[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
 NOT GOING AWAY: AMERICA'S ENERGY SECURITY, JOBS AND CLIMATE CHALLENGES

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



                                HEARING


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

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            DECEMBER 1, 2010

                               __________

                           Serial No. 111-20


             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

                      Michael Goo, Staff Director
                       Sarah Butler, Chief Clerk
                 Bart Forsyth, 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...........................................     7
Hon. F. James Sensenbrenner, Jr., a Representative in Congress 
  from the State of Wisconsin, opening statement.................     9
Hon. John Hall, a Representative in Congress from the State of 
  New York, opening statement....................................    10
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, prepared statement.........................    11

                               Witnesses

                                panel i

General Wesley K. Clark, United States Army (Ret.), NATO Supreme 
  Allied Commander Europe 1997-2000, prepared statement..........     3
Vice Admiral Dennis McGinn, United States Navy (Ret.)............    13
    Prepared Statement...........................................    16
Dr. Peter Gleick, Pacific Institute for Studies in Development, 
  Environment and Security.......................................    26
    Prepared Statement...........................................    28
    Answers to Submitted Questions...............................   105
Mr. Richard L. Kauffman, Chairman of the Board, Levi Strauss & 
  Co.............................................................    50
    Prepared Statement...........................................    52
    Answers to Submitted Questions...............................   111
Mr. Kenneth Green, American Enterprise Institute.................    66
    Prepared Statement...........................................    69
    Answers to Submitted Questions...............................   114

                                panel ii

Mr. Robert F. Kennedy, Jr., Chairman of the Waterkeepers Alliance    84
    Prepared Statement...........................................    90

                          Submitted Materials

Mr. Kenneth Green, copy of article from AIE, ``Climate Change: 
  Caps vs. Taxes,'' by Kenneth P. Green, Steven F. Hayward, and 
  Kevin A. Hassett, June 2007....................................   135
Mr. Kenneth Green, copy of article from AIE, ``Climate Change: 
  The Resilience Option,'' by Kenneth P. Green, October 2009.....   147


 NOT GOING AWAY: AMERICA'S ENERGY SECURITY, JOBS AND CLIMATE CHALLENGES

                              ----------                              


                      WEDNESDAY, DECEMBER 1, 2010

                  House of Representatives,
            Select Committee on Energy Independence
                                        and Global Warming,
                                                    Washington, DC.
    The committee met, pursuant to call, at 11:01 a.m., in room 
210, Cannon House Office Building, Hon. Edward J. Markey 
(chairman of the committee) presiding.
    Present: Representatives Markey, Blumenauer, Inslee, 
Herseth Sandlin, Cleaver, Hall, Sensenbrenner, Blackburn, and 
Capito.
    Staff Present: Ana Unruh-Cohen, Morgan Gray, Jonathan 
Phillips, Jeff Sharp and Jonah Steinbuck.
    The Chairman. Welcome. Welcome to the Select Committee on 
Energy Independence and Global Warming.
    In April of 2007, the Select Committee on Energy 
Independence and Global Warming held its first hearing. At that 
inaugural gathering, we discussed the twin challenges of 
climate change and our dependence on foreign oil. Since that 
time, Congress passed new fuel economy standards. We made 
investments into renewable energy, advanced battery technology 
and efficiency measures that save families and small businesses 
money. The House passed a comprehensive energy and climate 
bill. The world, including China and India, committed to reduce 
carbon pollution in the Copenhagen Accord. Our troops continue 
to fight bravely in Iraq and Afghanistan, where our energy 
interests remain entangled. The Gulf of Mexico was sullied by 
BP's oil spill, which became the worst environmental disaster 
in United States history. And here in this committee, we 
discussed and debated it all, paving the way for informed 
action.
    Over the last few years, the politics of energy have 
changed and shifted more times than we can count, yet what has 
not changed are the problems we face as a Nation and as a 
planet. Today's hearing is called ``Not Going Away'', a fitting 
title for issues that will be central to the health and 
survival of our planet and our economy for decades and 
centuries to follow. The national security challenges from our 
dependence on oil are not going away.
    Today before our committee we have Vice Admiral Dennis 
McGinn, who was a witness at our very first hearing. He knows 
the price of our dependence on foreign oil borne out not in 
this rhetorical battlefield but in the theater of actual war 
where bullets and bombs are spent to defend or acquire barrels 
of oil.
    The national security threats from climate change are not 
going away. During the first select committee hearing, we 
discussed the drought-influenced Somali conflict that led to 
Black Hawk down. A warming world exacerbated a military 
hotspot.
    This September, we hosted the Pakistani ambassador to 
discuss his country's devastating floods. He discussed how his 
country diverted resources like helicopters away from fighting 
Al Qaeda to assist in the flood response. An increasingly 
destabilized climate will invariably lead to more of these 
destabilizing geopolitical events.
    The economic security threats stemming from America's lack 
of an energy plan are not going away. China is pushing ahead 
with clean energy investment along with other emerging 
technologies to capture and store carbon from coal. Twice as 
much money was invested in clean energy in China as was 
invested by the United States last year. As we heard from the 
private investment community, this move by China will attract 
trillions in private capital money that could be invested in 
jobs here at home in the United States. And China is not alone. 
Germany, Japan, South Korea, and other countries recognize that 
dominating the trillion dollar market of tomorrow requires 
foresight and public investment today.
    Regardless of our political party, we can all agree that 
second place in the clean energy race is not an acceptable goal 
for the United States, and the carbon pollution that we have 
already spewed into the atmosphere warming our earth is not 
going away. The pollution we emit today will still be in the 
atmosphere centuries from now. Every day that we wait to act to 
stem the tide of carbon emissions will be felt for decades and 
centuries to come as our planet warms and our weather patterns 
become less stable.
    And, today, as the world's climate community gathers in 
Mexico, those of us who accept that cutting carbon pollution is 
this generation's responsibility are saying that we are not 
going away. We are not going away because the problems that 
climate change presents are too dangerous, too urgent for us to 
disappear into the abyss of cynicism and lost opportunity. We 
are not going away because China and India and Germany are not 
going away as competitors for global energy dominance. We are 
not going away because the national security threats from our 
continued dependence on foreign oil are not going away.
    I would like to thank our witnesses for coming today, and I 
look forward to their testimony. Unfortunately, General Wesley 
Clark was unable to make it here today. We look forward to 
having him back here soon, and we will submit his testimony for 
the record.
    [The statement of General Clark follows:]
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    The Chairman. Before I close, I would also like to thank 
the members of this committee and their staff for their service 
over the last two sessions of Congress. It has been an honor 
and a pleasure to explore and understand these global issues 
with each and every one of you, and I thank each of you on both 
sides of the aisle for your service to our country.
    [The prepared statement of Mr. Markey follows:]
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    The Chairman. I would now like to turn and recognize my 
friend, the gentleman from Wisconsin, the ranking member, Mr. 
Sensenbrenner.
    Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
    This hearing will be the last of the Select Committee; and, 
while I was initially skeptical of the Select Committee's 
mission, it ultimately provided a forum for bipartisan debate 
and an opportunity for House Republicans to share a different 
view on the pressing energy and environment issues that we 
currently face.
    I would like to thank Chairman Markey for his fair and firm 
leadership of this committee. He has showed courtesy, respect 
for the rules, and a willingness to rise above partisanship. I 
consider respect for the rights of the minority to be a 
hallmark of great congressional leadership, and I commend 
Chairman Markey for giving us the resources and platform that 
we needed to express our ideas.
    Chairman Markey and I disagree on policy choices, but we do 
agree that America needs to diversify its energy supply and 
increase our energy efficiency. When Senator Dodd of 
Connecticut gave his valedictory speech in the Senate 
yesterday, he made a comment saying that even though people can 
be friends and respect each other despite policy differences, a 
lot can get accomplished; and, unfortunately, there has been 
too little of this in this Congress as time has gone on.
    I can say that I consider Chairman Markey a friend. I can 
say that Chairman Markey believes that what Senator Dodd has 
said is good for America in this respect, and I hope that in 
the Congress ahead, where there will be a partisan divide 
between the two ends of the Capitol building, that we will be 
able to establish respect for each other without compromising 
our policy ideals. Because the American people want action. The 
American people do respect positions that are opposite, and it 
is going to be a tough task ahead.
    Now, I think that this select committee has shown a very, 
very wide division on how to approach our shared goals.
    On Monday, the Wall Street Journal ran an article in a 
special report on energy which I am holding up so that 
everybody can see. On the red side are arguments that have been 
made and which have failed in the forum of domestic and 
international public opinion and on the green side there are 
ideas and advocacy on what looks like is achievable in the road 
ahead. And on the red side it says, old, set a high tax on 
carbon to make alternative energy sources more competitive; 
old, impose strict controls on carbon dioxide emissions; old, 
force wealthy countries responsible for most emissions to send 
money to help poorer ones adapt to the effects of climate 
change; old, use the United Nations to work out comprehensive 
agreements.
    All of those were eloquently advocated by the chairman and 
people on the majority side of the aisle, and they have been 
rejected both in international forums and here in America.
    Now, let's look at what is on the new side. New, invest in 
making new clean energy technologies cheaper; new, focus on 
modest emission reductions such as replacing old diesel 
generators; new, encourage development aid that helps poorer 
countries deal with the effects of drought or flooding, no 
matter what the cause; and, new, focus on agreement amongst the 
world's 20 largest economies.
    All of these new things were advocated by the Republican 
minority on this select committee; and I believe that the 
select committee, unlike any other committee in Congress, was 
really the focus of the debate between what this article refers 
to as old and what this article refers to as new. And I would 
urge my friends on the other side of the aisle to forsake the 
old and embrace the new because I think in the years ahead we 
can make progress by looking forward rather than backward.
    I yield back the balance of my time.
    The Chairman. I thank the gentleman very much.
    The chair now recognizes the gentleman from Oregon, Mr. 
Blumenauer.
    The chair recognizes the gentleman from Washington State, 
Mr. Inslee.
    The chair recognizes the gentlelady from South Dakota.
    The chair recognizes the gentleman from New York, Mr. Hall.
    Mr. Hall. Mr. Chairman, I just want to thank you for your 
leadership of this chairmanship and able guiding of this 
committee. It has been a privilege to serve and learn all the 
things I have learned from the witnesses over the last 4 years 
who have come before the select committee, and I will waive an 
opening statement.
    The Chairman. I thank the gentleman very much. We thank the 
gentleman from New York for his incredible commitment to 
exploring these issues, raising them higher and higher as a 
national priority; and your service to our country is gradually 
appreciated. Thank you.
    The chair recognizes the gentlelady from West Virginia. The 
gentlelady waives her time.
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    Mr. Chairman. Let us turn then to our opening panel; and I 
will recognize Vice Admiral Dennis McGinn.
    Admiral McGinn spent 35 years with the United States Navy 
as a naval aviator, test pilot, aircraft carrier commanding 
officer, and national security strategist. Since completing his 
service with the Navy, Admiral McGinn has been an active 
climate change and clean energy advocate in national forums, 
stressing the need to develop comprehensive solutions to create 
a sustainable global environment. Admiral McGinn testified at 
the very first hearing of the select committee, and he will be 
our first witness today.
    We welcome you, sir.

  STATEMENTS OF VICE ADMIRAL DENNIS McGINN, U.S. NAVY (RET.); 
   ROBERT F. KENNEDY, JR., CHAIRMAN, WATERKEEPERS ALLIANCE; 
RICHARD L. KAUFFMAN, CHAIRMAN OF THE BOARD, LEVI STRAUSS & CO.; 
 PETER GLEICK, CO-FOUNDER AND DIRECTOR, PACIFIC INSTITUTE FOR 
STUDIES IN DEVELOPMENT, ENVIRONMENT, AND SECURITY; AND KENNETH 
     GREEN, RESIDENT SCHOLAR, AMERICAN ENTERPRISE INSTITUTE

            STATEMENT OF VICE ADMIRAL DENNIS McGINN

    Admiral McGinn. Thank you. Thank you, Mr. Chairman. It is a 
privilege for me to be back before this committee. Mr. 
Sensenbrenner, great to see you again, sir, and all the members 
of the committee.
    Since April 18, 2007, when I first appeared before this 
committee, I have been on the road a lot. I have traveled from 
Maine to California, from Alaska to Florida, from North Dakota 
to Louisiana and Texas; and I have been doing that to talk 
about these issues to the American people. And recognizing that 
there are always regional differences, regional assets, and 
liabilities related to energy or environmental challenges, the 
consistent thing that I brought from all of these travels and I 
share with the committee today is that the American people are 
concerned about energy security. They are concerned about 
environmental issues locally, regionally, and globally, 
including greenhouse gases.
    The question, as it always is, is what do we do about it 
and how urgently should we do it. In 2007, at that hearing we 
had the then chairman of the CNA Military Advisory Board, 
General Gordon Sullivan, who was a witness and talked about the 
first report that the CNA Military Advisory Board put out. The 
Advisory Board consists of about a dozen or 15 retired generals 
and admirals from all four of the military services, including 
the Coast Guard and the National Guard, and came up with the 
consensus in that report that climate change was a threat to 
national security because it will act as a threat multiplier 
for instability in critical regions of the world.
    This can be manifested in many different ways, but it 
occurred to me this summer when Pakistan had 20 million people 
affected by torrential monsoon flood, historical levels of 
flooding, that here is a nation that is nuclear armed, has an 
ongoing Taliban insurgency that threatens the stability of that 
government, and is essential to our success and the success of 
NATO in Afghanistan. And we have 20 million people that are 
affected by severe weather, the type of scenario that was 
exactly in the minds of the Military Advisory Board when we 
said climate change is a threat to national security.
    Another aspect of this was that the board recognized that 
our economy, energy, climate change, and national security are 
all inextricably linked. If you want to develop policies and 
solutions to address any one of those, you have to carefully 
think through the effects on all of the others.
    So, as a result of that, we got together and put out a 
report in May of 2009 that focused on the energy aspect of 
these interlinked challenges. And our main conclusion in that 
report was unequivocal. America's energy posture constitutes a 
serious and urgent threat to our national security--
diplomatically, economically, and militarily. In the military 
venue, we see it manifesting in Iraq with roadside bombs now in 
Afghanistan. We saw burning NATO fuel convoys that were along 
the Pakistan-Afghanistan border. We see from intelligence 
reports that petro dollars that are going to Iran are finding 
their way into the hands of the Taliban and al Qaeda and being 
used to buy the equipment and the very lethal projectiles and 
components that are killing and maiming our troops on a weekly 
basis over there. That money is coming from global purchase of 
oil, and the United States purchases one-quarter of that oil 
every year.
    Diplomatically, we are trying to do something about 
preventing a nuclear armed Iran from emerging. Our leverage in 
the international diplomatic community is undercut by the fact 
that we use 25 percent of the world's oil every year and we sit 
on perhaps 3 percent.
    And economically, make no mistake, the recession that we 
are hopefully and too slowly starting to come out of, has as a 
fundamental cause factor the tremendous cost of our addiction 
to oil in the past. In fact, if you go back in history, over 
the past four recessions, every one of them has been preceded 
within 6 months by oil spikes, oil price spikes.
    This is not going to go away. We are going to come out of 
this recession. The economy of the world and the United States 
is going to heat up and so will the appetite for oil and so 
will return the volatile cycle but ever higher prices and ever 
scarcer availability, certainly over the next 10 years but 
perhaps even sooner than that. We have got to find ways to 
break that addiction.
    Finally, in July of this year, the Military Advisory Board 
put out a report titled Powering America's Economy: Energy 
Innovation at the Crossroads of National Security Challenges; 
and the key finding of this report was that our economy and our 
national security are so inextricably linked. As we look at 
ways to deal with our deficit, as we look for ways to afford 
all of the priorities of America, one of the things that will 
be inevitably on the table is how much do we pay for defense. 
If you don't have a good and strong economy, you don't have a 
good and strong defense structure in armed services. So there 
is an inextricable link. And the fact that our energy choices 
in the past and certainly going forward are going to have a 
tremendous effect for the good or for not good on our economic 
strength is the key part.
    The main recommendation from this report that was published 
in July of this year was simply that the United States 
Government should take bold and aggressive action to support 
clean energy technology innovation and rapidly decrease the 
Nation's dependence on fossil fuels.
    Lastly, I want to share a quote from Admiral Mike Mullen, 
the Chairman of the Joint Chiefs of Staff. He addressed a 
Department of Defense energy forum on October 13th of this 
year:
    ``I am proud of the work that the men and women of the 
Department of Defense are doing, the work many of you are 
leading to ensure we turn our own energy security from a 
vulnerability to the strength that it could be. Few of us can 
argue that the need is not there. Many of us can see that the 
right technology is emerging, and I hope all of us can agree 
that the time for change is now.''
    He was addressing a Department of Defense armed services 
audience. His comments apply to every aspect of American 
society and the American economy.
    And I would like to close my opening remarks, Mr. Chairman, 
Mr. Sensenbrenner, by a summary that I made 3 years ago on 
April 18th. I will simply quote.
    ``Mr. Chairman, thank you. This is an American challenge. 
It is one that Americans together will meet. It doesn't have 
partisan labels on it. The solutions are available today. They 
need to be guided by leadership and good policy which enables 
us to advance our energy efficiency and to increase our choices 
of clean, renewable fuels in order to create opportunity for 
our economy, create opportunity for our society, and raise our 
level of national security and to be a leader in the global 
sense in meeting these energy and climate challenges.''
    Thank you, Mr. Chairman. I request that my written 
statement be included in the record.
    [The statement of Admiral McGinn follows:]
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    The Chairman. It will. Thank you, Admiral, very much. It 
will be included without objection.
    Our next witness is Dr. Peter Gleick. Dr. Gleick is an 
internationally recognized water expert and the cofounder and 
President of the Pacific Institute for Studies in Development, 
Environment, and Security, a nonpartisan research institute 
that works to advance environmental protection, economic 
development, and social equity.
    Doctor, we welcome you. Whenever you feel comfortable, 
please begin.

                   STATEMENT OF PETER GLEICK

    Mr. Gleick. Thank you very much, Chairman Markey, Ranking 
Member Sensenbrenner, and committee members. I appreciate the 
opportunity to appear before you today.
    My training and background is in the field of environmental 
science, hydrology, climatology, engineering. I have been asked 
to offer comments on the science of climate change and some 
thoughts about appropriate responses. My longer written 
testimony has been provided to the committee, and I would just 
like to make six brief points.
    First, the science of climate change is clear and 
convincing that climate change is happening, happening rapidly, 
and happening because of human activities. Based on a 
combination of our understanding of basic laws of science, 
laboratory experiments, observations of the real world, 
mathematical and computer modeling, the science of climate 
change is compelling and strong. Emissions of greenhouse gases 
from human activities not only will change the climate but are 
already changing the climate. The evidence is now 
incontrovertible.
    Second, despite continued efforts on the part of a small 
group of skeptics and deniers to mislead, misrepresent, and 
misuse the science, our understanding of human-caused climate 
change continues to strengthen and improve. There is nothing 
identified in recent efforts to discredit climate science that 
remotely changes these fundamental conclusions about climate 
change, and no credible alternative explanation has ever been 
offered that explains the science of what we observe around the 
world.
    A recent letter from 255 members of the U.S. National 
Academy of Sciences, of which I am a member, was published in 
Science magazine in May. I have attached it with my testimony, 
and it addresses this area as well.
    Third, every major international scientific organization 
working in the areas of geophysics, climate, geology, biology, 
chemistry, physics, human health, atmospheric sciences, 
meteorology, and every National Academy of Science of every 
country of the world, including our own, agrees that humans are 
changing the climate. Again, a list is attached with my written 
testimony. Conversely, there is no scientific body of national 
or international standing that rejects the findings of human-
induced climate change.
    Fourth, the Nation now only faces three options: 
mitigation, that is, reducing the emissions of greenhouse 
gases; adaptation, that is, dealing with the unavoidable 
consequences of climate change; and suffering. The only 
question that remains is what combination of those three things 
are we going to experience.
    The argument that all we have to do is adapt to climate 
change is simplistic. We have no choice but to do all three. If 
we do nothing to work on mitigation, the impacts of climate 
change will continue to accelerate and continue to become more 
and more extreme. We are now faced already with unavoidable 
climate change because we have already delayed too long to 
implement policies to reduce greenhouse gas emissions. In fact, 
it appears that many of our estimates of the rate of climate 
change have been too low, not too high, and that climate 
changes are happening faster than expected.
    Fifth, a wide range of impacts, ranging from sea level rise 
to changing water availability to altered food production to 
human health effects from heat and spreading tropical diseases 
to very clear threats to our national security, as Admiral 
McGinn just talked about and as others have talked about, are 
already beginning to appear. These impacts will be costly to 
society, far more costly, I believe, than efforts to reduce 
emissions of greenhouse gases.
    I offer one example in my testimony of the massive 
consequences expected simply from sea level rise along the 
California coast from an analysis my Institute did for the 
State of California. The value of infrastructure at risk along 
the coast of California from expected sea level rise is already 
$100 billion. There are 500,000 people in areas that are 
expected to be flooded from sea level rise, and that is one 
small impact in one small area of the world that we are going 
to have to deal with. Those costs are real, if badly 
quantified.
    Finally, the good news is that there are smart and 
effective things that can be done immediately with a focus on 
energy policy, land use policy, and water policy. Robert 
Kennedy, Richard Kauffman, General Clark all offer concrete 
examples in their written testimony. These kind of options 
include national energy policy that you have been discussing 
for a long time. Focused on non-carbon energy sources with 
Federal financing, tax credit, loan guarantees, there are many 
different ways of approaching that problem.
    We need environmental standards for greenhouse gas 
emissions, including not just carbon dioxide but methane, 
hydroflurocarbons carbons, and black carbon. We need to begin 
the process of adapting to unavoidable impacts of climate 
change through smarter land use and water use planning. If we 
act to slow climate change and the impacts turn out to be less 
severe than we predict, we will still have reduced our 
dependence on fossil fuels. We will have cut our export of 
money to countries that fund extremism and terror. We will have 
reduced our emissions of pollutant. We will have boosted our 
economy with new technologies and jobs.
    But if we do nothing, as some argue we should do, and 
climate changes are indeed more severe than we expect, we will 
have made things far worse than they need to be. Congress 
should step up and do its job.
    Thank you for the opportunity to provide this testimony. I 
would be happy to answer any questions that you may have.
    [The statement of Mr. Gleick follows:]
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    The Chairman. Thank you, Doctor, very much.
    Our next witness is Mr. Richard Kauffman. Mr. Kauffman is 
chairman of the board of Levi Strauss ` Company. During his 
long career, Mr. Kauffman has had broad experience in capital 
markets and corporate finance and recently stepped down as the 
chief executive officer of Good Energies, one of the largest 
investors in renewable energy. We welcome you, sir.

                STATEMENT OF RICHARD L. KAUFFMAN

    Mr. Kauffman. Thank you, Chairman Markey, Ranking Member 
Sensenbrenner, members of the committee. Thank you again for 
the opportunity to testify today.
    My name is Richard Kauffman. I am indeed the chairman of 
the board of Levi Strauss, although I must say that I am not 
dressed that way today.
    I would like to give you a view from the business 
community. Levi Strauss cares deeply about energy and climate 
change not just because we want to be a good corporate citizen 
but because of our business.
    First, we rely upon an agricultural product, in this case 
cotton, to make 95 percent of our product. Extreme weather 
events in Pakistan have driven up prices of cotton 50 percent 
since July, 100 percent since the beginning of the year. So we 
are actually seeing prices that we haven't seen since Levi 
Strauss himself was around. Climate change puts consumers of 
agricultural products at risk for crop availability, quality, 
and pricing.
    Second, climate change has a major effect on another part 
of our supply chain, our manufacturing facilities, which are 
already feeling the effects of extreme weather. Our products 
are manufactured in more than 45 countries, many of which are 
in the developing world that are expected to bear the risks of 
water shortage, such as India or Nicaragua, disease, such as in 
Cambodia, and flooding and saltwater intrusions, such as in 
Bangladesh and Vietnam.
    Third, we care about climate change because of our brand. 
Levi Strauss, like many other American companies, is the 
beneficiary of globalization not only in terms of establishing 
a global supply network but in terms of demand for our 
products. Our biggest growth markets are outside the United 
States and in particular the developing markets of China, 
India, Russia, and Brazil.
    I think we all recognize that Levi Strauss is an American 
brand. We respect the best of American cultural values: 
honesty, integrity, hard work, and the pioneer can-do spirit. 
These values speak to consumers around the world. But to the 
degree to which consumers see the U.S. as being resistant to 
the science of climate change and as wasteful of natural 
resources, our brand is at risk. I think all of us have had the 
experience, but young people in particular around the world 
care about climate change since it will affect them more than 
any of us in the room.
    Fourth, our own people care about our being a leader in 
environmental stewardship. Like other companies, we are in a 
constant battle for talent. Great people make great companies. 
What we do to help make our products more sustainable helps us 
attract and retain the best people. When we have done a 
lifestyle assessment of our products and identify environmental 
impacts and we work to address them, for example, educating 
consumers on how to care for their clothes more responsibly, 
including washing less or washing in cold water and line 
drying, we are not only reducing environmental impact but 
helping our people feel that their work has meaning.
    Fifth, we also see commercial opportunity in addressing the 
challenges of energy and climate change. There are product 
innovations that offer more environmental benefits that will 
differentiate us from lower cost commodity suppliers. All 
companies have to deal with that issue of competing with 
commodity suppliers.
    A good example of such products is our recently announced 
waterless jeans. A single jean uses over 10 gallons of water in 
its finishing process. The waterless jeans, as the name 
implies, can save over 90 percent of this water.
    Another opportunity for us is energy efficiency. At a 
single distribution facility--and we have quite a number of 
them--we could save over $600,000 a year, a 33 percent savings 
at this site. The millions of dollars that we could save from 
energy efficiency we would be able to reinvest in our business.
    Our goal as a company is to achieve carbon neutrality by 
reducing the amount of energy we use and moving to 100 percent 
renewable energy. The immediate short-term target is to reduce 
energy use in our globally owned and operated locations by 11 
percent compared to 2007.
    One of the problems we have in achieving our goal of carbon 
neutrality is uncertain and stop-start government policy and 
this can be measured in a lot of ways, from a failure to enact 
comprehensive climate and energy legislation to uncertainty 
about whether there will be an extension of the grant in lieu 
of tax credits for renewable energy we will be able to acquire 
and the cost of that energy.
    And in terms of energy efficiency, we could do more faster 
and cheaper with Federal legislation that incentivizes 
utilities to work with us. Utilities generally still have the 
incentive to sell more electricity rather than invest in energy 
efficiency.
    In terms of energy efficiency, there are substantial 
upfront costs we must make to invest that are difficult for us 
to finance. We see that the financing system for renewables and 
energy efficiency is not up to the task. And while we applaud 
government policy in supporting more R`D, the emphasis on 
innovation over deployment make it difficult for us to achieve 
our objectives by using good enough technology that is 
available today.
    My experience as renewable energy entrepreneur has taught 
me a lot about the promise and perils of the business that I 
hope we can explore in questions and answers. Thank you very 
much.
    [The statement of Mr. Kauffman follows:]
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    The Chairman. Thank you, Mr. Kauffman, very much.
    Our next witness is Kenneth Green. Mr. Green is a resident 
scholar at the American Enterprise Institute for public policy 
research. He has studied public policy involving risk, 
regulation, and environment for over 16 years.
    We welcome you, sir. Whenever you are ready, please begin.

                   STATEMENT OF KENNETH GREEN

    Mr. Green. Thank you, Chairman Markey, Ranking Member 
Sensenbrenner, members of the committee. It is a pleasure to be 
back with you again.
    I am Dr. Kenneth Green of the American Enterprise 
Institute, a resident scholar there for going on 5 years now. 
My training is in the environmental sciences. I hold a 
doctorate in environmental science and engineering from UCLA, 
and I have twice served as an expert reviewer for reports of 
the Intergovernmental Panel on Climate Change, the United 
Nations' IPCC.
    Thank you for inviting me to testify on what continues to 
be an important question of the day: How can we best manage the 
risks involving America's energy security, jobs, and climate 
challenges? Thank you also for the job security suggested in 
the title of this session: Not Going Away. If it did go away, 
so would my job security.
    First and foremost, I believe that it is critical for 
America that we shift our focus from mitigation of greenhouse 
gas emissions toward an agenda of building energy and climate 
resilience. Whether you believe that climate change is a 
looming disaster or whether, as I believe, it is a real but 
modest threat, there is really no rational argument for 
continuing to focus on mitigation of greenhouse gas emissions 
in the near or midterm. And that is because, despite the claims 
of renewable energy and efficiency rent seekers--for that is 
what they are--we do not have the technologies needed to 
significantly curb greenhouse gas emissions without causing 
significant economic destruction, and the money and attention 
we are spending on mitigation is largely wasted. Even if we 
shut the United States and the EU off, the savings on the 
greenhouse gas emissions would be overcome by emissions from 
China, which is now the world's largest greenhouse gas emitter. 
So the environmental benefit of our mitigation would be 
precisely zero.
    The fact of the matter is, also, mitigation is 
immiseration. Let us start with what was mentioned earlier, the 
legislation that was passed in the House, cap and trade, which, 
while seemingly dead, could come back to haunt us in the future 
under other guises such as buried in clean energy standards.
    For an emission treaty to work, certain conditions must 
apply. You need readily available technology to capture 
emissions or less-emission-intensive input fuels. We do not 
have those with greenhouse gases.
    You need a single regulatory jurisdiction. We do not have 
that.
    You need a single trading currency that can't be 
manipulated. We do not have that.
    We need the ability to confirm emission reductions and a 
manageable number of actors, preferably uniformly distributed; 
and you need to auction all permits to prevent rampant 
corruption of the scheme by seekers and special interests. We 
had those conditions for sulfur dioxide, which is why acid rain 
trading worked, but we don't have them for carbon dioxide.
    And even the economists who develop emissions trading for 
pollution control have acknowledged that it is not a suitable 
vehicle for controlling greenhouse gases. All that instituting 
cap and trade or, for that matter, a carbon tax would do is 
raise our energy costs, raise the costs of our goods and 
services, make our economy less productive, and make us less 
competitive internationally.
    The same is true of EPA's misguided efforts to use 
regulation to force down emissions of greenhouse gases. There 
are few, if any, affordable ways to do this. That is why it has 
proven so intractable in Europe and elsewhere. The methods of 
mostly switching to natural gas from coal are expensive and 
will render many businesses uncompetitive both domestically and 
internationally.
    We hear about efficiency gains. The idea that there are 
massive efficiency gains just laying around is an economic 
fallacy. There are not $100 bills laying on the ground to get 
picked up by actors who internalize that value. If they have to 
go to the government to do something, it is because it doesn't 
really make sense for them to do it without the government. It 
is not actual real efficiency. It is faux efficiency.
    My extended remarks, of course, will cover more things. 
What I want to say, though, is if we shouldn't regulate and we 
shouldn't institute cap and trade, what should we do? And, in 
fact, there is a very ambitious agenda of what we can do.
    First and foremost, though, we should stop making things 
worse. Right now, governments incentivize people to live in 
climatically fragile areas. If they are flooded out of a coast, 
we rebuild them on the same coast. If they have a drought area, 
we subsidize bringing water in to remedy their drought. 
Government as an insurer of last resort is a risk subsidizer.
    Infrastructure was mentioned earlier. And one of the things 
I wanted to talk about--I am running out of time, I am afraid. 
But we do build infrastructure. Governments are great at 
building infrastructure. But they don't price it. Therefore, 
there is no pricing signal to tell you what the risk to the 
infrastructure is from climate change.
    If our infrastructure was fully priced, the infrastructure 
that was mentioned earlier in California, for example, and sea 
levels rise, you get two things that happen: One, you have a 
price signal to tell you what to do about it, to reroute the 
highway, elevate the highway, put up seawalls along the highway 
and pass the cost onto the commuters on that road, which would 
move those away who can't afford the value at risk. The same is 
true of our water infrastructure. The same is true of our 
electrical infrastructure. We are making the issues much worse 
because of the way government manages our infrastructure, and 
that should change.
    The same is true of zoning. If the climate changes and 
people seek to move north, they will face a welter of zoning 
restrictions, national parks, State parks, and other barriers 
to entry. And this is particularly true of poor people who have 
faced difficulties moving into areas that are zoned and highly 
regulated and which have higher prices.
    Finally, I will say that we should trust in resilience but 
tie up our camel. I think the government should redirect 
research funds into geo engineering and into carbon capture 
technologies. Those will give us an option in case the worst 
case scenarios are correct but not cost us an arm and a leg and 
sacrifice our economic growth in the meantime.
    I would like to point out somebody recently from the 
Tyndall Center in the U.K., one of their scientists, said that 
in order to really deal with climate change the developed 
world--the entire developed world--must forgo 20 years of 
economic growth. Does anyone realistically think that is going 
to happen? I don't think so. And I think it is a waste of time 
and money and energy to focus on attempting to do what will not 
be done.
    I have submitted extensive remarks for the record as well 
as two policy studies backing up my comments, and I look 
forward to your questions.
    [The statement of Mr. Green follows:]
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    The Chairman. Thank you, Dr. Green; and we will include 
your studies in the record.
    Let me now turn and recognize the gentleman from Oregon, 
Mr. Blumenauer.
    Mr. Blumenauer. Thank you, Mr. Chairman.
    It is interesting to think about where we are ending up. I, 
for one, have appreciated the opportunity over the last 4 years 
to work with you and the committee in constructing a record and 
hearing from distinguished panelists such as we are graced with 
today. Nothing to me suggests that 10 years hence people are 
going to feel like these were exaggerated concerns, that 
somehow government did too much during this period. I fear that 
10 years hence the consensus will be we made a start in the 
House, there was aggressive effort, but that we have fallen 
short of the mark.
    I listened again to Dr. Green, and I do agree with him in 
one area, that we are not appropriately pricing the risks, that 
government is involved because we would like to help everybody. 
Having spent a lot of time dealing with flood insurance reform 
over the years, we subsidize people to be in harm's way, and we 
put them back afterwards, and that is wrong, and it is going to 
create a problem. But we have any number of Federal policies 
where we are paying people lavishly to grow cotton in the 
desert and then paying off Brazilian cotton farmers because we 
cheat internationally. A whole host of these things are going 
to come into play, and I think we will be making some 
significant changes.
    But the record that has been developed is replete with 
references that the cost of making these adjustments are a tiny 
fraction of what is to be expected that we will be contending 
with because of the problems that our witnesses have pointed 
out. And, in fact, it is not 20 years of growth that will lose. 
It is perhaps a fraction of a percent of GDP which may be 
redirected if we undertake the right policies.
    I conclude these hearings feeling actually a little more 
encouraged, even though we haven't done what we should have. I 
am encouraged because of what we are hearing from business. Mr. 
Kauffman, I appreciate very much both what you have done and 
what you have said. We are seeing businesses understanding the 
opportunities and the risks, and have been moving forward, not 
waiting for government. We have seen over 1,050 communities 
that haven't waited for the Federal government, that have 
started ahead with their own climate policies. This includes my 
own hometown of Portland, Oregon, which is essentially Kyoto 
compliant at this point and people can still earn a living and 
get across town. We are watching what is happening with the 
community of faith, with education in the communities and, 
frankly, with a lot of other governments.
    Part of my concern listening to Mr. Green, is his notion 
that we shouldn't do anything because there are other problems 
that are growing in India and China and that our actions will 
make no difference. First of all, this is not accepted 
scientific fact. If we move to mitigate and make a change, it 
does make a change. It doesn't maybe offset others' pollution 
entirely. But looking at what governments are doing in Brazil 
and Mexico, in China with stronger environmental standards than 
we have in some areas, I am heartened by what we have 
encountered.
    Last but not least, there is nothing that suggests that we 
shouldn't move forward with a more rational energy policy, 
rational water policy, even if you didn't believe in climate 
change. In terms of national security, in terms of not wasting 
energy, in terms of getting the economics right, the case is 
compelling.
    I am wondering if, Mr. Kauffman, you could comment briefly 
on what you are seeing in the business community even in the 
absence perhaps of appropriate pricing signals from the Federal 
Government. What do you see now that we may be able even in 
this more restricted climate you will face politically in 
Congress, things--simple things to do that would reinforce your 
interests and things that you think are opportunities?
    Mr. Kauffman. If I understand your question, what are the 
things that Congress can do?
    Mr. Blumenauer. That you think either in a scaled down--
that might be helpful in making the initiatives you talked 
about possible.
    Mr. Kauffman. Well, I do think that there is much more to 
be done in terms of a focus on energy efficiency. I am afraid I 
don't agree with Dr. Green. I do think that there are actually 
lots of dollars that are on the ground, but there are lots of 
market failures that could be addressed. I don't want to go 
into all of them. But I think efficiency is an area.
    I also think, as I say, on the financing side--and maybe 
this is one example I could talk about in terms of energy 
efficiency--there is some terrific energy efficiency technology 
that works that is available today off in little companies that 
are trying to go up against giants. They can't offer a leasing 
product to the market, they can't get financing, and the 
challenge with that is that the person often at a company that 
is responsible for the capital budget is different from the 
person responsible for the operating budget. So it seems very 
kind of prosaic, but it really creates a lot of issues.
    So the ability to create a financing vehicle that would 
help energy efficiency would go a very, very long way to 
accelerating energy efficiency and it really, really does pay 
for itself and it will help the economy.
    Mr. Blumenauer. Thank you.
    Dr. Gleick, you have referenced the scientific consensus 
which I believe was reflected in our record, notwithstanding 
Dr. Green's notion that we have to forego 20 years of economic 
development and that it really would make no difference what 
the United States did because other countries are polluting 
more. Do you want to make a brief reaction to that, which seems 
to fly in the face of your testimony and research?
    Mr. Gleick. Yes, I would be happy to.
    There are a number of things with which Dr. Green and I 
don't see eye to eye. That is one of them. The United States is 
still a massive emitter of greenhouse gases. There is no doubt 
that anything we do to reduce greenhouse gas emissions will 
have an effect on the ultimate concentration of greenhouse 
gases in the atmosphere and the extent and severity and speed 
of climate change.
    Certainly, without a global agreement to reduce emissions, 
we will not turn emissions around, but we have the enormous 
opportunity just from a technical side of slowing the rate of 
climate change and that by itself has a huge economic value. 
That is a critical issue.
    I don't often tell jokes at congressional hearings--and I 
am not an economist--but there is a classic economics joke 
about an economist walking down the street with his little 
girl. And the little girl--they are holding hands, and the 
little girl says, daddy, there is a $20 bill on the ground. And 
the economist says, don't be silly, dear. If there was a $20 
bill on the ground, someone would have found it already.
    And the truth is the potential for efficiency improvements, 
as you have said already yourself and as Mr. Kauffman has said, 
are enormous. The ability to improve the efficiency with which 
we use energy in this country, do the things we want to do with 
much less energy, and I would argue water efficiency as well, 
which has an enormous greenhouse gas savings as well, is 
largely untapped. We have made progress in that area, but there 
is enormous progress to be made. And it is far, far cheaper to 
do that than for the Federal Government to be spending money on 
expensive, unreliable efforts to sequester carbon. The cost 
benefit of expenditures at the Federal level on efficiency 
versus carbon sequestration are very different. I am not saying 
don't do research, but we should do research in that area as 
well.
    The Chairman. The gentleman's time has expired.
    By the way, our final witness, Robert F. Kennedy, Jr., has 
been delayed on the tarmac at La Guardia because of this 
violent weather that is going up and down the east coast. He is 
still trying to arrive for the hearing.
    Let me turn and recognize the gentlelady from Tennessee, 
Mrs. Blackburn.
    Mrs. Blackburn. Thank you, Mr. Chairman.
    I appreciate all of you being here with us, and I 
appreciate that this is our final hearing. We thank you for the 
leadership that you have shown.
    I think that we can agree that we--quite frankly, I have 
never met anyone that wants to pay more on their utility bill. 
We are all seeking better ways to use and to conserve and to 
achieve energy efficiency. I think the underlying question is, 
do you do that at the expense of American jobs? And that is 
something this committee has looked at and I think in the next 
Congress we will continue to look at.
    Dr. Green, I will have to say you have a friend in me. I 
may be the only one on this panel that is in agreement with 
what you have to say.
    Mr. Kauffman, first for you, what percentage of Levi jeans 
are manufactured in the U.S.?
    Mr. Kauffman. We do comparatively little manufacturing in 
the United States.
    Mrs. Blackburn. And primarily that manufacturing is held 
where?
    Mr. Kauffman. It is outside the United States. That is the 
nature of the global apparel industry. We would like to 
manufacture more in the United States.
    Mrs. Blackburn. What percentage of that is in China?
    Mr. Kauffman. What percentage of----
    Mrs. Blackburn. Of your manufacturing.
    Mr. Kauffman. I don't know the exact percentage.
    Mrs. Blackburn. And then what percentage of Levi jeans are 
marketed in the U.S.?
    Mr. Kauffman. Well, in terms of the United States, the 
United States is our biggest single market. But, as I said 
before, the growth of our business is outside the United 
States. It grows more rapidly than in the United States.
    Mrs. Blackburn. Thank you for that.
    You talked a little bit about clean energy and VC capital. 
Let me ask you this. Are you familiar with the experiences of 
the Spanish government's efforts to subsidize renewable 
energies over the past several years and the results of those 
efforts? And do you think the U.S. government should look at 
Spain as a model to imitate?
    Mr. Kauffman. I don't think that we should--yes, I am 
familiar with it, and I don't believe the United States 
government should emulate that experience. Do you want me to 
explain why?
    Mrs. Blackburn. That is fine, but I am running out of time. 
So let us make it fast if we can.
    Mr. Kauffman. In part, the Spanish government changed the 
rules of the game, and that is one of the problems that the 
United States has had as well.
    Mrs. Blackburn. So uncertainty of regulation and 
uncertainty of policy.
    Mr. Kauffman. That is correct.
    Mrs. Blackburn. We hear that a lot from companies.
    Okay, Dr. Gleick, I wanted to ask you, how can you talk 
about green jobs as a way to boost our economy in light of the 
colossal failures in Europe where each green job in Spain costs 
2.2 jobs elsewhere in the economy and each green job in Italy 
cost 6.9 jobs in the industrial sector and 4.8 jobs across the 
entire economy?
    Mr. Gleick. Let me first say I am not an economist. I am 
not familiar with the statistics you are using and their source 
or their quality.
    I do believe that the potential for jobs in new American 
technologies in energy efficiency, water efficiency, renewable 
energy technology, non-carbon technology, whatever it is, is 
very significant. Obviously, you don't want those jobs to come 
at the expense of other jobs, but I think that is probably a 
fallacy. I think we are probably smart enough to develop new 
jobs without losing old jobs.
    Mrs. Blackburn. Dr. Green, how do you respond to that?
    Mr. Green. Well, this is the Hayek's fatal conceit, that 
somehow, despite all experience elsewhere, that somehow we just 
have the ability to centrally plan the economy in a way to make 
jobs in this sector or that sector and create them on net. It 
is a fallacy that has been badly, many times, debunked.
    I am familiar with the studies you mentioned in Spain and 
Italy. I am not an economist, also. I play one on TV sometimes, 
but that is about as close as it gets. Those studies are quite 
robust. In fact, the Spanish government recently acknowledged 
that the 2.2 job study that you pointed out is accurate. They 
are cutting their subsidies to wind and solar power, and 
rampant corruption has been discovered in the Spanish example, 
especially of solar power, where some of the criminal cartels 
moved heavily into solar power and were using diesel generators 
to sell solar power, quote, unquote, at night to the Spanish 
government at a fixed rate higher than the competitive sources 
of energy. These things are, frankly, boondoggles. They are 
promoted by rent seekers, and this has been shown time after 
time after time.
    Mrs. Blackburn. Thank you. I have some other questions and 
I will submit those for written response. Thank you.
    Mr. Markey. We thank the gentlelady very much. The chair 
recognizes the gentleman from Missouri, Mr. Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman. I have, 
unfortunately, a meeting that I must chair beginning at 12 
noon. And I did want to have the opportunity to thank you in 
leading us in what I consider to be a great and important 
information gathering. And I appreciate all of your comments 
today and your willingness to provide us with information. We 
received it from scholars and thoughtful men and women from all 
over the world, actually, and I appreciate it.
    I look at this whole issue a little, perhaps differently. 
In a book that I read, frankly, often, there is a little-read 
line that says: The Earth is the Lord's and everything that is 
in it.
    We are, in a real sense, only squatters, not owners. It is 
our responsibility to care for the Earth. And we have no more 
right to change the climate of Earth than we have the right to 
change the thermostat in another person's home. And I think 
that in the years to come, one of the great questions will be--
and I can see television clips of it, I probably won't be 
around--of people denying that the Earth is warming or denying 
that humans are the cause. And I have looked at TV program 
special documentaries on things in the past how they show 
people saying this won't happen and so forth. And I hope for my 
children and my children's children that what we have attempted 
to begin will, in future days, rise to the surface of national 
consciousness, and certainly the Congress, and we will find 
ourselves taking an appropriate stand.
    Thank you so much, Mr. Chairman, for everything that you 
have done in leading this committee.
    Mr. Markey. And thank you. And thank you for everything 
that you are doing in Kansas City to make it a model for the 
installation of the energy efficiency and renewable energy that 
I think will ultimately be the model for the country, and we 
thank you for your great leadership as well.
    The chair recognizes the gentleman from Washington State, 
Mr. Inslee.
    Mr. Inslee. Thank you. Just one comment as we wrap up our 
hearing and our work of this committee. I want to thank my 
colleagues for working on this. If some archeologist happens to 
dig up the records of this committee 100 years from now, some 
of us will be shown to have been right and some of us will have 
been shown to be wrong. And none of us knows that for sure, but 
I want to thank all members for working on this important 
issue.
    I want to thank Dr. Gleick for being here, who is the 
author of a great book, ``Bottled and Sold, The Story Behind 
Our Obsession with Bottled Water.'' My wife has turned me on to 
that work, and I enjoy it very much.
    Dr. Gleick, tell me, why do you think there has been a 
group of folks that refuse to accept this, you described as 
uncontroverted science? And I think that is an accurate 
description given that every scientific group of any esteem has 
recognized this phenomenon as uncontroverted at this point. Why 
do you think there is any discussion to the contrary in our 
society today?
    Mr. Gleick. Thank you, Congressman. I was wondering where 
that copy of the book had been sold. Thank your wife for me.
    I am very reluctant to get into motive. I don't think it is 
useful for me----
    Mr. Inslee. Let me ask a different question then. What do 
you think is the most successful dialogue when you have had 
dialogue with people who have expressed doubts about that clear 
science? What do you think is most successful in a dialogue in 
that regard?
    Mr. Gleick. When I talk to people who are unsure about the 
science of climate change or skeptical, don't believe it is 
happening, I do like to find out why they believe that. 
Sometimes it is ignorance; they don't know anything about the 
science, they haven't read the science, they don't know where 
to go for good information. Sometimes it is ideological. They 
just don't want to believe that humans could possibly change 
the climate of something as great as the planet. Sometimes it 
is fear about what we might have to do to change emissions of 
greenhouse gases. There is concern about economics, there is 
concern about politics, there is concern about government 
versus nongovernmental action.
    There are a lot of things that drive it. And I find that 
people are willing to be convinced about the science when they 
understand that there is still plenty to debate on the policy 
side that the fact that the climate is changing, the fact that 
humans are changing the climate is a reality doesn't 
necessarily dictate what the response should be. There is a lot 
of difficult discussion that, frankly, you in Congress have to 
deal with about what to do about it, about where to put the 
effort on mitigation versus adaptation versus not doing 
anything.
    Mr. Inslee. So one thing, I hope you will have license to 
be vocal. We need the scientific community to step up to the 
plate here and be vocal on the issues. There is a tendency to 
be academic and we understand that, and that is important. But 
there is a time to be vocal, too. I hope you and your fellows 
will be vocal.
    Mr. Kauffman, you were talking about the need for financing 
mechanisms, particularly for efficiency and deployment of 
things that are ready to go now. We tried to pass a green bank 
to try to help finance the sort of first commercial-scale 
plants of a lot of these technologies. Could you give us some 
thoughts on what a financing mechanism could be for efficiency 
or those first new technologies and production?
    Mr. Kauffman. Okay. Thank you. One of the issues about 
financing efficiency is just one of the questions about who has 
the relative legal standing of the efficiency loan relative to 
the mortgage. And so Great Britain has actually been able to 
solve that by putting it on the utility bill. And so I think 
there are some financing structures that can be used, but 
fundamentally the problem is right now when we think about 
trying to finance energy efficiency, we have, first, that 
problem. And the other thing is if, in some cases, if you are 
using innovative technology, you think that would require a 
kind of specialized financing entity. Well, you couldn't get a 
bank license to do that, so we have bank regulations that are 
opposed to that.
    The other issue, broadly, in terms of some of the financing 
problems, is the proposed new capital rules for banks which 
will have the effect, not because of this reason, it is an 
unintended consequence of reducing the amount of credit that 
will be made available to below investment grade or marginal 
investment grade companies, unless they can generate a lot of 
business for the bank because the amount of capital needs to be 
reserved against those assets are very high.
    Mr. Inslee. Just so you know, we are working on the pace 
bond issue that will do exactly what Britain has done 
essentially. And if you have any influence with Freddie or 
Fannie right now, we have been trying to browbeat them into 
doing the right thing. Thank you for that insight.
    Dr. Green, I want to ask you about this issue. When you 
have an empty pop can and you are driving the car, do you throw 
it out the window?
    Mr. Green. Well, first of all----
    Mr. Inslee. That should be easy. That is a yes or no.
    Mr. Green. Well, I don't have a car. So the answer would 
have to be no.
    Mr. Inslee. If you had a car, would you throw it out the 
window?
    Mr. Green. Of course not.
    Mr. Inslee. Why not?
    Mr. Green. Mostly because it would be littering.
    Mr. Inslee. Now, you realize that even though you don't 
throw it out the window, somebody else might throw theirs out 
the window anyway. You can't stop other people from throwing 
theirs out the window. Right? But you decide, because it is 
unethical to do that, you just don't do that. Right?
    Mr. Green. Right.
    Mr. Inslee. Doesn't that logic, isn't that logic, shouldn't 
it be the same for all of us on the planet at this point to 
have an ethic of not polluting even though others somewhere 
else may do so? And if that should be the ethic, would you not 
urge the U.S. Congress to ask America to lead in that 
direction? Isn't that the same reason we don't throw junk out 
our window?
    Mr. Green. No. And the reason is this: As was mentioned 
earlier, that we are stewards of the planet. That is true. 
There are, however, at this point in time billions of people 
living in abject energy poverty. They are starving to death, 
they are dying of lung disease because they are using wood and 
dung fires. They are leveling the rain forests and destroying 
massive amounts of ecosystems because they are poor.
    If we raise the cost of energy, we raise the cost of 
everything. We slow the development and the elevation of those 
people out of poverty. And I think that is a much more 
important moral imperative than banging our head against the 
wall of litigation, which will not produce significant 
environmental benefits and will only impose significant costs.
    Mr. Inslee. So you say just keep throwing the cans out the 
window as long as somebody else wants pop. And I just disagree 
with you with that, and I will close with that. Thank you, all 
of our panelists.
    Mr. Markey. I thank the gentleman very much. And now we 
will recognize the gentleman from New York, Mr. Hall.
    Mr. Hall. Thank you, Mr. Chairman. Thank you to our 
panelists all.
    Dr. Green, I was listening to NPR on the way in this 
morning. They were talking about interviewing some insurance 
executives who would say that their industry has already 
decided that the science is in, and they agree with you, and so 
do I, that we shouldn't--governments shouldn't keep paying to 
rebuild houses on the Outer Banks or, you know, flood plains, 
places where they will obviously be destroyed again by another 
storm or another flood. But what they have done, in fact, many 
insurance companies, is withdraw completely from the market in 
south Florida and the Bahamas and places that they have taken a 
beating.
    When Hurricane Frances and Jeanne came through the Bahamas, 
they lost so much money that most insurance companies have 
completely pulled out. So that is a statement, a market 
statement in which the people on the show who were being 
interviewed are saying that the markets will arrive at the 
conclusion before the governments do, and I think people do as 
well.
    I just want to address a couple things that were said by 
the gentlelady from Tennessee, who I am sorry is not here any 
longer, and others. The idea that some of us on this committee 
or some of those who feel that we need to take action to 
prevent the worst-case scenario of climate change want to 
forego 20 years of economic growth. That is just not true. None 
of us said that. That is something being stated for us or 
imputed to my--first of all, I don't think that is the choice. 
That is a false choice.
    I will tell you a couple quick stories in the little bit of 
time before we have to vote. I think those were votes on the 
floor looming.
    One of my case workers, who handles veterans issues in the 
district in the Hudson Valley, asked me to come over in October 
to her house to see her husband's low head hydro project. He 
had come to a workshop that we held with some people who deal 
with low head hydro. And DOE's Web site, in fact, has 4,000 
small dams and waterfalls listed in New York State alone that 
are unused, many of them powered mills of the previous century, 
and the water is going--tons of water a second going over and 
being wasted. And these are not dams that can be removed 
because downstream has been developed. There are houses and 
restaurants and marinas and other things downstream.
    So these are opportunities for huge numbers of people to be 
employed. All the trades people. It would be mechanics and 
sheet metal workers and electrical workers and on and on, and 
engineers, lawyers to deal with the liability issues when you 
have an orphan dam and so on. But Idaho National Laboratory of 
our DOE, not a lefty environmental group by any means, 
estimates greater than 1,200 megawatts in New York just by 
harvesting the water that is already falling over existing 
infrastructure, some of which needs to be upgraded.
    Now, my staffer's husband, who I went up to their house, 
has--they don't have a waterfall, but they have a little stream 
about this wide that runs down their property and maybe about a 
70-foot drop from the top of their property to the lower part, 
and he decided, after going to our workshop, that he was going 
to try something, and he dug a trench, created a little pool up 
at the top with some boulders to get a little depth of water in 
the stream, put a grate with a screen on it to keep debris from 
clogging it and a 6-inch plastic pipe buried under the ground 
down to about 70 feet less elevation and landed into what looks 
like a doghouse, but you open it up, looks like a big blue 
motor there upside down. He is running it backwards. He put the 
blades on it and split one pipe into four pipes to blow water 
at the four blades as they turn around in, and the motor is 
acting as a generator running backwards and he is using a 
quarter of the power to power their entire house. He could 
power three other houses. They are selling power back into the 
grid from the project that he did because his eyes lit up when 
he got the information that this was possible and that other 
people were doing it.
    As for the other 4,000 in New York and many more thousands 
in New England, these are one of the untapped, unused regional 
resources. The Midwest doesn't have the geography, the 
topography to have these kinds of waterfalls or dams or stream 
flows, but they have other things. And I think we really do 
need to diversify and use all these things. And my experience 
and the studies that I have seen show that these jobs are real, 
that, in fact, the more decentralized our power is, the more 
people are hired. It is capital intensive projects are the big 
goal of national gas or nuclear plants. They are really good 
for the banks that lend the money and then get the interest on 
it. Labor intensive, job producing are the many decentralized 
and mostly renewable projects that are available, like these 
4,000 low head hydro sites in New York.
    Lastly, I just want to say there is another staffer I am 
very proud of who is with the Wounded Warrior project, did two 
tours in Afghanistan, was stop-lossed for 287 days on his 
second tour, a medic with a paratrooper unit, a fabulous guy. 
Josh Van Sanders is his name, and I spent a good deal of time 
riding around in the car with him and going to events, and as 
chairman of the Subcommittee on Veterans Disabilities, we had a 
lot to talk about. He is also a Purple Heart recipient. But he 
said that one time he was on a mountaintop exchanging fire. His 
unit was exchanging fire with a Taliban unit on another 
mountaintop, and the Taliban unit was solar powered and our 
unit was using a diesel generator. And he said, that is wrong. 
You know? They don't have to worry about the supply chain and 
the tankers blown up in the paths coming across from Pakistan.
    So we can make the sensible choices, whatever the reason 
is, whether you believe that the climate is warming or not, 
there are many reasons to want to do these same things. And I 
think that we should try to cooperate, and I hope the next 
Congress will do so.
    Mr. Chairman, thank you for your leadership of this 
committee. And I yield the rest of my time.
    Mr. Markey. Again, I can't thank the gentleman enough. 
There has been no more conscientious and committed person to 
ensuring that this issue is dealt with in a historically 
responsible way than you have been. We thank you so much for 
your service.
    Mr. Kennedy's plane has just landed. So what I think might 
be appropriate for him, just to make sure that we recognize his 
efforts, is that I am going to deliver my closing remarks right 
now with this panel here. And then, at the conclusion of my 
remarks because there are six roll calls pending on the House 
floor right now, we will then stand in recess so that Mr. 
Kennedy can testify himself, perhaps an hour and 15 minutes 
from now, to the committee so the record will be complete with 
all of those who had been intending to testify.
    So I want to close by thanking Speaker Nancy Pelosi who 
created this select committee. She did so with her 
grandchildren in mind, hoping to ensure that the world we leave 
behind is safe, prosperous, and filled with all the natural 
treasures that God intended. I want to thank my friend, ranking 
member Jim Sensenbrenner, for his bipartisan cooperation in the 
way in which we conducted business, the way in which we went to 
countries around the world, China, India, and many other places 
to study this issue. We may have disagreed on what the remedies 
are to deal with the issue, but we traveled, we conducted these 
hearings with a measure of bipartisanship that I believe is a 
model for how these important historic debates should be 
conducted.
    The select committee held over 75 hearings. We have focused 
on developing solutions to end our dangerous addiction to 
foreign oil and create millions of new clean energy jobs. The 
select committee looked to domestic energy resources, new 
technologies, and efficiency measures that cut waste and save 
consumers money. The select committee brought in hundreds of 
the world's leading energy and national security experts, from 
military generals, energy CEO's, Nobel Prize winning 
scientists, private-sector inventors and entrepreneurs and 
innovators who are creating the next generation of clean energy 
technology. Each and every energy industry had a seat at our 
table, from giants like oil and coal, to startups like the 
solar innovators at 1366 technologies and synthetic genomics 
who have traveled the globe in search of fuel-producing algae. 
Their message is clear: If Congress can provide regulatory 
certainty and an even playing field, then we can unleash 
American innovation and harness our technological advantage.
    While some in Congress may question the science of global 
warming, the rest of the world does not. The members of this 
committee met with world leaders from Germany, China, India, 
and other nations large and small. Our members from both sides 
of the aisle represented the United States in this global 
conversation on energy and climate with dignity, substance, and 
class.
    As I said in my opening statement, the politics may change, 
but the problem isn't going away. To illustrate this point, I 
want to share with you a few numbers. Number one, 1.3 trillion. 
That is the amount of money consumers have shipped overseas for 
foreign oil since the select committee was created in 2007. 
Imported oil represents nearly half of our trade deficit. This 
massive transfer of wealth is an albatross on our economy and a 
boon for terrorist activities around the globe. As long as 
foreign oil continues to jeopardize our national security and 
economic security, our work in Congress is not done.
    Number two, 738 billion. That is the amount of money China 
plans to invest in clean energy over the next decade. This will 
create jobs that should be created here in the United States. 
We have the technological advantage. We have the 
entrepreneurial might. But unless we generate the political 
will, we will continue to lose our innovation and manufacturing 
edge. Losing the jobs race with China is not an outcome that 
any of my colleagues would support.
    Number three, $4. In the summer of 2008, that was the price 
of gasoline that focused this Nation like a laser on finding 
alternatives to oil. As the global economy recovers, China and 
India continue to grow and supplies remain tight. It is 
inevitable that these prices will return. Consumers should not 
be forced to suffer for our inaction.
    And, number 4, finally, is the number one. We have one 
planet. We all share it. We are all responsible for it. 2010 is 
on track to be the hottest year on record following the warmest 
decade on record. We have heard the warnings from scientists. 
We have seen the damage with our own eyes. Some day our 
children and grandchildren will read the record of the select 
committee. Maybe they will watch our hearings on YouTube. They 
will see a respectful and rigorous debate and an unprecedented 
understanding of the problem.
    Whether or not they see action taken on the solutions 
remains to be seen. But trust me, it is a fight that is far 
from over. A fight that they will most certainly be watching to 
see what decisions we make in order to make sure that we have 
not passed on this problem to generations yet to come.
    So we thank each of our witnesses for their participation 
in this final hearing and with the thanks of the committee, we 
will now stand in recess and we will return at the conclusion 
of the roll calls.
    [Recess.]
    Mr. Markey. The Select Committee on Energy Independence and 
Global Warming is reconvened to hear its final witness. And we 
could have no more distinguished American than Robert F. 
Kennedy, Jr. He was delayed because of a violent storm that 
went up the East Coast that made it impossible for him to make 
it earlier today, but I felt it was very important for him to 
be able to present his testimony to this committee so that it 
is part of a permanent record that will document the need for 
aggressive, urgent action to deal with this issue.
    Mr. Kennedy is the chief prosecuting attorney for the 
Hudson Riverkeeper and president of the Waterkeepers Alliance, 
an environmental organization that protects the ecological 
integrity of the Hudson River and its tributaries.
    Throughout his career, Mr. Kennedy has been a champion of 
environmental issues and has established a reputation as a 
successful historic defender of the environment. He has been 
named one of Time Magazine's heroes of the planet. He is a hero 
to me as well.
    We welcome you, Mr. Kennedy. Whenever you feel comfortable, 
please begin.

              STATEMENT OF ROBERT F. KENNEDY, JR.

    Mr. Kennedy. Thank you very much, Mr. Chairman. And thank 
you to the other members of the committee and thank you for 
reconvening here to accommodate the difficulties that I had 
this morning. I want to thank you first of all, Mr. Chairman, 
for your years that you put into service in this committee and 
that you brought to us, and the ideologic views that you have 
to this country. And as you know, as I know, it should not be a 
partisan issue and I hope it does not become a partisan issue 
over the coming years. There is no such thing as Republican 
children or Democratic children. Our country ought to be the 
leaders of the world on this, these issues; and instead, we are 
looking at the future by staring at a rearview mirror, and it 
is not good for our country and it is not good for the world.
    I want to just make one brief remark to this committee, 
because yesterday the New York State Legislature, New York 
State Assembly--and you have my written remarks and I am going 
to depart from those. But yesterday, the New York State 
Assembly passed a bill that was previously passed by the New 
York State Legislature to establish a moratorium on natural gas 
drilling in New York State.
    This is a controversial area. Sheldon Silver, who is the 
chair of the Assembly in New York State, said that they got 
more calls on this bill than they have on any other bill. They 
had hundreds of bills to consider yesterday. It is a bad sign 
for the natural gas industry, it is a bad sign for our country. 
We have a thousand trillion cubic feet of natural gas that have 
become available for the past couple of years. There is so much 
distrust in the grassroots community of the natural gas 
industry, and of the regulators, that this bill has become 
necessary.
    It is not good for our country. We should be replacing the 
coal. We have 320 gigawatts of build capacity for coal in this 
country. We have 450 gigawatts of natural gas capacity. The 
coal capacity is used 99 percent of the time, the gas capacity 
is used between 37, 38 percent of the time. And that is not 
good for the environment, it is not good for jobs, it is not 
good for our country. And it is because of the reckless 
drilling protocols that are being employed by the lowest 
producers in the natural gas--the lowest cost producers in the 
natural gas industry. They are doing bad things, and they don't 
have to.
    There are three problems with natural gas with fracking. 
One is a water management problem. There are technological 
solutions. They should be required to do close-looped systems 
and they should be required to have transparency in their 
drilling fluids. That would solve the problem of water 
management.
    Number two, there is a problem with migration of methane, 
not from the target formations, but usually from high pressure-
low pressure formations that the drop well goes through as it 
is trying to reach the target formation. And the reason that 
migrates up and blows up the houses or catches the faucets on 
fire or contaminates drinking water is because of poor casing 
protocols. NRDC has worked with the gas industry to develop 
very, very high-quality casing protocols that would prevent 
those kinds of migrations. Those ought to be the law in all the 
States. We ought to have Federal regulations of that. Then we 
need very, very strong Federal enforcement.
    Number three, the industrialization of the landscapes. And 
that can be dealt with--and this is controversial, in the 
environmental community too--but in my view, the best way to do 
that is through pooling, saying we can do this horizontal 
drilling. We don't need to have 40 or 50 wells per square mile. 
You can have a single well per county in many places. And it 
increases the revenues that the industry gets, it increases the 
revenue of the landowners and of the people of that community.
    That is all I am going to say about that. We need 
government action on this in order to free up this vast 
reservoir, because natural gas isn't just a good replacement 
for coal. It is also a natural companion for wind and solar. It 
gets rid of the variability problems and lets wind and solar 
deliver baseloads to the utilities. So we need to do that, and 
I hope that this committee will consider that in the future. It 
is a critical issue. Republicans and Democrats ought to get 
together on this.
    The big issue and the issue that you have been working on 
for years, that this committee is trying to solve, is the issue 
of our dependence on carbon and on the decarbonization of 
American society, which is good for our country. Put aside the 
environmental issues. Everything we have got to do to deal with 
global warming are things we ought to be doing anyway, for the 
sake of our national prosperity, for the sake of building jobs, 
for the sake of our national security, our energy security, our 
independence, and our international leadership.
    We are borrowing $1 billion a day today, mainly from 
nations that don't share our values. In order to spend $1 
billion to import oil into this country, again largely from 
nations that don't share our values, we are--through our deadly 
addiction to oil--we are funding both sides of the war against 
terror. And we give about $1.3 trillion in subsidies to the oil 
industry every year. If you doubt that figure, look at Terry 
Tamminen's new book, ``Lives Per Gallon,'' direct Federal 
subsidies through the oil depletion allowance, then the 
indirect subsidies, the military expenditures, the crop damage, 
the air damage, et cetera, et cetera.
    We give about half a trillion a year, half a trillion to 
the nuke industry, about 1 trillion--nobody has ever done the 
calculations--to the coal industry. And these have allowed the 
incumbents to dominate the marketplace which otherwise would be 
dominated by renewables.
    We have extraordinary renewables in this country. We are 
the best in the world. My home in Mount Kisco, New York is 
powered by geothermal. We could do that with virtually every 
home in our country outside of the major cities we have, that 
we are number two in solar resources in the world. The 
Scientific American just did a study saying that if we were to 
harness the solar in an area that is 75 miles by 75 miles in 
desert southwest, we could power 100 percent of the existing 
grid. The Great Plains States, the Saudi Arabia of wind. We 
have enough wind in Montana, North Dakota, and Texas to provide 
100 percent of the energy grid of North America three times 
over, even if every American owned an electric car. The problem 
is developing a marketplace that is rational in this country.
    People have said to me for years, What is the biggest 
answer to environmental problems? I have always said, Free 
market capitalism, true free market capitalism, which we do not 
have in the energy sector, and we don't have much in this 
country anymore. But the energy sector is almost completely 
based on a kind of corporate crony capitalism model that is 
funded by subsidies to the big incumbents.
    We need to develop a grid system in this country. And I 
know your prejudices against a national unified grid because of 
the ease with which that would facilitate coal power into New 
England when we already have a New England extraordinary wind 
resource that we ought to be exporting. But we need a grid 
system. We need a grid system, whether it is regional grids or 
national unified grids, that are going to create a marketplace 
that is governed by rational rules, rather than having 50 
different public utility commissions in 50 different States, 
each with its own arcane, Byzantine set of rules, a vulcanized 
set of rules that restricts access to the grid.
    We need a system that creates a rational marketplace that 
coordinates the public interest with the marketplace rules. And 
right now we have a marketplace--we need a marketplace that 
does what a market is supposed to do--which is to reward good 
behavior, which is efficiency, and to punish bad behavior, 
which is inefficiency and waste.
    Today we have a marketplace in the energy sector that is 
governed by rules that were rigged by the incumbents to reward 
the dirtiest, filthiest, most poisonous, most destructive, most 
addictive fuels from hell, rather than the cheap, clean, green, 
abundant, and wholesome and local fuels from heaven. We need to 
reverse that dynamic. We need a market system.
    You know, I have my home--I have geothermal in my home and 
I have two solar systems. My home, 24 hours a day, produces 
more energy than it uses. It is a power plant. I ought to be 
able to sell that back on the grid and get market rates for it. 
We need a grid system that will turn every American into an 
energy entrepreneur, every home into a power plant, power our 
country based upon American ingenuity, resourcefulness, human 
energy, what Franklin Roosevelt called American industrial 
genius, rather than Saudi Arabian oil. We can do that in our 
country. And let me give you two examples of when we have done 
this before.
    In 1979, the Federal Government created an alternate grid 
in this country that connected every American home to the 
Internet. A year after that, the CEO of IBM in 1980 said that 
personal computers were a dead-end technology. And there were a 
lot of other computer companies that we knew about back then 
that made that same bet, that are no longer around today or 
moved out of the computer business, companies like Honeywell 
and others.
    Now, today most of us have PCs, and the reason is we 
created a national marketplace that rewarded their use. And 
what happened to the cost of information, of bits and bytes? It 
plummeted to virtually zero. That is what is going to happen to 
electrons in this country as soon as we build a national grid 
for energy.
    In 1996, we created a national unified grid for 
telecommunications. Bill Clinton signed the Telecommunications 
Act. He told all the baby bells, you have got to unify your 
lines. You can no longer restrict access to anybody. The lowest 
cost providers can prevail in the marketplace. And that 
triggered a telecommunications revolution in this country, and 
all of these little gadgets that we now have like I-phones are 
the offspring of that revolution.
    But what happened to the cost of telecommunications? Well, 
yesterday afternoon I was watching TV with my children. I saw 
an ad on TV by a company called Vonage, by a company that 
promises unlimited long distance overseas and local telephone 
calls for $19. Well, that is practically free. Two months ago, 
I made a call from Miami to London that cost $74. That is the 
old way. The new way is free telecommunications forever, 
because we created that national marketplace.
    As soon as we create a national marketplace for electrons, 
we build out that grid system so that every American can 
participate and sell and buy energy on the grid and have a 
rational marketplace with rational drivers, we are going to 
have essentially free energy forever in this country.
    Two weeks ago on Wednesday, one of my companies--I am on 
the board of the biggest green-tech venture capital firm in 
this country, Vantage Point. I also work as a special adviser 
to Starwood Energy, which is one of the largest players in 
transmission construction field and generation field. Two weeks 
ago we broke ground on one of the largest power plants ever 
built in this country, which is Bright Sources power plant, 
which you know well, because you helped get this done in the 
Mohave Desert. We are going to complete construction in 2 
years. It is 2.7 gigawatts, and we have power purchase 
agreements with the two biggest utilities in California. A 
typical nuke plant, as you know, is about 1,000 megawatts, so 
it is about 2\1/2\ times the size of a nuke plant. Well, we are 
going to build it in 2 years. A nuke plant will take, who 
knows, 20 years to build. A coal plant and a nuke plant costs 
15 to $20 billion a gigawatt. This plant costs $3 billion a 
gigawatt. A coal plant takes 10 years to build and a coal plant 
costs 3 billion a gigawatt, the same as an oil plant, the same 
as ours. But once you build our plant, once Bright Source 
builds its plant, it is free energy forever because the photons 
are hitting the Earth every day for free. All we have to do is 
build the infrastructure to harvest them and put them in the 
lines; then it is free energy forever.
    Once you build that coal plant, now the big costs are just 
starting because you have got to go cut down the Appalachian 
mountains, ship them across the country in railcars, burn the 
coal, poison every fish in America with mercury, acidify the 
oceans, acidify the high peaks of the Appalachians, poison, 
kill 60,000 people a year, according to EPA's Web site, from 
ozone and particulates, and all the other hidden costs of coal.
    Once you build an oil plant, now you have got to go to 
Saudi Arabia, punch holes in the ground, bring up the oil, 
refine it expensively, genuflect to the sheiks who despise 
democracy and are hated by their own people, get in periodic 
wars that cost $4.3 trillion, according to OMB--that is what 
this one is going to cost over the next 20 years--bring it 
across the Atlantic, with a military export that Exxon doesn't 
pay for, but you and I pay for, then spill it all over the 
Gulf, spill it all over Valdez, burn it, and poison everybody 
in America.
    So the big costs of oil occur after you build that $3 
billion plant. Once you build that solar plant, it is free 
energy forever.
    Here is the math. We use 1,000 gigawatts a day of peak 
demand in our country; 500 of those are carbon-based. So to 
replace the 500--wind is even cheaper than solar. So to replace 
those 500 gigawatts, if we had the transmission system, it is 
going to cost about $1.5 trillion--that is less than the Iraq 
war--to give us a decarbonized economy that will bring us free 
energy forever.
    Let me just say one last thing. In 1929, just before the 
stock market crash, the Dow Jones industrial average was at 
385. In 1942, 13 years later, it was at 85. So the stimulus 
package we now call the New Deal put millions of Americans to 
work, left millions of Americans--kept them in their homes, 
kept millions of farmers in their farms, kept 1,000 banks from 
closing. But it did not--it was not robust enough to restore 
the American marketplace economy.
    Then, a year before Pearl Harbor, Franklin Roosevelt made 
his biggest stimulus package ever, which was the preparation 
for World War II. And he gave a famous radio speech, and my 
grandfather was a part of this because he was part of the 
shipbuilding industry that built more tonnage of ships than had 
ever been done in history. But Franklin Roosevelt said to this 
country, We are going to build 50,000 airplanes a year. His 
aides later admitted that just before the radio address, he had 
picked that number out of thin air. The year before, we had 
built 2,800 aircraft in this country; he said we are going to 
build 25,000 tanks a year, we are going to build a ship a day, 
we are going to build a battleship every 3 months, an aircraft 
carrier every 6 months. We are going to do it until the war is 
over and won, and on and on. People laughed at him. He was 
ridiculed by editorials from the left and from the right. They 
said no industrial mobilization of this kind has ever happened 
in the history of the world. How are we going to do it here? He 
has overpromised, he has overcommitted.
    But Roosevelt went to Detroit and told the automakers, You 
are not building cars anymore. You are building tanks and 
aircraft and half tracks and amphibious vehicles and bombs and 
detonators. Within 6 weeks, they retooled their factories. 
Within 6 months, they had met his goals. Within 12 months, they 
had surpassed them.
    The following year we built 96,000 aircraft in this 
country. You had full employment; 160,000 women went to Detroit 
and found jobs where they had been black-balled before; 200,000 
blacks went to Detroit and found jobs. And that full employment 
created aggregate demand for this country, which stimulated the 
marketplace and then made us the richest country on Earth, with 
half the wealth in the world, for the next 50 years.
    We have the opportunity to do that same thing now by 
transforming our country into a green-tech economy, to employ 
thousands of people, to build pylons across the country and 
string wires down the existing railroad tracks and right-of-
ways to create a national grid system, and to build off the 
coast of New England, the Google grid that is being 
contemplated today, to employ thousands of people building 
solar thermal plants in the desert southwest, erecting wind 
turbines on every farm in the Midwest that wants them, to go--
teams of tens of thousands to go into people's homes to 
pressure-test the homes, to spray in cellulosic insulation. 
And, at the end of that we will have a system in place that 
gives our country free energy forever, and that will be the 
largest tax break in the history of the world. A permanent tax 
break. Because that is the biggest cost to American enterprise, 
the cost of our energy. And if we can eliminate that or reduce 
it significantly, we all of a sudden become the greatest 
competitor on the global marketplace.
    And that is the way we need to start thinking about this 
country. Instead of starting thinking about all the impediments 
to doing this and all the things that are going to go wrong, we 
need to start adopting a view of this country that has been the 
traditional view, which is an idealistic view, a hopeful view, 
a view that can allow our children to have a future that they 
can embrace, and us to be something that we can give them that 
we can be proud of. Thank you very much.
    [The statement of Mr. Kennedy follows:]
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    Mr. Markey. I thank you so much for that incredible 
statement that you made. In a lot of ways, we are going to be 
challenged, from the end of this hearing on, for 2 years to 
ensure that this vision of what our country can become remains 
in front of the American people. Because ultimately as you are 
saying, what we need to do is to inject Darwinian paranoia, 
inducing competition into the energy marketplace.
    We have to make sure that the energy giants, just as the 
telecommunications giants, feel the threat of smaller, more 
nimble, more cost-efficient ways of communicating or generating 
electricity, generating energy generally, to enter into this 
marketplace.
    And that is ultimately what the Waxman-Markey bill is 
intended to accomplish. It was modeled on the 
telecommunications laws of the 1990s. I happened to be the 
chairman of the committee that passed them, and it turned that 
into a different reality. And as you are saying, Wang Digital, 
and many other large companies that were household names no 
longer exist because they did not understand the change that 
was taking place. They did not have to go out of business, but 
they did not evolve. They did not see this future.
    I think that the attitude that the coal companies have, the 
attitude that the oil companies have, is that they can stop 
progress indefinitely. But I don't believe they are right. I do 
believe there is a green generation out there in the same way 
that there was a suffragette movement that rose up to get the 
vote for women, and the same way that the young people went 
south to be part of the movement to bring the vote to 
disenfranchised African Americans in the South. There is a new 
green generation out here. And as each year goes by, they are 
going to be pressing for the change that has to take place, and 
I do think it is going to happen.
    So I am still an optimist, as I know you are. We know that 
this is inevitable. We know that this change has to take place. 
But it will take place, because technology always triumphs.
    And the question for America, from my perspective, is not 
whether or not technology is going to triumph, but whether 
America will be the country that is number one, looking over 
its shoulder at number two and three in the world. Or, are we 
just importing things that say ``made in China,'' ``made in 
Germany, ``made in India, ``made in Brazil,'' made in countries 
all over the word?
    But we decided, because of the oil and coal industry, that 
we are going to tie the hands of entrepreneurs, our venture 
capitalists, our young people, to be able to be the global 
leaders. That is the challenge.
    And what this hearing, this last hearing of the Select 
Committee on Energy Independence and Global Warming, needed 
ultimately was this kind of inspirational vision which you give 
us, Mr. Kennedy, of what the future can be, and will be, 
because we are going to make it our future. Each and every 
revolution has taken years to happen, but at the end of the 
day, I think truth does triumph.
    So if you can--and I would ask you to just relate to--a 
little bit about this vision that you laid out for us and what 
happened in the Gulf of Mexico this spring and summer in terms 
of the two alternative paths that our country can travel over 
the next generation.
    Mr. Kennedy. Well, the two are connected. And actually, 
what people need to understand is this is part of the cost of 
oil, the same way that the Gulf War is part of the cause of our 
addiction to oil.
    You know, and the Bush administration, the most recent Bush 
administration was kind of coy about this not being an oil war. 
The original Bush administration was not coy. They said--in 
fact, they had to explain to the American people why are we 
going to war to stop Iraq, one dictatorship, from invading 
Kuwait, another dictatorship? Why is that a concern of the 
American people? And he proffered at that time what he called 
the Bush Doctrine, which was that the United States had a right 
to intervene in the affairs, the sovereign affairs of other 
countries, to protect the vital interests of our oil lines. So 
that was the justification for that war.
    And the second Gulf War, which we are now still involved 
in, grew out of the failure of Saddam Hussein to obey the 
treaties from the first Gulf War.
    So clearly this is a cost of oil. But it is not the only 
cost of oil. And I said, you know, I will refer you again to 
Terry Tamminen's book, ``Lives Per Gallon,'' where he--Terry 
Tamminen just stepped down as head of California EPA, and he 
scrupulously, meticulously inventories the vast raft of 
subsidies that we hand over to the oil industry every year. And 
they include crop damage, they include human health damage, the 
cost of all that. They include the direct Federal subsidies, 
like the oil depletion allowance, which is about $5 billion a 
year, but also all these indirect subsidies. And among those 
are the cost to our country of the Gulf oil spill. And it is 
hard to even calculate what that cost will be.
    We are finding now that--yesterday there was an 
announcement that seafood from the Gulf is in fact contaminated 
with dangerous levels of hydrocarbon. The government has tried 
to gloss over this fact by doing tests which are smell tests, 
you know, to try to smell hydrocarbons in the fish. Of course 
you can't do that. And the consumers in the Gulf have been 
saying, Wait a minute. We want to know more than just the smell 
test. Well, now a number of groups have gone out, including 
NOAA, and done these tests and found out there are high levels 
of contamination in fish from all over the Gulf. So that is 
going to be part of the legacy of the oil industry to our 
country.
    Let me just talk about some of the subsidies of coal. The 
National Academy of Sciences in August of last year, and the 
National Research Council, both research arms of the Federal 
Government, completed a 10-year study where they found that 
every freshwater fish in the United States is now contaminated 
with mercury. Well, that is a cost of coal to our country. When 
coal says, Oh, we are only 11 cents a kilowatt hour, they are 
not telling you that every fish in our country is now 
contaminated with mercury.
    If you go to EPA's Web site, there are two studies on 
there, one by the Harvard School of Public Health that says 
that ozone and particulate emissions from coal-burning power 
plants kill 60 million Americans every year. That is 20 times 
the number of people who were killed in the World Trade Center 
attacks, but not just once, year after year after year. And 
that is part of the cost of coal. A million asthma attacks, a 
million lost workdays.
    Another more recent study on EPA's Web site estimates the 
cost of ozones and particulates to the public health system in 
this country to be $156 billion a year. You have got people out 
there complaining about the cost of ObamaCare. Well, if you 
want to eliminate all the costs of national healthcare in this 
country, just get rid of ozone and particulates from coal-
burning power plants. That is $156 billion a year. You have got 
acid rain.
    You know, I live 2 hours south of the Adirondacks. I take 
my kids fishing and camping and kayaking and swimming up there 
and recreating. The oldest protected wilderness on the face of 
the Earth has been protected forever as wild since 1988. One-
fifth of the lakes in the Adirondacks is now sterilized from 
acid rain. That is the cost of coal, which has also destroyed 
the forest cover from the high peaks of the Appalachians, from 
Georgia to northern Quebec.
    If you fly over the Appalachians today, you will see a 
national disgrace. I flew over, not long ago, the Cumberland 
Plateau. We are literally cutting down the Appalachian 
Mountains. During the Bush administration, we flattened 1.4 
million acres, an area larger than the State of Delaware. We 
have buried 2,000 miles of rivers and streams, according to 
EPA. We have cut down 500 of the largest mountains in West 
Virginia, these historic landscapes where Daniel Boone and Davy 
Crockett roamed. Well, these were all parts of the cost of coal 
that they don't tell you about when they say it is only 11 
cents a kilowatt hour.
    If you really added up the price of coal, you would find 
that it was the most catastrophically expensive method ever 
devised to boil a pot of water. And we can do it a lot cheaper 
with solar and wind, and we can keep our country healthy and we 
can keep it independent, and we can create a lot more jobs.
    Mr. Markey. So let's move to solar and wind, if we could. 
Everybody knows that there is a Moore's law for semiconductors, 
and it told us that today's iPhones would be more powerful than 
the last generation's supercomputers. But there is also a 
Moore's law for solar photovoltaics as well. Every time 
deployment of solar photovoltaics doubles, the cost of solar 
falls by 18 percent. So you can see, going back to 1978 when it 
was $5 a kilowatt hour, as production globally doubled we are 
now down to maybe 23, 24 cents a kilowatt hour, but on this 
track to ultimately, by the year 2020, have it be competitive 
with coal, because the marketplace works.
    Over the last 2 years, the cost of solar has dropped by 50 
percent, 5-0 percent, in 2 years, and the industry expects it 
to drop by another 50 percent over the next few years. So the 
markets play a huge role in this phenomenon, because Moore's 
law is not an independent law of physics; but it rests on the 
role of markets, because without a vibrant market into which 
you sell integrated circuits, the shape of the performance 
curve would look very different. And so that is the same thing 
that is true for solar. It is the marketplace that creates the 
incentive for the physics to have the breakthroughs that then 
reduce the cost.
    Could you expand now a little bit on your own personal 
experience, using the companies that you work with or other 
observations that kind of reflect this reality in terms of what 
is happening out in the marketplace?
    Mr. Kennedy. I mean, kind of the collateral accessory that 
I would add to that is that the country that creates the 
infrastructure for solar or for wind is going to own the 
technologies that the rest of the world wants to buy.
    And you look at Germany which now has the largest 
deployment--Germany has solar because it was one of the first 
ones to develop feed-in tariffs for solar. And Germany has the 
largest deployment in the world of solar, but it has less 
sunlight than Alaska.
    I just came back from China. And When you go into--I toured 
all the major solar photovoltaic plants in China, which is now 
a Chinese industry. The interesting thing was they are using 
American infrastructure in their factories. Their furnaces are 
made by GT Solar, which you and I talked about before, which is 
a New Hampshire union company. And they have dozens of them in 
every factory. Their fusion furnaces are made by Dispatch, 
which is a Minnesota company. And those are technologies that 
were developed at a time when they were encouraging solar 
through rational policies from the Federal Government. We had 
companies all over this country that were developing new ways 
of creating solar. And a lot of those are still viable, they 
are still the marketplace leaders.
    But in the last 8 years, you have seen Germany take over 
that. So about three-quarters of the infrastructure in these 
Chinese plants is German-made. And Germany is now losing its 
lead because the Chinese are so aggressively moving forward. 
The Chinese have committed, as you know, $738 billion. They are 
spending three times what we are right now. They are going to 
increase their wind deployment over the next 5 years by 20,000 
percent. They are increasing their solar deployment by 1,200 
percent. They see this as the arms race of the future. They 
know whoever controls this industry is going to be the winner 
on the world economic stage. And they are moving aggressively 
to do it, and we are sitting on our hands over here.
    But now a lot of that original technology, that innovation 
technology is being developed in China. All the major research 
labs are moving to China. They are going to own that 
technology.
    So what I am saying is the country that creates the 
infrastructure--when I was a little boy, I went to Europe with 
my father in the 1960s. Everybody wanted to own an American car 
because we made the best cars in the world. Everybody wanted an 
American car. They had contempt for their own cars and they all 
wanted an American car. Why is that? Because we built a 
national highway system. We built the infrastructure that 
made--you know, building cars and a marketplace for those cars 
right here at home, something that was advantageous for local 
industries. So we owned the automobile industry. We developed 
all of the modern innovations for the automobile industry here 
in this country. And we sold them later to the Japanese, et 
cetera, as they improved their infrastructure.
    But the countries that have the infrastructure--and what 
that means today when it comes to solar, when it comes to wind, 
it means the rational economic incentive system that encourages 
or incentivizes the quick adaptation, the rapid adaptation of 
wind and solar. Whoever has the best legal infrastructure and 
incentive and marketplace infrastructures for quick adaptation 
is also going to be the nation that owns the technologies that 
they are going to be selling to the rest of the world, because 
that is part of the industry.
    The Chairman. So here is what I would ask then, Mr. 
Kennedy. Let us have you give us the last word for the Select 
Committee on Energy Independence and Global Warming. What is it 
that you want this committee, this Congress to know.
    Mr. Kennedy. The Republicans now control Congress. A lot of 
them talk about free-market capitalism. And I have said for 
many years, the free market is something that will give us the 
advantage in these areas. But the marketplace is not a god. It 
is a tool. It is like a hammer. You wouldn't worship a hammer. 
You would use it to build something that was good for your 
children.
    And what we have to do is build marketplace incentives that 
create competition and create that ferment and incentivize. The 
market is an economic engine, but it has to be harnessed to a 
social purpose. And the social purpose in this case would be 
what do we want as a country. We want energy independence. We 
want national security. We want economic independence and we 
want prosperity. How do we do that? We create it by creating 
rational market incentives that encourage people to invest in 
solar and wind, which is economic independence, which is going 
to create local jobs, which is going to use local resources, 
rather than having to get our resources from the Gulf. So I 
would say that would be the best future for our country, to 
live up to the values that we have espoused since the beginning 
of our history.
    The Chairman. Thank you, Mr. Kennedy. And thank you for 
your eloquence and thank you for your continued commitment to 
raising the profile of this issue so that Congress, the States, 
individuals, take the action which we need. The politics may 
have changed, but the problems have not changed. We have to 
continue to work to make sure that we solve the problems that 
you have brought before our committee.
    Since this select committee was created 4 years ago, we 
have imported $1.3 trillion of oil into our country. It 
represents about half of America's trade deficit and it goes 
largely to countries that are not our friends. The Chinese have 
announced that they are going to spend $750 billion over the 
next 10 years on solar and wind and developing that as an 
economic engine of growth.
    In the 1960s, we had the space race. Now we have a jobs 
race. Who will, which country will control these jobs, this 
manufacturing sector? The United States cannot sit on the 
sidelines. The price of a gallon of gas is going back up to $4 
a gallon. It is inevitable. And when that happens, consumers in 
America are going to turn to Congress once again and say, What 
were you people doing? Why didn't you put something in place 
that can break our dependence on OPEC's ability to tip us 
upside down at the gas pump and make us pay this $4 or $5 
again?
    And ultimately, it will be the green generation that is 
following on this generation of politicians, and they are going 
to ask the question, Why didn't you protect this one planet 
that we have? Why didn't you understand the interrelationship, 
the interconnectivity of all people on the planet?
    That is what this select committee has tried to do over the 
last 4 years, to raise these issues, to show how they are all 
interconnected, how it all goes to our national security, our 
economic security, our environmental security and how 
ultimately it is a moral issue. God created this planet. Our 
responsibility is to pass it on better than we found it. Maybe 
just a small bit better, but better than we found it be.
    And right now, the baby boomers, this generation of 
political leaders, has failed. They have failed all subsequent 
generations. So we cannot stop. We have a responsibility to 
stand up to, to fight these interests that want to keep us 
addicted to fuels which harm our environment, harm our national 
security, and harm our ability to create a new generation of 
jobs for American workers.
    That is my personal commitment. That is what I am going to 
be doing for the rest of my career here in Congress and for the 
rest of my life. And I am going to join with you, Mr. Kennedy, 
and millions of others out there who are committed to this same 
cause.
    I thank you for your great service to our country and I 
thank all of you who have helped us over the last 4 years to 
create this incredible record, led by Speaker Pelosi who made 
this her flagship issue 4 years ago. And 35 miles per gallon as 
an average fuel economy was considered to be impossible in 
January of 2007. Now people realize that it might be the best 
thing that can happen economically for General Motors or Nissan 
or all of these companies that are in this electric car 
revolution.
    The same thing is going to happen in every area of American 
economic competitiveness once we get the right market-based 
incentives on the book. I thank everybody for everything they 
have done to help us, the staff especially, over the last 4 
years. With that, this hearing is adjourned.
    [Whereupon, at 2:10 p.m., the committee was adjourned.]
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