick. 
Some people say to get to where we want to go, it is going to 
cost $2.50 per ton. You have expounded the cost of inaction is 
$85 a ton.
    Mr. Stern. I have tried to focus in most of the work on the 
marginal cost of abatement, how much it costs to get rid of the 
extra ton. And then on the kind of paths we are thinking about, 
that might be $40 or $50 a ton of CO2. You then have 
to compare that, and I think one of your colleagues referred to 
this earlier, what you think is the marginal damage of a ton of 
CO2. That is enormously sensitive, and I lay this 
out carefully in the Ely lecture that I referred to before, the 
one published in the American Economic Review last month. That 
is extremely sensitive to the assumptions you make, and in 
particular, varies greatly across the path. So the more 
responsible you are in bringing down the emissions, then the 
lower that cost will be.
    Mr. Shimkus. And if the chairman will allow me, Chairman 
Boucher, I will be real quick, and I apologize for running over 
my time, I just want to present a premise. You mentioned also 
about the cap-and-trade, and you also talked about a carbon 
tax. If we move in this direction, I would like us to be 
intellectually honest with the public, because the public has 
to make a decision because there are going to be increased 
costs. And what is intellectually honest and really easier on 
the balance sheet is the tax and a portion of the revenues to 
the solution, versus this cap-and-trade regime, which is a 
design regime to really confuse the public that there is 
actually a cost as the cost is passed on by other methods.
    I think Chairman Dingell had mentioned that at first. Of 
course, that is part of where I will come because we have to 
convince the public, and then they have to be willing to accept 
increased costs, whatever they may be. And I know that in Great 
Britain, in an article by Colin Brown, deputy political editor 
of the Independent, on the 2nd of May, more than seven in ten 
voters insisted that they would not be willing to pay higher 
taxes in order to fund projects to combat climate change, 
according to a new poll. And this is a Kyoto-regime accepted 
country. I met with some British parliamentarians from 
Scotland, coal regions. The GDP debate is across the board for 
a specific country, but what happened here in the Clean Air 
Act, as I have mentioned here in the committee, and I have 
talked to my environmental friends on the left, yes, you may 
apportion a moderate increase across the board, but there will 
be areas of the country that will be greatly disadvantaged in 
movement in this, and that is where a lot of us will be 
fighting for a fairer application across the board.
    Thank you, Mr. Chairman. You have been very gracious. I 
yield back my time.
    Mr. Boucher. Well, thank you very much, Mr. Shimkus. And 
Lord Stern, we appreciate very much your testimony here today 
which has been illuminating for all of the members. I think you 
could see from the range and depth of the questioning, the 
level of interest that we have in the work that you have done, 
and we are most appreciative to you. I think you can also see 
from the questions you received today that there is a somewhat 
more vigorous debate about whether we need to act on the 
subject of climate change in this country than exists in the 
U.K. and in most of Europe.
    It was a pleasure having you here. We look forward to 
future conversations with you, and with that, you are excused.
    Mr. Stern. Thank you very much. It was a privilege to be 
with you. Thank you all for your very thoughtful comments, and 
vigorous debate must be healthy. Thank you.
    Mr. Boucher. Thank you, Lord Stern.
    We turn now to our second panel of witnesses, and I would 
ask that they take seats at the table at this time. Ms. Sherri 
Goodman is the General Counsel of CNA, and the Executive 
Director of the CNA Military Advisory Board for that 
organization's project on national security and the threat of 
climate change. Dr. Anthony Janetos is the Director of the 
Joint Global Change Research Institute, which is a joint 
venture between the Pacific Northwest National Laboratory and 
the University of Maryland. He will testify regarding the 
effects of climate change on agriculture, land resources, water 
resources, and biodiversity in the United States, recently 
released by the U.S. Climate Change Science Program at the U.S. 
Department of Agriculture. Mr. Jim Lyons is the Vice President 
for Policy and Communications for OXFAM American. And Dr. Roger 
Pilke is the Senior Research Scientist and Senior Research 
Associate at the University of Colorado in Boulder.
    We welcome each of our witnesses. Without objection, your 
prepared written statements will be included in the record. We 
will now welcome your oral summaries. And Ms. Goodman, we will 
be happy to begin with you.

STATEMENT OF SHERRI W. GOODMAN, GENERAL COUNSEL, CNA, EXECUTIVE 
             DIRECTOR, CNA MILITARY ADVISORY BOARD

    Ms. Goodman. Thank you very much, Mr. Chairman and 
distinguished members. It is a pleasure to be here this 
afternoon. I appreciate the opportunity to testify before you 
on this critical and timely subject of climate change, and I 
will focus my remarks today on the national security 
implications of climate change.
    As you noted, I am with CNA, a nonprofit analysis and 
solutions organization. I have been privileged over the last 
several years to work with some of our Nation's finest military 
leaders in their role as members of the Military Advisory 
Board, to which I am the executive director. Our project was 
established to examine the national security implications of 
climate change, and last year we produced a report on national 
security and the threat of climate change, and Mr. Chairman, I 
would ask that that report as well as my statement be entered 
into the record.
    Our Military Advisory Board consisted of some of the most 
respected generals and admirals of recent times, including a 
former army chief of staff, former combatant commanders of both 
the Pacific Command and Central Commands for the U.S. Armed 
Forces. I have previously worked with most of these military 
leaders during the 8 years I served as Deputy Undersecretary of 
Defense for Environmental Security.
    The CNA Military Advisory Board concluded that global 
climate change is and will be a significant threat to our 
national security. The potential destabilizing impacts of 
climate change include reduced access to freshwater for major 
populations, impaired food production, health catastrophes, 
especially from vector and food-borne disease, and land loss, 
flooding, and the displacement of major populations. What are 
the potential security consequences of these destabilizing 
effects? Overall, they increase the potential for failed states 
and the growth of terrorism, mass migrations, potentially 
leading to greater regional and global tensions and tensions 
over recourses, particularly water, are almost certain to 
escalate.
    Let me briefly review the findings and recommendations of 
our work. The four findings of the Military Advisory Board are, 
first, projected climate change poses a serious threat to 
America's national security. The predicted effects include 
extreme weather events, drought, flooding, sea level rise, 
retreating glaciers, habitat shifts, and the increased spread 
of life-threatening diseases. As we noted in our report, these 
conditions have the potential to disrupt our way of life and to 
force changes in the way, keep ourselves safe and secure.
    During the Cold War, Mr. Chairman, our Nation spent 
billions of dollars to protect Americans from the threat of 
nuclear attack by the Soviet Union. While the probability of 
such an attack was low, the consequences were so catastrophic 
that Americans judge deterrence of this threat a sound national 
investment. While it may be difficult to know the probability 
of catastrophic climate effects from possible tipping points, 
the potential consequences are such that prudent action is 
warranted today to reduce the change of such events occurring. 
Unlike most traditional security effects that involve a single 
entity acting in specific ways and points in time, climate 
change does not have a human face and has the potential to 
result in multiple, chronic conditions, occurring globally 
within the same timeframe. These potential threats to the 
Nation's security require careful study and prudent planning to 
counter and mitigate potential systemic failure. As noted by 
General Sullivan, Chairman of the Military Advisory Board, ``As 
a military leader, you do not seek 100-percent certainty, 
because, frankly, we never have it. If you wait until you have 
100-percent certainty, something bad is going to happen on the 
battlefield.''
    Our second finding is that climate change acts as a threat 
multiplier for instability in some of the most volatile regions 
of the world. Many governments in Asia, Africa, and the Middle 
East are already on edge in terms of their ability to provide 
basic needs, food water, shelter, and stability. Projected 
climate change will exacerbate the problems in these regions 
and add to the problems of effective governance. Economic and 
environmental conditions in already fragile areas will further 
erode as food production declines, diseases increase, clean 
water becomes increasingly scarce, and people move in search of 
more sustainable resources.
    Third, projected climate change will add to tensions even 
in stable regions of the world. Developed nations including the 
U.S. and those in Europe may experience increases in immigrants 
and refugees as drought increases and food production declines 
in both Africa and Latin America. Pandemics and the spread of 
infectious diseases caused by extreme weather events and 
natural disasters, as the U.S. experience with Hurricane 
Katrina, may lead to increased domestic missions for a number 
of U.S. agencies, including state and local governments, the 
Department of Homeland Security, and our already stretched 
military, including our Guard and Reserve forces. Deployment of 
these forces comes at a cost to the American taxpayer.
    And fourth, climate change and national security and energy 
dependence are a related set of challenges. Because these 
issues are linked, solutions to one affect the others. The path 
to mitigating the worst security consequences of climate change 
involve reducing global greenhouse gas emissions and putting 
our Nation on the path to more sustainable energy supplies.
    There is a relationship between carbon emissions and 
national security. The more we can reduce our reliance on 
fossil fuels, especially those imported from countries that 
would do America harm, the more we can reduce the security cost 
America may pay later. The recommendations of the Military 
Advisory Board stress the need to take prudent actions to 
address climate change today to reduce national security 
threats and costs that could confront us in the future. 
Briefly, Mr. Chairman, our five recommendations are, first, 
that the national security consequences of climate change 
should be fully integrated into national security and national 
defense strategies, and as you probably know that included the 
recommendation which was enacted on the Defense Authorization 
Bill last year and the Intelligence Bill to produce a national 
intelligence assessment on climate change, which was released 
just this week and validates many of the findings of our work. 
Second, the U.S. should commit to stronger national and 
international role to help stabilize climate change at levels 
that will avoid significant disruption to global security and 
stability. Third, the U.S. should commit to global partnerships 
that help less developed nations build capacity and resiliency 
to better manage climate impacts. And fourth, the Department of 
Defense should enhance its operational capability by 
accelerating adoptions of improved business processes and 
innovative technologies that result in improved U.S. combat 
power through energy efficiency. And fifth, DoD should conduct 
an assessment on the impact of U.S. military installations 
worldwide of rising sea levels, extreme weather events, and 
other possible climate change impacts over the next 30 to 40 
years.
    Mr. Chairman, the threats posed by climate change can best 
be addressed, in my view, by the very qualities that make 
America a great Nation: leadership, innovation for smart 
solutions, and global engagement.
    Mr. Boucher. Ms. Goodman, your time has expired by about 3 
minutes now, so if you could, wrap up very quickly.
    Ms. Goodman. All right, first, U.S. leadership is 
essential. We must lead in the fight against climate change if 
we are to retain our standing as a global power in the 21st 
century and begin the transition to lower carbon energy sources 
and more emphasis on energy productivity and efficiently. 
Second, we need to adopt sustainable energy strategies and 
solutions, and that applies as well to our military. It would 
greatly benefit from moving toward more sustainable energy 
sources.
    [The prepared statement of Ms. Goodman follows:]

                      Statement of Sherri Goodman

    Chairman Boucher, Ranking Member Upton, distinguished 
members, I appreciate the opportunity to testify before the 
Energy & Air Quality Subcommittee of the House Committee on 
Energy & Commerce on the critical and timely subject of the 
national security implications of climate change.
    I am Sherri Goodman, General Counsel of CNA, a non-profit 
analysis and solutions organization. I have been privileged to 
work with some of our nation's finest military leaders over the 
last several years in their role as members of the Military 
Advisory Board (MAB), to which I am the Executive Director. The 
MAB was established to provide advice on a CNA report, 
``National Security and the Threat of Climate Change,'' that 
examined the national security implications of climate change. 
Our Military Advisory Board consisted of some of the most 
respected Generals and Admirals of recent times, including a 
former Army Chief of Staff, and former Combatant Commanders of 
both Pacific and Central Commands for the U.S. Armed Forces. I 
have previously worked with many of these military leaders 
during the eight years I served as Deputy Undersecretary of 
Defense (Environmental Security).
    I am also a member of the Council on Foreign Relations Task 
Force: Confronting Climate Change: A Strategy for U.S. Foreign 
Policy.
    The Military Advisory Board developed a series of findings 
and recommendations as part of the CNA report. These findings 
and recommendations are relevant to the Committee's inquiry 
into the costs and risks of inaction on climate change.
    Mr. Chairman, I request my statement and the 2007 CNA 
Report be entered into the record.

        Climate Change is a Risk to America's National Security

    The CNA Military Advisory Board concluded that global 
climate change is and will be a significant threat to our 
national security and in a larger sense to life on earth as we 
know it.
    The potential destabilizing impacts of climate change 
include: reduced access to fresh water; impaired food 
production, health catastrophes,especially from vector- and 
food-borne diseases; and land loss, flooding, and the 
displacement of major populations.
    What are the potential security consequences of these 
destabilizing effects? Overall, they increase the potential for 
failed states and the growth of terrorism; mass migrations will 
lead to greater regional and global tensions; and tensions over 
resources, particularly water, are almost certain to escalate.
    Let me review briefly the MAB's findings and 
recommendations.
    The four findings of the Military Advisory Board are:
     First, projected climate change poses a serious 
threat to America's national security. The predicted effects of 
climate change over the coming decades include extreme weather 
events, drought, flooding, sea level rise, retreating glaciers, 
habitat shifts, and the increased spread of life-threatening 
diseases. As we noted in our report, ``These conditions have 
the potential to disrupt our way of life and to force changes 
in the way we keep ourselves safe and secure.''
    During the Cold War, our Nation spent billions of dollars 
to protect Americans from the threat of nuclear attack by the 
Soviet Union. While the probability of such an attack was low, 
the consequence was so catastrophic that Americans judged 
deterrence of this threat a good national investment. While it 
may be difficult to know the probability of catastrophic 
climate effects, from possible tipping points, their potential 
consequences are such that prudent action is warranted today to 
reduce the chance of such events occurring. Unlike most 
traditional security threats that involve a single entity 
acting in specific ways and points in time, climate change does 
not have a human face and has the potential to result in 
multiple chronic conditions, occurring globally within the same 
time frame. These potential threats to the Nation's security 
require careful study and prudent planning--to counter and 
mitigate potential systemic failures.
    As noted by General Sullivan, Chairman of the Military 
Advisory Board, ``As a military leader you do not seek a 
hundred percent certainty, because frankly we never have it. If 
you wait until you have 100 percent certainty something bad is 
going to happen on the battlefield.''
     Second, climate change acts as a threat multiplier 
for instability in some of the most volatile regions of the 
world. Many governments in Asia, Africa, and the Middle East 
are already on edge in terms of their ability to provide basic 
needs: food, water, shelter, and stability. Projected climate 
change will exacerbate the problems in these regions and add to 
the problems of effective governance. Economic and 
environmental conditions in already fragile areas will further 
erode as food production declines, diseases increase, clean 
water becomes increasingly scarce, and people move in search of 
more sustainable resources.
     Third, projected climate change will add to 
tensions even in stable regions of the world. Developed 
nations, including the U.S. and countries in Europe, may 
experience increases in immigrants and refugees as drought 
increases and food production declines in Africa and Latin 
America. Pandemics and the spread of infectious diseases, 
caused by extreme weather events and natural disasters, as the 
U.S. experienced with Hurricane Katrina, may lead to increased 
domestic missions for a number of U.S. agencies, including 
state and local governments, the Department of Homeland 
Security, and our already stretched military, including our 
Guard and Reserve forces. Deployment of these forces comes at a 
cost to the American taxpayer.
     And, fourth, climate change, national security and 
energy dependence are a related set of global challenges.  As 
President Bush noted, now over a year ago in his 2007 State of 
the Union address, dependence on foreign oil leaves us more 
vulnerable to hostile regimes and terrorists, and clean 
domestic energy alternatives help us confront the serious 
challenge of global climate change. Because the issues are 
linked, solutions to one affect the others. The path to 
mitigating the worst security consequences of climate change 
involves reducing global greenhouse gas emissions. There is a 
relationship between carbon emissions and our national 
security. The more we can reduce our reliance on fossil fuels, 
especially those imported from countries that would do American 
harm, the more we can reduce the security costs America may pay 
later.
    The recommendations of the Military Advisory Board stress 
the need to take prudent actions to address climate change 
today to reduce the national security threats and costs that 
could confront us in the future.
    The five recommendations of the Military Advisory Board 
are:
     First, the national security consequences of 
climate change should be fully integrated into national 
security and national defense strategies.
     Second, the U.S. should commit to a stronger 
national and international role to help stabilize climate 
changes at levels that will avoid significant disruption to 
global security and stability.
     Third, the U.S. should commit to global 
partnerships that help less developed nations build the 
capacity and resiliency to better manage climate impacts.
     Fourth, the Department of Defense (DoD) should 
enhance its operational capability by accelerating the adoption 
of improved business processes and innovative technologies that 
result in improved U.S. combat power through energy efficiency.
     And, fifth, DoD should conduct an assessment of 
the impact on U.S. military installations worldwide of rising 
sea levels, extreme weather events, and other possible climate 
change impacts over the next 30 to 40 years.
    In the last year, the debate on climate change in the 
United States has shifted from ``Whether it is happening'' to 
``What should we do about it?'' In Congress, this debate has 
taken the form of deliberations on various ``cap and trade'' 
bills, and energy legislation. In the national security 
community, action has been taken to implement many of the 
recommendations of the CNA report:
     One of the first steps we recommended, based on 
our study, was that the intelligence community conduct an 
intelligence estimate of the national security consequences of 
climate change. Just this week, the National Intelligence 
Council has issued its first National Intelligence Assessment 
of the National Security Implications of Climate Change.
     Congress directed, as part of the FY08 Defense 
Authorization bill, that the national security implications of 
climate change be included the President's National Security 
Strategy and in DoD's National Defense Strategy.
     As part of the Senate's leading climate change 
legislation, cosponsored by Senator Lieberman and Senator 
Warner--Senator Warner cited the persuasive case made by CNA's 
Military Advisory Board, and their concern for the security 
costs and risks of climate change.
     Based on our fifth recommendation, the Defense 
Department's Strategic Environmental Research and Development 
Program has requested evaluations of the impact of sea level 
rise and ecological risks to military installations and their 
critical missions.
    Mr. Chairman, the threats posed by climate change can best 
be addressed by the very qualities that make America a great 
nation: leadership, innovation for smart solutions, and global 
engagement.

                      U.S. Leadership is Essential

    As I have traveled over the past year to discuss the 
report, there have been many occasions where members of the 
audience have revealed to me their sense of cautious optimism, 
wondering if the voices of our Military Advisory Board would 
finally be enough to move the U.S. government into action. 
While many of our allies have begun to pay serious attention to 
climate change, they are still waiting for the U.S., knowing 
that U.S. leadership is essential. While other major countries, 
such as China and India, should be part of the solution, they 
need to know that the U.S. is determined to act to create a 
more sustainable future. We must lead in the fight against 
global climate change if we are to retain our standing as a 
global power in the 21st century.
    One of the clearest signs of leadership the U.S. could take 
would be to begin the transition to lower carbon energy sources 
and more emphasis on energy productivity and efficiency as a 
key element of Sustainable Energy for the 21st century. Taking 
action now will create opportunity for the U.S. economy, in 
growing green sector jobs, and in American leadership in 
innovation and sustainable security.

            Adopt Sustainable Energy Strategies and Policies

    Numerous Department of Defense studies, including a recent 
report of the Defense Science Board, have found that our 
military's combat forces would be more capable and less 
vulnerable by significantly reducing fuel demand. As General 
Mattis, who is now Commander of U.S. Joint Forces Command, 
stated while commanding the First Marine Division during 
Operation Iraqi Freedom: ``Unleash us from the tether of 
fuel.''
    Transporting fuel to the front of the battlefield takes its 
toll in human lives. Soldiers must transport fuel to the front 
in vulnerable road-bound convoys. Numerous DoD studies have 
concluded that high fuel demand by combat forces detracts from 
combat capability, makes our forces more vulnerable, diverts 
combat assets from offense to supply line protection, and 
increases operating costs. Nowhere are these problems more 
evident than in Iraq, where millions of gallons of fuel is 
moved through dangerous territory everyday, requiring 
protection by armored combat vehicles and attack helicopters.
    The human and economic cost of delivering fuel to combat 
forces is significant. Energy efficient technologies, energy 
conservation practices, and renewable energy sources can all 
reduce the costs of American lives on the battlefield.
    In addition, the Defense Department is almost completely 
dependent on electricity from the national grid to power 
critical missions at fixed installations. The national electric 
grid is fragile and can be easily disrupted, as happened in the 
Northeast Blackout of 2003, caused by trees falling onto power 
lines in Ohio. It affected 50 million people in eight states 
and Canada, took days to restore and caused a financial loss in 
the U.S. estimated to be between $4 billion and $10 billion. As 
extreme weather events become more common, so do the threats to 
our national electricity supply.
    One approach discussed in the CNA report to securing power 
to DoD installations for critical missions involves a 
combination of aggressively applying energy efficiency 
technologies to reduce the critical load and deploying 
renewable energy sources. By investing now in these types of 
technologies and improved operational processes, DoD would 
become an early adopter of innovative technologies that would 
help transform the grid, reduce our load, and expand the use of 
renewable energy.

         Reduce Risk Now Through Constructive Global Engagement

    The risks posed by climate change present an opportunity 
for U.S. global leadership through constructive engagement with 
fragile and affected nations around the world. Climate change 
also creates the opportunity to advance the much needed 
integration of the national security, sustainable development 
and foreign assistance communities to harness the full 
potential of all elements of U.S. national power. In many 
dimensions of U.S. global engagement, from trade and 
agricultural policies, to foreign assistance, humanitarian 
relief, and disaster response, infusing climate resilience and 
sustainable approaches will benefit both the U.S. and reduce 
climate risks in the future.
    As we know, U.S. forces are often deployed as the global 
``911'' force. For example, the U.S. military helped deliver 
relief to the victims of the 2005 Indian Ocean tsunami because 
it is the only institution capable of rapidly delivering 
personnel and material anywhere in the world on relatively 
short notice. U.S. agencies, civilian and military, in 
partnership with non-governmental organizations and the private 
sector, can engage before disaster strikes to build capacity 
and resilience to reduce climate threats in the future, gain 
support for America's strategic interests, and build a more 
sustainable tomorrow.
    General Zinni, former Commander of U.S. Central Command, 
and member of the Military Advisory Board, provides an 
appropriate final comment on the costs of inaction:

    ``We will pay for this one way or another. We will pay to 
reduce greenhouse gas emissions today or we will pay the price 
later in military terms. And that will involve human lives. 
There will be a human toll. There is no way out of this that 
does not have real costs attached to it. That has to hit 
home.''

    Thank you for the opportunity to appear before the 
Subcommittee.
                              ----------                              

    Mr. Boucher. Ms. Goodman, thank you. We are going to need 
to pass on to other witnesses at this point. Thank you very 
much for your testimony. Dr. Janetos, please.

STATEMENT OF ANTHONY C. JANETOS, DIRECTOR, JOINT GLOBAL CHANGE 
  RESEARCH INSTITUTE, PACIFIC NORTHWEST NATIONAL LABORATORY, 
                     UNIVERSITY OF MARYLAND

    Mr. Janetos. Thank you, Mr. Chairman, and thank you, 
members of the committee for asking me to be here to testify 
today. I am the director of the Joint Global Change Research 
Institute, a joint venture between the Pacific Northwest 
National Lab and the University of Maryland. What I want to 
focus my remarks on is this report, ``The Effects of Climate 
Change on Agriculture, Land Resources, Water Resources, and 
Biodiversity in the United States.'' This is one of 21 
synthesis and assessment projects which have been undertaken by 
the U.S. Climate Change Science program, the purpose of which 
is to evaluate the scientific literature on topics of major 
concern.
    The charge for this report was to evaluate the impact that 
changes and variations in climate have had and are likely to 
have on ecosystems and ecosystem services. Specifically, we 
were asked to look at agriculture, land resources, water 
resources, and biodiversity, and we have written in-depth 
chapters on each of these topics. We focused our efforts on 
understanding the data over the past several decades and 
evaluating the potential for impacts over the next several 
decades, while remaining mindful of impacts that will take 
longer to express themselves. We assessed the existing peer-
reviewed scientific literature, in addition to assessing the 
adequacy of existing monitoring programs for documenting 
climate change impacts. We were not chartered to make 
recommendations or to advise the government on policy.
    There were 37 different authors from a wide range of 
institutions. We have gone through peer review, public comment 
period, oversight by a very senior review panel, and we are 
confident that our review of the literature, our findings, and 
our judgments are sound. I have attached the executive summary 
of this report to this statement as part of the written record, 
so I will not try to summarize the 300 pages of the entire 
document here, but what I would like to do is point out the 
five overarching conclusions that we reached, and then offer 
some personal observations about their implications.
    The first of these is that climate changes, increases in 
temperature, increases in the atmospheric concentration of 
carbon dioxide, and altered patterns of precipitation are 
already affecting U.S. natural resources and natural 
environments. We have specific examples of each of these in 
each of the sectors that we looked at, from the increases in 
pathogens and fire frequencies in the Nation's forests, 
especially in the West, to decreases in snowpack, and increases 
in early-season runoff in streams in climactically sensitive 
parts of the country, to sea level rise and coral-bleaching 
events. Not only in the U.S., but around the world, we are 
already beginning to see the impact of both natural variability 
and human-induced variability in the climate system in our 
natural resources.
    Secondly, climate change will continue to have significant 
effects on these resources over the next few decades and 
beyond. This is a summary, not only of the current science, but 
really of the past decade and longer of scientific research.
    Third, though it sounds trivial to say this, it is worth 
remembering that many other stresses and disturbances also 
effect these natural resources. Climate change operates in the 
context of many other factors that influence the current state 
and the expected future state of natural resources and 
ecosystems.
    Fourth, climate change impacts and ecosystems will impact 
the services that these systems provide that are not traded in 
marketplaces, such as cleaning water or removing carbon from 
the atmosphere. But we do not yet possess sufficient 
understanding to project, quantitatively, the timing, 
magnitude, and consequences of the changes in services.
    And lastly, the existing systems that we have for 
monitoring climate ecosystems, while they are useful for many 
purposes, are not optimized for detecting the impacts of 
climate change on these ecosystems.
    We have moved greatly in the scientific community over the 
last 20 years from a very cautious examination of model results 
to an increasing realization that there is now substantial 
documentation of current impacts, and in many cases, these 
impacts appear to be happening more rapidly, and have greater 
magnitude than we might have expected to see, even as little as 
a decade ago.
    There is a large literature on the responses of these 
systems and natural resources to climate variability, whether 
the source of that change in the climate system is natural 
variability or caused by human activities. There is a growing 
literature that not only documents the responses of ecosystems, 
but in addition begins to document that the climate change that 
they are responding to is, in fact, caused by humans. This 
progression is easily seen over the last several IPCC reports, 
and we point it out in our own report as well.
    This is not to say that all of the science of climate 
impacts is settled--far from it. We have many areas in which 
improved research and better observations would enable us to 
continue to reduce uncertainties in our understanding and 
improve our capacities to make forecasts about impacts. But it 
does mean that we are beginning to see impacts in the natural 
world today, when the climate drivers are still relatively 
modest, compared to reasonable scenarios of the future that 
have already been examined by the scientific community. We are 
already working on additional publications to explore those 
research topics.
    It will remain important to devote efforts to continue 
documentation of the state of these natural resources to 
research that understands how they react to changes in climate 
and to models that can give us reasonable expectation for the 
future. In the short term, in addition to constructing 
strategies for greenhouse gas emissions, as this committee just 
heard this morning from Lord Stern, it will be just as 
important to invest in strategies for coping and adapting to 
those impacts that cannot be avoided over the next several 
decades. This is an immediate challenge for both research and 
for management of natural resources, and in our authors' 
collective view is a critical need. It is most important in our 
view that such strategies be derived from the best available 
science. Thank you very much.
    [The prepared statement of Mr. Janetos follows:]

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    Ms. Baldwin [presiding]. Mr. Lyons?

      STATEMENT OF JIM LYONS, VICE PRESIDENT, POLICY AND 
                 COMMUNICATIONS, OXFAM AMERICA

    Mr. Lyons. Thank you very much, Madam Chairman. I am Jim 
Lyons. I am Vice President for Policy and Communications for 
Oxfam America, and we certainly appreciate the opportunity to 
appear before the subcommittee today.
    We have come to see climate change as one of the greatest 
challenges in our efforts in the 21st Century to promote 
development and to reduce global poverty, our overriding 
mission. In fact, we fear that climate change could be the 
catalyst for the greatest humanitarian crisis this world has 
ever known. Science indicates poor and vulnerable communities 
around the world will increasingly bear the brunt of the 
consequences of climate change, threatening the lives of 
millions of people and undermining global stability and 
security. In fact, people living in developing countries are 20 
times more likely to be affected by climate-related disasters 
compared to those living in the industrialized world. And the 
number of people affected by climate-related disasters in 
developing countries has increased exponentially in the just 
the past four decades.
    Estimates of climate change's contribution to worsening 
conditions are in fact very disturbing. By 2020, it is 
projected that up to 250 million people across Africa could 
face severe water shortages, and by midcentury, more than a 
billion people will face water shortages and hunger, including 
600 million in Africa alone. Since the 1960, in fact, there has 
been a fourfold increase in the occurrence of drought in Sub-
Saharan Africa.
    Now, ultimately the climate challenge we face is twofold. 
This has been discussed today. The first is dealing with 
greenhouse emissions, so-called mitigation issues, but equally 
important, we believe, is to deal with the already realized and 
now-being-recognized consequences of climate change and those 
yet to come, so-called adaptation strategies. Climate change 
has been illustrated here by others and will have ramifications 
throughout the entire economic, political, and social fabric of 
developing countries in ways that will hardly be limited to 
what we normally think of as environmental damage.
    Agriculture is clearly the economic sector that is most at 
risk as a result of climate change, and the sector in which the 
consequences of a global warming will affect the lives of the 
greatest number of people. It is important to note that more 
than 75 percent of people in developing countries still depend 
on agriculture as the main component of their livelihoods. Some 
countries' yields from rain-fed crops could be halved by 2020 
due to climate impacts, and according to recent findings by 
Stanford University researchers, parts of southern Africa and 
south Asia stand to lose substantial portions of their staple 
crops as a result of climate impacts.
    As one example of the ramifications of climate change, the 
World Food Program estimates that of Ethiopia's 80 million 
citizens, 3.4 million will need emergency food relief from July 
to September this year due to an extended drought that has hit 
the region. This is in addition to the 8 million currently 
receiving assistance.
    The UN estimates that the incidents of malaria worldwide 
could increase by more than 17 millions cases annually, another 
ramification of climate change, the public health implications. 
And this has been illustrated by Sherri and by other evidence 
presented by security experts. There are broad ramifications 
for stability and security associated with climate change. 
Josette Sheeran, Executive Director of the World Food Program, 
recently warned that food-related riots in more than 30 
countries were stark reminders that food insecurity threatens 
not only the hungry, but peace and stability itself.
    In the United States, low-income and other vulnerable 
populations will also be disproportionately affected by 
climate's impacts. The U.S. Climate Change Science Program has 
noted that many of the expected health effects are likely to 
fall disproportionately on the poor, the elderly, the disabled, 
and the uninsured. And this has already been mentioned. We have 
seen dramatically the impacts of the effects of climate change 
as a result of the effects felt in the southeast associated 
with Hurricane Katrina.
    Now, if moral and ethical arguments for dealing with 
climate crisis are not enough to afford clearly the economic 
imperative we have discussed at length this morning, one, even 
at current levels of global warming, the World Bank has 
estimated that the cost of protecting new investments in 
developing countries from climate impacts ranges from $10 to 
$40 billion. And last year, the UN Human Development Report 
estimated the need for dealing with consequences of climate 
change through new adaptation strategies could exceed $86 
billion per year from the year 2015 and beyond.
    It is vital to immediately invest in efforts to help adapt 
to climate change and to reduce disaster risks and improve 
likelihoods for improved production from agriculture and to 
support other sectors, really essential to avoid devastating 
costs that we will realize later.
    We think there are opportunities associated with developing 
these strategies that have been discussed to some degree here, 
but need to be reemphasized. Working with vulnerable 
communities and building their resilience to the consequences 
of climate change can also provide a means to encourage these 
same communities to become more economically, socially, and 
politically resilient. For example, reliable access to 
essential service such as sanitation and clean water can help 
build the capacity of communities to develop themselves.
    Ms. Baldwin. Mr. Lyons, I just want to note you are 
approximately a minute over your time.
    Mr. Lyons. And I will be 30 seconds in wrapping up. How is 
that?
    Ms. Baldwin. Thank you, sir.
    Mr. Lyons. We think there are opportunities for investment 
that go beyond simply those that have been recognized in the 
past, such as the development of clean-energy technologies. 
There are investments in water-purifications systems, in 
climate-risk insurance, a project that we are working on 
currently with some of the world's largest insurers, and in 
building a new energy future, not just for those developing 
countries that we talk about often, and that is China and 
India, but also for other developing community so they can get 
on low-carbon pathways as they enhance development.
    Let me simply close by saying that I think the two lessons 
that come from all of this is, as the saying goes, the first 
way to get out of a hole is to stop digging. We clearly need to 
develop a strategy to address CO2 emissions and to 
curb their effects, and secondly, we have to recognize the 
impacts of climate change, particularly for those in vulnerable 
communities, and particularly in the developing word, not 
simply as a matter of moral and ethical importance, and not 
simply because of the environmental consequences, but most 
importantly because of the social, economic, and global 
security ramifications if we fail to act. Thank you.
    [The prepared statement of Mr. Lyons follows:]

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    Ms. Baldwin. Thank you. Dr. McKitrick, you are next.

 STATEMENT OF ROSS MCKITRICK, ASSOCIATE PROFESSOR AND DIRECTOR 
  OF GRADUATE STUDIES, DEPARTMENT OF ECONOMICS, UNIVERSITY OF 
                             GUELPH

    Mr. McKitrick. Thank you, Madam Chairwoman and subcommittee 
members. I am an Associate Professor of Economics at the 
University of Guelph in Canada, where I specialize in 
environmental economics and climate change. I have submitted an 
extended written testimony, where I discuss a lot of aspects of 
today's hearing. For my verbal presentation, I just want to 
highlight three points.
    The first is that cost-benefit analysis as it has played 
out over the last few years in the economics literature simply 
doesn't provide support for deep emission cuts at this time. 
The Stern Review was not the first time that the economic 
consequences of global warming were studied. One recent tally 
points out that it is number 211 in a long series. There have 
been hundreds of studies looking at the economic consequences 
if climate-model projections are true. The median costs that 
emerge from these studies on a per-tonne basis fall in the 
range of about $0 to $20, and because there are relatively few 
abatement policies available in that range, cost-benefit 
analysis does not support deep emission cuts. The Stern Review, 
as has been noted, used some methodology and assumptions to 
generate much higher estimates of the per-tonne costs and 
fairly low estimates of the abatement costs. Those assumptions 
have been subject to quite a bit of criticism in the economics 
literature, not simply the discounting assumption, but other 
methodologies as well, and I think the Stern Review has been 
convincingly shown to be an unreliable guide for decision-
making.
    The second point is that if you do choose to act, cap-and-
trade is a poor instrument for controlling CO2 
emissions. There have been a lot of studies comparing carbon 
taxes to cap-and-trade instruments. Cap-and-trade, for the same 
outcome, costs many times more than what a carbon tax would. 
Cap-and-trade, you should understand, is basically a cartel-
forming device. It allows a group of energy producers in this 
case to restrict output, raise consumer prices, and pocket 
windfall gains as a result. One study showed that the 
distortions in the economy from cap-and-trade would be so 
severe that the very first tonne of emission reduction would 
begin at a cost between $20 and $55 a ton. So if you do choose 
cap-and-trade, you have to believe that the marginal damages of 
CO2 emissions are at least as high as that; 
otherwise, you are guaranteed to make people worse off by 
implementing it.
    The third point, my final point in summation, is that the 
stringency of any policy that you implement should be tied to 
the severity of the problem, and the severity should be 
measurable. It cannot be based on impressions formed by 
anecdotes or scare-stories, or for that matter offhand 
dismissals of the problem. There must be some measurable aspect 
to this that determines how severe a problem it is.
    So if, for instance, you should go with what I think is the 
mainstream economics view, the only policy that could be 
justified at this time would be a low carbon tax. Now, in the 
future, the carbon tax might be expected to go up, but there is 
no agreement at what rate it should go up. I would suggest, and 
I have argued in a number of publications, that future 
increases in any carbon tax should be tied to the actual, 
observed mean temperature in the atmosphere. That way, if the 
people who are concerned about the greenhouse gasses are right, 
the carbon tax would go up rapidly in the years ahead, and you 
would get steady emissions reductions as a result. On the other 
hand, if greenhouse gasses are not really causing much global 
warming, then the tax won't rise, nor should it--either way, 
the severity of the problem guides the policy response, and I 
think it is a common principle in any policy undertaking that 
you tie the stringency of the policy to the severity of the 
problem, and I would remind you that that principle should 
apply in this case as well. Thank you.
    [The prepared statement of Mr. McKitrick follows:]

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    Ms. Baldwin. Thank you. Next, Dr. Pielke.

 STATEMENT OF ROGER A. PIELKE, SR., SENIOR RESEARCH SCIENTIST 
   (CIRES), SENIOR RESEARCH ASSOCIATE (ATOC), UNIVERSITY OF 
                       COLORADO, BOULDER

    Mr. Pielke. My presentation is entitled ``A Broader View of 
the Role of Humans in the Climate System as Required in the 
Assessment of Costs and Benefits of Effective Climate Policy.'' 
And I would like to start with the human addition of 
CO2 in the atmosphere is a first-order climate 
forcing, and we need an effective policy to limit the 
atmospheric concentration of this gas. However, humans are 
significantly altering the climate system in a diverse range of 
ways, in addition to CO2. The information that I am 
presenting will assist in properly placing CO2 
policy in the broader context of climate policy.
    Climate policy is much more than just long-term weather 
statistics, but it includes physical, chemical, and biological 
components of the atmosphere, oceans, land surface, and glacial 
covered areas. In 2005, the National Research Council published 
a report, ``Radiative forcing of climate change: expanding the 
concept and addressing uncertainties,'' and documented that a 
human disturbance of any aspect of the climate system 
necessarily alters other aspects of the climate.
    The role of humans within the climate system must, 
therefore, be one of the following three possibilities: the 
human influence is minimal and natural variations dominate 
climate variations on all time scales; or while natural 
variations are important, the human influence is significant 
and it involves a diverse range of first-order climate 
forcings, including, but not limited to, the human input of 
CO2; or the human influence is dominated by the 
emissions into the atmosphere of greenhouse gasses, 
particularly carbon dioxide. My written testimony presents 
evidence that the correct scientific conclusion is that the 
human influence on climate is significant and involves a 
diverse range of first-order climate forcings including but not 
limited to the human input of carbon dioxide.
    Modulating carbon emissions as the sole mechanism to 
mitigate climate change, therefore, neglects the diversity of 
other important first-order climate forcings. As a result, a 
narrow focus only on carbon dioxide to predict future climate 
impacts will lead to erroneous confidence in the ability to 
predict future climate, and thus cost and benefits will be 
miscalculated. CO2 policies need to be complemented 
by other policies focused on the other first-order climate 
forcings. In addition, the 2005 National Research Council 
report concluded that a global average surface temperature 
trend offers little information on regional climate change. In 
other words, the concept of global warming by itself does not 
accurately communicate the regional responses to the diverse 
range of human climate forcings. Regional variations in warming 
and cooling, for example, such as from aerosols and landscape 
changes, as concluded in the National Research Council report 
have important regional and global impacts on weather.
    The human climate forcings that have been ignored or 
insufficiently presented in the IPCC and CCSP reports include 
the influence of human-caused aerosols on regional and global 
ratiative heating; the effect of aerosols on clouds and 
precipitation; the effect of aerosol deposition, such as from 
soot and nitrogen on climate; the effect of land-cover/land-use 
on climate; and the biogeochemical effect of added atmospheric 
CO2. Thus, climate policy that is designed to 
mitigate the human impact on regional climate by focusing only 
on the emissions of carbon dioxide is seriously incomplete 
unless these other first-order human climate forcings are 
included or complementary policies for these other human 
climate forcings are developed.
    Moreover, it is important to recognize that climate policy 
and energy policy, while having overlaps, are distinctly 
different topics with different mitigation and adaptation 
options. A way forward with respect to a more effective climate 
policy is to focus on the assessment of adaption and mitigation 
strategies that reduce vulnerabilities of important societal 
and environmental resources to both natural and human-caused 
climate variability and change. For example, restricting 
development in flood plains or in hurricane storm surge costal 
locations is an effective adaptation strategy, regardless of 
how climate changes.
    In conclusion, humans are altering significantly the global 
climate, but in a variety of diverse ways beyond the rated 
effect of carbon dioxide. The CCSP assessments have been too 
conservative in recognizing the importance of these human 
climate forcings as they alter regional and global climate. 
These assessments have also not communicated the inability of 
the models to accurately forecast future regional climate on 
multi-decadal time scales since these other first-order human 
climate forcings are excluded. The forecasts, therefore, did 
not provide skill in quantifying the impact of different 
mitigation strategies on the actual climate response that would 
occur as a result of policy intervention with respect to only 
CO2. Thank you.
    [The prepared statement of Mr. Pielke follows:]

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    Ms. Baldwin. I would like to thank our panel of witnesses. 
We will now proceed to a round of questioning by members. And I 
will start by recognizing myself.
    Ms. Goodman, when you started the CNA project, did all of 
the admirals and generals who participated agree that climate 
change was a problem that needed to be addressed or were there 
divergent views within the group at that point? And if there 
were divergent views, how did that dynamic evolve as the group 
heard from scientists and developed its report?
    Ms. Goodman. In fact, when we began, I would say that many 
of the generals and admirals came to the project somewhat 
skeptical of climate change and human-induced climate change 
because largely they weren't familiar with the subject. And we 
spent some considerable period of time educating ourselves, and 
they learned from meeting climate scientists as well as 
skeptics. They met with business leaders as well as industry 
and government leaders and scientists. We traveled to the U.K. 
and met with leading climate officials there as well as leading 
British government officials and industry officials. And they 
really came to believe that this is a serious risk to national 
security that needs to be addressed now, and that it is prudent 
to begin to take the proper actions to integrate climate change 
into national security planning.
    Ms. Baldwin. I understand, or I think we heard in some of 
the opening statements that a National Intelligence Assessment 
for Climate Change is being released this week. What does this 
report say that is different from the conclusions reached by 
the CNA, or are the two reports, in general, in agreement?
    Ms. Goodman. Well, I would say the National Intelligent 
Assessment actually validates many of the findings of our 
report in that climate change is a threat multiplier for 
instability and the National Intelligence Assessment uses a 
phrase of ``impact of state stability'' and ``consequences for 
state stability.'' So they framed it in the terminology that is 
commonly used in the intelligence community, and they have 
noted, in particular, the impact on water resources over the 
coming decades and the potential for migrations, and so I would 
say, in many ways, the two reports have reached similar 
conclusions and confirmed that the national security impacts 
are quite important and warrant attention now.
    Ms. Baldwin. The Chair would next recognize Ranking Member 
Barton for his questions for 5 minutes.
    Mr. Barton. Thank you, Madam Chairwoman.
    My first question is to Mr. McKitrick. In Lord Stern's 
analysis, did he include any benefits of climate change, and if 
so, how did he cost those, like longer growing seasons, more 
irrigable land, things like that?
    Mr. McKitrick. In the Stern Review the cost of greenhouse 
gas emissions are put into a number of different categories. 
Some of them are the direct effects, which would be netted 
against benefits of the type you are talking about. That 
category, in the end, is very small. Eighty to 90 percent of 
the costs are indirect effects, which go under headings like 
social and political instability and knock-on effects, and 
these categories, I don't think are all that well defined in 
the report, and it is hard to get details of how the underlying 
model treats them, or what the parameters were that drove them. 
But those are the costs that dominate on the cost side of the 
ledger.
    So even if there are some assumed benefits from longer 
growing or increased CO2 fertilization, they are 
quite a bit overwhelmed by these other cost categories.
    Mr. Barton. And my next question is to Dr. Janetos and Dr. 
Pielke. I have begun to see pop up various climate groups 
talking about the goal of getting to 350 parts per million of 
CO2 in the atmosphere. And my question is: where 
does that number come from, and what is the assumption that 
that is the perfect level of CO2 to have in the 
atmosphere?
    Mr. Janetos. I will start if you don't mind. It is not a 
goal that we address in our report. In our report, what we try 
to do is look at the data as we understand them today, and not 
do an analysis of what an appropriate target goal might be. And 
so what we have done is look at both effects of increased 
atmospheric carbon dioxide in the atmosphere, longer growing 
seasons, as you just pointed out. We also look at the issues of 
the sensitivities of natural environments to phenomena like 
reduced precipitation, long-term drought, fire, and pests, and 
so on, which we are also beginning to see. We have made no 
attempt in our report to establish what a target might be. That 
is not simply a scientific question. It is also a question 
about values, and it is not one which we were asked to address.
    Mr. Pielke. I would answer. I think that is a very good 
question. I don't know how they come up with that number. And I 
would also point out that if you want to come up with a number 
in terms of how we are disturbing the human-climate system, you 
could do that for land-use change, or you could do it for 
nitrogen deposition. You could do it for aerosols. And I think 
the problem we see is they picked one particular disturbance of 
the climate system as the whole universe that they are looking 
at.
    Mr. Barton. Well, is it fair to say that this number does 
not have a scientific basis?
    Mr. Pielke. Basically it is above the preindustrial level, 
but other than that, it doesn't have any reality that I can 
see.
    Mr. Barton. I think this is something that you believe: we 
need to address climate change, and we need to do it sooner 
rather than later. Are there things we could do that would have 
a greater cost-benefit effect than carbon cap-and-trade, carbon 
taxes? Are there things like planting more forests, doing 
something in the oceans? I have heard all kinds of ideas put 
forward. I just don't have the scientific basis to evaluate 
them. I have even heard that you just even painted the parking 
lots in Los Angeles white or silver that that would have a 
temperature effect. And I am not saying that it would. I am 
asking.
    Mr. Pielke. Well, it would, but I think the first thing we 
have to do is separate climate policy from energy policy, and 
we are using climate policy to make energy policy, and I think 
that is a huge mistake.
    When we look at climate, climate has always been changing, 
and we have to recognize that we have dealt with that for a 
long time, and we have been very successful in this country--
less loss of life, for example, in the coastal regions because 
we have better forecasts. So I think we need to see what we can 
do in terms of adaptation to climate, because it has always 
been varying. And we always have to do things, like you say put 
white roofs or white parking lots in drier climates and semi-
arid climates. That would be a cooling effect, and you would 
use less air conditioning.
    But I think the bottom-line message is this is a complex 
issue, and we need to look at it in an integrated fashion, and 
there is no simple solution. It would be really great if we 
could just turn down carbon dioxide and we would prevent 
droughts and floods, but it is not that simple, and I think 
that has not been recognized?
    Mr. Barton. I know my time is expired, but could I have one 
more question?
    Ms. Baldwin. Without objection.
    Mr. Barton. Again, this is not an argumentative question. 
It is just an informational question. I see all of these 
allegations that climate change or CO2 increases in 
the atmosphere are now responsible for violent hurricanes and 
more violent weather events, but I have not been able to find 
any scientific or meteorological justification for that. Could 
the two climatologists on the panel explain to me what the 
genesis is for that and what the link is?
    Mr. Pielke. Well, there are conflicting papers in the 
literature about increases of hurricane intensity. They are 
based some on data, some on models. The ones that are based on 
data, unfortunately, are using a data set that is not 
homogenous in time. So I think the bottom line is we just don't 
know what is the effect of all of these human disturbances on 
the climate system. But it seems that if you are from one side 
or other, you tend to pick an event and say it is attributable 
to CO2, and I think that is a mistake.
    Mr. Barton. Global warming is responsible for everything.
    Mr. Pielke. Right, and I think that is mistake.
    Mr. Barton. We have a drought; we have a flood. It doesn't 
matter which way it goes, somebody says it is a global warming 
issue.
    Mr. Pielke. Well, our research has shown, I think rather 
convincingly that it is the regional changes that matter, not 
the global average temperature change anyway. So we have to be 
able to understand how the regions change in response to these 
climate forcings, and we are just not there essentially. So 
when I hear people say the science is done, it is far from 
done. If it was done, you wouldn't be funding any more science 
research, so it is not done.
    Mr. Barton. Doctor, let us have your view on that.
    Mr. Janetos. My view is not so different from Dr. Pielke's. 
I wouldn't pretend to know what the geneses of all of these 
assertions are. It is, I think, in some sense, a fool's errand 
to say that this particular storm, or this particular drought 
or this particular rainfall event or hurricane is the marker 
for climate change. That is simply making the mistake that a 
particular event is emblematic of what is a very clear longer 
term trend of change in the physical climate system.
    The science on hurricanes is obviously an active scientific 
debate as to what has happened during the 20th Century. There 
are some serious model issues with projections. It requires far 
more computational power than we currently have to do these 
hurricane projections in a reasonable way.
    So I think, in some sense, the jury is very much out as to 
what the future entails in terms of tropical storms. We are 
quite clear on those particular points in our assessment. What 
is equally clear is that the longer term trends that we have 
seen are already having demonstrable measurable effects on 
natural resources, and that is something that is not a matter 
of modeling results. It is a matter of data and actual 
observations, and that is something that I think is important 
to keep in mind as we consider the fate of these natural 
resources and the people who depend on them over the next 
several decades.
    Mr. Barton. Thank you, and thank you, Madam Chairwoman.
    Ms. Baldwin. Thank you. The chair now recognizes the 
gentleman from Utah.
    Mr. Matheson. No questions.
    Ms. Baldwin. The Chair now recognizes the gentleman from 
Illinois, Mr. Shimkus, for 5 minutes of questions.
    Mr. Shimkus. No questions? I am impressed.
    I appreciate the panel being here. I am curious. I just was 
aged out of the Army Reserves after 28 years served during the 
Cold War on the border, infantry officer. I think I have a 
little bit of background in national security and in military 
affairs.
    The Japanese went to Southeast Asia for what? Oil. The 
Germans went into the caucuses for what? Oil. Our dependence 
upon imported crude oil is a national security concern, and it 
is such of a concern. I have a couple of questions. I have got 
zillions, but I will try to be very patient.
    Ms. Goodman, do you support Gene Taylor's call for 
expanding the nuclear Navy?
    Ms. Goodman. Congressman, I support a strong Navy.
    Mr. Shimkus. But the question is not a strong Navy. The 
question is Gene Taylor, my friend from Mississippi, is calling 
for the expansion of the nuclear navy. It addresses climate. It 
addresses energy security. Do you support that?
    Ms. Goodman. I think we have to look at all of the options 
to maintain the viability of our Navy.
    Mr. Shimkus. Now, you sound like a politician. Yes for 
expansion of nuclear Navy or no?
    Ms. Goodman. I think the Navy, itself, is considering those 
options now.
    Mr. Shimkus. And is that good or bad?
    Ms. Goodman. I think if we can maintain the record----
    Mr. Shimkus. Do you like nuclear power?
    Ms. Goodman. Nuclear power has been excellent for our Navy. 
There is absolutely no doubt about it. They have an excellent 
and unsurpassed safety record in managing nuclear power.
    Mr. Shimkus. Nuclear power, does it emit any carbon?
    Ms. Goodman. Nuclear power is a good, non-carbon----
    Mr. Shimkus. You sound like a politician. We are the 
politicians up here. Does nuclear power emit carbon?
    Ms. Goodman. No, it does not.
    Mr. Shimkus. The answer is no. Should we expand a nuclear 
Navy? I believe yes. I believe that one of the greatest 
challenges to the world today will be fighting over energy 
resources. We saw it in WWII. We can see it in the future. If 
you are a climate change believer, the problem that many of us 
have is you all won't go to nuclear power. The environmental 
left says no nuclear power, and that is fool hearty.
    And if we are talking about national security and our 
military ships traveling around the world and doing warfare, 
but also doing great humanitarian issues, I support Gene 
Taylor.
    For every dollar increase in a barrel of oil, it costs our 
Air Force, the number one jet-fuel user in the world $60 
million. What we have been trying to say is good American coal, 
good American jobs. It is actually better for capturing and 
sequestering carbon than a pulverized coal power plant, 
American jobs to operate this refinery. American jobs to 
produce in this refinery. Put it in a pipeline, away from the 
shores, the gulf coast or anything that could be affected by a 
Katrina, and you pump it to our jet airplanes. If you want to 
talk about helping the national security environment of this 
world, it is decreasing our reliance on imported crude oil from 
unstable places around the world, like Iran, like Venezuela. We 
have increased our reliance on imported crude oil. The only way 
we get out of this mess is by developing our own energy 
resources, which we have in the Outer Continental Shelf, we 
have in Alaska, we have on the east coast, we have on the west 
coast. We have in coal in Illinois.
    So I would hope that my admiral and general friends would 
talk about how we operate our military war machines in this era 
of increasing costs and this fight over energy resources, and 
especially if there is an inability or unwillingness to move to 
nuclear power. And that is the same argument that our country 
has to have. We have to move to nuclear.
    And Mr. Lyons, my time is running real quickly. I would 
submit that the higher cost of fuel today is currently doing as 
much if not more damage to the developing world in the food 
debate and in the food riots than this supposed futuristic 
concern. I would say, and I think the economists that are here 
are saying cost-benefit analysis and how do you get the biggest 
bang for the buck now, and what is the best way to transform?
    And my last question, because I know I am running out of 
time. Dr. McKitrick, just this question, because I think you 
posed it in your opening statement, you addressed the 
difference between a cap-and-trade regime and a carbon tax, and 
I would like my colleagues to hear this, because I said in my 
opening statement, if you want transparency, a carbon tax is 
clearer. But you pose an economic principal that a cap-and-
trade regime is also more costly. Can you just briefly 
elaborate that?
    Mr. McKitrick. Yes, thank you for the question.
    A cap-and-trade regime controls the quantity of emissions 
and allows the market for permits to determine the price. The 
government doesn't capture the rents that are created by this 
regime. What happens is that by controlling the quantity of 
emissions, the producers of energy who are allocated the 
permits are able to increase the price that they charge to 
consumers. That gap, then, doesn't go to the government who 
could, in principal, at least, reduce other taxes or provide 
some other means of recycling the revenue to households. 
Instead it just accrues to the owners of the permits.
    There has been a lot of work in economics using what are 
called computable general equilibrium models to compare the 
effects of carbon taxes and cap-and-trade systems. And there is 
a kind of hidden mechanism with cap-and-trade in the way that 
it affects earnings to labor, real earnings, and real income, 
and those indirect effects, which are called the tax-
interaction costs, turn out to be a large category of costs for 
households, but they are entirely hidden.
    In terms of transparency, if you are not willing to put a 
$50 a ton carbon tax in front of the public and say you want to 
charge them that, it is not fair to do it in the form of a cap-
and-trade system where the permit price turns out to be $50, 
because that is still the same hit for the public, but there is 
no offsetting benefit in terms of income tax reductions 
financed by a carbon tax, and that is where the extra costs 
come in for the cap-and-trade system.
    And one of the reasons cap-and-trade doesn't work very well 
for carbon dioxide emissions is there are so few abatement 
options that firms can't really cut their emissions. They just 
have to keep cranking up the prices until the demand falls 
enough that they meet their permit allocations. And because 
they have very few emission reduction options it is not like 
sulfur dioxide. It is not like particulates. It just translates 
into large price shocks for consumers. The carbon tax system 
allows you to put a cap on the price shock, and that is very 
important if you are interested in protecting households from 
the economic consequences.
    Ms. Baldwin. As this hearing winds to a close, the chair 
would allow either Mr. Lyons or Ms. Goodman to respond to that 
same last question.
    Mr. Lyons. I appreciate that, Madam Chairman. Thank you 
very much. And I appreciate the question, Mr. Shimkus, and I 
wouldn't disagree with you on the energy-cost quotient. There 
is front-end cost associated with inputs, and there is 
certainly a high cost associated with transportation.
    I guess where I would disagree with you on the notion that 
there is some futuristic element to climate change. I think all 
of the evidence would indicate that there are real impacts 
being felt now, that these are being documented, not only by 
scientists, but if I could quote from the intelligence estimate 
that was presented to the Congress yesterday, ``scientific 
studies indicate that climate change is likely to cause 
agricultural losses, possibly severe in the Sahel, west Africa 
and southern Africa. Agricultural yields from some rainfall-
dependent crops could be reduced by up to 50 percent by 2020.'' 
So those represent real, environmental induced costs.
    I know we are running out of time. And I guess the third 
thing I would point out is I would be glad to submit for the 
record if you would like an explanation of the 350 parts per 
million, the scientific basis for that. I am not an economist, 
thank God, but I know a little bit about science.
    Mr. Shimkus. And if I may, I would say in the statement you 
just said, of course, that 50 percent could be. I have no time, 
but I am happy to debate this as long as the chair would allow 
us to debate this.
    Ms. Baldwin. Not much longer, but go ahead.
    Mr. Lyons. The IPCC report is based on a 90- to 95-percent 
confidence in the observations included in the report, and it 
includes scientists worldwide, including scientists from the 
United States. So as was discussed earlier, this is a matter of 
understanding risks and probabilities, but here there is a high 
probability in what they have observed. That is all I would 
offer for the record.
    Ms. Baldwin. Ms. Goodman?
    Ms. Goodman. Thank you very much, Madam Chairman. Mr. 
Shimkus, I just wanted to clarify that I support continued and 
possibly increased reliance for our U.S. Navy. It has indeed 
been an essential source of power for our naval vessels. I 
would observer, however, that coal-to-liquids, unlike nuclear 
power, is not presently a carbon-free solution unless we make 
substantial investments in carbon-sequestration technology, 
which we have not yet materialized, but I hope it will in the 
future.
    Mr. Shimkus. If I may, Madam Chairman, if we went--with 
today's prices, that would free up $192 billions of additional 
revenue to do all of these things and all of this scientific 
movement into this ``new Manhattan project'' because it is 
going to be costly, and we have got to find the money to do 
that.
    Ms. Baldwin. With that, I want to thank the witnesses for 
your testimony today. And the Chair announces that our hearing 
on Climate Change: the Cost of Inaction is adjourned.
    [Whereupon, at 1:55 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                  Prepared Statement of Hon. Tom Allen

    Chairman Boucher, thank you for holding this hearing on 
this important topic. Thank you also to all of the witnesses 
here before us today. I look forward to your testimony.
    One of the primary criticisms of legislation to curb 
greenhouse gas emissions is the potential cost of the 
legislation on consumers. Consumers are worried they will see 
increased costs at the pump, on their electric bill and 
throughout our economy. However, we are seeing the cost of 
climate change impacts now. Climate change threatens our farms, 
our oceans and our national security. The cost of doing nothing 
could far outweigh the cost of taking action.
    Climate change leads to a multitude of effects on all 
aspects of ecosystems from farmland to water supplies. Right 
now food prices are high and crop supplies are low, and climate 
change could further exacerbate this problem. It is very likely 
that crop yields will decrease as the temperature rises. In 
addition, it is likely that increasing carbon emissions have 
already increased the frequency of forest fires and pest 
invasions in the Western United States. Climate change may also 
lead to a decrease in precipitation in some areas as well as 
increasing evaporation in other areas. Decreasing water 
supplies impact ground water, water reservoirs and ultimately 
water quality and human health.
    Even our substantial oceans are not immune from climate 
change impacts. Approximately one third of the carbon dioxide 
released by the burning of fossil fuels ends up in the oceans, 
causing ocean acidification. Ocean acidification can impede 
shell formation in marine shellfish and is harmful to many 
organisms essential to ocean food webs. These species include 
corals, shellfish and plankton; all of these species are 
essential to the food chain for many larger fish and marine 
mammals. Research by scientists at St. Joseph's College in 
Standish, Maine has revealed that ocean acidification, due to 
climate change, may substantially increase the mortality of 
young clams, threatening a $16 million industry and the 
livelihoods of 1,800 commercial clam diggers in Maine alone.
    This administration has long touted national security and 
stability in the Middle East as important goals, yet they 
reject legislation on one of the biggest threats; climate 
change. Climate change adds stress to already tense and hostile 
areas and could lead to sustained natural disasters and 
humanitarian crises far worse than those we see today. Impacts 
from climate change will threaten populations in Asia, Africa 
and the Middle East that are already stressed from lack of food 
and adequate water supplies. As food production further 
declines and water becomes scarcer large numbers of people will 
move in search of these crucial resources. Large scale 
migrations could cause political unrest and increases the 
likelihood of failed states and weakened governments. As we 
have seen before, increasing conflict breeds extremism and 
radical ideologies. Climate change has the potential to 
dramatically alter the political landscape.
    Climate change is not just a problem facing polar bears. 
Our drinking water, our farmlands, and our national security 
are all threatened by the lack of action on climate change 
legislation. The cost of doing nothing is a price we can no 
longer afford.
                              ----------                              


               Prepared Statement of Hon. John B. Shadegg

    Thank you Mr. Chairman for holding this hearing.
    I welcome this discussion on the costs of climate change 
and would like to offer my perspective on where I see the 
highest costs. Given the record-high energy prices of today, I 
think we would be putting the American people in grave peril if 
we were to pursue any of the various climate change proposals 
before this Congress. For example, Senator Boxer's amendment to 
S. 2191, of the Lieberman-Warner Climate Security Act is 
estimated to cost a staggering $6.7 trillion. It is naive to 
believe that this cost will not be passed on directly to the 
American consumer.
    An analysis of the effects of S. 2191 on my state of 
Arizona shows a potential loss of 34,699 jobs by 2020 and 
84,543 jobs by 2030. Arizonians would see a decrease in 
disposable household income of $6,617 by 2030. Gasoline prices 
in Arizona would increase as much as 140% by 2030 and 
electricity prices would increase up to 133%. Overall, this 
legislation is estimated to reduce Arizona's gross state 
product by $2.6 to $3.6 billion by the year 2020 and $9.6 to 
$11.3 billion only a decade later.
    It is the upmost importance that Congress balances the need 
for any policy to properly balance cost with resulting 
benefits. However, this legislation results has no such 
benefit. According to the Environmental Protection Agency, S. 
2191 would only decrease global temperatures by only one tenth 
of one degree Celsius; I am not sure that my constituents, in 
the third congressional district of Arizona, will believe that 
it is worth $6.7 trillion for a global temperature change equal 
to less than one degree Celsius.
    Many on this Subcommittee share these concerns. I want to 
thank our witness panel for their testimony today and I look 
forward exploring the issue further. Thank you.
                              ----------                              


    Anthony Janetos, Response to Question from Hon. John D. Dingell

    Is the tropical troposphere more or less sensitive to 
climate change than the troposphere at the poles?
    The tropical troposphere is not inherently different in its 
sensitivity to climate change than the troposphere in other 
regions. The major greenhouse gases produced by human actions 
(e.g. carbon dioxide, methane, nitrous oxide) are globally 
distributed and well-mixed, and the particular locations of 
their sources and sinks is not important from an atmospheric 
perspective over the long term.
    The tropics are nevertheless extraordinarily important in 
climate change. The tropical troposphere is an area of deep 
convective processes that promote atmospheric mixing; it also 
has higher water content than the polar troposphere, in large 
part because it is so much warmer, and it is thus an important 
region to understand. The tropics are also a major source of 
fluxes of carbon dioxide to the global atmosphere from land-use 
change, largely the result of the conversion of forests to 
agricultural lands.
    There is a general expectation from both theory and models 
that changes in annual surface temperature from climate change 
will actually be greater as one moves towards the poles and 
away from the tropics. There is observational evidence that 
this phenomenon is indeed occurring, and this forms one of the 
many signatures that have led the IPCC to conclude that human 
activities are a major contributor to the observed warming seen 
globally over the past century.
                              ----------                              


       Jim Lyons, Response to Question from Hon. John D. Dingell

    1. At the hearing, a question was raised about the 
scientific basis for suggesting that we should be aiming for 
global atmospheric CO2 concentrations of 350 ppm. 
One witness testified that there is no scientific basis. Do you 
agree? If not, please explain why not.
    The Intergovernmental Panel on Climate Change estimates in 
their Fourth Assessment Report that 350 09400 parts per million 
(ppm) of CO2 would increase global average 
temperatures from 2.0 092.4C above pre-industrial levels (see 
table below). Global average temperature rise above 2C above 
pre-industrial levels would likely generate the most dangerous 
impacts of climate change, such as extremely harmful levels of 
water scarcity, severe weather events, decreased agricultural 
productivity, exacerbated disease, and ecosystem degradation.
    Given these findings, stabilizing CO2 at 350 ppm 
would keep temperature rise at the low end of IPCC's estimate, 
making it more probable that temperature increases remain at or 
below a 2C global temperature change.
    Table from IPCC's Fourth Assessment Report, Summary for 
Policymakers (p. 20):


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