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

    AFTER BALI: THE U.N. CONFERENCE AND ITS IMPACT ON INTERNATIONAL CLIMATE
                                 CHANGE POLICY

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

                                    HEARING

                                   before the
                              SELECT COMMITTEE ON
                              ENERGY INDEPENDENCE
                               AND GLOBAL WARMING
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED TENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               DECEMBER 19, 2007

                                   __________

                               Serial No. 110-21

                 Printed for the use of the Select Committee on
                     Energy Independence and Global Warming
                            globalwarming.house.gov

                                   ----------
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                    SELECT COMMITTEE ON ENERGY INDEPENDENCE
                               AND GLOBAL WARMING

                   EDWARD J. MARKEY, Massachusetts, Chairman
    EARL BLUMENAUER, Oregon              F. JAMES SENSENBRENNER, Jr.,
    JAY INSLEE, Washington                   Wisconsin, Ranking Member
    JOHN B. LARSON, Connecticut          JOHN B. SHADEGG, Arizona
    HILDA L. SOLIS, California           GREG WALDEN, Oregon
    STEPHANIE HERSETH SANDLIN,           CANDICE S. MILLER, Michigan
      South Dakota                       JOHN SULLIVAN, Oklahoma
    EMANUEL CLEAVER, Missouri            MARSHA BLACKBURN, Tennessee
    JOHN J. HALL, New York
    JERRY McNERNEY, California
                                     ------

                               Professional Staff

                         David Moulton, Staff Director
                           Aliya Brodsky, Chief Clerk
                     Thomas Weimer, Minority Staff Director
                                C O N T E N T S

                                   __________
                                                                       Page
    Hon. Edward J. Markey, a Representative in Congress from the
      Commonwealth of Massachusetts, opening statement...............     1
        Prepared statement...........................................     3
    Hon. F. James Sensenbrenner, Jr., a Representative in Congress
      from the State of Wisconsin, opening statement.................     5
    Hon. Earl Blumenauer, a Representative in Congress from the State
      of Oregon, opening statement...................................     6
    Hon. Jay R. Inslee, a Representative in Congress from the State
      of Washington, opening statement...............................     6
    Hon. Stephanie Herseth Sandlin, a Representative in Congress from
      the State of South Dakota, opening statement...................     7
    Hon. Emanuel Cleaver II, a Representative in Congress from the
      State of Missouri, opening statement...........................     8
    Hon. Jerry McNerney, a Representative in Congress from the State
      of California, opening statement...............................     8
    Hon. Hilda Solis, a Representative in Congress from the State of
      California, opening statement,.................................     8
        Prepared statement...........................................    10
    Hon. John Hall, a Representative in Congress from the State of
      New York, opening statement....................................    13
    Hon. Marsha Blackburn, a Representative in Congress from the
      State of Tennessee, opening statement..........................    13

                                   Witnesses

    Mr. Alden Meyer, Director of Strategy and Policy, Union of
      Concerned Scientists...........................................    15
        Prepared statement...........................................    18
    Mr. Philip Clapp, Managing Director, Pew Environmental Group.....    31
        Prepared statement...........................................    33
    Ms. Christiana Figueres, Official Negotiator, U.N. Framework
      Convention on Climate Change and the Kyoto Protocol, Costa Rica    43
        Prepared statement...........................................    45
    Mr. Ned Helme, President, Center for Clean Air Policy............    49
        Prepared statement...........................................    52
    Mr. Myron Ebell, Director, Energy and Global Warming Policy,
      Competitive Enterprise Institute...............................    75
        Prepared statement...........................................    77

                              Submitted Materials

    The Climate Change and Energy Security Challenge, Stephen D.
      Eule, U.S. Dept. of Energy, November 29, 2007..................   101
    EPA Analysis of Bingaman-Specter Request on Global CO2
      Concentrations, U.S. EPA, Office of Atmospheric Programs,
      October 1, 2007................................................   120
    Stabilizing CO2 Concentrations with Incomplete
      International Cooperation, Edmonds, Clarke, Lurz, and Wise,
      U.S. Dept. of Energy, October 2007.............................   127
    ``Europe's Dirty Secret: Why the EU Emissions Trading Scheme
      Isn't Working'', Open Europe, August 2007......................   156

    AFTER BALI: THE U.N. CONFERENCE AND ITS IMPACT ON INTERNATIONAL CLIMATE
                                 CHANGE POLICY

                                  ----------

                          WEDNESDAY, DECEMBER 19, 2007

                      House of Representatives,
                Select Committee on Energy Independence
                                            and Global Warming,
                                                        Washington, DC.
        The committee met, pursuant to call, at 12:05 p.m. in Room
    2318, Rayburn House Office Building, Hon. Edward J. Markey
    [chairman of the committee] presiding.
        Present: Representatives Markey, Blumenauer, Inslee, Solis,
    Herseth Sandlin, Cleaver, Hall, McNerney, Sensenbrenner,
    Walden, and Blackburn.
        Staff present: Morgan Gray, Joel Beauvais, and Ana Unruh
    Cohen.
        The Chairman. This hearing of the Select Committee on
    Energy Independence and Global Warming is called to order.
        During the last 2 weeks, delegates from more than 180
    nations, including the United States, met in Bali, Indonesia,
    to begin the process of developing a post-2012 worldwide
    agreement to reduce global warming pollution. This past
    Saturday, these delegates adopted the Bali Action Plan, which
    puts in place a road map for negotiations over the next 2
    years. This road map has been criticized for being too weak,
    too fuzzy and inadequate for leading us out of the climate
    wilderness. Today's hearing will shine a light on the Bali
    agreement and give us a sense of whether we are headed toward
    climate catastrophe or climate responsibility.
        The Bali Action Plan rests on four key pillars of climate
    policy: reduction of global warming pollution, adaptation to
    global warming impacts, technology development and transfer to
    developing countries, and financial investment to aid
    developing countries.
        This road map appears to represent real progress in a
    number of key areas. Most importantly, it marks the first time
    that developing countries have agreed to consider taking
    actions to reduce their global warming pollution. The road map
    also increases the focus on adapting to the impacts of global
    warming that the world can no longer avoid. It recognizes the
    need to develop and deploy clean technology and steer global
    investment toward low-carbon ventures, as well as the
    importance of avoiding tropical deforestation in combatting
    global warming.
        The Bali Action Plan achieved these important steps forward
    despite being weakened by the continued opposition of the Bush
    administration. Initial drafts of the road map included
    language based on the latest science that recognized the need
    for global heat-trapping emissions to peak within the next 10
    to 15 years before declining by more than half by 2050, with
    developing countries reducing emissions 25 to 40 percent below
    1990 by 2020.
        In the face of opposition from Bush administration
    negotiators backed by Japan, Russia and Canada, this action was
    dropped from the final action plan. These science-based guides
    to emission targets were relegated from front and center to a
    footnote in the final document.
        Although inclusion of these guides would have strengthened
    the road map, the leaders gathered at Bali did succeed in
    opening the door to negotiations on a new global agreement.
    These negotiations represent an opportunity to address global
    warming comprehensively, but we still need global leadership to
    realize this opportunity.
        One message that emerged from the world's leaders in Bali
    is that we cannot afford to wait any longer to take
    international action to address global warming. The question
    now is whether the Bush administration will continue to be a
    roadblock on this new path.
        In the meantime, Congress has taken the critical first step
    to reduce our global warming pollution by passing a Democratic
    energy bill, which President Bush signed today. That raises the
    fuel economy standards of our vehicles for the first time in
    over 30 years and puts our national energy policy back on
    track. The energy bill is an important downpayment on solving
    the climate crisis, reducing U.S. global warming emissions by
    up to a quarter of what is needed to save the planet by 2030.
        In the new year, Congress will begin work on a cap, auction
    and trade bill which will achieve the balance of the reductions
    needed and demonstrate the U.S. leadership that is essential to
    reach a global agreement under which all countries take action.
        We are fortunate to have an outstanding panel of experts on
    the U.N. climate negotiations with us today. Many of our
    witnesses were in Bali, participating in the negotiations, and
    have graciously agreed to join us so soon after returning.
        I look forward to hearing all of your thoughts on the
    outcome of the Bali conference and the next steps for
    international climate negotiations.
        I would now like to recognize the ranking member of the
    committee, the gentleman from Wisconsin, Mr. Sensenbrenner.
        [The prepared statement of Mr. Markey follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
        Last week in Bali, Indonesia, a speaker at the U.N. climate
    change conference had some pointed comments about what must
    happen in order to achieve a meaningful agreement on global
    warming. The speaker had firsthand knowledge of the political
    landscape in the United States.
        The speaker said that international negotiators had to move
    away from failures that have hampered global warming talks
    since the U.N. framework convention on climate change had its
    first meeting in Berlin 12 years ago in 1995. The speaker,
    referring to the so-called Berlin mandate, said that the
    meeting put in place an inadequate process that exempted China,
    India and other developing nations from taking significant
    steps to reduce emissions by exempting these nations. The
    speaker said it made the subsequent Kyoto Treaty impossible to
    ratify in the United States Senate.
        The speaker warned that negotiators in Bali must not make
    the same mistake of exempting China and India and other
    developing nations. The speaker said that many in the United
    States were ready to move forward with substantial greenhouse
    gas reductions but not, and I quote, ``without the knowledge
    that other folks are cutting in a way that is meaningful,''
    unquote. The speaker wisely said that technology transfer and
    assistance with developing countries is crucial. To quote the
    speaker again, quote, ``The industrial world can't do it
    alone,'' unquote.
        And while that speaker at Bali and I disagree on many
    global warming policy proposals, I am pleased that my
    Chairman's own junior Senator, John Kerry of Massachusetts,
    grasped the importance of enjoining China and India in the
    process.
        Senator Kerry's statements are a breath of cool, fresh air
    when compared to those of another American who spoke in Bali.
    While Senator Kerry laid out conditions that must be met in
    order for a global warming treaty to be approved by the United
    States Senate, another former presidential candidate simply
    laid blame for lack of promise at the feet of America. And
    while Vice President Al Gore was calling America the
    obstructionist at the Bali conference, he failed to notice that
    other nations were joining the United States in opposing the
    mandatory reduction targets in the Bali road map.
        Mr. Gore also failed to acknowledge that China and India
    initially refused to commit to taking actions on their own to
    reduce emissions before eventually accepting that they need to
    be part of the solution too. And I am very pleased that China
    and India agreed to language in the Bali road map for, quote,
    ``nationally appropriate mitigation actions that must be
    measurable, reportable and verifiable.''
        While there are some provisions in the Bali road map that
    raise concern, I think overall it is a good agreement.
    Negotiators have given policymakers all over the world the time
    to promote the development of technology that will make
    emissions restrictions achievable without damaging the economy
    and hurting jobs and thus making those restrictions and changes
    politically untenable in any democratic country in the world.
        If China and India were willing to work with the
    international community, it is possible to develop the
    meaningful climate change treaty that creates real
    environmental benefits, protects jobs in the economy and
    advances technology. Without China and India, any global
    warming treaty would simply be an invitation for manufacturers
    to move their options to these unregulated economies. And where
    would our economy and environment be?
        I opposed the Kyoto Treaty from the start because I knew
    what we were getting into with that flawed agreement. And I am
    disappointed that there are those in this country that did not
    heed what Senator Kerry said then and what he said 10 years ago
    when the Byrd-Hagel resolution came up.
        And because those cautions were not heeded, the Senate
    didn't ratify the treaty, and eventually we lost at least a
    decade and probably more in reaching an agreement that could be
    worldwide in application, was technology-based and which would
    be politically acceptable, both in this democracy as well as in
    other democracies around the world.
        I hope that this road map from Bali can start us on the
    path toward a more realistic and effective global emissions
    reduction solutions, but I must caution everybody that if we
    fall into the trap of what caused Kyoto to fail, then we will
    be losing even more time in this fight.
        I thank the gentleman, and I yield back the balance of my
    time.
        The Chairman. Great. The gentleman's time has expired, and
    the Chair recognizes the gentleman from Oregon, Mr. Blumenauer.
        Mr. Blumenauer. Thank you, Mr. Chairman. I am looking
    forward to this hearing today so that we can learn about what
    happened in Bali and what we do with that experience.
        The good news is that that will be the last international
    gathering of that scope where the United States is totally
    isolated from not just the rest of the developed world, but
    probably the rest of the world in total. And I count that as a
    singular bright spot.
        But just because we have been isolated does not mean that
    we haven't a great deal of leadership going on in this country.
    And I appreciate the reference to Al Gore, so derided by some
    as ``the ozone man,'' who has had a consistent message for
    years and is now recognized globally for being right and being
    effective in moving us in the right direction. We also have a
    great cross-section of people who have been involved with the
    leadership in this country, a slice of what is happening in
    terms of the NGOs, the private sector, unions, over 750 cities,
    which I find extraordinarily exciting.
        There is still time for this Congress, under the leadership
    of you, Mr. Chairman, and this committee and others, to be able
    to have singular accomplishments before we conclude. And I
    think the combination of what has happened in Bali, the
    international consensus, the leadership on the ground, means
    that it is much more likely that the focus of this election is
    going to mean that not only will we make some success in 2008,
    but the stage will be set for a new era of American policy.
        And I look forward to starting to get a glimpse of some of
    the specifics, as we listen to our witnesses here today.
        The Chairman. The gentleman's time has expired.
        The Chair recognizes the gentleman from Washington State,
    Mr. Inslee.
        Mr. Inslee. Thank you.
        As far as when we talk about the road from Bali, I just
    want to note that this is moving so fast, both in the wrong
    direction and the right direction, that we ought to have both
    concern and optimism.
        It is moving in the wrong direction because the science, as
    we know, is astoundingly rapid at giving us signals that things
    are going out there, particularly feedback mechanisms in the
    far north, that are 20 times disturbing as they were 2 or 3
    years ago.
        The good news is that the people of this country are
    changing so rapidly on this issue and the science of the
    technology of dealing with energy solutions to this are
    becoming so available to us that we ought to have some optimism
    following Bali.
        And I just want to tell one little story why we ought to
    have optimism. About 3 years ago, I asked former Vice President
    Al Gore to address our colleagues about this issue. It was
    about 3 years ago, and it was in this building. And we asked
    all the Members of the House of Representatives to come listen
    to him. Four members of the United States House of
    Representatives showed up to listen to the former Vice
    President of the United States. Now the world is giving him the
    Nobel Peace Prize.
        And I encourage anyone who is interested in this subject to
    read his speech at Bali. It was a work of genius, and it is a
    mark not just of individual achievement but a global action.
    And I just think we ought to come away from Bali with a sense
    of optimism to see how fast things are changing.
        And, with that, I will yield back my time.
        The Chairman. The gentleman's time has expired.
        The Chair recognizes Ms. Herseth Sandlin from South Dakota.
        Ms. Herseth Sandlin. Thank you, Mr. Chairman. Thank you for
    having this hearing.
        I want to thank all of our witnesses for their
    participation in Bali and for being here today. I apologize I
    won't be able to stay for the testimony, but I, again, wanted
    to thank you for taking the time to talk about the next steps
    and the work of this select committee and the priority of the
    110th Congress and continuing to make progress domestically as
    well as working with international partners in sharing
    information.
        And I would have to share--I want to reiterate the
    statement made by Mr. Inslee about having some optimism. While
    there are going to be different interpretations about the road
    map itself and how it compares to the objectives of the
    conference, I do think that hopefully we can at least agree
    that the road map has us going in the right direction. We are
    not off-course. We have made some progress in the last couple
    of years, at least acknowledging with what the science has
    provided and the negotiations over the last couple of weeks of
    the direction we need to go.
        But in the 3\1/2\ years that I have been in Congress, I
    have watched a dramatic shift in one area in particular. As Mr.
    Inslee was describing, in terms of how fast things are
    changing, not only in terms of the science, but the political
    views that people have about certain things, where they may
    have had a certain position over the last 10 to 15 years and
    now all of a sudden they are changing their positions, as my
    friend from New York, Mr. Eliot Engel, has done on the issue of
    biofuels.
        And so, when we have gone from huge resistance to biofuels
    in some corners to a signing of a bill that has a 36-billion-
    gallon target by 2022, addressing, as we will have to, some of
    the issues that will arise over the next few years, again, we
    should have some optimism that we are going in the right
    direction, that there is more progress to be made, but we still
    haven't yet agreed on the precise destination we are trying to
    get to.
        But I have no doubt that over the next few months, and
    certainly heading into the next year or 2, that we will
    continue to make progress. And we appreciate the strong efforts
    that all of you have made in getting us to the consensus that
    we have achieved thus far and the consensus that we hope to
    achieve in the months ahead.
        So, again, I thank you all for being here. We look forward
    to working with you as we figure out the destination.
        Thank you. I yield back.
        The Chairman. The gentleman from Oregon is recognized.
        Mr. Walden. Mr. Chairman, thank you. I am going to waive my
    opening statement and look forward to hearing the testimony of
    the witnesses.
        The Chairman. The Chair recognizes the gentleman from
    Missouri, Mr. Cleaver.
        Mr. Cleaver. I, too, would waive my opening comments. I am
    extremely interested in hearing from the panelists on whether
    or not they view this major economy's process as being
    competitive with the Kyoto Protocol or, maybe more
    significantly, whether or not it is undermining the Kyoto
    Protocol.
        So thank you, Mr. Chairman, for calling this hearing, and I
    look forward to hearing more detailed--or a detailed response
    from our witnesses.
        The Chairman. The gentleman's time has expired.
        The Chair recognizes the gentleman from California, Mr.
    McNerney.
        Mr. McNerney. Thank you, Mr. Chairman.
        First, I want to commend the members who have participated
    in the Bali conference for their hard work and for their
    accomplishment. I recognize the challenges ahead. They are
    going to be difficult. They are very big. But I am very
    optimistic because both of the technology that I see already in
    play but also because we are opening up, this cooperation is
    opening up a new chapter in human history, a chapter of
    cooperating worldwide to solve global problems. And so I look
    at this as a tremendous achievement.
        I thank the participants, and I yield back the balance of
    my time.
        The Chairman. The gentleman's time has expired.
        The Chair recognizes the gentlelady from California, Ms.
    Solis.
        Ms. Solis. Thank you, Mr. Chairman. I will be brief.
        I just want to welcome our panelists also, and I watched
    with much amusement at the behavior of the United States at the
    particular meeting in Bali. I was very disappointed, very
    disappointed, because so many of us here in the Congress have
    been working very hard on trying to educate our communities,
    especially communities of color, but, more importantly, the
    messages that are sent out to third world countries. And, in
    particular, I am thinking about countries that have been
    hardest hit by droughts and fires and hurricanes. And I look
    south of the border, I look to Latin America, and I see that
    folks there are looking for leadership. And I know, while we
    have the technology, we have the know-how, we have the
    financial resources, that we should be providing a bigger role
    on a bigger level.
        So I am very anxious to hear what you have to say. Many of
    us here are excited. I know my staff and I worked on getting an
    amendment into the foreign operations spending package that
    would require, for the first time, the Secretary of State to
    convene an interagency committee to provide Congress with a
    report describing the needs of developing countries and the
    actions planned to help provide for their needs.
        This is a major, major concern of ours here in the House.
    And I am happy to say that, in spite of what the administration
    may say, those of us here, as representatives for our
    constituents, are strongly in support of advancing whatever we
    need to do to make sure that our communities are well taken
    care of and that we play an active role in combatting the
    negative effects of global warming in our planet and in our
    country and in our neighborhoods.
        Thank you very much. I yield back the balance of my time.
        [The statement of Ms. Solis follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Great. The gentlelady's time has expired.
        The Chair recognizes the gentleman from New York State, Mr.
    Hall.
        Mr. Hall. Thank you, Mr. Chairman.
        And thank you to our witnesses for your work and for coming
    here to tell us about it.
        I am one who was raised to believe that the United States
    should be a leader in many spheres of government and policy.
    And this is one in particular that we should not lag any
    further on. We should not only join the rest of the world in
    working for reduction of greenhouse gases, but we should be
    leading.
        And I, of course, would love to see China, India and all
    countries of the world join in, but I don't think we should
    hold back, because leaders do not hold back. They set the
    example for the rest of the world.
        People in my district and the people I know around the
    country who I speak to see the changes in the weather. They
    know about the drought in Georgia that is so extreme that boats
    and docks and marinas are far from where the water is. They
    know in our district about the three 50-year floods in the last
    3 years. They know about the ice storm in the Midwest that was
    deadly to many people; the 139-mile-per-hour hurricane-force
    storm that hit the Northwest States; the typhoon that decimated
    Bangladesh; the multiple extreme hurricanes that hit the
    Yucatan this year; the tornado that destroyed the town of
    Greensburg, Kansas, and on and on. These are phenomena that may
    be isolated but are probably a part of the predicted pattern of
    increased intensity and frequency of storms.
        I have seen several examples recently of ways of developing
    and using energy. I just drove a hydrogen car that GM is
    developing, which, especially if they get hydrogen from water
    rather than from natural gas, I am optimistic that that is a
    possible solution to part of the problem. And of course the
    verdant hydrokinetic tide-powered experiments that are going on
    in the East River in New York are very promising.
        The last thing I want to say, just because this is
    Christmastime or holiday time of giving for many people of many
    faiths, if you know somebody who has everything and you want to
    give them something that will help mitigate the impacts of
    global warming, you can go on the Internet and search for how
    to adopt a polar bear and give a polar bear to somebody who has
    everything. And that bear will be followed; their habitat will
    be protected. And you can teach people, at the same time, about
    the changes going on in the arctic as a result of this problem.
        And, with that, I yield back. And thanks for holding this
    hearing, Mr. Chairman.
        The Chairman. I thank you very much.
        And just before we end it, the gentlelady from Tennessee,
    Mrs. Blackburn, has arrived. And she is recognized for an
    opening.
        Mrs. Blackburn. I thank you, Mr. Chairman.
        And welcome to all of our witnesses today. Thank you for
    the hearing and the time.
        We all know that on December 15th the U.N. completed a 2-
    week conference in Bali, Indonesia, and it was attended by
    representatives of more than 180 countries. And the attendees
    completed the conference by establishing an Adaptation Fund
    Board to oversee the implementation of the adaptation fund
    created under the Kyoto Protocol. Delegates also considered
    policies to reduce emissions from deforestation and forest
    degradation in developing countries.
        However, I have two main concerns about the general path
    that the U.N. conference in Bali proposes, and these are
    concerns I want to address with you all today.
        First, the conference seeks to implement severe
    CO2 restrictions worldwide in an attempt to prevent
    global warming. And, as we are hearing, global warming has
    little to do with human activities. So that one is of concern
    to me.
        Data is increasingly surfacing in peer-reviewed journals
    that show climate change may or may not be a problem. Further,
    much of the data in the climate models that the IPCC have used
    and some that the Bali road map is based upon are appearing to
    pose questions, and the credibility is being questioned on
    those.
        Emerging data suggest that recent global warming over the
    past hundred years may not be caused by human CO2
    emissions. Instead, the data tells us that the warming could be
    well within the natural variability and largely determined by
    changes in the sun.
        So that is one area that I would like to travel with you
    all.
        Second, the conference wants to institute a world carbon
    market to track and manage CO2 emissions. Last year,
    some of my colleagues and I went on a fact-finding mission to
    Europe to look at their emissions trading scheme. I found it
    curious that they called it a ``scheme.'' And what we found was
    a system that maybe wasn't as credible as we would like to see
    it; that it didn't reduce the CO2 emissions and, in
    some cases, might have even aided the increase.
        So, to force this type of system on every industrialized
    nation is not going to be something that is going to stop
    global warming. We have to look at what the benefits and the
    causes and the cost are going to be and then look at how we
    need to address other issues that may be more pressing problems
    that we can do something about: diseases, malnutrition and
    sanitation.
        So thank you, Mr. Chairman. I look forward to the
    questions. And welcome to our witnesses.
        The Chairman. I thank the gentlelady.
        All time for opening statements by members of the committee
    has expired, so we will turn to our panel. And our first four
    witnesses today all participated in the Bali conference.
        We will begin with Mr. Alden Meyer, director of strategy
    and policy for the Union of Concerned Scientists. Mr. Meyer
    has, for over 30 years, had experience working on issues of
    energy and climate change, both at the State and national
    level. Before coming to the Union of Concerned Scientists in
    1989, Mr. Meyer served as executive director for the League of
    Conservation Voters, Americans for the Environment, and the
    Environmental Action Foundation.
        We welcome you, Mr. Meyer. Please begin.

    STATEMENTS OF MR. ALDEN MEYER, DIRECTOR OF STRATEGY AND POLICY,
        UNION OF CONCERNED SCIENTISTS; MR. PHILIP CLAPP, DEPUTY
       MANAGING DIRECTOR, PEW ENVIRONMENT GROUP; MS. CHRISTIANA
      FIGUERES, OFFICIAL NEGOTIATOR, U.N. FRAMEWORK CONVENTION ON
      CLIMATE CHANGE AND THE KYOTO PROTOCOL, COSTA RICA; MR. NED
    HELME, PRESIDENT, CENTER FOR CLEAN AIR POLICY; MR. MYRON EBELL,
        DIRECTOR, ENERGY AND GLOBAL WARMING POLICY, COMPETITIVE
                          ENTERPRISE INSTITUTE

                        STATEMENT OF ALDEN MEYER

        Mr. Meyer. Thank you, Chairman Markey and members of the
    select committee. UCS has been active on international,
    national and State climate change policy since 1989, and I have
    personally attended almost all of the international negotiating
    meetings on climate change since 1991 when negotiations started
    over the original Rio Framework Treaty. I am pleased to be able
    to share with you my observations on the Bali negotiations.
        I do believe this meeting reflected a sea change in the
    willingness of both developed and developing countries to move
    forward together in confronting the climate threat and really
    opens the way for serious negotiations over the next 2 years.
        Substantial scientific evidence indicates that an increase
    in the global average temperature more than two degrees Celsius
    above pre-industrial levels would pose severe risks to natural
    systems and human health and well-being. Limiting warming to
    this level will require global emissions to peak within the
    next 10 to 15 years and then be reduced by 50 percent or more
    by mid-century, with much deeper cuts for industrialized
    countries.
        In the late 1990s, you may recall companies opposed to U.S.
    ratification of the Kyoto Protocol ran television commercials
    with the theme, ``It is not global, and it won't work,''
    because countries like China and India did not take on binding
    emissions targets under the initial Kyoto framework. The most
    important outcome of Bali, in my mind, is the full recognition
    that the climate change problem is global and that we all have
    a stake in addressing it.
        In Bali the world saw the dismantling of the so-called
    Berlin wall, the famous phrase, the 1995 Berlin mandate that
    Mr. Sensenbrenner referred to, that prohibited any new
    commitments for parties not included to Annex 1 of the
    framework convention, nonindustrialized countries. The
    president of Indonesia captured it well in his keynote address
    to the meeting: ``Developing countries, too, must do our part.
    The bottom line is that we all must do something differently
    and do something more.''
        The new Australian Prime Minister, Kevin Rudd, put it
    starkly: ``The community of nations must reach agreement. There
    is no plan B. There is no other planet any one of us can escape
    to; we have only this one. And none of us can do it alone, so
    let's get it right.''
        And the Minister from India captured the true spirit of
    Bali when he said, ``What is at stake is saving our future
    generations. And therefore it is not a question of what you
    will commit or what I will commit, it is a question of what we
    will commit together to meet that challenge.''
        Through the constructive efforts in Bali of countries like
    China, Brazil, Indonesia, South Africa and others, Costa Rica,
    with last-minute acquiescence of the U.S., negotiations have
    been launched under the framework convention on nationally
    appropriate mitigation actions by developing country parties,
    as well as on post-2012 emission reduction commitments for the
    U.S. and other non-Kyoto industrialized countries.
        Simultaneously, negotiations over deeper emission reduction
    obligations of industrialized countries that have ratified
    Kyoto, including most recently Australia, will continue in the
    ad-hoc working group launched in 2005 in Montreal. These two
    negotiating tracks will proceed in parallel with comparability
    of action required for all developed countries.
        Consensus could not be reached on the level of ambition for
    these negotiations, as the U.S. fought hard to keep any
    specific reference to the need for industrialized countries to
    reduce their emissions 25 to 40 percent below 1990 levels by
    2020 out of the convention track decision.
        In the closed working group negotiations, developing
    countries said they could accept a reference to a need for
    global emissions to peak in the next 10 or 15 years and to be
    reduced by 50 percent or more by mid-century. This would have
    been a significant achievement, given that achieving such a
    goal would require substantial reductions in projected
    emissions for big developing countries like China, India and
    Brazil.
        But these countries made it crystal clear they could only
    support such a goal if it were to be accompanied by the
    language on 25 to 40 percent reductions in emissions by
    industrialized countries by 2020. The U.S. was unwilling to cut
    this deal, falsely claiming that inclusion of such a range
    would, quote, ``prejudge,'' unquote, the outcome of the
    negotiations. In my view, this was a significant missed
    opportunity. But the science-based language remains in the
    Kyoto track decision, along with the comparability language in
    the Bali action plan, so you can argue, by reference, it
    applies to the United States.
        While the language on mitigation actions by developed and
    developing countries generated the most intense debate in Bali,
    there are a number of other important building blocks included
    in the Bali Action Plan, which I describe more fully in my
    prepared testimony. These include adaptation, as Ms. Solis
    referred to; helping vulnerable developing countries deal with
    significant impacts of climate change that are already apparent
    and will only worsen in the future; reducing emissions from
    deforestation and forest degradation, which accounts for an
    estimated 20 percent of global CO2 emissions, equal
    to the total emissions of the U.S. or China and more than the
    total emissions of the transportation sector worldwide; and
    strategies to facilitate the development transfer and
    accelerated deployment of clean technologies, along with
    greater access to financing and capacity-building for
    developing countries.
        Putting flesh on the bones of the technology and financing
    elements of the Bali Action Plan is key to reaching agreement
    over the next 2 years on sectoral policy-based and other
    mitigation commitments by developing countries to help
    decarbonize their future development path. The fact that, at
    the end of the day, the Bush administration was unwilling to
    block these negotiations from going forward is a hopeful sign,
    for, while a different U.S. team will be on the field during
    the second half of negotiations, it would have been a tragic
    waste of time to run out the clock.
        Finally, Mr. Chairman, in her speech during the high-level
    segment, Connie Hedegaard, the Minister of Denmark, which will
    host the meeting in December 2009 where the new agreement will
    hopefully be reached, laid out a clear challenge to the U.S.:
    ``It is about time that we act in a collective, constructive
    and timely manner. For almost a century, Europe has looked to
    the U.S. for leadership and guidance in times of instability
    and change. We do so yet again as we strive to reach a truly
    comprehensive agreement to combat climate change. But we do so
    knowing full well that all countries, not just the largest
    emitters, share responsibility for the final outcome.''
        I hope, Mr. Chairman, that we will heed Minister
    Hedegaard's wise words as we move forward from Bali to
    Copenhagen.
        [The statement of Mr. Meyer follows:]

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        The Chairman. Thank you, Mr. Meyer, very much.
        Our second witness is Mr. Phil Clapp, who is the deputy
    managing director of the Pew Environmental Group. Mr. Clapp
    previously served as the president of the National
    Environmental Trust, which he led since its founding in 1994.
    Mr. Clapp has more than a decade of experience on Capitol Hill,
    as staff director of the House Budget Committee's Energy and
    Environment Task Force and legislative director for former
    Senator Tim Wirth.
        We welcome you, Mr. Clapp. Whenever you are ready, please
    begin.

                        STATEMENT OF PHILIP CLAPP

        Mr. Clapp. Thank you, Mr. Chairman. And thank you for your
    invitation to be here today.
        First of all, I want to congratulate you on what has just
    occurred. The President has just signed the energy bill, and
    that culminates what I know is for you a 20-year crusade to
    increase the fuel economy standards in Federal law. And you
    have contributed an enormous amount to that all the way back to
    1982, and I remember your efforts back on the Energy and
    Commerce Committee at that time. So, congratulations.
        The delegates came to Bali with fundamentally three
    challenges: first, a decision as to whether to launch formal
    negotiations on a new treaty to be concluded in Copenhagen in
    2009; secondly, to establish the timetable and rules for those
    negotiations; and third, to agree upon measures that would be
    open for discussion.
        That was the minimum bar, and I think all three were
    accomplished in Bali. We have an agreement today that could
    have launched a much stronger set of negotiations. As many of
    you have noted in your opening statements, the European Union
    proposed a reduction of 20 to 40 percent in worldwide emissions
    and a long-term goal of a 50 percent reduction by 2050.
        I want to emphasize that those were only in the preamble of
    the agreement. This was an ultimately hortatory statement that
    this is the target that the world should be seeking to reach in
    the new negotiations. No one was attempting in Bali to impose
    some sort of regulatory straightjacket that said there was a
    binding agreement that these reductions should occur. But it
    was an attempt to create a budget.
        Unfortunately, the United States opposed those provisions,
    that preambular language. And, as a result, although it does
    appear in the text, we can claim less of an endorsement coming
    out of Bali for that as a target than we could have. And that
    is unfortunate, given how quickly the scientific evidence is
    mounting.
        I mean, we are now at the point where Arctic Sea ice was
    reduced to less than half of its normal size this year. The
    Northwest Passage opened for the first time in history this
    year. And we have scientists telling us very clearly, most
    recently at the American Geophysical Union meeting that was
    held in San Francisco concurrent with the Bali talks, that we
    will reach the point when the Arctic may be free of summer sea
    ice not by 2040, a projection which shocked scientists when one
    NASA scientist made it last year, but as early as 2012. The
    leading scientist who made that projection, who actually is the
    son of a coal miner and worked in coal mines as a child, said,
    ``The canary has died. It is time to get out of the mine.''
    That is the urgency of these talks. The world has one more shot
    to get an agreement, and this will be it.
        There is enormous suspicion of the United States throughout
    these talks, and it does not come just from President Bush's
    opposition to a binding international treaty and numerical
    targets. The United States, all the way back to 1992, has a
    long history of either fighting binding agreements, as it did
    with the framework convention under the first President Bush--
    that convention is voluntarily only because of U.S.
    opposition--through Kyoto in 1997, when the United States,
    under the Clinton administration, sought weaker targets and,
    indeed, did not act to reduce its own emissions.
        So we have an enormous challenge to lead. And Kevin Conrad
    of Papua New Guinea said it best at the end when he said,
    ``Lead, follow or get out of the way. We would like to see you
    lead. But if you will not lead, get out of the way.'' The
    United States has to lead these talks. There is enormous
    suspicion of U.S. intentions under an administration of either
    party. And unless we do not take up our responsibilities, we
    will see another treaty that fails.
        I want to make one more comment about the role of
    developing nations, which Ms. Figueres will go into, I am sure,
    in much more detail. The watershed at these talks was that
    developing nations came to the table and the United States
    found itself incapable of saying yes to their proposals. For
    the first time, developing countries, including China, agreed
    to undertake measurable, reportable and verifiable emissions
    reductions actions. That is a step across a line that was first
    drawn in 1992.
        In addition, although I was complimenting the Chairman on
    the bill that the President signed today, I would like to point
    out that China, for example, has fuel economy standards in
    place today that met the same target in that bill, which is
    2018, in 2005. So there is an enormous amount of leadership
    going on in the developed world that the United States is not
    recognizing. And unless we do and come to the table with
    something to offer in return for their leadership on a number
    of these issues, we will find yet another failed negotiation.
        [The statement of Mr. Clapp follows:]

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        The Chairman. Thank you, Mr. Clapp, very much.
        And thank you for your kind words about the energy bill. I
    might add that we have now finished the energy bill. The
    President has signed it. I don't think anyone was predicting
    that last December, but it has happened.
        And what we are doing here in this December, on this day,
    on this afternoon, is having the last hearing that this
    Congress will have, but it is really the first hearing of the
    next Congress. There are a lot of people who do not believe
    that we can pass a cap, auction and trade bill as well. But the
    Speaker is committed to it. And that is why we are having this
    hearing today. Think of it as the first hearing on the next big
    issue that we hope that we can get the President's signature
    on.
        Our next witness, Christiana Figueres, has been official
    negotiator of the U.N. Framework Convention on Climate Change
    and the Kyoto Protocol for Costa Rica since 1995. She also
    serves as a member of the executive board of the Kyoto
    Protocol's Clean Development Mechanism. In 1995, Ms. Figueres
    founded the Center for Sustainable Development in the Americas,
    where she served as director until 2003. For her leadership in
    the areas of climate, energy and conservation, National
    Geographic and Ford Motor Company recognized her with their
    Hero of the Planet Award in 2001. We are extremely fortunate to
    have her expertise on Costa Rica and developing nations.
        Welcome, Ms. Figueres. Whenever you are ready, please
    begin.

                    STATEMENT OF CHRISTIANA FIGUERES

        Ms. Figueres. Thank you, Mr. Chairman, Honorable Members.
        I speak to you as a citizen of Costa Rica, a developing
    country that has taken on the goal of being carbon-neutral by
    the year 2021. We do so in full recognition that our impressive
    size will not necessarily affect global trajectories of
    emissions, but out of the deep conviction that it is the moral
    obligation of every country, large or small, to do the utmost
    to address climate change.
        You have asked me to come here today to address the issue
    of the Bali meetings from the perspective of the developing
    countries. As already pointed out by speakers before me, this
    meeting will be recognized as the one meeting in which
    developing countries made a landmark stride forward.
        I want to point out three specific issues that are highly
    unusual for developing countries.
        Number one, their willingness to participate in the climate
    change convention in very unusual ways. Developing countries
    are already and have already done more than the sum total of
    countries participating in the Kyoto Protocol, and I believe
    Ned will give you the numbers of that. However, in Bali, they
    expressed their very clear intent to do more than that. In a
    dramatic departure from the traditional no-new-commitments
    stand, developing countries assumed, under the Bali decision,
    their willingness to undertake measurable, verifiable and
    reportable actions supported by finance and technology on the
    part of developed countries.
        The industrialized countries assume measurable, verifiable
    and reportable commitments or actions according to their
    national circumstances. From our perspective, we recognize that
    this is a major step forward for the United States, given where
    the United States has been over the last few years. But it is a
    much weaker commitment than that which the European Union had
    already committed to before they went to Bali. So on that
    score, the developing countries have put much on the table,
    and, as a group, the industrialized countries have put
    comparatively less.
        To my second point, commitments, our very favorite word.
    The decision in Bali does not obligate any party to any type of
    commitment. In fact, it just opens a process over which, over
    the next 2 years, we will explore the form and level of
    commitment of all parties.
        The form of further contributions on the part of developing
    countries is yet to be determined, but it will very likely not
    be binding national emission targets as those that are assumed
    under the Kyoto Protocol. In fact, it is our task over the next
    2 years to explore the full range of commitment types that may
    be possible and possibly to move toward a basket of commitment
    types where every country will assume the type of commitment
    that it feels comfortable with according to its national
    circumstances.
        Third, and most importantly, contingency. The Bali
    discussions point very clearly to the fact that all further
    action of the developing countries is predicated on whatever
    the industrialized countries are going to do and, more
    specifically, on what the United States is going to do.
        The United States is admittedly the largest historical
    emitter, the highest per-capita emitter and the wealthiest
    nation. It is understandable, then, that there is a perception
    that the United States is not doing enough.
        I would like to underline that a higher level of ambition
    of the United States as we go forward will encourage stronger
    contributions of the developing countries. Conversely, a lower
    level of ambition of the United States will elicit only weaker
    contributions of the developing countries. Hence, the United
    States is in the very privileged position of wielding the most
    influence on what the global overall level of effort is going
    to be, as we move forward.
        To conclude, I would like to underscore that this new
    engagement of developing countries is a very clear invitation
    to the U.S. to engage. But there is a timing issue here. The
    agreement is scheduled to be reached by the end of 2009. Given
    where the United States is in its electoral cycle, it is more
    than likely that the U.S. participation in this regime will be
    shaped by this Congress. Hence, we are very encouraged by the
    development of mandatory legislation to reduce emissions in the
    United States.
        Honorable Members, it is in your hands to ensure that we,
    together, live up to the science of what is needed and stay
    within the art of what is possible. Thank you.
        [The statement of Ms. Figueres follows:]

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        The Chairman. Thank you very much.
        And our next witness, Ned Helme, is founder and president
    of the Center for Clean Air Policy and has more than 25 years
    of experience working on climate change and air policy. Mr.
    Helme advises Congress, State governments and the European
    Commission and developing countries on those issues. He played
    a key role in the development of the Clean Air Act of 1990 and
    the European Union's emissions trading system.
        So we welcome you, sir. Whenever you are ready, please
    begin.

                         STATEMENT OF NED HELME

        Mr. Helme. Thank you very much, Mr. Chairman and Members. I
    appreciate the opportunity to speak to you today. I will kind
    of clean up here and I will try to cover the points that maybe
    weren't covered by my colleagues.
        As you mentioned, we work a lot with key developing
    countries--China, India, Brazil and Mexico, in particular--and
    we work with a number of the States in the United States.
        During the course of the Bali meeting, we brought together
    Ministers from 25 countries--Christiana was part of that
    meeting--and talked about the Bali road map and the idea of
    providing incentives for developing countries to go beyond what
    they have done. And I will show you in a minute a slide that
    shows exactly how much effort they have made. And it was
    endorsed by all of those present and certainly became a part of
    the final agreement.
        We also hosted a meeting for Senator Kerry and your staff
    and other staffs there, with the leadership of the European
    Union, in a very constructive exchange on a lot of these
    issues.
        I want to make four points this morning.
        First, I want to emphasize the difference in vision between
    the United States and that of the European Union and developing
    countries and the rest of the world in this debate.
        Secondly, I want to talk about the EU's leadership. I think
    what they did going into Bali and what they did at Bali was
    critical to the outcome and deserves a lot of recognition and
    reflects dealing with the competitiveness issue in an effective
    way. And I want to come back to that.
        Thirdly, I want to echo what Christiana and others have
    said about the role of developing countries and sort of provide
    you with some actual detail on the level of effort developing
    countries have undertaken already and what we expect coming
    forward.
        And, finally, I want to address the issue that Mr.
    Sensenbrenner raised earlier about competitiveness. I think the
    European Union has crafted a much better path, a much more
    positive path to dealing with that than we have so far in the
    U.S., where the major effort so far has been this border tax
    adjustments provision proposed by Mr. Bingaman and others in
    the Senate bill. I think there is a much better path that
    developing countries would welcome to move the ball forward
    rather than sort of saber-rattling, as we saw the
    administration do a bit of during the debate.
        Let me hit quickly these points.
        In terms of difference in vision, I think the fundamental
    difference here is Europe and developing countries see this as
    a process where we take unilateral action, we step forward,
    make commitments, and then we work together through incentives
    to go beyond that. That it is a joint effort. We have all got
    to rise together to meet this challenge. In contrast, the
    U.S.'s view has been let us all make pledges, let us have some
    weak aspirational goals for 2050 and then call it a day.
        The heart of the difference here is, do we do something in
    2020 that ensures that we still have the possibility of meeting
    the goal we want in 2050, or do we sort of see what happens and
    hope for the best? Basically, unless we make a decision in 2020
    that is pretty concrete, we basically wipe out our chance of
    meeting the budget in 2050.
        In terms of EU leadership, as you know, the heads of state
    of Europe, back in March, agreed to a 20 percent reduction
    below 1990 levels on their own, unilaterally, regardless of
    what anybody else does. And they proposed to do 30 percent or
    more below 1990 if other developed countries step forward and
    if major developing countries made comparable efforts.
        And that really set the bar for the discussion at Bali. It
    was a very useful signal. And it also sent the signal that the
    EU sees this as not just a question of narrow competitiveness
    concerns, but a matter--this is a bigger deal than that; that
    we can take a hit in the cement industry, the steel industry in
    the short run in return for solving this much larger problem. I
    think that is the way we have got to think about this issue.
        In terms of developing country leadership, let me ask the
    team to put the slide up for me. I think this is a statement by
    the Minister from South Africa, and I think it really captures
    where we are. He said basically, ``Developing countries are
    saying voluntarily that we are willing to commit ourselves to
    measurable, verifiable mitigation action.'' And then he said,
    ``It has never happened before. A year ago, this was totally
    unthinkable.'' This is what he said right before the U.S.
    caved. And I think this gives you a context of how much of a
    watershed, how much of a breakthrough this was.
        Next slide, please.
        This shows you quickly the numbers. As Christiana
    mentioned, the gray line is what Lieberman-Warner would do in
    2015. The blue line is what the EU's minus-30 percent target
    would do. The red line is what China, Brazil and Mexico, with
    laws on the books today in each of these countries, policies on
    the books today, if fully implemented, they would make greater
    total reductions from their business-as-usual levels than the
    European Union or the Lieberman-Warner bill. So this puts to
    sleep once and for all this myth about, ``Developing countries
    aren't doing anything, so we shouldn't do anything.''
        Here are the facts. And, as others have said, this is about
    car standards, this is about a 20 percent improvement in energy
    efficiency by 2010. This is by 2010. Lieberman-Warner numbers
    are for 2015 and 2020. So it gives you a sense of how big this
    is.
        I was in China the last 2 days, discussions with them. I
    was impressed by how committed they are. A lot of criticism,
    ``Oh, they only got 1 percent the first year.'' This year they
    will get 4 percent of that 20 percent goal, and they are making
    big steps to go further in the coming years.
        Let me close with a quick word on competitiveness. I will
    come back to it, hopefully, in the questions.
        Europe has a high-level group on competitiveness. They
    brought together 500 chief executives. I got to speak there a
    week before Bali. All the leadership of the European
    Commission, the Secretary of Commerce, the Secretary of
    Treasury, the Secretary of Transportation, the Commissioner of
    Environment, all met. They agreed on a package on
    competitiveness that says sectoral approaches make sense. Let's
    offer carrots to developing countries to take a similar carbon-
    per-ton-of-steel goal, offer some incentives in terms of
    financing, and we get toward that proverbial level playing
    field that we hear so much about and Mr. Sensenbrenner was
    talking about.
        This is a much better path, an incentive-based approach,
    than this idea of putting border tax adjustments on everybody.
    And Europe talks about border tax adjustments too. The
    companies are just as worried there as we are here about what
    happens to our industries. But I think they recognize that
    there is a much better way forward. And this is something that
    I would really like to see us do.
        The U.S. and the Asia-Pacific Partnership started this
    thing, but, as usual, they let it die by being unwilling to do
    anything serious. It is a classic story of everything we touch
    turns to you know what. That is what has happened in terms of
    the U.S. position.
        So I think there is an opportunity here, there is an
    opportunity across the aisle here, to deal with this issue, and
    we really got to grab that piece.
        Thank you.
        [The statement of Mr. Helme follows:]

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        The Chairman. Thank you, Mr. Helme.
        Energy bill, step one. Mandatory cap, auction and trade
    next.
        Our next witness is Myron Ebell. Mr. Ebell is director of
    energy and global warming policy at the Competitive Enterprise
    Institute. Before joining the Competitive Enterprise Institute,
    Mr. Ebell focused on environmental issues as policy director
    for Frontier of Freedom, as a senior legislative aide for our
    good friend and colleague on this committee, Congressman John
    Shadegg, and has also served as the Washington representative
    of the American Land Rights Association.
        We welcome you, Mr. Ebell. Whenever you are ready, please
    begin.

                        STATEMENT OF MYRON EBELL

        Mr. Ebell. Thank you, Chairman Markey. And thank you for
    having me here today.
        I am sorry to say I cannot begin by congratulating you on
    the anti-energy bill that was enacted. One of the reasons I was
    not able to go to Bali this year is that you all have been
    keeping us so busy with things that we oppose. But I do--but
    congratulations for getting it through. I am not pleased, but
    congratulations.
        The Chairman. Mr. Ebell, I did not go, but I went by Avatar
    to Bali. And I would recommend that the next time you can't
    travel.
        Mr. Ebell. Right. Right. Well, I have been to many of
    these. You know, it is interesting that 15,000 people were so
    eager to get out of our winter temperatures and fly to a
    tropical paradise. Of course, they used a bit of energy. I
    don't hold that against them.
        I would also like to say I am very pleased that two members
    from my native State are here. One of them I consider my own
    Congressman. He is from the right side of the Cascades, as I
    like to think of it.
        I would like to say I think that the Bali talks need to be
    put in some kind of context. And what I would like to say is
    that if global warming is a problem, then the Kyoto approach
    cannot possibly be part of the solution. It is being tried
    halfheartedly in some of the countries that ratified the Kyoto
    Protocol, and it is not working. Even in the European Union,
    where global warming is a religious commitment, emissions are
    going up. Emissions have been going up since Kyoto was ratified
    in 1997; they are continuing to go up.
        They are going up much more rapidly in some European
    nations than in the United States, even though those nations
    have lower economic growth and virtually no population growth.
    Our emissions have tracked population growth, and we have been
    putting on about one point of emissions growth for every point
    of population growth. And we have been putting on about three
    points of economic growth for every point of emissions growth.
    Spain has been putting on more than one point of emissions
    growth for every point of economic growth, for example.
        Now, if Europe were really serious about this issue, I
    think there would be some indicators. For example, if the Brown
    Government decides not to go ahead with the new runway at
    Heathrow, or if they decide to cancel the proposed coal-fired
    power plants, or if the German Government decides to back down
    on auto emissions controls and tells that their big auto makers
    will just have to stop producing so many big cars, I think that
    would be an indication that they are serious.
        But, you know, we have this cap and trade before the
    Congress. Cap and trade is not working in Europe except to
    benefit big special interests. Places like hospitals are having
    to buy credits from big oil companies, for example. This is a
    huge wealth transfer, but it is not an emissions reduction
    program.
        And I have brought copies of a paper, an exhaustive paper,
    by a think tank in London, Open Europe, that shows why the
    European emissions trading scheme is not working. I would point
    out that the preface to that large paper is by a Green Party
    member of the Swedish parliament.
        Now, I generally agree with Mr. Sensenbrenner about Bali. I
    think there are reasons to be positive.
        And I would say, first of all, the U.S. tends to be
    isolated at all of these negotiations on multilateral
    environmental agreements. And the reason is because we are
    unusual in that, if we ratify a treaty, it has the force of law
    and it can be enforced in Federal courts against the
    administration and against the Congress. That isn't true of any
    other country in the world. That is why if Japan or Canada or
    the European Union fail to meet their Kyoto targets, they will
    say, ``Oh, well, we tried. We are morally superior because our
    intentions were good.'' That would not be possible if we
    ratified the Kyoto Protocol or a succeeding agreement. We would
    have to do what we said. It could be enforced in Federal court.
        But I do not think the U.S. is isolated anymore at these
    negotiations; I think it is the European Union that is
    isolated. The United States now leads that. And you will see
    this if you look at the positions of Japan, Canada, Australia
    even, even the new government in Australia, Russia, many of the
    G77 members, and I think we have found a lot of common ground
    with China and India.
        Very briefly, the common ground is mandatory regulations
    won't work if the technology and economics don't work; that,
    therefore, future agreements must first focus on technology, on
    adaptation and on some side issues, which I think are
    important, like forestry.
        So I will stop there. Thank you very much.
        [The statement of Mr. Ebell follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chairman. Thank you, Mr. Ebell, very much.
        The Chair will now recognize himself for a round of
    questions.
        First you, Mr. Clapp, and you, Mr. Meyer. Do you think that
    the major economies meetings initiated by the United States can
    make any positive contribution to the U.N. negotiating process,
    or are they more likely to undermine it?
        Mr. Clapp. I think what is important, Mr. Chairman, is that
    the administration's objectives in the major emitters talks are
    quite unclear. We have two sets of talks going on here
    simultaneously.
        I mean, there is an aggressive agenda that has to be
    followed to achieve an agreement in Copenhagen under the U.N.
    process by 2009. At the beginning of the Bali conference, the
    Chairman of the White House Council on Environmental Quality
    delivered a letter to the other delegates outlining a process
    of monthly meetings between now and July, all over the world,
    with an agenda to come to some sort of agreement by a leaders
    summit in July.
        Well, every country only has so many global warming
    negotiators. It is very unclear to me, and I think the
    administration should make clear what its objectives are,
    because it has the prospect of really undercutting the ability
    to continue the U.N. negotiations.
        The Chairman. Mr. Meyer.
        Mr. Meyer. Let me just build on that. I think it could be a
    useful process if the U.S. would put forward a specific
    proposal of what we want to do. The European Union has said
    that they want to try to stay below the 2 degree Celsius
    temperature increase that I mentioned. Japan has put forward
    its Cool Earth 50, calling for a 50 percent reduction in global
    emissions by 2050. The U.S. refuses to put any specific
    proposal on the table.
        And I asked about this in Bali. I said it is like inviting
    people to a dinner party and not serving food. The main purpose
    of the September meeting was to talk about the global long-term
    goal. The U.S. put no proposal on the table. If they don't put
    a serious proposal on the table in Honolulu, my own view is it
    is not a serious effort.
        If not 2 degrees, what? What risk are we willing to take
    with the planet? What risk are we willing to commit future
    generations to? Is it 3 degrees, 4 degrees, 10 degrees? We
    don't know. The administration refuses to put forward a
    concrete proposal either for long-term global reductions or for
    near-term industrialized country targets.
        The Chairman. Thank you, Mr. Meyer.
        Mr. Ebell, in your testimony you say that global warming
    may be a problem in the future, but we should leave it to
    future generations to deal with it, because they will be better
    equipped to do so.
        Do you reject the IPCC's conclusion, endorsed in the Bali
    roadmap, that climate change represents an urgent problem and
    that continued delay will foreclose options to save the planet?
        Mr. Ebell. That is an involved question, but I would say,
    in general, yes. I think that if you look----
        The Chairman. You do reject it?
        Mr. Ebell. Yes. If you look at the most extreme scenarios
    from the IPCC computer projections, you will find that, even
    under what is called the A1 FI scenario, in 2100 the high-
    growth, high-emissions scenario leads to a richer and warmer
    world rather than a poorer and cooler world under some of the
    emissions-constrained scenarios.
        So I think, in fact--to give you another example, cold
    weather kills a lot more people than warm weather. About over
    10 times more people die from cold weather every year than warm
    weather. Now, we know that, under the global warming theory,
    most of the warming will occur in the upper latitudes in the
    winter. And all the projections from all of these models are
    exactly--they mirror what has been happening in the 20th
    century; namely, hot-weather mortality has been going down, but
    cold-weather mortality has not been going down nearly as much.
        The Chairman. Thank you, Mr. Ebell.
        Mr. Ebell. So, from a simple utilitarian calculation, a
    little bit of warming in the upper latitudes will lead to an
    increase in human flourishing.
        The Chairman. Let me go to Ms. Figueres.
        Your testimony discusses the watershed decision of
    developing countries at Bali to agree to consider mitigation
    actions under a new global climate change agreement.
        Given the current administration's intransigence on climate
    change, what explains developing countries' willingness to open
    up to this discussion?
        Ms. Figueres. Thank you, Mr. Chair.
        The willingness comes, I believe, from desperation. The
    fact that the United States has been completely unwilling to
    live up to its very visible responsibility has led developing
    countries to say, okay, then that means that we need to
    accelerate the pace at which we will accept our responsibility
    in order to bring the United States on board. And I think,
    really, this is a very, very frank invitation to bring the
    United States on board.
        And if I could just add one comment to your question
    previously about the memo, from the developing-country
    perspective I think one of the major issues and arguments that
    has been said by the United States is that they needed a
    parallel process because the developing countries were not
    willing to play fairly within the climate regime. Bali has
    proved that that is no longer a valid argument.
        Thank you.
        The Chairman. Thank you.
        My time has expired. The Chair will recognize the gentleman
    from Wisconsin, Mr. Sensenbrenner.
        Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
        As you know, I am, kind of, more a veteran of the climate
    change wars than any of my colleagues that are sitting here on
    the dais. And I harken back to what Senator Kerry said at Bali,
    and that is that any treaty that does not involve the third
    world is doomed to failure in the United States Senate.
        I think that is a given, that is a political fact of life.
    And I salute Senator Kerry as a leading Democrat in making that
    observation to delegates who might not have wanted to have
    heard that message.
        Now, that being said, I guess I would like to ask the
    panelists to briefly say, as a result of Bali and the softening
    of the administration's position, the signing up of the
    developing countries, and particularly China and India, do you
    think we are going to hear less demagoguery from the European
    Union on this subject?
        Because what the EU has been saying, and particularly what
    the Germany Environment Minister, Herr Gabriel, has been
    saying, certainly is not going to bring about the type of
    consensus needed to wrap this up in 2 years.
        Who would like to be first?
        Mr. Helme. My sense is that we really saw a coming together
    of the EU with the developing world and most of the other
    nations in agreement on how to move forward. And I think, as I
    said in my testimony, the EU's putting these targets out set a
    bar that was very useful. I think----
        Mr. Sensenbrenner. Okay. Now, let me interrupt you on that.
    The deal that was made in Berlin, which exempted the developing
    world and gave the EU a much lower emissions reduction target,
    the so-called EU bubble, as a result of two factors that
    occurred since 1990 that had nothing to do with this issue,
    basically was a deal where the developing world didn't have to
    do anything and the EU was able to what we refer to in this
    business as ``pose for holy pictures'' in playing a game of
    economic ``gotcha'' against the U.S. and Japan and Russia and
    perhaps some smaller countries like Australia and Norway as
    well. Now, if we are going to continue playing the game of
    economic ``gotcha,'' you are not going to see very much support
    in the United States Senate for what proceeds henceforth.
        And, you know, I think that what I am interested in seeing
    is whether the EU will admit not only that Kyoto was a failure
    but the mistake that made Kyoto a failure was the agreement
    that came from Berlin in 1995.
        Mr. Helme. I think there are two responses.
        One, we are beyond that, as everyone on the panel has said.
    I mean, we basically had that clear statement that verifiable
    national actions will be part of this. And we have the track
    record I presented in terms of what China, India, Brazil and
    Mexico have already done.
        I think in terms of the EU, they did make significant
    reductions, and they are now prepared to participate in that
    larger effort that will go forward in terms of with developing
    countries. So I think we are going to see a significant package
    coming forward.
        So we are beyond, sort of, the history of, did we do the
    right thing on Kyoto or not? We have now stepped up to the
    point where everybody is going to now take real steps.
        Mr. Sensenbrenner. Unfortunately Mr. Markey and I couldn't
    go to Bali because we were busy doing the job we were elected
    to do here. But reading the quotes in the press, particularly
    from Minister Gabriel, did not give me much heart that the EU
    had gotten the message, and particularly the largest economy
    within the EU, which is that of Germany.
        Mr. Ebell. Could I reply to your question, Mr.
    Sensenbrenner?
        I think we really can't expect much more from the European
    Union than demagoguery because that is really all they have.
    They are not willing to take the actions that they committed to
    to reduce their emissions. And, as you have already noted,
    their emissions went down between 1990 and 1997 for reasons
    that had nothing to do with emissions reductions.
        And so, I think what we can hope for in future negotiations
    is that the U.S., together with Japan, Canada and other several
    leading nations, will be able to lead these negotiations out of
    the Kyoto dead-end. And as long as the EU is unwilling to match
    its actions to its rhetoric, I think they will become more and
    more marginalized in this.
        Mr. Helme. Mr. Sensenbrenner, the facts simply don't bear
    out what Mr. Ebell is saying. And for the record----
        Mr. Sensenbrenner. Mr. Helme, it is my time. And I will
    just say that the two factors that allowed the EU to reduce
    their emissions from 1990 to 1997 were the fact that Mrs.
    Thatcher decided to put the British coal-miners union out of
    business and change electric generating in the U.K. from coal
    to natural gas, and the merger of East Germany and West Germany
    and the closing of the Stalin-era East German industries which
    belched hot air and greenhouse gases and were environmental
    disasters and workplace safety disasters. That had nothing to
    do with compliance with the Rio Treaty.
        My time is up. I yield back.
        The Chairman. The gentleman's time has expired.
        The Chair recognizes the gentleman from Oregon, Mr.
    Blumenauer.
        Mr. Blumenauer. Thank you, Mr. Chairman.
        And I would invite any of our other panel members who would
    like to submit for the record their view of reality in this
    regard.
        And I would just like to begin by saying how much I
    appreciated the testimony that has been presented in written
    form. They are terrific documents dealing with the broader
    context, and the reference that we are really sort of moving
    beyond Kyoto, we are moving to a new era, the rest of the world
    is moving in an exciting direction. And I really appreciate the
    context that you have provided. I think this ought to be
    required reading for everybody in Congress. I think it would be
    extraordinarily helpful. But I do invite you to supplement your
    submission.
        Part of what is interesting for me is that the United
    States, under a Republican administration, made some
    commitments, made commitments. This didn't pop out of the
    Clinton administration or other fuzzy-headed people. This was
    the result of negotiations where the United States was a
    partner. And the United States turned its back on
    implementation and, in fact, resisted that.
        Let's go back to where that was in 1992. It is not that it
    is impossible. And you have documented some of the area. I come
    from a city that is at 1990 level of emissions and has had 4
    consecutive years of--and I appreciate, Mr. Ebell, that is on
    the other side of the mountains. But it is doing something that
    has actually helped that community, and it has met those
    commitments.
        Mr. Walden. Careful now, the other side of the mountain
    thing.
        Mr. Blumenauer. Just referring back to his testimony, just
    his testimony, Greg.
        I am intrigued, however, about where we go from here. I
    have been in a number of international meetings where the
    United States has been dragging its feet, not because it is
    going to get sued, but because it would be held accountable. I
    mean, think about our failure to meet our commitments in terms
    of global water and sanitation, where we were, in Johannesburg,
    a retarding influence, not because we would be sued but because
    we would have to perform.
        I am curious if, as we are moving into this next year,
    where it is an election year, where we have greater consensus
    around the world, where the people who have been dragging their
    feet, both in the developing and the developed world, are sort
    of launching ahead, I am wondering if our panel has some
    suggestions or recommendations of what we might do in that next
    step, Mr. Chairman, as we plot things that might find their way
    into law and help frame the next steps.
        If we can just briefly have our friends respond.
        Mr. Meyer. Let me start, because I think the agreement
    reached in Bali does create a place for that conversation.
        The United States is neither fish nor foul. We haven't
    ratified Kyoto so we haven't participated in the discussions
    since Montreal in the last 2 years, the working group there,
    about mitigation potential, cost-effectiveness, what we can do
    vis-a-vis other industrialized countries. And, of course, we
    are not a developing country, so it is not appropriate for us
    to try to put ourselves in the same box within the convention.
        We have an agreement now creating the space for developed
    non-Kyoto countries like the U.S. to put on the table what they
    can do, to have civil society come in and talk about analysis
    that has been done in the United States about the cost-
    effective mitigation potential, to have other others put
    forward their information about that.
        This next year is really an analytical and research, get-
    the-facts-right year to prepare for the serious, hard
    bargaining in 2009. And there is a space there for Congress,
    for civil society, for our national labs, for NGOs, to put
    forward the facts as we see them about how much the U.S. can
    do.
        Mr. Clapp. Mr. Blumenauer, I would really encourage the
    members of this committee, as I have many Members of the
    Senate, to become personally involved in these negotiations.
    Because we are going to find ourselves in a position,
    regardless of what the Congress does next year in terms of
    debating legislation, where it is extremely likely that we will
    be in the middle in the winding up of major negotiations
    concluding in a treaty at the same time that Congress is
    seriously moving forward on the first legislation that will
    bind the United States to emissions reduction.
        So the two debates are going to affect each other. And I
    think it is rather incumbent upon Members of the Congress to
    begin talking to a number of foreign governments and really
    familiarizing themselves with this position, because the two
    debates are going to collide.
        I want to go back for a moment to what Mr. Sensenbrenner
    was asking. Regardless of what one wants to say about the
    European Union and the effectiveness of the measures it is
    taking, according to our own Department of Energy, Europe's
    projected emissions increases between now and 2030 are .3
    percent per year. Japan's will be .1 percent per year. That is
    one-third and one-tenth of projected U.S. increased emissions.
        So there has been a significant--for whatever reason--and
    there are policy reasons for it--Europe and Japan are actually
    making major progress in improving their emissions, whereas the
    United States, to go back to Myron's comment, is currently in
    violation of its treaty obligations under the Framework
    Convention on Climate Change, and we are 18 percent above our
    1990 levels.
        Mr. Blumenauer. I am happy to have given the remainder of
    my time to the answer to Mr. Sensenbrenner's question.
        Mr. Clapp. My apologies.
        Mr. Blumenauer. No, no, no.
        Had I had time, Mr. Chairman, one area that I happen to
    agree with Mr. Ebell--and I think my colleague from Oregon, Mr.
    Walden, would concur--that there is a huge role in terms of
    worldwide practice of forestry, what happens in this country. I
    am going to be lobbying you. We have some legislation pending
    on illegal logging. But there are a range of things. This might
    be something that might be worthy of a hearing in the future
    where we could, I think, make some real progress.
        Thank you, sir.
        The Chairman. Great. The gentleman's time has expired.
        And Mr. Sensenbrenner is a formidable proponent of this
    opposition, so I think this is very helpful for everybody to
    have a chance to come back at Mr. Sensenbrenner.
        Mr. Helme. Could I have a reaction and then an answer?
        The Chairman. No. I think other members will give you that
    opportunity.
        The Chair recognizes the gentleman from Oregon, Mr. Walden.
        Mr. Walden. Thank you, Mr. Chairman.
        And I want to thank our panelists for their testimony
    today. It is helpful to get your views on this topic.
        I want to pick up on a couple of points, one from my friend
    and colleague from Oregon, and ask you each to talk about what
    the United States could do domestically on forest practices on
    its own land that might assist in carbon sequestration or
    mitigating against unnecessary release of carbon and other
    greenhouse gases, principally because the record wildfires we
    are seeing and given the Forest Service's analysis over the
    last decade of warming climate and its effect on forest, with
    drought and bug infestation.
        And if you could keep your answers fairly brief, because I
    have got another question, is there anything specifically you
    or your organizations have relative to management changes you
    would recommend on Federal forest lands?
        Mr. Ebell. Yes, indeed, Mr. Walden. I grew up on a ranch in
    Baker County, Oregon. We still own that ranch. It adjoins BLM
    and Forest Service land, so I have a great deal of practical
    experience in Federal land management.
        And I would say the very most important thing you could do
    would be to privatize the national forests. The management of
    those forests is a disaster. It is a continuing disaster. They
    change management practices and philosophies, but the
    continuing undercurrent is it is always a disaster, because
    they don't have the incentives to manage their land properly,
    the way private owners do.
        Thank you.
        Mr. Walden. All right. Thank you, Mr. Ebell.
        Mr. Helme, do you have any comments? Again, briefly.
        Mr. Helme. I think there is a very interesting provision in
    the Lieberman-Warner bill that would be attractive here. In the
    allocation of allowances, they provide some of the allowances
    to forestry and agriculture folks who make improvements--
    reforestation, afforestation and so on. The idea here is it is
    not offsets, it is in addition to. So you have a basic cap,
    then you take so many allowances out of the pool, sell them for
    the money, pay the money to farmers----
        Mr. Walden. Would that apply to Federal forest lands?
        Mr. Helme. Only in-holdings, not--no. These would be for
    private people, basically.
        Mr. Walden. All right.
        Ms. Figueres.
        Ms. Figueres. I could answer that with respect to our
    countries but not with respect to the United States. I will
    hold off.
        Mr. Walden. All right.
        Mr. Clapp.
        Mr. Clapp. I will pass. I think that Ned covered what I
    would have said.
        Mr. Walden. All right.
        Mr. Meyer.
        Mr. Meyer. I can ask our forestry experts to get a response
    for you for the record. It is not my area of expertise. But one
    of our scientists is the lead author of the IPCC's ``Land-Use
    Change and Forestry'' chapter, so I will try to get something
    for you on that.
        Mr. Walden. That would be helpful. I would appreciate it.
        Mr. Helme. One additional suggestion would be to keep, in
    this debate, in essence, at Bali, we are looking at national
    baselines for performance of forests across the board. We do
    that sort of informally in the U.S. It would be very useful to
    do that and sort of keep track of what are the net flows on
    these Federal lands.
        Mr. Walden. Right. That would be helpful. And, certainly,
    the work internationally on forestry I think is extraordinarily
    important. We all recognize the importance of healthy forests
    in sequestering carbon. Eradication of the forest doesn't help.
    And, certainly, these fires we have seen in the West are a real
    problem.
        I want to move to carbon sequestration technology. I was in
    Europe with the Energy Committee earlier this year. We were
    looking at different facilities.
        Can anybody talk to me about the status of existing
    technology to do both capture and compression and then
    sequestration? Is the technology available today? If I have a
    coal-fired plant, is there technology available to me today
    that will capture, compress, which you have to do, and then
    sequester carbon? And if not, what is the timeline to get
    there?
        Mr. Helme. My sense is the answer is yes, that we have done
    the different steps in carbon capture sequestration at
    different points. We haven't done it in one integrated way. The
    oil industry has done this for years with oil refineries, where
    they capture the carbon and, of course, then reinjected for
    secondary and tertiary oil recovery.
        So I would argue the technology is there. We still have
    some questions about the cost. I mean, if you talk to Exxon,
    for example, some of the major oil companies, they feel they
    can do this. They know how to capture it. They do it now, in
    terms of secondary oil recovery.
        So I think it is there. It is a question of putting all the
    pieces together. It is not something the utility industry has
    done. It is something more of the chemicals and the gas and the
    oil industry.
        Mr. Walden. Sure. But I am trying to find out--because when
    we did SOX and NOX, the acid rain
    capture, those emissions, that technology, I understand, was
    available at the time that cap and trade was put in place. And
    I keep hearing that this technology for carbon capture
    compression sequestration is not perfected yet.
        Mr. Meyer.
        Mr. Meyer. Let me just build on what Ned said. I think the
    technology is available. It is a question of price. My
    understanding is it would add now somewhere of 60 to 70 percent
    to the price of a conventional coal plant to retrofit this
    technology on. And then, when you are going up to scale, to
    find the reservoirs to permanently sequester the carbon is a
    challenge that our agencies are working on. There is
    demonstration projects around the world.
        The goal, I think, of DOE is to try to get that increased
    cost down to maybe the 10 to 15 percent range, so it is more
    viable economically. But even there, we are going to have to
    help countries like China and India cover that spread between
    conventional unconstrained coal and carbon capture and storage
    coal.
        Mr. Walden. Two questions on that point, as a follow-up. Is
    the issue about where do you put this carbon, how do you keep
    it there, and what happens if it comes out?
        And the second is, have you cost out the additional price
    per megawatt hour, kilowatt hour, whatever matrix you want,
    that this capture and sequestration will add to, say, the
    average power bill?
        Mr. Clapp. Mr. Walden, I think we are at the point where
    the real issue is demonstrating the cost at scale. You have
    utilities in the United States. I mean, Jim Rogers of Duke
    Energy has said this publicly many times, that he simply cannot
    justify to his shareholders, because there is no regulatory or
    legislative requirement in place, the kind of investment that
    is necessary to do demonstration projects. And that is where we
    are, at this point.
        Mr. Walden. So you are telling me that I could go out today
    if I owned that coal-fire plant and that technology is
    available to me to put in my smoke stack or carbon stack,
    whatever we call it now, and the technology is there to run a
    tube and put the carbon in the ground?
        Mr. Clapp. No. What I said is that we need the
    demonstration projects that bring it up to scale.
        Mr. Walden. So it is not available now?
        Mr. Clapp. It is not available at a commercial scale now.
        Mr. Helme. You need incentives to make it go.
        Mr. Walden. I am trying to get the first piece, which is,
    is it technologically ready? What does it take to get there?
    And then, at what cost?
        Mr. Ebell. I think it is ready in the sense if you are
    willing to spend a lot more money and you are willing to do it
    at a small scale.
        I think that two things should be really kept in mind. One
    is the current technology only captures two-thirds of the
    carbon dioxide that is produced. And secondly, I think the real
    thing, besides the technology, are the legal and political
    obstacles to transport and pressurize storage underground. I
    think those are----
        Mr. Walden. We heard that in Europe, too, that if carbon is
    a pollutant, you are putting a pollutant in the ground, and
    some laws will have to be changed here and elsewhere to deal
    with that.
        Is that true?
        Mr. Helme. That is true.
        I would add, in terms of Europe, Mr. Sensenbrenner's
    favorite topic, Europe has committed to building 10 or 12 of
    these demonstration plants by 2015. They will have in place
    next year a new framework for regulating this very question you
    are asking. It will be completed by the end of 2008, so that we
    can go forward with those plants.
        I think what we need here is we need the same kind of
    commitment in terms of demonstration. We are still just trying
    to build one FutureGen.
        Mr. Walden. Thank you, Mr. Chairman.
        The Chairman. The gentleman's time has expired.
        And I will just make this point, that, as part of the
    legislation the President is signing related to energy, that
    there is $6 billion, $6 billion worth of Federal Government
    loan guarantees for carbon capture and sequestration in the
    legislation. So we are also moving much more aggressively on
    that path.
        Mr. Blumenauer. Mr. Chairman, I am concerned, with the
    lateness of the hour, people have missed lunch. I have an
    alternative energy source: a fruit cake that I make every year.
    It may not be legal after the next round of environmental
    protection. So I was just going to pass this down here, if
    there is no violent objection.
        The Chairman. Mr. Sensenbrenner is raising ethics
    questions, but I think we will say that, for the purposes of
    our Congressmen, we can accept fruit cake from other
    Congressmen.
        The Chair recognizes the gentleman from Washington State,
    Mr. Inslee.
        Mr. Inslee. Thank you.
        Fruit cake, the ultimate renewable energy, I suppose.
        I wanted to ask Mr. Helme to elaborate on the European
    experience of the carrots rather than the sticks on imports
    from countries that don't have aggressive carbon measures.
        Could you tell us how mature those efforts are and what
    successes they may have had and what lessons we ought to learn?
        Mr. Helme. Okay. I would be happy to.
        As I mentioned, the U.N. has this high-level group on
    competitiveness, energy security and climate. And it has been
    meeting for 2 years. And I participated 2 weeks ago in this
    high-level conference with 500 executives there. They agreed on
    a path that would be to encourage key developing countries to
    work with them on setting carbon intensity goals for key
    competitive sectors, so cement, steel, pulp and paper, oil
    refining, that sort of thing. And the idea here would be you do
    a benchmarking, so you say what is the best-practice technology
    today for a wet kiln cement plant? That comes at some level of
    carbon per ton of cement produced.
        You would ask the Chinese to look at that, figure out what
    that means in terms of the context of China in terms of its
    cost picture, could they do that with a pay-back or is that
    going to cost them a fair amount, what does that look like. You
    then ask the Chinese to set a target. And the Chinese would be
    offered incentives in the form of technology finance to go a
    little further, to set a little tougher target.
        That would be their target. It would be a no-lose target.
    They would set that target as part of their commitment in this
    next period, 2012 to 2020. They would receive the financing as
    an initial incentive on the technology side. And then if they
    beat the target, they could sell credits into the international
    market.
        This is an idea that has been tested among developing
    countries. Shown a lot of interest in it, because they are
    interested in the same way, thereafter improving the efficiency
    of these sectors. So it is got an appeal on both sides.
        It moves you toward that level playing field, so that all
    of us would have a similar kind of commitment to technology,
    and we would take this carbon issue off the table. It doesn't
    take labor costs off the table, but it takes the carbon issue
    and the technology issue off the table, and it gets the new
    technology in the hands. If you talk to China, what do they
    want from this treaty? They want the most advanced
    technologies. And this is a way to offer that to them.
        And the EU sees this as a very promising incentive path,
    which gets us to the same place I want to go. I want a level
    playing field in cement and steel so I don't lose market share
    based on carbon standards. And that is where we are heading.
        So a very promising opportunity, as opposed to I am going
    to stick you with taxes or I am going to make you buy
    allowances if you are not doing as well as I would like you to
    do in terms of your carbon program. So it is a much more
    positive approach.
        Mr. Inslee. You said if they met or exceeded these
    standards, they could sell credits into the system. Was there a
    cost if they did not meet these standards?
        Mr. Helme. No. There would be--understand that to get this
    financing for technology, they have to have a contract, they
    have to build the plants, they have to operate the plants. They
    can't just say, ``Oh, thanks, we like the money, and it is very
    nice.'' It is a contractual arrangement between that country
    and the Annex 1 countries, who are often the financing.
        And they can use that money for a variety of things. We
    were in discussions yesterday in China about their 20 percent
    goal. And one of their difficulties is getting the provinces to
    meet those targets. They set the national goal; it is the law.
    But then they have to get this done at the local level. So they
    are saying, well, could we use the money for tax credits, could
    we use the money for having the cement association in China
    work with its members to get compliance? And that is the kind
    of thing we are looking at.
        And it is a good opportunity of collaboration with the
    World Business Council for Sustainable Development and others.
    So it is a very promising opportunity.
        Mr. Inslee. What is the best way to really delve into that
    proposal from Europe? I mean, has anybody got sort of a master
    paper describing that?
        Mr. Helme. I can certainly share with you, I think, as I
    mentioned earlier, the U.S. is on this path. The Asia-Pacific
    Partnership is developing the very benchmark data. The trouble
    is the U.S. has no credibility because, at the end of the day,
    they won't put any money on the table for incentives and they
    won't take any targets. If they did, their good idea would get
    a lot of momentum.
        I mean, I think Myron was saying there is some
    collaboration with China and India. There is. But the point is,
    where is the beef, where is the incentive money? That has what
    has been lacking. Where is the action?
        Mr. Inslee. Could you put up that--you had a graph showing
    relative improvements in CO2 between the U.S. under
    McCain-Lieberman and Chinese existing----
        Mr. Helme. Yes. Here it is. Can you see it from back there?
    The red is China, Brazil and Mexico. The blue is the European
    Union's 30 percent target that they set for 2020. The gray on
    the left is Lieberman-Warner in 2015. And the green on the
    right is Lieberman-Warner in 2020. So to give you a feel for
    the targets.
        And these are reductions below business-as-usual, okay.
    Because, remember, China is growing 100 percent, so they are
    shaving the growth. These are not reductions from 1990 levels
    or anything like that. But it still shows you that--and this is
    laws on the books today.
        This isn't projections of what they might do some other
    time. This is laws on the books today, if fully implemented, if
    they did 100 percent implementation, which is always tough in
    developing countries.
        Mr. Inslee. Take this with a grain of salt. I mean, I
    haven't studied this. But it is actually--what is interesting
    to me, if you look at that graph, is even if we adopt McCain-
    Lieberman, even if it was implemented, we are still just
    marginally ahead of the amount we would be reducing compared to
    China, even if we adopt a cap-and-trade system, relative to
    their measures already.
        Mr. Helme. That is exactly right. And China's numbers are
    for 2010. McCain-Lieberman-Warner is 2020. So they are doing
    this faster by 10 years, which is what we need actually.
        Mr. Inslee. So is that a comment on--and I support the cap-
    and-trade system.
        And my time is up, so I will talk to you after this
    hearing. Thank you.
        The Chairman. The gentleman's time has expired.
        The Chair recognizes the gentleman from Missouri, Mr.
    Cleaver.
        Mr. Cleaver. Thank you, Mr. Chairman.
        I would like to also say God bless Mr. Blumenauer for the
    spirit of giving. Thank you, sir.
        The gentlewoman from Tennessee has left. And I certainly
    will not be disrespectful. On two occasions, she has presented
    the word, the European ``scheme,'' as if it is something like
    the guy who was able to drill underground in Texas when I was a
    kid to tap into other oil. That was a scheme. In Europe, the
    word ``scheme'' is--the English word ``scheme'' is synonymous
    with the word ``plan,'' ``diagram.'' It has nothing to do with
    some kind of system of ripping off folks. It means map; it
    means sketch. And it gives off the impression to some that the
    Europeans are announcing we are ripping you off. And if they
    were doing that, they would use another word. So she has done
    that twice, and I just wanted to say that.
        The other thing, Mr. Ebell, I wasn't sure if you were
    serious when you were saying that the forest should be operated
    privately. Were you making a point, or do you actually--I mean,
    do you----
        Mr. Ebell. Mr. Cleaver, absolutely. Federal land managers
    do have the correct incentives to take care of what they are
    managing because they don't own it. So, yes, absolutely.
        Mr. Cleaver. Okay.
        The developing nations and the poorer nations must figure
    this risk that are especially vulnerable to climate change,
    particularly concerning floods and droughts and other
    disasters. These nations, like many of those in sub-Saharan
    Africa and southeast Asia, are least responsible for the
    effects of global warming.
        What can the nations of the world like the United States,
    like the EU, do to assist some of the poorer countries, third-
    world countries in attaining the technologies to compensate for
    the effects of global warming? Costa Rica probably is not
    necessarily in that category, but certainly southeast Asia and
    African nations are.
        Ms. Figueres. Yes, exactly. Southeast Asia, Africa, all the
    small island states and the low-lying, least-developed
    countries are all in that situation. This is, in fact, one of
    the major inequities of climate change, the fact that you say
    that all of these countries are major victims without having
    contributed to the problem in the past or in fact in the future
    in most of these countries.
        What the United States could do very concretely is
    contribute to the various instruments that are being developed.
    One of the issues in the Bali decision, one of the chapters, is
    adaptation; and there are very concrete measures there as to
    what all countries could do together in order to support
    particularly those countries that will need to adapt and that
    actually urgently need to adapt before they completely
    disappear like the small island developing states.
        In addition to contributions to the adaptation fund, there
    is finally some decision on the governments of the adaptation
    fund and that also would require a very clear leadership of the
    United States both in terms of financing as well as in terms of
    ascribing where funds would go to.
        Mr. Cleaver. Thank you. Mr. Meyer.
        Mr. Helme. Just commenting on that, Congressman, the thing
    to get clear here is the scale of the need. The World Bank
    estimates that we need 40 billion or 50 billion a year. OXFAM's
    estimate is 50 to $80 billion a year as a starting point to
    build capacity in these countries to deal with adaptation in
    the climate change. We are putting two orders of magnitude less
    a year on the table, hundreds of millions, not tens of
    billions.
        The other point I would make is that we have to do
    aggressive mitigation if we want to make an adaptation of
    infeasible. We did an analysis, for example, for our own State
    of California for Governor Davis and Governor Schwarzenegger,
    which showed if have you an aggressive mitigation path in
    California and the world you would lose about half of the
    Sierra snow pack by 2090. If you have business-as-usual growth,
    you would lose virtually all of the Sierra snow pack by the
    middle of the century; and that's the drinking water supply for
    California, that's the central valley irrigation. That's when
    Governor Davis and Governor Schwarzenegger got it. This is a
    core economic issue.
        So to have adaptation be feasible and even on the bounds of
    being affordable, you have to have the most aggressive
    mitigation scenario you can have. Even with that, we are going
    to have impacts that we are experiencing now that will get
    worse over the next 20 or 30 years. It is our moral
    responsibility to help these countries who had no role in
    creating this problem deal with the consequences of our past
    behavior.
        Ms. Figueres. Just to add a half a sentence to that, yes,
    it is the moral responsibility; and it is not just a moral
    responsibility. Actually, from the point of view of the United
    States, this is a long-term security issue for the United
    States. If you think that we are having a hard time now dealing
    with the immigration issue in the United States, that is
    nothing compared to the climate immigration waves that we will
    have unless we help these countries deal with the situation on
    their own territory.
        Mr. Clapp. Let me just add one more comment to that.
        The nation projected to be the most rapidly impacted in
    terms of loss of water supplies worldwide is actually not in
    Africa. It's Mexico. So the question of immigration--is a very
    serious one.
        In addition, this actually has implications for the
    targets--the worldwide reduction targets that were on the table
    in Bali. Those are actually projected, no matter how aggressive
    they may seem in our context, to provide us with only a 50
    percent chance of avoiding the worst impacts of climate
    changing. So the measures were not extremes.
        Mr. Cleaver. How much time do I have left?
        The Chairman. Five seconds.
        Mr. Cleaver. General Motors National Park--I mean----
        Mr. Ebell. No. No. I am sorry. I do not support the
    privatization of national parks, but in terms of managing our
    national forest they are and they have been for a long time a
    disaster, and it is because people who don't own things don't
    have the incentive to take care of them. They have the
    incentive to use them up.
        Therefore, I really think that the best thing we can do in
    terms of adopting the good kinds of forestry practices that Mr.
    Walden has been an advocate of would be to privatize the
    national forest. They wouldn't end up in General Motors' hands,
    but a lot of them would probably end up in Ted Turner's hands.
    So you can have either good or bad feelings. I don't know.
        Mr. Cleaver. Enron National Park.
        The Chairman. The gentleman's time has expired.
        The Chair recognizes the gentleman from New York State, Mr.
    Hall.
        Mr. Hall. Thank you, Mr. Chairman, and thank you all for
    your testimony.
        I wanted to ask Mr. Meyer, regarding that worst-case
    scenario, which is Bali gives us a 50 percent chance if we
    manage to put this agreement together of avoiding--what is your
    organization projecting as likely sea level rise should we hit
    that worst-case scenario?
        Mr. Meyer. Well, it is not what my organization is
    projecting. It is what the International Government Panel on
    Climate Change is projecting, that has been certified by all
    governments in the world. If you read line by line, there are a
    couple of stories there: one, that the sea level rise we are
    going to see from thermal expansion and glaciers melting, that
    kind of thing--what is really not okay was the more rapid--our
    concern about disintegration of the Greenland ice sheet, the
    Antarctic ice sheet. Some renewed science is coming out about
    the flow rates there and the water going down and lubricating
    the flow of those glaciers.
        I would encourage you to have a hearing with some of the
    top experts on that in the world. Because there is a lot of
    concern in the science community that there may be more on the
    table there than was captured in the recent IPCC report, which
    had a close-off date of the end of 2005 for the peer-reviewed
    literature that it could take into consideration in its
    findings.
        This is of great concern to the scientists that study the
    ice sheet model and the ice sheet flows, and I encourage to you
    have a separate hearing just on that issue.
        Mr. Hall. Thank you, sir.
        I represent a district which is divided by the Hudson
    River, which is tidal, all the way to Troy past Albany; and of
    course any increase in sea level will also be an increase in
    river level, which will be then added to by tidal changes and
    storm waves and surge and so on. So it does effect us directly,
    including those communities like Beacon and Newburgh and
    Kingston and others that have newly refurbished their
    waterfronts with restaurants and stores and promenades, not to
    mention the commercial rail running up just above river level
    on the west bank of the Hudson and the Amtrak and MTA commuter
    line that runs carrying passengers up the east bank just above
    the water level of the Hudson currently.
        I am curious, given the fact that the executive branch
    tends to be the face of our Nation to many around the world, we
    in Congress are trying, as you know, to change energy policy;
    and we were just successful in getting a decent energy bill. It
    wasn't perfect, but then no legislation is, I suppose. We hope
    that this will show the world that we are serious or getting
    serious on this issue. What else would you recommend that
    Congress do to send this message to other countries around the
    world?
        Mr. Meyer. I think, as my colleague, Phil Clapp, said,
    participate in this process as part of the U.S. delegation,
    talk to the delegates about what is going on. I was amazed how
    very aware they are of the actions of this Congress. They knew
    when the energy bill was coming to the floor. I got e-mails the
    day after the committee reported out the Lieberman-Warner bill
    by an 11 to 8 vote from Japan, from Europe, from developing
    countries congratulating the United States for the work that
    committee had done.
        They follow our politics very closely because, as
    Christiana said, they realize they are in our hands. What we do
    is going to matter to their future. And I think participating
    in this process, going over to meet with them at these meetings
    or on your own, inviting them to come and testify or even meet
    with you here, the exchange of views between the rest of the
    world and civil society and the other branches of government in
    the United States is a key issue and I think will improve their
    confidence in going forward in the next 2 years in this
    process.
        Mr. Hall. I am just going to jump ahead, because my time is
    limited, as is all our time.
        I am happy to see one of the key topics in Bali is
    technology transfer and that helping developing countries to
    leapfrog over fossil-fuel-powered development is on the map.
    America has the technological know-how and resources to bring
    many of these technologies into play to help developing
    countries jump into a clean energy future.
        Perhaps Ms. Figueres and Mr. Helme could comment on what
    steps our government should be taking to aid the process of
    technology transfer, which would also make us an energy and
    technology exporter, as opposed to this fuel importer that we
    are mostly now.
        Mr. Helme. As I mentioned, I think there is a great deal of
    interest in sharing technology, particularly in these
    internationally competitive industries, and so I think the U.S.
    joining in this effort with Europe and others to provide
    assistance directly for innovation and linking it to developing
    countries, taking more aggressive targets--I mean, the theory
    from Bali is--as I showed you, they'll do more if there is
    assistance for technology, for sectorial activity in terms of
    these key investment sectors, for reductions from
    deforestation.
        So I think there is a big opportunity for us to put
    something on the table and draw forward. I think one of the
    ways to do it is to take a portion of the allowances--we are
    seeing this. Norway is doing it. Germany is doing it. But if
    you are taking allowances out of their system, auctioning those
    and using the money as incentive money to help developing
    countries move forward and get more reductions.
        Ms. Figueres. On the private sector side, the studies that
    have been done on financial flows that are necessary in order
    to address climate change show that more than half--in fact,
    above 60 percent of the financial flows will be coming from the
    private sector, as opposed to from the public sector.
        And so in that sense once a policy, both nationally and
    internationally, is in place, that will be enough to signal to
    the markets and to signal to the private sector that they can
    go ahead and make the investments; and those investments will
    then translate into the technology transfer the developing
    countries need.
        Mr. Hall. Thank you very much, Mr. Chairman.
        The Chairman. The gentleman's time has expired.
        Let's do this. We will give each one of you 1 minute to
    summarize what you want us to remember. The energy bill is
    done. Bali is completed. Climate change, cap and auction and
    trade is now front and center in the United States House of
    Representatives and Senate next year. What do you want us to
    remember from this hearing as we go forward and begin this
    great project that is about to be undertaken?
        We will go in reverse order; and we will begin with you,
    Mr. Ebell.
        Mr. Ebell. Thank you, Mr. Chairman.
        I would urge you to keep--as you consider energy rationing
    policies, to keep in mind the energy needs not only of this
    country but of the world. And I would just make this particular
    observation that Mr. Hall said earlier. He encouraged people to
    adopt a polar bear. I think that is great.
        My colleague who is here today in the audience, William
    Yeatman, was a Peace Corps volunteer in Krygyzstan; and he
    will--if you want to contribute $50 to buy a ton of coal to
    keep a Kyrgyz family warm during this very cold winter in
    Krygyzstan, he will be happy to arrange that for you. Those are
    the real energy realities of the world. There are a lot of
    people who do not have enough energy to live the kinds of lives
    that we lead.
        And I would just think back to another great Member from
    Massachusetts, John Adams. When he was elected to the
    Continental Congress, he was a leading citizen of Boston, but
    he had to walk to Philadelphia. That is still the reality for a
    lot of the world.
        Thank you.
        The Chairman. Thank you, Mr. Ebell, Mr. Helme.
        Mr. Helme. Number one, I would say moving legislation at
    least as strong as Lieberman-Warner is the most important thing
    you could possibly do. We need that kind of a target.
        Secondly, on this competitiveness issue, I think we need to
    recognize as a place for incentives--we need to recognize that
    it is a myth that developing countries are going to steal
    market share based on carbon. China is already acting in
    cement, steel, carbon paper and so on; and they will be more
    efficient than we are by the time 2020 rolls around. So that is
    not the issue. The issue is working together to get the level
    playing field.
        Finally, on the EU, I want to submit for the record only 2
    countries of the 15 are not meeting their targets on their own.
    Only Spain and Italy are not. And I can give you chapter and
    verse about why the new EU program is very aggressive and the
    trading system works.
        The Chairman. Ms. Figueres.
        Ms. Figueres. Thank you, Mr. Chairman.
        Good news and bad news. The good news is that the new
    engagement of the developing countries actually opens up an
    unprecedented opportunity to rethink the structure, the logic
    and the potential of the future chapter of the climate change
    regime.
        The bad news is we need to do this overnight. We are on an
    incredible tight time frame. We cannot afford to fail on this
    opportunity that is laid before us over the next 2 years. If
    within 2 years at the end of 2009 we don't have a global
    agreement that aggressively moves us forward, we will not be
    able to face our children and grandchildren.
        The Chairman. Mr. Clapp.
        Mr. Clapp. Similar to what Ms. Figueres just said, this is
    our last agreement. This is our last shot. We have to have an
    international agreement that stops the growth of emissions and
    begins a pathway downward by 2020. If we don't get that
    agreement now, we will have missed the opportunity to get
    industry moving in that direction. So the catastrophic impacts
    will occur.
        The second thing is I would hope that many of you would
    have the political courage to not become part of the bash China
    movement. China has been rather aggressive in its energy
    policies domestically, as we have heard today, and it is a
    country very different from United States. China's coastal
    population in the cities has a per capita income of about
    $1,200 a year. Fifty-seven percent of its population still
    lives on less than $5 a year. Whereas the United States per
    capita income is $42,000 a year. Our standard--of what is still
    one of the poorest countries in the world is rather slim.
        The Chairman. Thank you, Mr. Clapp.
        Mr. Meyer.
        Mr. Meyer. Yes. Three points.
        I think the message from Bali is clear. It is time for the
    United States not to talk the talk but walk the walk. If we
    continue to put a price of exactly zero on carbon pollution of
    the atmosphere, we are not going to be taken serious in this
    process. The more you can do to move domestic cap and trade
    legislation through the process, the sooner the U.S. is going
    to get on board with the rest of the world, the better our
    chances will be in negotiation.
        Second, this is not just a risk, it is an opportunity. Keep
    your focus on the clean energy jobs that can be created, the
    new markets that can be created in helping the world solve this
    problems. I know Congressman Inslee has put forward some very
    bold ideas there. We need a revolution in this country. And
    there is an upside for dealing with this problem, not just a
    downside.
        The third is the cost of achieving the deep cuts that we
    are talking about by 2050 are not zero, they are not minimal
    they are affordable. They are somewhere in the range of half to
    1 percent of gross domestic output by the middle of the
    century. That is the equivalent of postponing tripling world
    output from 2050 to 2051. I think our descendants will say that
    is a pretty good deal.
        On the other side, the costs of doing something are far
    lower than the costs of doing nothing. There is no scenario
    feasible where we can do nothing and have nothing happen in
    return. Estimates vary on what the ratio is there, but there is
    very, very little disagreement that the costs of inaction are
    much greater than the costs of dealing with this problem.
        The Chairman. We thank you and each of the witnesses. This
    has been absolutely a fantastic panel. We thank each of you for
    giving us this preview of upcoming attractions in the United
    States Congress for the next year. I think global warming is
    about to be injected into the politics of the United States in
    a way that will match few other times for the next year, and
    with your help we have begun that today.
        Thank you so much.
        [Whereupon, at 1:57 p.m., the committee was adjourned.]

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