    [House Hearing, 112 Congress]
    [From the U.S. Government Publishing Office]

              H.R. 4255, THE ACCOUNTABILITY IN GRANTS ACT OF 2012

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

                                    HEARING

                                   BEFORE THE

                        SUBCOMMITTEE ON ENERGY AND POWER

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE

                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 SECOND SESSION

                                   __________

                               SEPTEMBER 11, 2012

                                   __________

                               Serial No. 112-173

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

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                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman

    JOE BARTON, Texas                    HENRY A. WAXMAN, California
      Chairman Emeritus                    Ranking Member
    CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
    ED WHITFIELD, Kentucky                 Chairman Emeritus
    JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
    JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
    MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
    GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
    LEE TERRY, Nebraska                  ANNA G. ESHOO, California
    MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
    SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
      Vice Chairman                      DIANA DeGETTE, Colorado
    JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
    TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
    MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
    MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
    BRIAN P. BILBRAY, California         TAMMY BALDWIN, Wisconsin
    CHARLES F. BASS, New Hampshire       MIKE ROSS, Arkansas
    PHIL GINGREY, Georgia                JIM MATHESON, Utah
    STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
    ROBERT E. LATTA, Ohio                JOHN BARROW, Georgia
    CATHY McMORRIS RODGERS, Washington   DORIS O. MATSUI, California
    GREGG HARPER, Mississippi            DONNA M. CHRISTENSEN, Virgin
    LEONARD LANCE, New Jersey            Islands
    BILL CASSIDY, Louisiana              KATHY CASTOR, Florida
    BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
    PETE OLSON, Texas
    DAVID B. McKINLEY, West Virginia
    CORY GARDNER, Colorado
    MIKE POMPEO, Kansas
    ADAM KINZINGER, Illinois
    H. MORGAN GRIFFITH, Virginia

                                     7_____

                        Subcommittee on Energy and Power

                             ED WHITFIELD, Kentucky
                                     Chairman
    JOHN SULLIVAN, Oklahoma              BOBBY L. RUSH, Illinois
      Vice Chairman                        Ranking Member
    JOHN SHIMKUS, Illinois               KATHY CASTOR, Florida
    GREG WALDEN, Oregon                  JOHN P. SARBANES, Maryland
    LEE TERRY, Nebraska                  JOHN D. DINGELL, Michigan
    MICHAEL C. BURGESS, Texas            EDWARD J. MARKEY, Massachusetts
    BRIAN P. BILBRAY, California         ELIOT L. ENGEL, New York
    STEVE SCALISE, Louisiana             GENE GREEN, Texas
    CATHY McMORRIS RODGERS, Washington   LOIS CAPPS, California
    PETE OLSON, Texas                    MICHAEL F. DOYLE, Pennsylvania
    DAVID B. McKINLEY, West Virginia     CHARLES A. GONZALEZ, Texas
    CORY GARDNER, Colorado               HENRY A. WAXMAN, California (ex
    MIKE POMPEO, Kansas                      officio)
    H. MORGAN GRIFFITH, Virginia
    JOE BARTON, Texas
    FRED UPTON, Michigan (ex officio)

                                      (ii)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Ed Whtifield, a Representative in Congress from the
      Commonwealth of Kentucky, opening statement....................     1
        Prepared statement...........................................     3
    Hon. Bobby L. Rush, a Representative in Congress from the State
      of Illinois, opening statement.................................     7
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, opening statement....................................     8
        Prepared statement...........................................    10
    Hon. Joe Barton, a Representative in Congress from the State of
      Texas, opening statement.......................................    11
    Hon. Henry A. Waxman, a Representative in Congress from the State
      of California, opening statement...............................    11

                                   Witnesses

    Craig E. Hooks, Assistant Administrator for Administration and
      Resources Management, Environmental Protection Agency..........    71
        Prepared statement...........................................    73
        Answers to submitted questions...............................   164
    Daniel Simmons, Director of Regulatory and State Affairs,
      Institute for Energy Research..................................    90
        Prepared statement...........................................    93
    Andrew Light, Senior Fellow, Center for American Progress, and
      Associate Director, Institute for Philosophy and Public Policy,
      George Mason University........................................   102
        Prepared statement...........................................   105
        Answers to submitted questions...............................   171
    Elisa Derby, Senior Program Officer, Winrock International.......   125
        Prepared statement...........................................   127
        Answers to submitted questions...............................   174
    David W. Kreutzer, Research Fellow in Energy Economics and
      Climate Change, The Heritage Foundation........................   143
        Prepared statement...........................................   145

                               Submitted Material

    H.R. 4255, the Accountability in Grants Act of 2012, submitted by
      Mr. Whitfield..................................................     5
    Memorandum, dated September 11, 2012, Re: Supplemental
      Information on EPA's International Grantmaking, with
      supplemental material, submitted by Mr. Waxman.................    13
    Statement, dated September 11, 2012, of Nan Swift, Federal
      Affairs Manager, National Taxpayers Union, submitted by Mr.
      Whitfield......................................................   159
    Letter, dated April 9, 2012, from Thomas A. Schatz, President,
      Council for Citizens Against Government Waste, to
      Representatives in Congress, submitted by Mr. Whitfield........   163

              H.R. 4255, THE ACCOUNTABILITY IN GRANTS ACT OF 2012

                                  ----------

                          Tuesday, September 11, 2012

                      House of Representatives,
                      Subcommittee on Energy and Power,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:20 a.m., in
    room 2123 of the Rayburn House Office Building, Hon. Ed
    Whitfield (chairman of the subcommittee) presiding.
        Members present: Representatives Whitfield, Walden, Terry,
    Burgess, Bilbray, Scalise, Olson, McKinley, Pompeo, Griffith,
    Barton, Upton (ex officio), Rush, and Waxman (ex officio).
        Staff present: Gary Andres, Staff Director; Anita Bradley,
    Senior Policy Advisor to Chairman Emeritus; Allison Busbee,
    Legislative Clerk; Andy Duberstein, Deputy Press Secretary;
    Cory Hicks, Policy Coordinator, Energy and Power; Heidi King,
    Chief Economist; Ben Lieberman, Counsel, Energy and Power; Mary
    Neumayr, Senior Energy Counsel; Phil Barnett, Democratic Staff
    Director; Alison Cassady, Democratic Senior Professional Staff
    Member; Greg Dotson, Democratic Energy and Environment Staff
    Director; Caitlin Haberman, Democratic Policy Analyst; and
    Karen Lightfoot, Democratic Communications Director and Senior
    Policy Advisor.

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

        Mr. Whitfield. I would like to call this hearing to order
    this morning.
        Today, we are going to have a legislative hearing on H.R.
    4255, the Accountability and Grants Act, which was introduced
    recently. And I might say that all of us when we are back home
    in our districts hear people talk all the time about the
    Federal debt. And as you know, it is now around $16 trillion.
    And they are always asking the question, why is it that you all
    in Washington cannot seem to ever get spending under control?
    And we all know that there is not one piece of legislation that
    is going to solve that problem. But this is one piece of
    legislation that many of us believe is a small step in the
    right direction, and it does involve real money, but in many
    ways I think we could say that it is really a symbolic gesture
    that does save money.
        Now, our friends on the other side of the aisle had a memo
    that they sent out on this legislation and it says, ``the data
    does not support the majority's assertions that the Obama
    administration has intensified grant-making from EPA for
    international activities that do not benefit the American
    people.'' Well, I would say, first of all, I introduced this
    legislation and I never asserted that the Obama administration
    intensified grant-making for international activities. I am
    simply saying that ever since the Clean Air Act was written,
    this Section 1703 has been in there allowing money to be spent
    for international purposes through grants out of EPA. And the
    Bush administration did it, Obama administration did it, the
    Clinton administration did it, so everyone is doing it.
        But the purpose of this legislation is simply to take one
    small step to show the American people that at this time in our
    Nation's history when we have a $16 trillion Federal debt that,
    yes, at least temporarily, let us stop international grant-
    making through EPA. And I am not even going to argue that there
    hasn't been some benefit in these grants. But I would argue
    that, right now, one of the major factors facing our country is
    a debt load that we cannot continue with over the long-term. So
    if we cannot pass a piece of legislation like this, then I
    would say our opportunities of trying to curtail this debt is
    almost hopeless.
        So this bill is limited in scope and applies only to grants
    and other financial assistance under Section 103 of the Clean
    Air Act, which authorizes the administrator to undertake
    certain research, investigation, and training. Now, we know
    that the money has gone to the Chinese for swine study, we know
    money has gone to the Ukraine, has gone to Polish
    municipalities regarding landfill gas, we know it has gone to
    Indonesia, we know a lot of it has gone to the United Nations,
    and all of these projects may be perfectly fine, but when we
    have this kind of debt, we are simply trying to make a
    statement--let us curtail this for a period of time. And that
    is what this legislation is designed to do.
        And as we go through this hearing, we will get more into
    the specifics of it. But I would reiterate once again certainly
    not my purpose, not my intent to try to jump on the Obama
    administration for doing this. This is a government program
    that has gone on for too long. At this time, we think it should
    be halted. So that is what it is all about.
        And at this time, I would yield to the distinguished
    gentleman from Illinois, Mr. Rush.

        [The prepared statement of Mr. Whitfield and H.R. 4255
    follow:]

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     OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ILLINOIS

        Mr. Rush. Thank you, Mr. Chairman.
        Well, I tell you, Mr. Chairman, in my 20 years in this
    Congress, I have never seen nor heard of anything that is so
    shallow, any legislation that appeared before any committee in
    the Congress that is so shallow, so ill-informed, so misplaced
    than this piece of legislation that we are wasting the
    taxpayers' money on right now by even considering this
    headline-grabbing attempt by your side to, one more time, cast
    the Obama administration in an ugly light.
        Mr. Chairman, we have been having hearings and you seem to
    know we are presiding again as one of the most ineffective and
    unproductive sessions of this subcommittee in recent years, and
    I thought that maybe over the summer, especially when we are
    under a new decorum here, I thought that at least we would have
    a different kind of attitude after the summer recess.
        But Mr. Chairman, I want to remind you that it has been a
    year now and Republicans on this subcommittee have passed
    message vote after message vote and they have brought up a
    variety of useless deals expressing some kind of dislike over
    the EPA, the Clean Air Act, and again the Obama administration.
    And this bill, I must remind you or predict that it is headed
    straight to the legislative scrap pile, a scrap heap where all
    legislation like this usually ends up. And this bill is not
    aimed at producing not one job for the American people or it is
    not aimed at moving our country's energy policy forward not
    even one iota, one scintilla.
        Today, we are having this hearing and trying to keep the
    EPA from awarding grants or contracts or partnerships in
    foreign countries that could be used to address global issues,
    not just issues that we are not affected by. These are global
    issues that most of this money goes toward, issues like climate
    change. Mr. Chairman, climate change doesn't just affect your
    constituents in Kentucky or my constituents in Illinois. We are
    living in a global environment and climate change affects all
    of us. Mercury emissions and things, all of us, they don't have
    any kind of consideration for national waters.
        Mr. Chairman, again, we are trying to embarrass the
    administration and we are going about this absolutely wrong.
    There are some facts--you might not want to hear them--but
    there are some facts. You know, the data provided by the EPA to
    this subcommittee shows that under President Obama, the EPA
    grants have resulted in less spending abroad than in the last
    year of the Bush administration. Foreign expenditures covered
    by the EPA grants total $8.5 million in 2008 and declined to $6
    million in 2011. Mr. Chairman, you might not want the American
    people to know, but I am going to tell them that most of this
    money of these grants, they don't go outside of the shores of
    this Nation. This money is spent right here at home at our
    universities, our research centers. These grants help keep
    American scientists and American students busy, keep them
    working. This is certainly not a boondoggle for some foreign
    government.
        Mr. Chairman, I think that we are really way off base with
    this. This would be laughable if it was not so serious in that
    we are wasting precious taxpayer dollars on this shallow non-
    productive hearing on this bill that I guarantee you will not
    see the light of day.
        I yield back.
        Mr. Whitfield. Thank you very much, Mr. Rush.
        At this time, I recognize the gentleman from Michigan, Mr.
    Upton, for 5 minutes.

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

        Mr. Upton. Well, thank you, Mr. Chairman.
        Today, as we know, we are going to be discussing H.R. 4255,
    the Accountability in Grants Act of 2012, which prohibits EPA
    from awarding grants to foreign countries under the Clean Air
    Act.
        Over the past 18 months, this committee has held numerous
    hearings on various actions taken by the EPA, and one recurring
    theme throughout our oversight is that the Agency has strayed
    away from its core mission. In fact, EPA is pursuing a wide-
    ranging agenda that is neither specified nor required under the
    Clean Air Act. One example is the Agency's war on coal. EPA has
    no statutory authority to set America's energy policy, yet the
    Agency has embarked on a multi-pronged agenda to regulate coal
    out of existence. We will continue to push back hard against
    this anti-coal effort to protect jobs and ensure Americans
    continue to have access to affordable electricity.
        But today, we are addressing another one of the Agency's
    questionable activities--the sending of millions of dollars in
    grants overseas, particularly those grants awarded under
    Section 103 of the Clean Air Act. There is nothing in the Clean
    Air Act directing the EPA to send tax dollars abroad, and the
    American people would not be pleased to know we are subsidizing
    foreign projects at a time when millions of Americans are out
    of work and the national debt has now eclipsed $16 trillion.
        While the practice of awarding such grants to foreign
    recipients did not begin with this EPA, it is under this
    administration that foreign grant spending has nearly doubled.
    The Agency doled out nearly $12 million in foreign grants in
    '09, $22 million in 2010, $28 million in 2011. It is a
    disturbing trend that won't stop unless we do something about
    it.
        It is not merely an issue of money. In fact, many of these
    foreign grants raise questions for reasons that go well beyond
    the dollars and cents. Some of the grants go to countries like
    China, Russia, Brazil who rank among the largest foreign
    holders of U.S. treasury securities. In the case of China, we
    are talking about a country that holds more than a trillion
    dollars in U.S. debt, so we have the odd situation of borrowing
    money from a country and then giving back some of it in grants.
        Several grants go to foreign countries to help their
    industries deal with various pollution issues, but many of
    these foreign energy producers and manufacturers are in direct
    competition with their American counterparts. The fact that the
    very same EPA that is strangling our domestic industry with
    regulatory red tape is also sending checks that assist foreign
    competitors raises questions as well. In addition, many of
    these grants seem downright outlandish--$450,000 for the
    ``Breathe Easy, Jakarta'' initiative. Somehow this spending has
    got to come to an end.
        The Accountability in Grants Act would prohibit any more
    American tax dollars from being used under Section 103 of the
    Clean Air Act for purposes outside of the U.S. In doing so, the
    bill will save taxpayer dollars and force the administration to
    focus on actual responsibilities here at home.
        And I yield back to Mr. Barton.
        [The prepared statement of Mr. Upton follows:]
        [GRAPHIC] [TIFF OMITTED] 82931.005

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

        Mr. Barton. Well, thank you, Chairman Upton, and thank you,
    Chairman Whitfield, for scheduling a legislative hearing on
    H.R. 4255.
        During the EPA budget hearing back last spring, we asked a
    number of questions which were related to how the EPA was
    spending taxpayer monies at what would appear to be breakneck
    speeds. The economy is still struggling, although it is
    somewhat better, this Congress is facing some of the most
    difficult spending decisions in our history. As we all know,
    very soon, we are going to have to take up a bill to determine
    whether we want to allow the sequester to go forward or if we
    want to change it in some way.
        The Clean Air Act does allow EPA to issue grants to
    projects both here in the United States and around the world.
    Subcommittee staff have discovered that over 300 grants have
    been given to projects around the world in the last number of
    years. Since 2009, for example, we had almost $1 million that
    was given to China to study air pollution in that country,
    $200,000 to study something called ``clean cooking'' in
    Ethiopia, and $300,000 went towards methane recovery in
    Ecuador, just for example. We even sent almost $8 million for
    something called ``technical assistance'' in Russia. Several
    million dollars have gone to international groups such as
    United Nations. It is no wonder that the EPA's budget has gone
    up almost 34 percent during the Obama administration and is now
    over $10 billion per year.
        I don't believe, Mr. Chairman, that this type of spending
    reflects the priorities of the average American voter that vote
    for us to come to Washington. I just finished almost a dozen
    town hall meetings in my district down in Texas during August.
    Not once did I have a constituent stand up and tell me to spend
    more money for EPA grants overseas.
        So I am very glad, Mr. Chairman, that you put this bill
    forward and I hope on a bipartisan basis we can move it very
    expeditiously to full committee and then to the floor.
        With that, I yield back.
        Mr. Whitfield. Thank you very much.
        At this time, I recognize the gentleman from California,
    Mr. Waxman, for 5 minutes.

    OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mr. Waxman. Thank you, Mr. Chairman.
        I note that the committee Republicans launched an
    investigation into EPA's long-standing practice of awarding
    grants for work abroad. This investigation was commenced last
    summer and the Republicans released a staff report saying that
    President Obama had doled out millions of dollars to foreign
    recipients. But this report was seriously flawed. Half of the
    grants they criticized President Obama for awarding actually
    started under the George W. Bush administration.
        So I wrote to Chairman Upton and Chairman Whitfield and
    explained that their report was incorrect, asked them to
    retract that report until they reviewed the facts more
    carefully. What do they do? They ignore the letter, just as
    they have been ignoring a lot of letters. EPA then provided the
    committee with a comprehensive list of 500 grants awarded in
    the last 10 years for projects with an international component.
    Republicans have used this data to argue the Obama
    administration has increased grant funding for foreign
    projects. In fact, almost half of these grants went to U.S.-
    based university organizations, not foreign recipients, and
    many had only the most minor international connection.
        EPA calls a grant ``international'' if the grantee spends
    any money abroad at all, even if it is just to fly to a
    conference in a different country to get the perspectives of
    international experts. One grant on the list went to the
    University of Pittsburgh for research into air pollution in New
    York City. EPA Administrator Jackson explained this to the
    committee last February. She testified that very little of the
    money categorized as international actually went abroad.
        Well, after that hearing, we sent another letter to
    Chairman Whitfield raising concerns about how the committee
    Republicans were portraying EPA's international grant-making
    activities. Again, we didn't get a response. So we decided to
    ask EPA to tell us how much money the grantees actually spent
    abroad. And based on that data, we found that EPA grantees have
    spent less abroad on average in the Obama administration than
    they did during the last year of the Bush administration.
        And I would like to introduce into the record a
    supplemental memo that explains the reality of EPA's
    international grants program. And I hope, Mr. Chairman, without
    objection you will take that into the record.
        Mr. Whitfield. Without objection.
        [The information follows:]
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        Mr. Waxman. This hearing and the bill we are considering
    are a good illustration of what is wrong with this committee.
    Facts don't seem to matter. This bill proves that poor
    oversight leads to dumb legislation.
        There is another problem with this bill. Its entire premise
    is that the U.S. engagement with the rest of the world on
    environmental issues is wrong. We don't have enough money to
    send to those foreigners. That is the line we are hearing from
    the other side of the aisle. Well, the United States does not
    exist in a bubble. Pollution doesn't respect national borders.
    Pollution does not need a passport. That is why sustained U.S.
    international engagement by EPA and other Federal agencies is
    essential.
        When we wanted EPA to crack down on U.S. emissions of
    greenhouse gases, Republicans said it wouldn't do any good. We
    need an international response. Unilateral climate change would
    harm U.S. competitiveness. They say they want an international
    solution, but when EPA makes a grant to build global support
    for reducing emissions of methane or black carbon, which
    contribute to climate change, the same Members attack EPA for
    spending U.S. funds abroad. It is a cynical Catch-22.
        Committee Republicans ridicule ``Breathe Easy, Jakarta''--
    this is their press release--for its name, but ignore that this
    modest $15,000 will help the Indonesian city transition away
    from leaded gasoline. They ignore the benefit of providing
    funding for cleaner cookstoves so that poor women and children
    in Haiti and other developing countries aren't exposed to
    deadly indoor air pollution. Well, no one at Mr. Barton's town
    hall meeting said they wanted it, but if they knew about it, I
    would think they would support it. We want to protect kids in
    other countries and help other countries protect their
    population from air pollution that causes mental retardation.
        One of our greatest strengths as Americans is our
    generosity to those in need. Sadly, we seem to regard
    compassion to the needy as a weakness, not a virtue, on this
    committee.
        And I want to add, even though my time is expired, that
    painting this room green does not make this committee green.
    And I otherwise will privately tell the chairman how ugly I
    think the walls are, but I don't want to say that publicly.
        I yield back my time.
        Mr. Whitfield. I didn't have anything to do with the color
    of these walls. Well, thank you very much for your opening
    statement.
        Mr. Hooks, we genuinely appreciate your being with us this
    morning, and I am reluctant to say that, not infrequently, we
    have to delay hearings for one reason or the other. And today,
    we are having a memorial service for the 9/11 victims in the
    Capitol that begins in a few minutes. So we are going to recess
    this hearing until 11:30. And I hope that is not too much of an
    inconvenience for you. But we do look forward to your
    testimony.
        And we will recess the hearing, then, until 11:30. And I
    know we have other witnesses after that and I hope that you all
    will bear with us because we do look forward to your testimony.
    And we will reconvene at 11:30.
        So at this time, the hearing is recessed.
        [Recess.]
        Mr. Whitfield. Thank you very much for being with us this
    morning, and we look forward to your testimony. And I will
    recognize you for 5 minutes for your opening statement, and
    then at the end of that time we will have questions for you.
    And Mr. Rush is here but he is in the anteroom. He will be
    right in but in the meantime we would like for you to go on and
    get started.

       STATEMENT OF CRAIG E. HOOKS, ASSISTANT ADMINISTRATOR FOR
        ADMINISTRATION AND RESOURCES MANAGEMENT, ENVIRONMENTAL
                           PROTECTION AGENCY

        Mr. Hooks. Chairman Whitfield, Ranking Member Rush, and
    members of the subcommittee, Mr. Chairman, thank you for the
    opportunity to testify today on H.R. 4255. This bill would
    prohibit the EPA from awarding grants under the Clean Air Act,
    Section 103, for any program, project, or activity, outside of
    the United States.
        Since 1972, administrations of both parties have used
    international grants awarded by EPA to support public health
    and environmental protection globally. These grants comprise a
    very small percentage of EPA's grant budget and are supported
    in part with appropriations from other agencies. Most of this
    money is spent here in the United States. In fact, from fiscal
    year 2008 through 2010, about \2/3\ of the total awarded
    through grants designated as international was allocated for
    work here in the United States.
        While EPA's investment in international grants is small,
    these grants support efforts to reduce trans-boundary and
    global environmental threats to the United States, reducing the
    cost and increasing the effectiveness of the Nation's
    environmental protection. They also serve broader U.S. foreign
    policy and economic interest.
        Section 103 grants are a key component of EPA's
    international grant portfolio. Among the programs supported
    with Section 103 grants that would be adversely impacted by
    H.R. 4255 are the Partnership for Clean Indoor Air, or PCIA,
    and the Partnership for Clean Fuels in Vehicles. These programs
    were launched by the Bush administration in 2002.
        The PCIA addresses the burning of solid fuels for household
    cooking and heating. Over half of the world's population uses
    these fuels, which cause indoor air pollution resulting in
    premature deaths of more than 2 million people annually.
        The PCFV reduces air pollution in developing and
    transitional companies by promoting the use of lead-free and
    low sulfur fuels and clean vehicles. These programs have
    produced outstanding results. The PCIA through EPA grants and
    other activities has enabled at least 9.3 million households to
    adopt cleaner technologies and fuels improving the health and
    livelihood of 52.4 million people in developing countries.
    Similarly, the Partnership for Clean Fuels in Vehicles has
    contributed to more than 180 countries eliminating lead from
    fuels and opened international markets to American
    manufacturers of advanced air pollution control equipment.
        This legislation would also inhibit EPA's ability to
    address overseas emissions of toxic mercury pollution. When
    mercury deposition is highest in the United States, domestic
    sources are the largest contributors. However, mercury in the
    atmosphere can be transported globally. In much of the U.S.,
    mercury from global sources dominates the deposition.
    Furthermore, much of the marine fish that Americans consume
    comes from waters far from our shores. Therefore, to fully
    protect Americans from toxic effects of mercury contamination,
    a global effort is required. EPA has provided funding under
    Section 103 to the United Nations' Environmental Program to
    support efforts to reduce mercury use in products and
    manufacturing processes, as well as mercury emissions in the
    atmosphere from a variety of sources.
        H.R. 4255 would also adversely impact the Global Methane
    Initiative, or GMI, a program initiated under the Bush
    administration to reduce methane emissions. Methane is a potent
    greenhouse gas and contributes to the formation of tropospheric
    ozone, an air pollutant that is transported across borders and
    causes significant health problems in the U.S. and around the
    world. Under the GMI, EPA's Section 103 grants support work
    with 41 countries, international financial institutions, and
    hundreds of private sector organizations to reduce methane
    emissions. GMI grants have directly provided over $2.7 million
    in benefits to U.S. companies, universities, and nonprofit
    organizations. These grants have created significant market
    opportunities for U.S. technologies, goods, and services. In
    total, U.S. support for GMI has leveraged more $398 million in
    additional investment in methane-reducing projects around the
    globe.
        Countries need adequate governmental structures to enforce
    environmental standards. This can benefit U.S. companies by
    helping to ensure that foreign companies are subject to similar
    regulatory requirements. H.R. 4255 would hinder our ability to
    promote strong governance that continued award of Section 103
    grants that assist U.S. trading partners in developing
    effective institutions.
        Finally, H.R. 4255 would inhibit international scientific
    collaboration that strengthens the quality of EPA-supported
    research by prohibiting travel of Section 103 grant-funded
    scientists to attend international meetings or work with
    scientists at foreign institutions. Such a limitation would
    conflict with well established international collaboration
    practices of Federal science agencies.
        Section 103 grants play an important role in improving the
    quality of the U.S. and the world environment providing
    business opportunities for U.S. companies and supporting U.S.
    foreign policy interests. The EPA believes that H.R. 42 would
    cripple the Agency's ability through grants to address harmful
    air pollutants that affect both the global and domestic
    environment.
        Thank you for inviting me here today and I look forward to
    answering any of your questions.
        [The prepared statement of Mr. Hooks follows:]
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        Mr. Whitfield. Thanks, Mr. Hooks, very much.
        I will recognize myself for 5 minutes and then we will give
    other Members an opportunity.
        Has the EPA taken a formal position on opposing or
    supporting the legislation? I know you said it would cripple
    the Agency so I am assuming you are not going to support it,
    but have you adopted a formal position of opposition to it?
        Mr. Hooks. We have not adopted a formal opposition to this
    proposed legislation, no, sir.
        Mr. Whitfield. OK. Now, these 103 grants have certainly
    been in the Clean Air Act for many years, and as of the end of
    last year, at least from the information I was able to obtain
    from EPA, there was not any formal agenda or procedure for
    determining how these grants would be made. Do you all have a
    formal procedure adopted at EPA on how the decision will be
    made on these grants?
        Mr. Hooks. The majority of our grants are actually awarded
    competitively. International entities have the ability to
    compete for certain grants. In these instances, they were
    awarded through a competitive process.
        Mr. Whitfield. OK. The reason I was asking the question, we
    had received recently a grants policy issuance, GPI 1204, award
    and administration of foreign grants, and I was just wondering,
    is this an official document of EPA and do you know what I am
    talking about or have you seen it?
        Mr. Hooks. Yes, I do. We periodically actually review our
    internal grant policies and create additional guidance as
    necessary to ensure consistent management or assistance
    agreements for all types of award recipients. Separate and
    apart from the subcommittee's investigation, we had already
    identified updating our awards for entities as a priority for
    this fiscal year.
        Mr. Whitfield. OK. Now, when we have looked at Section 103
    of the Clean Air Act and you read that in its entirety, there
    is not any mention whatsoever of any grant for international
    purposes. So what is the legal authority of EPA for making
    these grants?
        Mr. Hooks. Actually, I believe there is a couple of
    authorities that provide our ability to award these grants. We
    use Section 103(a) and Section 103(b), but in addition to that,
    we actually refer to Section 102(f) of NEPA, the National
    Environmental Policy Act.
        Mr. Whitfield. So you do rely on 103(a) and 103(b) as well?
        Mr. Hooks. Correct.
        Mr. Whitfield. What specific language?
        Mr. Hooks. Well, maybe it is specific language by omission
    as opposed to directly--it does not state directly
    international entities. However, it does say that it directs
    EPA to establish national research and development program,
    including for any activities related to the prevention of
    control of air pollution.
        Mr. Whitfield. Yes.
        Mr. Hooks. Given the trans-boundary and international
    nature of air pollution, we think it provides us the authority
    to deal with air pollution issues at its source as well.
        Mr. Whitfield. Do you need the NEPA authority, then, if you
    have 103(a) and (b)? Do you need NEPA authority?
        Mr. Hooks. It is just an additional authority that we use
    in this instance.
        Mr. Whitfield. OK. So under NEPA, then, there are various
    Federal agencies that have the authority--at least that you
    all's position--to make these international grants?
        Mr. Hooks. Correct.
        Mr. Whitfield. OK. OK. In order for any of the above
    statutes to apply internationally, they must be supplemented by
    NEPA 102(a). OK--102(f). All right. Now, where is that
    executive order that we were looking at a while ago? You know,
    as I said in my opening statement, you know, one of the
    concerns that we have, it is not that the Obama administration
    is doing any more than anyone else, although the total amount
    of grants from 2008 through 2011 is 78 million and in 2011 it
    was over 28 million, and in 2010 over 22 million, and I know
    not all of that has been identified as specifically for
    international, but as we are dealing with this debt, the reason
    we are focusing on this is that, you know, I think it is
    helpful--I think it is healthy to look at the agencies and they
    are spending--for example, China alone through this program has
    received over 3 or $4 million over the last 2 or 3 years.
        Mr. Hooks. Um-hum.
        Mr. Whitfield. And as you know, we are borrowing a lot of
    money from China to turn around and give them money back.
        So my time is expired, but at this time I recognize Mr.
    Rush for 5 minutes.
        Mr. Rush. Thank you, Mr. Hooks. Let us talk about China and
    the Obama administration in terms of sending checks to China.
    Can you tell me for the record were the majority of the funds
    from the international grants remain inside the U.S. or most of
    the money is sent overseas?
        Mr. Hooks. Right, the majority of our international grants
    as they have been defined are spent here in the United States.
        Mr. Rush. By whom and for what?
        Mr. Hooks. Principally, through private industry. It can
    also go to universities and nonprofits. The majority go to
    universities and nonprofits.
        Mr. Rush. For what?
        Mr. Hooks. To do a variety of things through a variety of
    very outstanding programs. The Global Methane Initiative which
    was launched back in 2004 is designed to reduce the amount of
    methane in our environment. The Clean Fuels and Vehicles
    Program designed to reduce leaded gasoline and low sulfur
    fuels. And Partnership for Clean Indoor air is designed to
    reduce the amount of exposure to wood stoves.
        Mr. Rush. Um-hum. Are you aware of any other nations having
    similar international obligation or international needs as it
    relates to pollution, any other nation that sends money similar
    to what we do?
        Mr. Hooks. Sure. I think that has been one of the beauties
    about these programs is the international component associated
    with them. Right now, there are 41 countries that participate
    in the Global Methane Initiative. I think there are over 115
    countries that are participating with the Clean Indoor Air
    initiative. And I am not sure exactly how many countries are
    participating with the Clean Fuels and Vehicles Program. But it
    is an international group of countries that are now
    participating and based largely in part on U.S.'s leadership.
        Mr. Rush. And if this bill were to pass, which I doubt very
    seriously, but if by some chance it passed the Senate, got to
    the President and if he signs it, this bill becoming a law,
    what would the impact of that be in terms of our international
    stature, particularly as it relates to pollution?
        Mr. Hooks. Well, EPA is certainly viewed as the
    international leader in terms of government entities. And so
    the rest of the world does turn to the EPA for its leadership
    advice and counsel. I think, you know, if this legislation were
    to pass, clearly, we would not be able to participate in
    programs such as these. But I think it would also have a very
    chilling effect in terms of our research, in terms of the
    research that we conduct. It would prohibit a university
    professor, if you will, going to Canada to participate in an
    international meeting. And much of the international work and
    scientific and technical work that we do is in large part based
    on an international effort in putting the best minds and
    putting the best science towards our environmental decision-
    making.
        Mr. Rush. Thank you. What is the total percentage of EPA
    funds allocated to this program?
        Mr. Hooks. For our international grant activities, it is
    less than 1 percent of our EPA budget.
        Mr. Rush. But because we spend that less than 1 percent,
    then we have credibility in terms of the voice of the American
    people being heard and felt as it relates to global issues
    around the environment in this instance, including air
    pollution. Is that right?
        Mr. Hooks. That would definitely be correct. Again, like I
    said earlier, the rest of the country does look to EPA for its
    leadership, not only in our ability to promote capacity-
    building and governance, but also they look to the United
    States Government for our technology as well. When we have the
    ability to go into these foreign countries, impart our
    knowledge, we actually can bring our technologies with us. For
    example, when the Partnership for Clean Fuels in Vehicles, you
    know, the fact that most of the continent of Africa is no
    longer using leaded fuel or is on target to no longer use
    leaded fuel, that enables our initial control technology to
    come into play. Catalytic converters would be a perfect
    example.
        Mr. Rush. Right. Well, I only have one more second. Let me
    say, I just cannot believe that if this bill passed, it kind of
    reminds me of a gag rag that we are muffling or gagging the
    voice of the American people as it relates to our environmental
    leadership, our strong voice that has been here present for the
    world. We lead the world in terms of environmental issues and
    matters. We are going to tie a gag rag around that voice,
    silence that voice as it relates to the American people if this
    bill passes.
        So thank you so very much.
        Thank you, Mr. Chairman.
        Mr. Whitfield. At this time, I recognize the gentleman from
    Nebraska, Mr. Terry, for 5 minutes.
        Mr. Terry. Thank you, Mr. Chairman.
        My mind started racing during this colloquy with Mr. Rush.
    In your statement you said that this bill would ``cripple'' the
    Agency's ability through grants to address harmful air
    pollutants that affect both global and domestic environment.
    And in your colloquy here----
        Mr. Hooks. Um-hum.
        Mr. Terry [continuing]. You had mentioned also that this is
    about--well, it is less than 1 percent of the budget. It seems
    like an extreme exaggeration, then, to reach a conclusion if 1
    percent of the EPA's budget was eliminated, that that would
    equal 100 percent of all new technologies and research like the
    catalytic converter. So was the catalytic converter a result of
    foreign grants?
        Mr. Hooks. No, that was the result of the----
        Mr. Terry. That is my point. I think in this colloquy you
    were leaving us with the impression purposely that there would
    be no new technologies, and I think that is so much of an
    exaggeration that it probably impacted your credibility. But I
    wanted to talk about how much of that 1 percent is going to the
    UN. As I understand, some of that money is going to the United
    Nations Environmental Program, is that correct?
        Mr. Hooks. That is correct.
        Mr. Terry. Do you have the amount?
        Mr. Hooks. I don't have that with me.
        Mr. Terry. But in general, then, could you tell me once we
    provide those funds to UNEP, do we have any control over where
    those dollars go?
        Mr. Hooks. In the award of these grants, we actually manage
    and track these grants the same way that we would a grant here
    in the United States. They would be subject to the same pre-
    award processing and requirements in terms of reporting as our
    U.S. entities if they were to receive a grant.
        Mr. Terry. You are sure that UNEP is, then, providing you
    with the documentation to show how those dollars are being used
    once the grant has been issued to UNEP.
        Mr. Hooks. Yes, one of the requirements is that grantees
    supply----
        Mr. Terry. OK.
        Mr. Hooks [continuing]. Us with----
        Mr. Terry. So those documents would be easy--could you
    provide those to the committee because I would like to see how
    they are actually using those dollars and how we are tracking
    those.
        Mr. Hooks. Yes, sir.
        Mr. Terry. So do you know offhand, though, I am really kind
    of confused. As I understand, the dollars just go to UNEP and
    then the grant is issued, but how do you follow up? Then, after
    that, UNEP sends you the documents probably outlined in the
    grant?
        Mr. Hooks. It is going to be--well, I would have to
    actually get back to you specifically on----
        Mr. Terry. OK. If you would do that.
        Mr. Hooks. I can do that.
        Mr. Terry. All right. All right, I have no further
    questions, Mr. Chairman.
        Mr. Whitfield. All right, thanks, Mr. Terry.
        At this time, I recognize the gentleman from West Virginia,
    Mr. McKinley, for 5 minutes.
        Mr. McKinley. Thank you, Mr. Chairman.
        I would like to follow up just a little bit more on that
    question, maybe make sure I heard correctly. When grants and
    others are given to the countries, universities, wherever, I am
    curious about the follow-up, particularly there were several--
    well, take some of the more serious ones was the demonstration
    project for the abatement of nitrous oxide emissions using--
    anyway, it was a demonstration project. What did we do? Did we
    follow up?
        Mr. Hooks. What particular----
        Mr. McKinley. This was with Taiwan, funded in '02. I am
    just curious. Do we have a set pattern of following up to see
    that, once money has been given to something, we have a
    procedure to see what they have done with it?
        Mr. Hooks. Once EPA makes an international grant award, we
    carefully monitor the grant. This includes administrative and
    programmatic post-award monitoring----
        Mr. McKinley. Well, what happens afterwards, if we do a
    pilot project that ends in a couple years or whatever, do we
    follow back up again to see was this just a one-shot deal? Or
    do we make that a condition? Is that a condition of the grant
    that they are going to continue to fund this project?
        Mr. Hooks. No, sir.
        Mr. McKinley. OK. So things like--there is a series of them
    like that that we are just giving money away and we are not
    following up that pilot project and clean projects and
    processes in Norway. The Diesel Retrofit Demonstration Project
    in Thailand, did we follow up to find out are they continuing
    to work with diesel fuels in that country or is this just a
    one-shot deal?
        Mr. Hooks. I don't know specifically about the particular
    projects you might be referencing to, but I can tell you just
    in terms of scientific growth, you know, we learn from these
    projects. One of the great benefits in terms of what we might
    be piloting or demonstrating in a particular country is that we
    have the ability to take the lessons learned and transfer that
    to other regions.
        Mr. McKinley. But when we fund these other projects, if
    they just die on the vine, if they are just a one-shot deal, I
    am just curious, what American project that maybe could have
    put some people to work here and researchers, something in
    America that lost out in the competitive research? And I look
    at this one that we did a field survey of endangered whale
    population offshore of Russia. What American project lost out
    to that?
        Mr. Hooks. Well, I am not sure if that is a Clean Air Act--
    --
        Mr. McKinley. Clean Air Act has to do with whales?
        Mr. Hooks. I am not sure if that is a Clean Air act. There
    are other authorities----
        Mr. McKinley. No, this is your list that you all provided
    all the--I am just curious about that, but obviously you don't
    have the answer for that.
        Mr. Hooks. Well, I believe that we supplied the committee
    all of our international----
        Mr. McKinley. I am just curious with all this money we are
    spending overseas, whether it is 30 million or $5 million, when
    the EPA itself recognizes that the biggest detriment to
    healthcare in America is indoor air quality--in its own Web
    site, the EPA publishes that it is 96 times worse indoors than
    outdoors--but yet we are spending money on--I don't know what
    we are doing in America to focus on indoor air quality. I don't
    see much at all on that, and that is the issue that we know
    when we have the asthma attacks, we have other issues they are
    talking about, why aren't we educating our American people on
    where our air quality's issues are rather than worrying about
    the endangered whales off Russia?
        Mr. Hooks. Well, as it relates to air quality, air
    pollution is an international problem. It has been fairly well
    documented that certainly pollution from Asia is deposited here
    in this country, the same as pollution that is generated here
    in this country goes across the Atlantic and gets deposited in
    Europe. International air pollution problems is an
    international----
        Mr. McKinley. I am not denying that but I am just saying at
    this time when we can't afford it, I think I would rather spend
    my money taking care of American citizens and educating
    American folks about indoor air quality or whatever it is than
    worrying about some of these others.
        So what I am hearing wrapping up, we don't have necessarily
    or you are not aware of a follow-up program to find out after
    we do a demonstration project, after we do a start-up, there is
    no follow-up to see that they continue with that. We don't have
    a prioritization of where we are going to spend money on indoor
    air quality in America but we are sure spending a lot of money
    dealing with indoor air quality overseas. And lastly is that
    apparently we are losing out. Some of our American companies
    are losing out in applications to foreign governments. I would
    be curious how many American applications were lost in the
    shuffle.
        Mr. Hooks. Well, I need to go back to one of the advantages
    of these grants is actually creating market opportunities for
    U.S. industry here in this country. The Global Methane
    Initiative, while the EPA component--it is a multiple-agency
    component, by the way. In fact, the majority of the money that
    has been distributed through these Section 103 grants has
    actually not come from EPA; it has actually come from the
    Department of State and USAID and other agencies as well.
        For example, I know that Caterpillar was able to sell 62
    megawatt generators to a coalmine in China for $100 million.
    MEGTEC, which is another large U.S. subsidiary here in this
    country was able to sell some thermal oxidizers for millions of
    dollars as well to overseas countries. It is, you know, putting
    our foothold into these countries that actually is good for
    U.S. industry as well.
        But as I said before, air pollution does not respect
    geopolitical boundaries. I think that was maybe stated in one
    of the opening statements. It does not respect geopolitical
    boundaries. So U.S. monies that can be spent at the source of
    pollution I think is a good use of our money because ultimately
    that deposition can impact our U.S. shores.
        Mr. Whitfield. Gentleman's time is expired.
        You know, Mr. Hooks, I may just make one comment here. You
    were talking about Caterpillar selling equipment, coalmines in
    China. As a result of EPA, we can't even build a new coal-
    powered plant in America, so it is nice that you all like to
    see equipment going to China so they can mine coal.
        I recognize the gentleman, Mr. Pompeo from Kansas, for 5
    minutes.
        Mr. Pompeo. Thank you, Mr. Chairman. I am going to follow
    up on that.
        You know, we have had multiple hearings on energy
    initiatives here in America and it is great to see you talk
    about how pollution from Asia impacts us here. I will tell you
    that the very policies that the Environmental Protection Agency
    has put in place has driven that production, coal-fired power
    plants, all those things, out of America, all of this
    manufacturing out of America and then the pollution comes back.
    Actually, in the very first hearing as a Member of Congress I
    asked Ms. Jackson about that and she pooh-poohed the idea that
    this pollution was coming here and that they don't live under
    the same regulatory environment that we do and don't have the
    same rules for their processes, so it is fascinating to hear
    you sort of argue the other side of the coin inside the
    administration. I would suggest maybe a little meet between the
    two of you.
        But I want to get to a couple of things that you said. Does
    the competition for international grants compete with the
    domestic grants?
        Mr. Hooks. Yes.
        Mr. Pompeo. So they are in the same pool?
        Mr. Hooks. Yes, sir.
        Mr. Pompeo. And what part of that is the fact that it is
    not in the United States, that it is how much of a piece of the
    criteria is the fact that it is a non-U.S. applicant versus a
    U.S. applicant? What piece of the criteria is that?
        Mr. Hooks. Can you restate the question again? I am sorry.
        Mr. Pompeo. Yes, so they are in the same pool competing for
    the same grant money, American taxpayer money, and when you are
    deciding whether to send it to Kentucky or Botswana, how much
    of the fact that it is not in America does that impact your
    decision-making process?
        Mr. Hooks. Well, bear in mind the majority of our
    international grant money would go to like the University of
    Kentucky----
        Mr. Pompeo. Um-hum.
        Mr. Hooks [continuing]. Where a Kentucky professor or
    graduate----
        Mr. Pompeo. The majority. Those that don't, let us talk
    about those that don't go to a U.S. institution. Is it a factor
    that it is a non-U.S. entity? Is that weighed in the merit
    process or is it just blind? You don't even know if it going to
    Oregon or Denmark?
        Mr. Hooks. Well, we would know where the grant proposal--
    where the monies were ultimately----
        Mr. Pompeo. So do you use it a factor in the decision-
    making process?
        Mr. Hooks. Ultimately, the criteria that we are going to
    use is how does it impact the human health and the environment
    here in the United States----
        Mr. Pompeo. Right, so it doesn't matter----
        Mr. Hooks [continuing]. But there are other criteria.
        Mr. Pompeo [continuing]. The country that it is going to.
    If it has got a higher net benefit on an environmental basis,
    then it goes to Denmark as opposed to Oregon. You don't weigh
    the fact that it is a non-U.S. entity directly?
        Mr. Hooks. The first criteria that we are going to use is
    the impact----
        Mr. Pompeo. Right.
        Mr. Hooks [continuing]. And the benefit to the
    environmental quality of the United States.
        Mr. Pompeo. Makes sense. You talked about sort of nation-
    building and national security. Do you coordinate with the
    State Department before making these grant awards?
        Mr. Hooks. Yes, we do.
        Mr. Pompeo. And the Department of Defense?
        Mr. Hooks. Not the Department of Defense.
        Mr. Pompeo. So just the State Department?
        Mr. Hooks. Yes, sir.
        Mr. Pompeo. Got it. How many offices within EPA actually
    distribute grants for activities that occur overseas other than
    under this particular program?
        Mr. Hooks. I don't know specifically but certainly our
    Office of Research and Development, obviously the Air Program.
    But I would have to check----
        Mr. Pompeo. Are they coordinated? That is, are you all
    saying, you know, the State Department says, ``We don't really
    want to deal with this nation. I think we won't give them a
    grant.'' Are you guys coordinated or is it completely stove-
    piped so you all don't know what is going on in the other parts
    of EPA, let alone other parts of the administration?
        Mr. Hooks. No, it is coordinated. Before we award a grant,
    it would be coordinated with our Office of International and
    Tribal Affairs. Once it meets their criteria, it would be sent
    through the State Department provided it met their criteria.
    Provided that they concurred, we would fund it. If either one
    of those entities were to not concur, if it was inconsistent
    with our foreign policy, then it would not be funded.
        Mr. Pompeo. OK. I will just close here. I have to tell you
    that when I go home, much like you, before I go home and talk
    to folks, when you are $16 trillion in the hole, to justify
    programs like this is an incredibly difficult sell. It is not
    something that I can support. You all talk about it being
    bipartisan; this began in a previous administration. That may
    well be. I am neutral as to who is making this poor decision,
    whether it is a Democrat or Republican administration. It is of
    no importance to me. This program whose time, if it was ever
    here, is certainly gone now.
        And I yield back the balance of my time.
        Mr. Whitfield. At this time, I recognize the gentleman from
    Virginia, Mr. Griffith, for 5 minutes.
        Mr. Griffith. Thank you, Mr. Chairman.
        Thank you so much for being here today, Mr. Hooks. You
    would agree with me that Virginia is more important than
    Kazakhstan, would you not?
        Mr. Hooks. I would agree that----
        Mr. Griffith. At least to our government?
        Mr. Hooks. To our government, yes.
        Mr. Griffith. All right. And you would also agree, would
    you not, that China is not doing enough to clean up their air
    pollution and that you would like to see them moving at a
    faster pace, is that not correct?
        Mr. Hooks. That would be correct.
        Mr. Griffith. So then I question why you would not or why
    the EPA would not support withholding money from any country
    that is not moving fast enough or as fast as the United States
    at cleaning up its air pollution, because I note that in a
    Virginian pilot article of yesterday that the EPA in regard to
    the Chesapeake Bay has held back Virginia's money--1.2 of the
    $2.4 million granted originally to Virginia to help it clean up
    the Bay--and I understand I am talking about water but I was
    glad to hear that you all are coordinated so I want you to take
    this message back--that you are withholding that money because
    you don't think Virginia is moving fast enough on stormwater
    management. And one of the problems that Virginia is having
    with that, of course, is that the cities that are required to
    do more on stormwater management on the waters that fall on
    their streets are Norfolk, Virginia Beach, Chesapeake,
    Portsmouth, Newport News, and Hampton, and while I don't
    represent those areas, I certainly feel their pain.
        And they say that it would be expensive and they are having
    a hard time coming up with the money because they have thrown
    up their hands--I am quoting from the article now--``local
    governments across Virginia have thrown up their hands at the
    prospect of financing stormwater upgrades amid budget crises
    and layoffs'' and yet we are sending money to other countries
    but we are holding back the money to Virginia. And I hope--and
    I am not going to ask you for a response because I know it puts
    you at odds and the water side of it is not your deal, but I
    hope that somebody at the EPA recognizes the conflict there. We
    are going to hold back Virginia's money. We are going to make
    it even harder on localities that are struggling now to deal
    with stormwater management. At the same time, we are sending
    money to places like China, Kazakhstan--and there are a lot of
    different places that we have sent money to--and it just seems
    when we are having issues with money in this country that maybe
    we ought to care more about the Bay than we do necessarily what
    is going on in some small project in China.
        Moving on, I will also note that I agreed with and here-
    here'd the chairman's comments in regard to coalmining. We lost
    another 620 miners last week who were laid off in my district
    in on small town alone, and yet I noticed that one of--and it
    is true that some of these were started in the previous
    administration, so I am not trying to pick on the
    administration, but explaining why I think this bill has some
    merit and why we should take a look at it, we are helping the
    Chinese figure out how to--it is technical assessment of
    coalmine gas recovery and utilization in China. Well, the
    Chinese don't seem to be having any problem competing with us
    on all kinds of different levels, and I don't understand why we
    are giving them grants to help them in their industries. Now,
    can you explain that to me?
        Mr. Hooks. Well, one of the purposes of the grant is
    actually for governance and capacity-building. One of the
    things that we are trying to do in these foreign countries as
    they approach us for our advice and expertise is how do they
    raise the environmental standards that we have here in this
    country. If we are successful at what we are doing, if we can
    raise the environmental standards and environmental
    requirements in the governance of other countries, that puts
    our U.S. industry at a more equal footing in terms of our
    ability to compete.
        Mr. Griffith. And I am wondering that was $180,000 and I am
    wondering if you all have given any mining operations in the
    United States $180,000 to help them with technical assessment
    of coalmine gas recovery and utilization? Because what my
    companies tell me generally is is that you all come in and tell
    them they got to do it; they have to spend the money or they
    get fined. So it looks like to me we are taking money out of
    the mines, you know, out of the pockets of the mines in the
    United States while we are giving money to help the Chinese
    mines figure out their problems.
        Mr. Hooks. Well, bear in mind, we have actually worked----
        Mr. Griffith. Let me ask this question because my time is
    running out.
        Mr. Hooks. OK.
        Mr. Griffith. Have you given any $180,000 grants to the
    United States mines to help them with this same type of thing?
        Mr. Hooks. We work extensively with the U.S. Mining
    Commission on voluntary programs such as coalmine methane
    reduction. We understand it can be used as an energy source and
    it is also----
        Mr. Griffith. I use Mr. Dingell's----
        Mr. Hooks [continuing]. Very explosive----
        Mr. Griffith. Yes or no, have you given any grants of a
    similar size, $180,000 or more to U.S. mining concerns in
    regard to helping them mine coal?
        Mr. Hooks. I do not know. I am not saying that we haven't.
    I am just not aware of any personally.
        Mr. Griffith. All right. You don't have a list of those.
    Can you get me a list of all of those?
        Mr. Hooks. Of where we worked with the U.S. mining
    industry?
        Mr. Griffith. Where you have given grant money to help U.S.
    coalmines figure out better ways to give them money to help
    them put the equipment in or whatever is necessary like you did
    the Chinese? And I am looking at page 17 of your report--
    ``technical assessment of coalmine gas recovery and
    utilization.''
        Mr. Hooks. I will see what we have in our files.
        Mr. Griffith. And like some of the others have said, I am
    glad that you recognize it is an international problem. One of
    our concerns has been that we think we are sending jobs with so
    many different regulations coming from so many different parts
    of the EPA and other agencies at one time and we are actually
    sending a lot of jobs overseas. And as you recognize, we are
    reaping back pollution and we think we need a better-paced set
    of regulations and more reasonable regulations.
        Thank you, Mr. Chairman. I yield back.
        Mr. Whitfield. The gentleman's time is expired.
        Mr. Hooks, I want to thank you very much for being with us
    this morning. In concluding, we would appreciate if you would
    get back to the committee with a list of grants that have been
    made to U.S. coalmining companies.
        Mr. Hooks. Bear in mind, some of our grants go to
    universities or other institutions and they in turn work with
    other entities.
        Mr. Whitfield. Yes, but we would like a list of any direct
    grants you have given to coalmining companies.
        Mr. Hooks. Yes, we wouldn't have the authority to actually
    give a grant to a mining company.
        Mr. Whitfield. All right. OK. Then I would like for you to
    do this. I am going to give you a grant number, grant number
    83299401 and 83505801. Those were two grants that the EPA
    through 103 grants gave to the China Coal Information
    Institute. And I would like for you to provide the committee a
    synopsis of the information or benefit to the taxpayers from
    those two grants. Thank you.
        Mr. Hooks. Yes, sir. Thank you.
        Mr. Whitfield. That concludes the questions.
        Mr. Hooks, thank you again for being with us. And at this
    time----
        Mr. Hooks. Thank you, Mr. Chairman.
        Mr. Whitfield. Did you have a question? No. OK.
        At this time, I would like to call up those on panel two,
    our witnesses on the second panel. And we have with us Mr.
    Daniel Simmons, who is the Director of Regulatory and State
    Affairs for the Institute for Energy Research. We have Dr.
    Andrew Light, Senior Fellow, Center for American Progress
    Action Fund; Associate Director, Institute for Philosophy and
    Public Policy at George Mason University. We have Ms. Elisa
    Derby, Senior Program Officer, Winrock International; Co-
    coordinator for the Partnership for Clean Indoor Air. And we
    have Dr. David Kreutzer, Research Fellow in Energy Economics
    and Climate Change at the Heritage Foundation.
        So I would like to welcome all four of you to the
    committee. We appreciate very much your taking time to join us
    to discuss H.R. 4255 and your views on the legislation.
        And Mr. Simmons, we would like to start with you and you
    will be recognized for 5 minutes for your opening statement.

    STATEMENTS OF DANIEL SIMMONS, DIRECTOR OF REGULATORY AND STATE
     AFFAIRS, INSTITUTE FOR ENERGY RESEARCH; ANDREW LIGHT, SENIOR
     FELLOW, CENTER FOR AMERICAN PROGRESS, AND ASSOCIATE DIRECTOR,
       INSTITUTE FOR PHILOSOPHY AND PUBLIC POLICY, GEORGE MASON
       UNIVERSITY; ELISA DERBY, SENIOR PROGRAM OFFICER, WINROCK
    INTERNATIONAL; AND DAVID W. KREUTZER, RESEARCH FELLOW IN ENERGY
         ECONOMICS AND CLIMATE CHANGE, THE HERITAGE FOUNDATION

                      STATEMENT OF DANIEL SIMMONS

        Mr. Simmons. My name is Daniel Simmons. I am the director
    of Regulatory Affairs at the Institute for Energy Research.
        It is difficult for me to see the value of EPA providing
    taxpayer funding grants to organizations and governments
    outside the United States for things such as ``good governance
    capacity-building'' in Jordan or ``regulatory dialogue'' on
    landfill gas in Brazil. Part of the reason the United States is
    now over $16 trillion in debt is because the Federal Government
    has little spending discipline. Compared to $16 trillion, these
    grants are small, but the grants are symptomatic of out-of-
    control spending by the Federal Government. When individuals
    have money and debt problems, the commonsense solution is to
    cut back on unnecessary spending. It is only fair to ask the
    Federal Government to do the same. Taxpayer dollars should be
    spent on projects that have an obvious benefit to the American
    people and these foreign grants do little, if anything, to
    benefit Americans.
        If EPA would like to improve environmental quality at home
    and abroad, a far more productive approach would be to promote
    environmental improvements through economic growth. Years of
    research shows that economic growth promotes environmental
    protection. As noted previously, Section 103 does not provide
    explicit authority for EPA to award these grants to foreign
    entities, only to ``establish a national research and
    development program. But Section 103 also does not provide an
    explicit limitation, and therefore, EPA for years has been
    awarding these sorts of grants.
        When faced with these questions, I would hope that EPA
    would look to the Federal regulatory philosophy that is laid
    out in Executive Order 12866, which was originally signed by
    the Clinton administration and reaffirmed by the Bush
    administration and again reaffirmed by the Obama
    administration. And in pertinent part, the Executive Order says
    that Federal agencies should promulgate only such regulations
    as are required by law, are necessary to interpret the law, or
    are made necessary by compelling public need. And it is
    difficult to see for these grants that they are required by law
    or necessary or what the compelling public need is, at least
    for American citizens. And these grants, there is a large
    number of them that are definitely of dubious value for
    Americans.
        For example, on March 22 of this year, EPA awarded a grant
    with the following description: ``the goal of this project is
    to increase environmental public participation through a pilot
    project in Dominican Republic. ALIANZA will work with
    stakeholders and appropriate governmental authorities to ensure
    the pilot project expected results are successfully
    accomplished.'' Now, I have no idea what in the world it means
    to ``increase environmental public participation'' and what
    value that is for the American people. Pollution may cross
    boundaries but this isn't about that. This is about
    ``increasing environmental public participation.''
        And if EPA wants to promote environmental protection,
    economic growth is a far better alternative, but as we have
    seen from EPA, a number of the regulations that they have been
    promoting lately does not promote economic growth. One example
    is the Mercury and Air Toxics Standards Rule. The point of this
    rule, allegedly, is to reduce mercury. However, the rule cost
    $10 billion a year according to EPA and results in a maximum--
    according to EPA--of $6 billion in benefits from the reduction
    of mercury. In other words, this is a net cost to the American
    economy, and honestly the economy of the world, of $10 billion
    a year. You can buy a lot of anaerobic digesters in China or
    Brazil or where-have-you with $10 billion. And the Mercury and
    Air Toxics Standards is just one example, but it is
    representative of EPA's current regulatory philosophy.
        Far more benefits could be achieved both environmental and
    economic if EPA were more circumspect in its regulation. The
    American people want Congress to balance the budget and get
    America's fiscal house in order. One key to doing this is to
    reduce spending on things that are obviously unnecessary. It is
    not obvious what the value is to the American people of
    international grants issued under the Clean Air Act, Section
    103.
        I thank you for your time and I will be happy to answer any
    questions.
        [The prepared statement of Mr. Simmons follows:]
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        Mr. Whitfield. Thank you very much, Mr. Simmons.
        And Dr. Light, you are recognized for 5 minutes.

                       STATEMENT OF ANDREW LIGHT

        Mr. Light. Thank you, sir.
        Chairman Whitfield, Representative Rush, honored Members, I
    appreciate the invitation to testify on H.R. 4255. In these
    brief remarks, I will focus on that part of my written
    testimony which offers evidence for House Section 103 grants to
    foreign partners help to protect the health of Americans,
    fulfill our foreign policy objectives, ensure American
    competitiveness, and deliver on our ability to solve global
    environmental problems. I will give examples for each point. My
    written testimony has many others.
        Point one: these grants help to protect the health and
    safety of Americans. Mr. Simmons called into question the
    utility of these grants for Americans. In fact, funding for
    studies and projects abroad directly help to protect us. For
    example, interdisciplinary team led by Susan Annenberg at the
    University of North Carolina demonstrated in 2009 that
    reductions in air pollution in other countries will result in
    significantly reduced mortality rates here in the United
    States. Looking at the impacts of ozone pollution alone in
    their study--a target of many of these grants--they estimate
    foreign emission reductions contribute about 30 percent of the
    total avoided mortalities in North American with almost \3/4\
    of those in the United States. Increasing these measures abroad
    will save more American lives.
        Point two: these grants help the United States to meet
    critical foreign policy objectives. In a moment, Ms. Derby will
    describe the importance of Winrock's work with the Partnership
    for Clean Indoor Air and the Global Alliance for Clean
    Cookstoves, including the lifesaving benefits these projects
    have provided for millions of people. But the Clean Cookstoves
    initiative does more than prevent indoor air pollution; it
    reduces the vulnerability of women in African conflict zones by
    decreasing their time gathering fuel, which in turn increases
    their social mobility. This may not seem like much but it is
    quite a lot for them given their daily lives. More is provided
    here than a new appliance. These cookstoves assist in creating
    a fundamental element of democracy, namely, a safe, free
    environment where they can have a chance at success, which in
    turns strengthens our relationship with these countries.
        Point three: these grants help to ensure competiveness for
    American companies, as many have already argued. Support for
    multilateral organizations that raise ambition for tighter
    pollution-protection measures abroad, including cooperation
    with organizations like UNEP, the OECD, and others help to
    ensure the developing countries are applying similar pollution
    standards that we do at home. Programs like the Partnership for
    Clean Fuels in Vehicles, as we heard in the first panel, help
    U.S. companies abroad because equal regulation on air pollution
    creates a level playing field for American companies to be
    competitive when manufacturers in other countries are being
    held to the same standards.
        Point four: these grants are critical for applying global
    solutions to global challenges. And I will spend a bit more
    time on this one. The Global Methane Initiative mentioned
    earlier by Assistant Administrator Hooks certainly helps to
    reduce the impact of this powerful greenhouse gas, as he said.
    But the impacts go much further and help to explain why all
    countries have an interest in cooperatively taking on these
    challenges and are doing so now. Methane, along with black
    carbon, hydrofluorocarbons, and tropospheric ozone are what we
    call short-lived climate pollutants. Not only do these gases
    have more warming potential than carbon dioxide, some of them
    are potentially deadly. Each year, millions of people die
    prematurely from black carbon or soot. These gases are also
    responsible for extensive crop losses each year.
        Regardless of one's views on the reality of climate
    change--we don't have to agree on that--addressing these non-
    CO2 pollutants is both cost-effective and yields multiple
    health and economic benefits. For example, this year, a study
    published in ``Science'' by an international team led by NASA's
    Drew Shindell estimated the effects of 14 very straightforward
    methane and black carbon control measures. Implementation of
    these measures would avoid up to 4.7 million annual premature
    deaths worldwide and increase crop yields annually by 30 to 135
    million metric tons starting in 2030 and beyond, including 6.3
    proven million tons of crops in the United States.
        The costs for these programs are minimal. Reducing a metric
    ton of methane costs around $250 while the benefit ranges from
    700 to $5,000. Already U.S. investments in the Global Methane
    Initiative have leveraged 398 million in additional investment,
    or almost three times as much as all 103 grants to foreign
    recipients since the year 2000. Developing countries simply
    cannot leverage private finance in the way U.S. dollars can,
    and that is why we need cooperation on these efforts moving
    forward.
        Now, for those who are concerned with global warming, this
    suite of measures reduces total projected warming by half a
    degree Celsius. Given that the current internationally accepted
    goal is to try to stabilize temperature increase caused by
    humans at 2 degrees Celsius over preindustrial levels and given
    that humans have already pushed the temperature up almost 1
    degree, we can't afford not to do this.
        The measure studied in the Shindell paper include reducing
    methane leakage from coalmining, oil and gas production,
    landfills, wastewater, livestock manure, and rice paddies. The
    black carbon measures cover diesel vehicles, clean-burning
    biomass, and things like cookstoves, in other words, exactly
    the same kinds of programs that the Section 103 grants are
    funding right now.
        Provision of these funds is not proof that developing
    countries will not work towards reducing emissions on their
    own, as some have argued. Instead, it shows that an ambitious
    approach focused on sharing knowledge on multiple fronts helps
    to build momentum toward a common end that will benefit
    everyone. Developing countries are already working to reduce
    these pollutants for the same reason we are--to save lives,
    grow more food, and give their children a chance at a better
    future.
        To briefly conclude, given the abundant benefits
    demonstrated here of cooperation with foreign partners in
    projects outside of the United States and given the absolute
    necessity for international cooperation to adequately address
    problems that cannot effectively be stopped at anyone's
    borders, it would be irresponsible to limit EPA as this bill
    proposes.
        Of course I agree that we need to reduce budgets across the
    board in the Federal Government. No one could argue otherwise.
    But if we must trim 103 grant programs, better to use a scalpel
    than a sledgehammer.
        [The prepared statement of Mr. Light follows:]
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        Mr. Whitfield. Ms. Derby, you are recognized for 5 minutes.

                        STATEMENT OF ELISA DERBY

        Ms. Derby. Chairman Whitfield, Representative Rush,
    distinguished members of the committee, thank you for inviting
    me here today. My name is Elisa Derby. I am a senior program
    officer at Winrock International and I manage Winrock's
    household energy programs.
        Winrock International is a nonprofit organization that
    works with people in the United States and around the world to
    empower the disadvantaged, increase economic opportunity, and
    sustain natural resources. Winrock is headquartered in Little
    Rock, Arkansas, the State of our namesake, former governor
    Winthrop Rockefeller. I am pleased to be here today to discuss
    Winrock's partnership with the U.S. Environmental Protection
    Agency related to clean, efficient cooking practices. Winrock
    is one of the grantees being discussed today.
        I will summarize my testimony for you today to maximize
    time for your questions. My complete testimony has been
    submitted for the record. I hope this testimony helps committee
    members understand the work we have done and the people it has
    benefitted.
        Some 3 billion people worldwide burn solid fuels like wood,
    animal dung, crop residues, coal, and charcoal for cooking and
    heating in open fires or rudimentary stoves, releasing toxic
    smoke into their homes. Nearly 3 million people, primarily
    women and children in poor countries, die prematurely each year
    from exposure to indoor smoke from burning solid fuels, more
    than from either AIDS or malaria. Pneumonia, also closely
    associated with exposure to indoor smoke, is the number one
    killer of children worldwide and kills more children than AIDS,
    malaria, and tuberculosis combined. Exposure to indoor smoke it
    also associated with various cancers, cataracts, tuberculosis,
    asthma attacks, babies born with low birth weight or stillborn,
    and early infant death.
        Time and money spent on gathering and buying fuel
    perpetuates the cycle of family poverty. While I am not an
    expert on this issue, we do know that there are direct links
    between international poverty and U.S. national security. The
    inefficient burning of wood and charcoal also increases
    pressures on local natural resources and contributes to
    emissions of greenhouse gases and black carbon. In short, the
    simple task of cooking family meals has serious negative health
    and socioeconomic implications for half the world's population
    and serious negative environmental impacts locally and
    globally.
        Fortunately, there are clear solutions to these problems.
    Winrock, EPA, and a host of national, international, and
    private sector partners have worked to promote low-cost but
    clean and efficient approved cookstoves to address these
    problems since 2002 under the Partnership for Clean Indoor
    Air--which we will refer to as PCIA--launched as a presidential
    initiative of George W. Bush and led by EPA, and now, through
    ongoing work of the Global Alliance for Clean Cookstoves, EPA,
    and other U.S. government agencies.
        I personally have witnessed the damaging health and safety
    effects of indoor air pollution in homes I have visited in
    Latin America and Asia and the impact that a clean, efficient
    cookstoves can have on their lives. Women have shared with me
    that with an improved cookstove, they cough less and their
    children stay healthier. They say they have more time to spend
    with their children and more money for food and school as a
    result of their reduced fuel needs of the improved stoves. They
    are horrified to realize that the soot coating their walls and
    ceiling from their old stove was also coating their children's
    lungs.
        As a recognized global leader and expert in indoor air
    quality, EPA's involvement in this work has lent important
    prestige to the improved cookstoves sector that has enabled
    tremendous accomplishments and growth and development of the
    sector over the past 8 years that would not have been possible
    otherwise. Over the 6 years that we monitored PCIA partner
    achievements, PCIA partners reported selling and distributing
    more than 9.3 million improved stoves benefitting approximately
    52 million people around the world.
        Winrock takes seriously our important role as stewards of
    U.S. taxpayer dollars. As such, we are firmly committed to
    cost-effective and efficient use of funds and always require
    significant participant cost-share for all travel scholarships
    used to bring participants to our high-impact and low-cost
    technical trainings. Participants that receive airfare support
    are responsible for all other travel costs, including meals and
    lodging. The overwhelming majority of the grant funding that
    Winrock has received from EPA for this partnership was spent
    here in the United States. At no time have any funds been
    transferred to any foreign government or other foreign entity.
        We believe that the work EPA has funded to date related to
    clean and efficient cookstoves has been pioneering and vital to
    the sector, and we have been proud to play a role in these
    achievements. Ultimately, this effort will lead to more people
    using better technologies and practices, reducing their
    exposure to indoor smoke, and thereby improving their health,
    livelihood, and quality of life.
        I appreciate the opportunity to make this presentation and
    I am happy to answer any questions you may have.
        [The prepared statement of Ms. Derby follows:]
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        Mr. Whitfield. Thank you, Ms. Derby.
        Mr.----
        Mr. Kreutzer. Kreutzer.
        Mr. Whitfield. Kreutzer. Dr. Kreutzer, you are recognized
    for 5 minutes.

                     STATEMENT OF DAVID W. KREUTZER

        Mr. Kreutzer. My name is David Kreutzer. I am research
    fellow in energy economics and climate change at the Heritage
    Foundation. The views I express in this testimony are my own
    and should not be construed as representing any official
    position of the Heritage Foundation.
        Chairman Whitfield and Ranking Member Rush and other
    members of the committee, I want to thank you for inviting me
    to address you on the issue of EPA grants to foreign
    recipients.
        Though there may well be legitimate concerns about the
    appropriateness of funding environmental activities abroad,
    especially given our national debt and the fraction of our debt
    that is held by one of the leading recipient countries, a
    greater concern is what this tells us about our government's
    vision for much more significant obligations. That the EPA
    funds environmental programs in foreign countries is a clear
    sign that these countries are unwilling to fund these programs
    themselves. Though there are serious disagreements about the
    impact of CO2 emissions, climate skeptics, climate activists,
    the EPA, and others all agree the growth of CO2 emissions over
    the next century will come predominantly if not entirely from
    the developing countries.
        For example, in 2002, China's CO2 emissions were 40 percent
    less than those in the United States while this year they are
    at least 50 percent greater. And this trend is likely to
    continue with CO2 emissions coming from the developing world
    are growing much faster than they will from the developed
    world.
        Even accepting the Intergovernmental Panel on Climate
    Change's high-end estimate of climate sensitivity--and that is
    a measure of how much warming there will be for a doubling of
    carbon dioxide levels in the atmosphere--even accepting those
    numbers, it is acknowledged that cutting CO2 emissions in the
    U.S. alone or even in conjunction with the Annex I countries--
    that is the developed countries of the Kyoto Agreement--will
    moderate any global warming by less than a half a degree by the
    end of this century. Whenever this point was made in the
    debates over cap-and-trade bills, for instance, the proponents
    of the legislation would imply that the emerging economies
    would follow our lead. What these proponents usually left out
    was that we would have to pay them to follow our lead.
        And why should they want to voluntarily? Last summer, there
    was a headline that said half of India was without electricity
    that was due to a blackout. The week before, they could have
    had a headline that said \1/3\ of India is without electricity
    because they are always without electricity. All right? And so
    they are looking at having phenomenal growth rates. They would
    like everybody to have electricity. They would like them to
    have more than just electricity; they would like them to have
    refrigerators and dishwashers and all the things that we have.
    It is going to take a phenomenal amount of money to bribe them
    to forego those things, that growth that they would get by
    using energy.
        The UN Framework Convention on Climate Change established a
    $100 billion Green Climate Fund as sort of the first ante to
    help transfer this wealth from the developed world to the
    developing world to get them to comply with the carbon
    restrictions. What the UN Framework Convention on Climate
    Change left out was the actual funding part of this fund, but I
    think we can get an idea by simply looking at past legislation
    in the U.S. The Lieberman-Warner cap-and-trade bill had
    provisions for designating U.S. money to go to foreign
    programs, as did the Waxman-Markey cap-and-trade bill, as did
    the Kerry-Boxer cap-and-trade bill, as did the Kerry-Lieberman
    cap-and-trade bill.
        EPA funding of foreign environmental programs is a clear
    sign that foreign countries are unwilling to fund these
    programs themselves. It should be noted that the cost of these
    programs is a small fraction of the cost of those necessary for
    these countries to meet carbon emission targets set out by
    proponents of global warming policies. So this is yet another
    sign that any carbon legislation in the U.S., whether it is a
    carbon tax or a cap-and-trade, is likely to obligate U.S.
    energy consumers to bear not only the burden of our own
    policies but the additional burden of paying foreign countries
    for their compliance. There is new universal agreement that
    without severe restrictions on the carbon emissions of the
    developing countries, no policy in the developed world will
    have sufficient impact for them to meet the targets that are
    being set out, ones that I oppose, by the way.
        Though unadvertised, this significant additional burden of
    paying for the developing world's compliance is known to those
    involved in climate negotiations and policymaking. The UN has
    established a fund that will require developed countries to
    contribute hundreds of billions of dollars. U.S. energy
    consumers may not know about this obligation, but those
    negotiating supposedly on their behalf do, that every major
    cap-and-trade bill in the U.S. included mechanisms for
    contributing to this fund or ones like it makes it clear that
    climate policymakers in the U.S. intend to acquiesce to these
    demands for our wealth.
        Taken in this context, the EPA grants may just be the
    camel's nose in the tent. Thank you.
        [The prepared statement of Mr. Kreutzer follows:]
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        Mr. Whitfield. Thank you very much, Dr. Kreutzer.
        And thank all of you for your testimony. I will recognize
    myself for 5 minutes and then the other Members will ask
    questions as well.
        Mr. Simmons, in your testimony you talked about the
    Executive Order that President Clinton and President Obama had
    in which it basically was saying that agencies should not issue
    grants other than as explicitly set out in the legislation of
    the statute. Can you make an argument based on that Executive
    Order that EPA may be violating that Executive Order with their
    103 grants?
        Mr. Simmons. Well, I need to be clear on this. The
    Executive Order is the regulatory philosophy, and there is
    obviously a difference between regulations and between grant-
    making. And my argument is that grant-making and how they
    decide grant-making ought to be analogous to how they should be
    following the regulatory philosophy. So I mean I think it
    definitely violates the spirit of the Executive Order, but
    unfortunately, there has been a longstanding----
        Mr. Whitfield. Well, there has been a long standing and I
    agree with you that I think it does violate the spirit of it.
    And I don't really agree with EPA that it is very clear in the
    Section 103 statute that they have the authority to do these
    international grants. But I think primarily they are relying on
    their NEPA authority and I don't know that that has ever been
    tested in the courts. Do you know if it has?
        Mr. Simmons. My understanding--well, yes, I don't know. I
    mean Section 103 says that EPA has the authority to ``establish
    a national research and development program for the prevention
    and control of air pollution.'' It says it is a national
    program. It doesn't----
        Mr. Whitfield. Right.
        Mr. Simmons. By not explicitly limiting EPA's----
        Mr. Whitfield. Right.
        Mr. Simmons [continuing]. Authority----
        Mr. Whitfield. Yes. Yes.
        Mr. Simmons [continuing]. Is why we are in the situation--
    --
        Mr. Whitfield. And Ms. Derby, all of us have heard of
    Winrock International and we know that you all do great work
    and that you are here testifying you are not trying to hide
    anything. And on your Web site it talks about and you have said
    in your testimony you received grants from the Federal
    Government, and you list agencies that you have received grants
    from. How much would you say that you receive a year in grants
    from the Federal Government for Winrock?
        Ms. Derby. I don't have that number but I would estimate
    that at least $60 million a year.
        Mr. Whitfield. Sixteen million, OK.
        Ms. Derby. Sixty. Sixty.
        Mr. Whitfield. Oh, 60 million.
        Ms. Derby. Yes, it fluctuates----
        Mr. Whitfield. Yes.
        Ms. Derby [continuing]. From year----
        Mr. Whitfield. Because I know you have foundations that
    support you and----
        Ms. Derby. Um-hum.
        Mr. Whitfield [continuing]. Even Federal agencies outside
    the U.S. and so forth. But I am glad that you and Dr. Light are
    here because, as I said in my opening statement, this is more
    symbolic than anything else. We have a gigantic Federal debt
    and everyone that comes up here to testify, they always say I
    agree that we need to be more focused on reducing our debt, but
    anytime we ever come up with even a minor way to do it,
    everyone says, oh, my God, we can't do that. And now, here we
    are talking about EPA. They have a budget over $8 billion a
    year and we are talking about less than 1 percent of that on
    these 103 grants. And I mean I find it difficult to believe in
    all the hearings that I have been a part of listening to EPA
    testify up here, all of their programs, that they would be
    damaged in any significant way or that the American people
    would be damaged in any significant way by eliminating these
    grants. Obviously, you don't feel that way, Dr. Light, and I
    guess you don't feel that way either. Is that right, Ms. Derby?
        Ms. Derby. Yes. Can I respond?
        Mr. Whitfield. Sure.
        Ms. Derby. Yes, so all of Winrock's household energy
    technical training work has been funded by EPA, and so if this
    legislation should pass, then that possibility going forward
    would be eliminated but not just for Winrock, for all of the
    improved cookstoves sector. And because EPA is a leading,
    recognized expert in indoor air quality, their involvement has
    been very important to the sector.
        Mr. Whitfield. Let me just interject here. Mr. McKinley
    talked about this and he talks about it every hearing, every
    time EPA comes up here we talk about indoor air quality being
    worse than outdoor air and they seldom, if ever, focus any
    attention on indoor air, and yet, through these grants, they
    are concerned about indoor air problems outside the U.S.
        Ms. Derby. Well, I can't represent EPA but I know EPA does
    work on indoor air quality in the United States.
        Mr. Whitfield. Not much. Not much.
        Ms. Derby. I would have to defer to EPA on----
        Mr. Whitfield. Does anybody else have any comment? My time
    is expiring. Yes?
        Mr. Light. Mr. Chairman, I think there is certainly a place
    for, you know, putting forth some piece of legislation to make
    the symbolic argument you are making. I think the consensus
    view that Ms. Derby and I have and many of the people who work
    in this area and my review of the scientific literature is
    that, unfortunately, the impact would not be symbolic, that it
    effectively would have a very big impact on our ability to
    fight----
        Mr. Whitfield. Yes.
        Mr. Light [continuing]. Pollution that is harming
    Americans. And it might sound like a very small amount of money
    from the EPA budget, but as you say, the EPA budget is very
    large. And so compared to what a lot of other countries come
    into efforts like this, even a small amount of our budget
    actually goes quite a long way, especially with respect to
    leveraging private finance, even increase the pots of----
        Mr. Whitfield. Yes.
        Mr. Light [continuing]. Money available for reducing these
    pollutants.
        Mr. Whitfield. Thank you. Dr. Kreutzer?
        Mr. Kreutzer. Yes. Again, I would like to take a somewhat
    bigger picture view. I don't have any problem, I don't think,
    with our cookstove at our house because it is electric. And it
    is electric because we have economic growth and we have power
    plants I think in Virginia--probably the majority is from coal.
    And while it is noble and I think a good idea to improve the
    cookstoves that are using gathered wood or dung or whatever the
    source may be, it is ironic that at the same time that the EPA
    is funding this project, they are working so hard to prevent
    the electrification or the use of coal that can provide a much
    cleaner indoor environment by allowing people--\1/3\ as I
    mentioned in India don't even have electricity; one of the
    cheapest sources of electricity for them will be coal--but we
    have almost a jihad against coal here in the U.S. spearheaded
    by the EPA. So I think it would be more consistent if they were
    really worried about indoor air pollution to come up with ways
    to help the developing world to get electricity that is
    affordable and reliable.
        Mr. Whitfield. Yes, very good.
        Mr. Rush, you are recognized for 5 minutes.
        Mr. Rush. I agree with Dr. Light that this is more than
    just symbolism. To spend this much time on a bill using these
    resources, I hope that it is not just about symbolism. But Dr.
    Kreutzer, you raise some interesting points. You know, you kind
    of rattled me a little bit. He accused us of trying to bribe
    foreign governments with these funds. How do you react to that?
    How do you react to his whole statement?
        Mr. Light. Yes, sir. I would not agree with Mr. Kreutzer
    that these are bribes that we are giving to other governments.
    I don't think that that is way the fundamental leveraging of
    finance works out in these cases. Sort of the trajectory of his
    argument was that this was the camel's nose under the tent and
    what is down the road is by 2020 this Green Climate Fund, which
    is supposed to raise the bulk of the commitments for $100
    billion, but the way that Mr. Kreutzer characterized this in
    his testimony, there were just many errors. He says, for
    example, that the U.S. is expected to make the biggest
    contribution to international climate finance. Well, while some
    people might expect that, that certainly isn't how this
    administration has characterized what they plan on contributing
    to funds like these.
        He also suggested towards the end of his testimony that
    setting up these big funds like this will require developed
    countries to contribute hundreds of billions of dollars, and
    that is just simply not the way they are set up. In fact, if
    you look at the Green Climate Fund and many of the other
    climate funds around the world, including the current ones that
    exist in World Bank and others, the United States has always
    said public money cannot be used to fill all these coffers.
    That is the consistent position of this administration. And the
    United States, in fact, held up the implementing document for
    the Green Climate Fund before last year's Climate Summit in
    Durbin because it did not sufficiently allow for private
    investment to be one of the key factors of how this one was
    going to move forward. In fact, the United States held up the
    document and said we will not agree to signing onto this
    document moving forward until there is a significant portal for
    private investment going forward.
        This is how the United States looks at this, and so I think
    to characterize this as just a big public giveaway globally is
    just simply false. It is the case that because we are talking
    about countries that have excruciating development needs that
    they are going to need some assistance to leverage adequate
    amounts of money to deal with these problems, and the good part
    is is that we all absolutely benefit from this. And I think the
    numbers are absolutely clear.
        Mr. Kreutzer. Can I chime in since you are talking about my
    testimony?
        Mr. Rush. Mr. Chairman, I have the time.
        Ms. Derby, I am very, very excited about your program and
    what you do and what Winrock does across the world, and when
    you talked about the cookstoves, I recall a time when I was in
    Chiapas, Mexico, and we walked into this little hut and the
    smoke, we could not really understand how they could stay in
    this one-room hut with this cookstove, and it was just so much
    smoke. The smoke was so thick and here you had babies and
    little children, you know, in and out of that place. So I mean
    that picture is driven in my mind. So can you tell me a little
    bit about or can you describe the breadth of support for your
    work? How many other international organizations support this
    kind of work? The chairman indicated that you had foundations
    supporting this kind of work. How much of an international
    initiative does the matter of cookstoves engender around the
    world, how much support around the world?
        Ms. Derby. Well, there are numerous improved cookstove-
    related programs around the world. Many are funded by U.S.
    government agencies. When the Global Alliance for Clean
    Cookstoves was launched, there was a $53 million commitment by
    the U.S. Government. About half of that was committed by CDC
    and NIH for health studies and the rest was committed between
    the Department of Energy, Department of State, USAID and EPA.
    The World Bank also works on improved cookstove-related and
    household energy work, as do smaller foundations fund this kind
    of work. At Winrock, our primary work with improved cookstoves
    and household energy in general has been through USAID and EPA
    funding.
        Mr. Rush. So if in fact this bill were to become law, then
    it would have a cascading effect or reverberation on these
    other programs and these other initiatives around the world. Is
    that correct?
        Ms. Derby. I believe so because EPA has been a pioneering
    leader in the sector and has been able to leverage the
    involvement of other U.S. Government and international
    agencies. And so to have EPA suddenly pull out from the sector
    would be a tremendous blow to the sector.
        Mr. Rush. What would it do to our foreign image, I mean our
    image around the world as it relates to being a leader in terms
    of environmental----
        Ms. Derby. Well, the U.S. is definitely, thanks to EPA,
    currently recognized as a leader in household energy and indoor
    pollution and cookstoves work. Right now, the EPA is funding
    technical trainings around the world to help people learn to
    make better cookstoves and make sure that they work right. You
    can't tell by looking at a cookstove if it works right; you
    have to test it. So all of this training that we are doing
    increases U.S. visibility and goodwill abroad by us helping
    these producers to make their stoves better and thereby improve
    health and livelihood for families.
        Mr. Whitfield. Gentleman's time is expired.
        At this time, I would like to recognize the gentleman from
    Virginia, Mr. Griffith.
        Mr. Griffith. Thank you, Mr. Chairman.
        Dr. Kreutzer, nice to see you and welcome you here. You, a
    couple times, wanted to make some comments in the last couple
    of minutes and I am going to give you that opportunity.
        Mr. Kreutzer. Well, thank you.
        First, and I will talk about the most recent topic which is
    these cookstoves and I think it is a noble initiative. The
    trouble is the EPA seems to want to create a world that is
    ideal for subsistence farmers. As we want to help them with the
    technologies that they had when they were poor, we do not want
    to help promote technologies and energy sources that are going
    to allow them to become rich. And I think that is misguided. As
    a great a problem as I think the one you have now is, ignoring
    the second half is even worse, in greater magnitude.
        Dr. Light accused me of making some misrepresentations
    regarding these global funds. He said the administration does
    not want public funds to go to them. The administration
    supported the Waxman-Markey bill, the Kerry-Boxer bill, the
    Kerry-Lieberman bill, all of which had provisions for sending
    funds to these foreign programs. They were not actually tax
    dollars because they used the disingenuous plan of calling
    something ``allowances.'' That is energy producers would have
    to buy allowances. That would generate funds and it is those
    funds that are going overseas.
        That is exactly--and if you talk to all the economists,
    they agree--it works very much like a CO2 tax and we can call
    those allowances CO2 tax or revenues. Every person I know that
    did modeling on both sides of the aisle of the cap-and-trade
    bills regarded those as carbon taxes. Maybe officially they
    weren't but sending money from energy consumers in the U.S. to
    foreign countries to try to get them to do something they
    clearly don't want to do because it is going to be very costly
    in terms of limiting their growth I think is a bad idea and I
    think it was hidden in these negotiations. I don't think they
    advertised the fact that there was going to be a big amount of
    money transferred.
        Mr. Griffith. Mr. Simmons, if I might, and it is one of
    those things that sometimes happens. I think I misheard your
    testimony so I want to make sure that it is clear because then
    when I went back to read it because I thought it was a really
    good point, I read it differently than I heard it. So let me
    make sure I get it clear. In your testimony you stated that in
    regard to the Mercury and Toxic Standards Rule that the EPA Web
    site indicates that it costs $10 billion a year and then what I
    thought I heard you say was was that the EPA said that it had a
    value of $6 billion. But I noticed in your written testimony
    that it is an ``M.'' I am assuming your written testimony so it
    is a $6 million benefit. I am assuming your written testimony
    is correct and that I just wasn't paying enough attention.
        Mr. Simmons. I could have easily misspoken. In EPA's
    regulatory impact analysis, the cost of the Mercury and Air
    Toxics Standard is $10 billion a year. The benefits for
    reducing mercury are between 500,000 and $6 million with an
    ``M.''
        Mr. Griffith. And so that does leave a huge amount of money
    that could be used for other projects. And I see this all the
    time where it appears that the EPA is either making others
    spend a lot of money or they are spending money and yet we
    could take that money and use it for something that really
    matters like the cookstoves and do things in this country. And
    then I also liked your point in regard to the economic
    situations because my district is being hit very hard by what I
    believe Dr. Kreutzer--I always called it the War on Coal--used.
    What was it? Armageddon on Coal? What was the term you used?
        Mr. Kreutzer. I didn't mean to bring in a religious
    component----
        Mr. Griffith. Let me go back to my War on Coal.
        Mr. Kreutzer. War is fine.
        Mr. Griffith. But, you know, we are on the frontlines of
    that. We lost another 620 jobs just last week that are idled.
    Hopefully, they will come back in the not-too-distant future.
    But prior to that, we have had over 1,000 people in the region
    that have been laid off from various mines, and, you know, it
    is interesting because we are talking about the cookstoves in
    Third World countries but I envision in a cold winter--and we
    did not have a cold winter this last winter--a lot of folks in
    my district are going to have to live in one room even if that
    have a multi-room house with some type of a small little
    heater, probably either electric or kerosene because they can't
    afford to heat the whole house to a level that is comfortable,
    and even in that small room they are going to have to be
    bundled up. And does that not have greater effect, Mr. Simmons,
    on the health of those individuals than the value of the MATS
    compared with the $10 billion a year?
        Mr. Simmons. It has a large impact. I mean there is a great
    discrepancy between the health outcomes of the poor versus the
    rich and it has everything to do with which rich people and
    rich countries can afford more environmental amenities than
    poor people in poor countries. And so the point is the richer
    we are as people, the richer we are as a country, the safer we
    are and the better our environment is.
        Mr. Griffith. And Mr. Chairman, I see my time is up and I
    yield back.
        Mr. Whitfield. Thanks very much, Mr. Griffith.
        And I want to thank all four of you for taking time to come
    up today and talking about this legislation and the impact that
    it would have from your perspective. We appreciate your time
    once again. And we are going to keep this record open for at
    least 10 days if you have any additional material that anyone
    would like to put in, the record will be open.
        And Mr. Rush, do you have anything else?
        Mr. Rush. No, nothing else.
        Mr. Whitfield. Sorry we are not going to have a hearing
    tomorrow.
        But anyway, thank you all very much and we look forward to
    working with you as we decide whether to move forward or not.
    Thank you very much.
        Hearing is concluded.
        [Whereupon, at 1:05 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]
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