[Senate Hearing 113-782]
[From the U.S. Government Publishing Office]







                                                      S. Hrg. 113-782

                   OVERSIGHT HEARING: EPA'S PROPOSED
                       CARBON POLLUTION STANDARDS
                       FOR EXISTING POWER PLANTS

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 23, 2014

                               __________

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


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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                    ONE HUNDRED THIRTEENTH CONGRESS
                             SECOND SESSION

                  BARBARA BOXER, California, Chairman
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JAMES M. INHOFE, Oklahoma
BERNARD SANDERS, Vermont             JOHN BARRASSO, Wyoming
SHELDON WHITEHOUSE, Rhode Island     JEFF SESSIONS, Alabama
TOM UDALL, New Mexico                MIKE CRAPO, Idaho
JEFF MERKLEY, Oregon                 ROGER WICKER, Mississippi
KIRSTEN GILLIBRAND, New York         JOHN BOOZMAN, Arkansas
CORY A. BOOKER, New Jersey           DEB FISCHER, Nebraska
EDWARD J. MARKEY, Massachusetts

                Bettina Poirier, Majority Staff Director
                  Zak Baig, Republican Staff Director
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                            C O N T E N T S

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                                                                   Page

                             JULY 23, 2014
                           OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California...     1
Vitter, Hon. David, U.S. Senator from the State of Louisiana.....     3
Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode 
  Island.........................................................     4
Wicker, Hon. Roger, U.S. Senator from the State of Arkansas......    11
Sanders, Hon. Bernard, U.S. Senator from the State of Vermont....    13
Fischer, Hon. Deb, U.S. Senator from the State of Nebraska.......    14
Cardin, Hon. Benjamin, U.S. Senator from the State of Maryland...    15
Inhofe, Hon. James, U.S. Senator from the State of Oklahoma......    17
Barrasso, Hon. John, U.S. Senator from the State of Wyoming......    18
Carper Hon. Thomas, U.S. Senator from the State of Delaware......    20
Sessions, Hon. Jeff, U.S. Senator from the State of Alabama......    21
Merkley, Hon. Jeff, U.S. Senator from the State of Oregon........    23
Udall, Hon. Tom, U.S. Senator from the State of New Mexico, 
  prepared statement.............................................    82

                               WITNESSES

McCarthy, Hon. Gina Administrator, U.S. Environmental Protection 
  Agency.........................................................    23

                          ADDITIONAL MATERIAL

Articles:
     Desmogblog.com; The infamous Petition.......................    83
    Skeptical Science; Over 31,000 scientists signed the OISM 
      petition project...........................................    86
    New York Times; Taking Oil Industry Cue, Environmentalists 
      Drew Emissions Blueprint...................................    92
    Switchboard Natural Resources Defense Council Staff Blog 
      (NRDC); Does NRDC Operate Like thd Oil Industry? Not on 
      Your Life..................................................    97
    EPA Fact Sheet: Clean Power Plant; By the Numbers: Cutting 
      Carbon Pollution From Power Plants.........................    99
    Natural Resources Defense Council (NRDC); Slower, Costlier 
      and Dirtier, A Critique of the Bush Energy Plan............   102
 
  EPA'S PROPOSED CARBON POLLUTION STANDARDS FOR EXISTING POWER PLANTS

                              ----------                              


                        WEDNESDAY, JULY 23, 2014

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The full committee met, pursuant to notice, at 9:30 a.m. in 
room 406, Dirksen Senate Building, Hon. Barbara Boxer (chairman 
of the full committee) presiding.
    Present: Senators Boxer, Carper, Cardin, Sanders, 
Whitehouse, Merkley, Gillibrand, Markey, Vitter, Inhofe, 
Barrasso, Sessions, Wicker, Fischer.

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

    Senator Boxer. Good morning, everybody. This oversight 
hearing will examine the critically important steps that the 
Obama administration is taking to address climate change by 
reducing carbon pollution. Today we are focused on the 
President's new proposal to reduce dangerous carbon pollution 
from the biggest source, power plants.
    Just as last week when I welcomed the miners, it is my 
pleasure to welcome the Moms Clean Air Force. We are glad to 
see you here with the kids in tow.
    Power plants account for nearly 40 percent of all carbon 
pollution released into the air. Currently there are no limits 
on the amount of carbon pollution power plants can release into 
our air. The President's plan, in my view, is a win-win for the 
American people because by addressing climate change through 
carbon pollution reduction, we can cut many types of air 
pollutants that also threaten human health.
    Climate change and rising temperatures will lead to 
increased ground level ozone and smog which could worsen 
respiratory illnesses like asthma, increase air pollutants from 
wildfires and more heat-related and flood-related deaths.
    When the President announced his power plant proposal at 
the Children's National Medical Center in Washington, he 
visited with young asthma patients to highlight the health 
impacts of air pollution and to underscore how important 
addressing dangerous carbon pollution is to our children's 
health. This proposal would play a vital role in protecting 
public health and will save thousands of lives. It will avoid 
up to 3,700 cases of bronchitis in children, 150,000 asthma 
attacks, 3,300 heart attacks, 6,600 premature deaths and 
490,000 missed days at school and work.
    I often say, if people can't breathe, they can't go to work 
or school. More than 9 percent of American children are already 
living with asthma, and it is the third leading cause of 
hospitalizations for children. So we all benefit from having 
clean air to breathe that literally saves lives. We need to 
take action now to protect families and communities from the 
mounting impacts of climate change and dangerous carbon 
pollution.
    A recent congressionally required national climate 
assessment report tells us we could see a 10 degree Fahrenheit 
rise in temperatures if we don't act to limit dangerous 
pollution now. The President's new proposal will not only 
protect public health and save lives, it will enable America to 
lead the way to avert the most calamitous impacts of climate 
change, such as sea level rise, dangerous heat waves and 
economic disruption. We must safeguard our children, our 
grandchildren and future generations. As the President stated, 
``We have a moral obligation to leave our children a planet 
that is not irrevocably polluted or damaged.''
    The Obama administration gets it, and so do the American 
people. A recent Washington Post ABC poll, a bipartisan 
majority of the American people want Federal limits on carbon 
pollution. Approximately 70 percent say the Federal Government 
should require limits to carbon pollution from existing power 
plants. Seventy percent. And 70 percent support requiring 
States to limit the amount of carbon pollution within their 
borders.
    Just last month the committee heard from four former EPA 
administrators who served under Republican Presidents, from 
Richard Nixon to George W. Bush, and they all agreed that 
climate change requires action now, and it should not be a 
partisan issue. The President's plan relies on the authorities 
under the Clean Air Act, which was created with a bipartisan 
consensus. In 1970, the Clean Air Act passed with a by a vote 
of 73 to zero in the Senate, and in the House, 375 to one. I 
don't know who that one was. And it was signed into law by 
President Nixon.
    In 1990, the revisions to the Clean Air Act passed the 
Senate by 89 to 11, and the House by 401 to 21, and was signed 
into law by President George Herbert Walker Bush. The Clean Air 
Act has a proven track record of success. Since 1970, emissions 
of pollutants have dropped 72 percent, while the U.S. GDP has 
grown by 219 percent and total private sector jobs have 
increased by 101 percent. So while pollutants have dropped by 
72 percent since 1970, private sector jobs have increased by 
101 percent and the GDP increased by 219 percent.
    So for all this fear mongering we hear from my friends on 
the other side about job losses, disproven every time. And if 
you take their quotes, they match up with the quotes that we 
heard both in 1970 when Nixon signed it, and then again when 
George Herbert Walker Bush signed it.
    The President's proposal, I believe, will create thousands 
of jobs, while ensuring big polluters reduce their dangerous 
contributions to climate change.
    I want to thank EPA Administrator Gina McCarthy for being 
with us today and I look forward to her testimony. So I am 
going to turn it over to Senator Vitter. I wanted to mention, 
we have a vote at 11. So we have two options. We can work as 
hard as we can and then when it hits, 11:15, end, or we can 
take a pause and come back. Either way is good with me. So we 
will see, Administrator, where we are at that time.
    Senator Vitter.

          OPENING STATEMENT OF THE HON. DAVID VITTER, 
            U.S. SENATOR FROM THE STATE OF LOUISIANA

    Senator Vitter. Thank you, Chairman Boxer, for convening 
today's hearing. I look forward to hearing from Administrator 
McCarthy on EPA's proposed existing source rule. It is really a 
truly unprecedented, outside the fence set of regulations that 
will have major negative impacts on our Nation's electricity 
system. I hope we talk about this very directly.
    EPA's proposal does a number of things. But fundamentally, 
it hijacks that electricity system all in the name of 
flexibility. In reality, EPA usurps the role of State 
governments and public utility commissions as well as FERC, DOE 
and other Federal agencies that do have the authority over and 
expertise in electricity generation issues.
    Unfortunately for EPA, electricity is not directly under 
its jurisdiction. Changing dispatch rules would require the 
most expensive power to be delivered first. The mandating 
efficiency and use of renewables are examples of interState 
generation, transmission and distribution matters reserved to 
the States by the Federal Power Act.
    Moreover, EPA attempts to dump the politically unpopular 
decisionmaking of having to pick winners and losers on the 
State regulators and legislatures. EPA's proposed rule seeks to 
turn States into either hostages or unwilling accomplices in 
its effort to impoverish families and businesses and 
communities.
    In its existing source proposal, EPA goes beyond the plain 
reading of the Clean Air Act Section 111, directing States to 
achieve questionable emission reduction targets from a limited 
menu of economically damaging and legally questionable options. 
As I mentioned before, electricity prices in the Regional 
Greenhouse Gas Initiatives States and California are 45 percent 
higher than in my home State of Louisiana. And yet 56 percent 
of Louisiana families already at their lower Louisiana rate 
spend an average of 21 percent of their after-tax income on 
energy. They simply can't afford the higher electricity bills 
that will inevitably result from this rule.
    EPA is also setting up States to fail, our local economies 
to fail, to deliver on the President's promise that electricity 
prices will necessarily skyrocket, all for virtually 
immeasurable climate benefits. This rule is all pain and no 
gain, therefore, and we need to look to our friends in 
Australia, for instance, who just last week repealed their 
carbon tax in recognition of this sort of lesson.
    It is also noteworthy that EPA's blueprint is fundamentally 
similar to NRDCs, and it drives States to implement renewable 
portfolio standards and to replace fossil fuel, whether they 
like it or not. In States like Louisiana where wind and solar 
are not feasible or not at all practical, we are supposed to 
divert economically valuable timber into fuel for electricity 
generation. That is a very expensive feedstock compared to, 
say, coal or natural gas.
    In defense of attacks by the New York Times and others, the 
Administrator also readily admits that her agency must revisit 
nuclear energy, since right now it encourages the closure of 
nuclear plants. So basically EPA is insisting that States 
ration electricity and limit consumer choice, especially if 
that choice involves using more electricity.
    As 40 of my Republican Senate colleagues and I have stated 
in our June 3d letter, EPA's proposed rule will increase costs 
to families, schools, hospitals and businesses and in doing so, 
as always, it will hit the poor, the elderly, those on fixed 
incomes the hardest. In reality, it is a Federal takeover of 
our American electricity system. I for one am not at all 
comfortable for this EPA takeover, this dramatic expansion of 
EPA's role and authority. Neither are the people of Louisiana.
    So I look forward to this discussion. It is very, very 
important. There are a lot of important stakes on the line.
    Thank you, Madam Chair.
    Senator Boxer. Thank you, Senator Vitter.
    According to arrival, we will go next to Senator 
Whitehouse, followed by Senator Wicker.

       OPENING STATEMENT OF THE HON. SHELDON WHITEHOUSE, 
          U.S. SENATOR FROM THE STATE OF RHODE ISLAND

    Senator Whitehouse. Thank you, Chairman Boxer, and Ranking 
Member Vitter, for hosting this important hearing, and 
Administrator McCarthy, thank you for being here and for your 
continuing leadership on this vital issue.
    Obviously my State has a very different point of view than 
that expressed by the Ranking Member. We are on the losing end 
of carbon pollution in a lot of respects and we urge you on.
    EPA's mission to protect human health and the environment 
is one of the most fundamental and popular responsibilities of 
the Federal Government. There is no greater environmental 
threat today than climate change. EPA has a duty to respond but 
it also has a mandate to respond.
    EPA took a critical step forward in this fight when it 
exercised its existing Clean Air Act authority, as established 
by Congress, and as affirmed by the Supreme Court, to propose 
carbon pollution standards for existing power plants. That 
proposal was based on unprecedented public engagement, more 
than 300 public meetings with stakeholders of all kinds and 
across the political spectrum.
    EPA's plan puts States in the driver's seat to come up with 
their own best plans to met State-specific targets. States and 
power companies have a wide variety of options to cut carbon 
pollution, like boosting renewable energy, establishing energy 
savings targets, investing in efficiency, or joining one of the 
existing cap and trade programs, like our RGGI program in New 
England.
    States can develop plans that create jobs, plan that cut 
electricity costs by boosting efficiency, plans that achieve 
major pollution reductions. As proposed, the rule will reduce 
carbon pollution while providing as much as $93 billion in 
public benefit; $93 billion in public benefit per year by 2030.
    A recent Washington Post ABC news poll found that 70 
percent of other public supports Federal standards to limit 
carbon pollution. Last month the Wall Street Journal-NBC News 
also released a poll showing that two-thirds of Americans 
support President Obama's new carbon pollution standard. More 
than half say the U.S. should address climate change, even if 
it means higher electricity bills for them. But it won't, 
because efficiency can reduce your bill, even if the per unit 
cost can go up.
    EPA's proposal is supported by major utilities, like 
National Grid, faith organizations like the U.S. Conference of 
Catholic Bishops, public health groups, like the American Lung 
Association. There is also support from nameplate American 
corporations, like Mars, Nike and Starbucks. I would like to 
ask unanimous consent to enter into the record a letter from 
more than 125 American companies expressing support for the 
standard.
    Senator Boxer. Without objection, so ordered.
    [The referenced information follows:]
    
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 
  
    
    I just want to mention, could you freeze the clock, please? 
If there are babies who are talking, it is important that you 
consider that we have an overflow room at G50. Because it is 
kind of hard to hear over that wonderful sound that we are 
hearing from the back. Your call, but we do have a room, G50.
    Go ahead.
    Senator Whitehouse. Thank you, Madam Chair.
    We had four former Republican EPA Administrators to testify 
before our Subcommittee on Clean Air and Nuclear Safety last 
month. They agreed, all four, that EPA's rule is a reasonable 
way to reduce carbon pollution and that industry has a history 
of overstating the compliance costs of environmental 
regulations. The benefits of the Clean Air Act, according to a 
2011 EPA assessment, will outweigh its costs by a ratio of 30 
to one, $30 of value in the lives of regular Americans for 
every $1 that polluters had to pay in cleanup costs. That is a 
good deal for America.
    Administrator McCarthy, EPA's carbon pollution standards 
will lead to tremendous economic, environmental and health 
benefits for Americans. Do not be deterred by the polluters and 
their Republican allies in Congress who attack the proposal. 
They are fighting to protect the present status quo, which is 
polluters polluting at will and profiting at public expense. 
And do not worry, you are way more popular than they are, and 
the American people have far more confidence in you.
    States are already achieving greater energy efficiency in 
renewable use than assumed in the proposed standards. Factor 
those into the standards, raise the bar. Develop carbon 
pollution standards for other major sources, like cement kilns 
and refineries.
    Administrator McCarthy, the American people are behind you 
and counting on EPA to stand strong against the polluters. 
Stand up for the American people and go even further as you 
develop the final power plant standards in the months ahead. 
History will judge your efforts favorably.
    Thank you very much.
    Senator Boxer. Thank you, Senator.
    We turn to Senator Wicker.

          OPENING STATEMENT OF THE HON. ROGER WICKER, 
            U.S. SENATOR FROM THE STATE OF ARKANSAS

    Senator Wicker. Thank you, Madam Chair. This morning we 
have an opportunity to discuss the serious implications of the 
Administration's unilateral move to execute its oppressive 
climate agenda.
    Some of my friends on the other side continue to speak of 
carbon pollution, which suggests to some people that they are 
talking about particulate emissions. Of course, we know that 
what is being talked about with this proposed rule is carbon 
dioxide emissions from existing power plants. These regulations 
regarding CO2 could negatively impact every single 
American.
    The President seems determined to wage an all-out war on 
coal, launching costly regulations that would have little 
effect on changing the climate. Over the past 10 years, global 
coal consumption has soared by 65 percent. During the same 
period, U.S. coal exports have skyrocketed by more than 200 
percent. Coal is burned to provide 40 percent of the world's 
electricity needs in a reliable and economical way.
    So although the coal consumption has soared, global average 
temperatures have stagnated over the past 17 years. This is a 
fact worth repeating. There has been no rise in global average 
temperatures over the past 17 years. Regardless, the 
Administration continues to defend its heavy-handed climate 
regulations with assertions that global average temperatures 
are on the rise.
    The regulation we are here to discuss today is EPA's most 
blatant over-reach thus far. Under the guise of the Clean Air 
Act, the agency has proposed to mandate entities that are far 
outside its regulatory authority. The rule does not simply 
attempt to reduce emissions from existing plants. For the first 
time, EPA has gone beyond power plants with a regulation that 
reaches up to and including the power meter.
    EPA is relying on the talking points that its proposed rule 
is flexible and allows States to create their own plans. I know 
this will be mentioned today. But this is fiction when it comes 
to many States. The rule is a regulatory noose for electricity 
providers and users in my State of Mississippi. In fact, in 
States like Mississippi, we are being punished by EPA for 
having a diversified portfolio of electrical generation. One 
hundred percent of Mississippi's current coal production will 
be forced to close down under this role.
    In place of coal, EPA suggests an increase in the use of 
renewable energy resources, an increase by more than 250 
percent of renewable energy resources. Yet EPA's own technical 
support documents show zero potential for this type of 
renewable energy resource in Mississippi. What good is 
flexibility if there is no chance of flexibility?
    Low cost and reliable electricity is at the core of 
economic growth. Many parts of the Country have been 
experiencing a manufacturing renaissance in part due to the 
great success of American energy innovation and the shale 
revolution. Unfortunately, EPA's rules do not account for 
future economic development and could actually thwart new 
growth. The so-called flexible regulation would mandate that 
States put CO2 emissions above all else.
    If the proposed rules move forward, and I hope they do not, 
our economy would be put at an economic disadvantage. Utilities 
and States will be handcuffed by EPA's mandate, because they 
have to rely on uneconomical resources to power America's homes 
and businesses, increasing the costs for everyone. The 
consequences of the Administration's proposed rule would be 
disastrous for our economy, and again, would have minuscule 
impact on the environment.
    In summary, my friends, the proposed rule is a breathtaking 
regulatory over-reach. It is a job-killer; it is based on 
questionable science; it is of dubious legality under the Clean 
Air Act. It amounts to an end run against Congress. It is 
inflexible. It will have no effect on the climate and is 
therefore pointless. And it is punitive, to name a few.
    Thank you, Madam Chair.
    Senator Boxer. But outside of that, you love it.
    [Laughter.]
    Senator Boxer. I know, I am just kidding. That was very 
effective and I was just trying to lighten up the atmosphere.
    Senator Sanders.

        OPENING STATEMENT OF THE HON. BERNARD SANDERS, 
             U.S. SENATOR FROM THE STATE OF VERMONT

    Senator Sanders. So you are leaning yes, is that right, 
Roger?
    [Laughter.]
    Senator Sanders. Administrator McCarthy, thanks very much 
for being here, and thank you very much for the work you are 
doing.
    We are in a remarkable moment in American history and in 
fact, in world history. And that is that for the first time, to 
the best of my knowledge, we have a major political party which 
by and large is rejecting what the scientific community is 
saying. Now, we can disagree about funding for education or 
health care, all that stuff. But if we cannot accept what the 
overwhelming majority of scientists are taking, and there is no 
more debate, the overwhelming majority of scientists are 
saying, A, climate change is real, climate change is caused by 
human activity, climate change is already causing devastating 
problems in the United State and around the world. And if we do 
not get our act together by significantly reducing carbon and 
methane emissions, that situation will only get worse.
    That is not really a debate any more. And that we have a 
major political party that is rejecting that is extremely 
frightening.
    Now, the evidence is overwhelming. According to the U.S. 
National Climate Assessment released in May, the average global 
temperature has increased by more than 1 and a half degrees 
Fahrenheit between 1880 and 2012. And temperatures in my State 
of Vermont and in New England have increased at least 2 and a 
half degrees Fahrenheit just in the last 30 years. By 2100 New 
England could be as much as 10 degrees hotter.
    That is extraordinary. The debate that we should be having, 
and it would be an important debate, because nobody has all the 
answers, is how do you deal with this crisis? How do we work 
with countries around the world to reduce carbon, to transform 
our energy system? How do you do it? That is tough stuff. 
Nobody has any magical answer.
    But that should be the debate. The idea that we are still 
debating whether or not this is a real issue when the 
scientific community tells us, this the planetary crisis of our 
time, is extremely distressing. Planetary warming is causing 
sea levels to rise. NOAA reported that global average sea level 
has increased 8 inches since 1880. Several locations along the 
east coast and the Gulf of Mexico have experienced more 8 
inches of local sea level rise in only the past 50 years.
    What we are talking about if we do not get our act together 
is major cities in the United States and countries around the 
world, parts of countries around the world being underwater. 
Being underwater. As a result of rising sea levels and 
increasingly intense storms, catastrophic storm surges have 
been rising as well.
    People talk about financial issues. I will remind my 
colleagues that Hurricane Sandy cost this government alone over 
$60 billion. And all over the world, all over the world, there 
are projections that we will be spending trillions of dollars, 
trillions of dollars, in order to deal with rising sea levels, 
extreme weather disturbances and other manifestations of 
climate change.
    I would remind my colleagues that in a certain sense, this 
debate that is taking place today is very similar to a debate 
that took place 50 or 60 years ago right here in Congress. And 
that is, we had tobacco industry lobbyists coming in here and 
heads of the tobacco industry saying, tobacco causing cancer? 
Oh, no, that can't be the case. And they brought doctors in 
here, guys who were smoking Kools and putting ads on 
television. And they were spending huge amounts of money trying 
to convince the American people that tobacco had nothing to do 
with cancer, emphysema and other serious illnesses.
    Finally, the truth won out. And the truth will win out on 
this debate as well. Our job is to transform our energy system, 
work with countries around the world to reduce carbon and to 
help save the planet so these young people will have a 
habitable nation and a habitable world in the years to come.
    Senator Boxer. Thank you, Senator.
    Senator Fischer, followed by Senator Cardin, Senator Inhofe 
and then Senator Barrasso.

          OPENING STATEMENT OF THE HON. DEB FISCHER, 
            U.S. SENATOR FROM THE STATE OF NEBRASKA

    Senator Fischer. Chairman Boxer and Ranking Member Vitter, 
thank you so much for holding the hearing today. I want to 
welcome Administrator McCarthy. It is always a pleasure to see 
you. Thank you for being here today.
    We all share in the goal of cleaner air and can be proud of 
the tremendous improvements we have made in air quality over 
the past several decades. Air pollution has decreased, even as 
our population and the number of vehicles on the roads have 
increased, and even as our economy has growth.
    In Nebraska, our public power utilities have made 
significant investments in coal-generated facilities in order 
to provide an even cleaner source of that low-cost energy in 
our State. While the regulatory actions at issue today are 
being pursued under the authority of the Clean Air Act, they 
are a significant departure from the true aims of the statute.
    In an unprecedented use of the law, this Administration is 
seeking to reduce U.S. emissions of carbon dioxide, ostensibly 
to control global temperature changes. While the environmental 
benefits of capping carbon in America are negligible at best, 
the economic consequences are unquestionably devastating.
    President Obama himself warned that electricity rates would 
necessarily skyrocket under a plan to control carbon. More than 
80 percent of America's energy needs are met through carbon and 
many unconventional fuels.
    Last year, coal and natural gas provided 66 percent of U.S. 
electricity generation. As EPA forces carbon reduction, it 
inflicts higher energy costs on American families and on 
businesses. While the economic pain would be felt throughout 
the Country, it is America's poorest families that will be hit 
the hardest. The median family spends about 5 cents out of 
every dollar on energy costs. Low-income families spend about 
20 cents.
    States like Nebraska that receive a majority of their 
electricity from coal-fired generation would also be 
disproportionately harmed under this proposal. The guidelines 
would force premature retirement of efficient, low-cost coal-
fueled generation, lead to the potential loss of billions of 
dollars in investments made over the last decade to make coal 
plant cleaner, and require construction of higher cost 
replacement generation, and would increase natural gas prices.
    Also troubling is the EPA-set emission guidelines that are 
not achievable at the affected source, the electricity-
generating unit. Energy efficiency in a renewable portfolio 
mandates should not come through regulatory fiat. While I do 
not have enough time to list all the concerns raised by this 
proposal, you know that I believe there are many.
    The issues are complex and the impacts are far-reaching. 
While I appreciate the 120-day comment period that was granted 
for public comment on this rule, the challenge presented to the 
States and other stakeholders to analyze and assess the 
enormous range of issues that are posed is beyond expectations. 
The level of complexity of the proposal, the volume of 
technical documents that are released, the amount of 
coordination required and the magnitude of energy impacts of 
the rule, I believe, warrant a 60-day extension of that public 
comment period. I hope to visit with you about that.
    I am pleased that we are spending time today examining some 
of the concerns raised by the proposal. This is an important 
discussion, this is an important debate. I look forward to 
today's dialog. Thank you.
    Senator Boxer. Thank you, Senator Fischer.
    Senator Cardin.

        OPENING STATEMENT OF THE HON. BENJAMIN CARDIN, 
            U.S. SENATOR FROM THE STATE OF MARYLAND

    Senator Cardin. Thank you, Madam Chair.
    First, let me thank Administrator Gina McCarthy for being 
here, but more importantly, being willing to take on the 
responsibilities of the Environmental Protection Agency at this 
critical moment in the history of our Country. It is not an 
easy task, and you were willing to step forward, knowing full 
well the challenges that you would confront. I want to thank 
you for being willing to do this.
    The Chairman already mentioned that there are children at 
the hearing. I think that is wonderful, because it is their 
future that we are talking about. It is the environment that 
they will be living in that is very much impacted by what we do 
here and what the Administration is doing.
    The impact of climate change in Maryland is well 
understood. The people in my State recognize the risks that are 
involved as a result of climate change. Seventy percent of the 
population of Maryland lives in coastal areas. And they are at 
risk. Property owners are at risk of losing their properties, 
and they know the financial impact that is involved. The people 
of Maryland, the iconic shorelines that we have, that is our 
way of life, that is at risk.
    The economics of my State are at risk, from the poultry 
industry that depends upon reasonable price for corn in the 
cost of producing the poultry know that the weather conditions 
have made corn more expensive, therefore, their business more 
difficult.
    The watermen understand the loss of our crab population due 
to the warming of the waters and loss of sea grasses. The 
seafood industry also understands the warmer waters affect all 
the produce coming out of the Chesapeake Bay. The Port of 
Baltimore is one of the economic hearts of our State. And the 
climate change, rising sea levels, make it more difficult to 
run the Port of Baltimore economically. It has an impact on our 
economy.
    And I could go on and on about the impact, on our military 
installations, from the Aberdeen proving grounds to Pax River 
in the southern part of our State, to in our capitol, the Naval 
Academy. All very much impacted by climate change. As my 
colleagues have pointed out, the science is indisputable that 
our activities here in our communities are affecting climate 
change.
    Congress should have acted, Madam Chair, we tried, we 
should have provided the framework for the way that we deal 
with climate change. We tried, but we were stopped. We wanted 
to use market-based solutions to make it clear and make it more 
available for private companies to invest. But no, we were 
stopped in those efforts. So the Administration is doing what 
they are required to do. EPA has the authority and the 
responsibility to act. And three Supreme Court decisions have 
made it clear that you are acting within that authority.
    Let me quote from the case that the Chair mentioned, 
Justice Scalia, what he said just very recently: ``It bears 
mention that EPA is getting almost everything it wanted in this 
case. It sought to regulate sources that it said were 
responsible for 86 percent of all greenhouse gas emissions from 
statutory source nationwide. Under our holding, EPA will be 
able to regulate source responsible for 83 percent of those 
emissions.''
    And then, the Clean Air Act clearly gives you the authority 
to establish baseline performance standards for power plants, 
which in this case or this rule are talking about achieving a 
30 percent net reduction in carbon pollution from power plants 
using 2005 as a baseline by 2030. You have the authority, you 
have the responsibility, you are acting.
    And thank you for the flexibility that you are providing. 
You are putting the States in charge. You are giving them the 
power they need to do what is right for their community. We can 
work in regional, among different States. That is what you have 
allowed, and I thank you for that proposed rule.
    Maryland energy companies have acted. Constellation and 
Exelon have taken on this challenge, have done it in a cost-
effective way and have created jobs in the meantime.
    Madam Chair, I have heard that it doesn't take another 
Cuyahoga River to catch on fire, which we needed before we 
enacted the Clean Air Act, or for toxic air to be breathed by 
the people of Los Angeles before we enacted the Clean Air Act. 
I hope it doesn't take the loss of Smith Island in Maryland or 
the washing away of the Everglades or dust bowls to become the 
regular in our breadbasket in this Country before we act on 
this critical issue.
    I thank the Administration for taking action. I hope 
Congress will take action to be your partner in making the 
reality of America's leadership on global climate change when 
it is desperately needed.
    Senator Boxer. Thank you, Senator.
    Senator Inhofe.

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

    Senator Inhofe. Thank you, Madam Chairman, and 
Administrator McCarthy, thank you for being here. It is very 
nice to see you.
    There are so many problems that have been pointed out 
already by my colleagues with the existing source carbon 
renewal that it is hard to know where to begin. First, there is 
the issue of the impossible efficiency requirements that the 
rule would place on power plants. Then there is the question of 
what should happen with the standard and the MATS-compliant 
coal plants and how they are supposed to achieve reductions 
without going belly up.
    Then there are bigger questions like how EPA plans to 
enforce the rule and to what extent the agency will be allowed 
to tweak the State's plan if it is not making the progress that 
it needs to be made during the decade-long compliance period.
    These are very complex questions. And there are hundreds 
more. Many smart people have been reading this rule for the 
last 2 months, and they are at a loss for what this will 
actually look like. In other words, it appears that EPA is 
urging the Nation to trust them as they take over the entire 
electricity market in the black-box confines of the comment 
period.
    With that said, there are a few things that are crystal 
clear. First of all, we know that the rule will cause 
electricity prices to go up. We know this from the EPA's own 
logic. EPA's rule set out to save the 6 percent of nuclear 
generators that have become economically marginal. Now, how 
will the EPA do this? By increasing electricity prices. In the 
absence of regulatory relief from the NRC, and the EPA, which 
is not happening, the only way to keep a marginal nuclear plant 
in business is for it to be paid more for its power. And the 
only way the EPA can do that is by pushing the prices up.
    The second thing that we know is that this rule will end up 
with the United States looking like Germany where the poor and 
the business community alike are reeling under the high 
electricity prices. Their prices are now three times what they 
are in the United States.
    And this is something the Administration is doing even 
though the American people, and they really don't care about 
this, talk about all the people that are joining in and saying 
that global warming is happening, the science is overwhelming, 
they say that because there is nothing else they can say. We 
have already had this before our U.S. Senate many times, and it 
has been resoundingly defeated by a larger margin each time it 
comes up. It has come up four times.
    And that is the trend line that is there. We all understand 
that. We know that a recent Gallup poll showed that, I can 
remember back when global warming was our No. 1 or No. 2 
concern. It is now 14, as of 2 weeks ago, 14 out of 15 
concerns. According to the Pew Research center, 53 percent of 
the Americans who believed global warming is happening, when 
asked the cause of it, either don't believe there is enough 
evidence to blame man or believe that it is by natural 
variation.
    This may explain why it has become difficult for Tom 
Steyer, the guy who is putting out $50 million to put up 
campaigns to influence people to try to believe that, he has 
tried to resurrect the whole global warming thing and tried to 
kill the Excel pipeline. He put his $50 million up; he is going 
to raise the other $50 million. According to Politico a couple 
of days ago, he has been able to raise only $1.2 million from 
outside donors. So they are not coming to the party, either.
    The third thing we know is that this rule will have 
essentially no impact on global temperatures, which is the very 
reason, because that is ultimately what the rule is supposed to 
do. According to one analysis, which was used as a model and 
developed by the EPA, the ESPS rule would reduce global 
temperature, this is using their analysis, by 0.02 degrees 
Celsius as is shown on this chart. It is hardly measurable with 
all the costs we are going to be involved in.
    Monday night I had dinner with Senator Mathias Cormann, who 
happened to be here in the country from Australia. Senator 
Cormann is the guy who was leading the cause after he at one 
time supported the idea of taxing carbon, to repeal it. So they 
have repealed it in Australia.
    Stop and think about it, it is China and Russia and other 
states, even if you believe all this, they are the ones that 
are sitting back anxiously hoping that we will somehow tax 
carbon, so that they will be able to draw in our base.
    The last thing, since I am running out of time here, I want 
to mention that there is a study that is floating around that 
says that this rule will enhance natural gas. You can get an 
argument that it would. But I think what they are forgetting to 
mention is that this is a war on fossil fuels. Natural gas is a 
fossil fuel. And as you can see up here, they would be next. 
The war on fossil fuels is going to come, natural gas right 
after coal.
    So that is what is behind the whole thing. I appreciate 
your holding this hearing and we will see what happens.
    Senator Boxer. Thanks, Senator.
    Senator Barrasso.

         OPENING STATEMENT OF THE HON. JOHN BARRASSO, 
             U.S. SENATOR FROM THE STATE OF WYOMING

    Senator Barrasso. Thank you very much, Madam Chairman.
    On July 6th of this year, the New York Times wrote a piece 
about the outsized role that the National Resources Defense 
Council, the NRDC, had in developing the EPA's new regulations 
to curb power plant emissions. The article focused on three key 
senior NRDC officials who the Times described as Washington's 
best-paid lobbyists, who developed the core of EPA's plan. 
Washington's best-paid lobbyists developed the core of EPA's 
plan.
    The New York Times stated that on June 2d, President Obama 
proposed a new Environmental Protection Agency rule to curb 
power plant emissions that used as its blueprint the work of 
three men and their team. The article says it was a remarkable 
victory for the Natural Resources Defense Council.
    Now, for those outside the beltway, the NRDC is a $120 
million a year lobbying machine backed by Hollywood elites. It 
is absolutely shameful to me that the EPA, under the direction 
here of the Administrator, will allow this powerful group of 
lawyers and lobbyists to draft their regulations. But yet this 
same Administrator refuses to actually listen to the people 
whose lives and jobs will be severely impacted by these 
regulations drawn up by wealthy lawyers and lobbyists.
    In fact, the Administrator refuses to listen to the 
thousands of Americans who will be impacted by this rule. The 
EPA Administrator has refused to go out and visit folks in coal 
country, whose lives the agency is upending. The EPA 
Administrator won't hold a public hearing in Wyoming, won't 
hold a public hearing in Kentucky. The EPA Administrator has 
literally gone out of her way and the EPA has gone out of its 
way to avoid hearing from unemployed families who have lost or 
will lose everything, their job, their home, their retirement 
savings, issues relating to their health, all because the EPA 
has decided to push a rule that was drafted behind closed doors 
by powerful, wealthy Washington lawyers and lobbyists at the 
NRDC.
    Let's be clear. The NRDC is a wealthy, elite, powerful 
lobbying machine with more influence over decisionmaking in 
Washington than any ordinary American citizen. They have 
millions, which gives them access. The EPA has turned a deaf 
ear on those who don't.
    It should come as no surprise that this is how the EPA's 
regulations for new and existing power plants were hatched. In 
fact, the Times article argues that the NRDC employed this very 
same tactic during the Bush administration to craft their 
comprehensive energy strategy. When the Bush energy strategy 
was released at the time, the NRDC issued the following 
statement about how it was crafted: ``The conclusions of the 
Cheney Task Force are a product of an undemocratic process. 
When NRDC filed a Freedom of Information Act,'' the story 
continues, ``NRDC filed a Freedom of Information Act request 
for documents identifying members of the task force and the 
calendars of task force members, the Department of Energy 
denied the request.''
    I would say this is quite a change of heart by this group 
of wealthy Washington lobbyists and lawyers. If I am wrong, 
then the NRDC and the EPA and its Administrator can provide and 
should provide all records and documents that are requested by 
members of this committee and my House colleagues on how these 
new regulations for coal-fired power plants were crafted. 
Because right now, it sure looks like the EPA let a trio of 
high-powered Washington lobbyists write their regulations for 
them.
    If what the Times is reporting is what the EPA 
Administrator has called preposterous, then the EPA must comply 
with any committee and Freedom of Information Act requests for 
these documents. Comply with requests from our House 
colleagues, comply so that we can then know the truth.
    If the answer is no, that you will not comply, or that 
there are more recordkeeping mishaps, broken hard drives, lost 
files, then we will know the truth about this agency as well.
    Thank you, Madam Chairman, I look forward to the testimony.
    Senator Boxer. Thank you, Senator.
    Now, here is where we stand, because we are trying to move 
on. We are going to accommodate the Senators who are here, so 
we are going to move to Senator Carper, Senator Sessions, and 
we will close with Senator Merkley. At that point, unless there 
is serious objection, we are going to move to Administrator 
McCarthy. And the colleagues that come later can have an extra 
minute to do a little bit of an opening, if that is OK with 
everybody.
    So let's move forward, and we will go now to Senator 
Carper.

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

    Senator Carper. Thanks, Madam Chair. Administrator 
McCarthy, very nice to see you.
    For many years, I served as either the ranking member or as 
the chair of the Subcommittee on Clean Air and Nuclear Safety. 
I remember in those days, I think George Voinovich was the 
chair at the time, we were meeting with a number of utility 
CEOs from around the Country. We were talking about multi-
pollutant legislation, dealing with sulfur dioxide, nitrogen 
oxide, mercury, CO2.
    And after about an hour-long meeting, this one utility CEO 
from some place down south, a southern State, I don't remember 
which one, kind of a curmudgeon-like guy, he said at the end of 
our hour-long conversation, all right, Senators, this is what 
you should do. This was with respect to multi-pollutant 
legislation. He said, you should tell us what the rules are 
going to be. You should give us a reasonable amount of time to 
implement those rules. Give us a little bit of flexibility and 
get out of the way. That is what he said.
    Tell us what the rules are going to be. Give us a 
reasonable amount of flexibility, reasonable amount of time and 
get out of the way. That was 10 years ago.
    Well, my hope and my belief is that EPA is actually not 
just saying, these are what the rules are going to be. They 
said, after talking to a lot of stakeholders, including 
utilities, including coal companies, including environmental 
groups, including State and local governments, EPA said, this 
is what we think the rules should be. In doing so, they 
basically put out a draft of what they think the rules should 
be. Asked for a lot of response, a lot of input from people 
around the Country.
    And that is where we are. I think it great we are having 
this hearing, Madam Chair, great that the Administrator is 
here. But the way the system works here, EPA doesn't mandate 
what is going to happen. I hope they are getting input from all 
kinds of groups, including groups like NRDC. That would make 
sense. I hope they get input from utility companies. That would 
make sense. I hope they get input from the coal companies. That 
would make sense.
    So I am glad you are here, glad we have an opportunity to 
hear what the Administration is proposing, and glad we are 
going to have an opportunity to provide input to them.
    Delaware and some other States feel the impact of climate 
change that are already taking place to reduce our local power 
plant carbon emissions. Unfortunately, few States like us 
cannot tackle this issue alone. All States have to do their 
fair share if we are going to make an impact.
    The Clean Power Act unites our Country in working to take 
on the largest source of carbon emissions together. I want to 
thank the Administrator, want to thank our President for their 
leadership and for moving forward with this rule.
    Opponents to this rule are going to say that we have to 
choose between having a cleaner environment and a stronger 
economy. I have said a million times, that is a false choice. 
We can have both. And if we are smart, we will have both. In 
fact, we have done it time and time again.
    We know that inaction on climate change only costs us money 
in the long run. Inaction can be devastating to our economy. In 
fact, the Government Accountability Office has already listed 
climate change as one of the biggest fiscal risks facing our 
Nation. They are not making this stuff up. It is. That is why I 
believe we need to move forward with the Clean Power Plan.
    However, for such an important rule, we need EPA to get it 
right. We need to have a rule that reduces carbon emissions, 
protects public health and grows our economy, which is finally 
growing quite nicely. We need a rule that does not pick winners 
and losers between clean energy technologies. And we need a 
rule that is flexible and legally defensible so the States can 
meet their carbon targets.
    I believe that EPA is trying to strike the right balance. 
God knows it isn't easy. Through unprecedented outreach and 
hearing from over 300 stakeholders nationwide, EPA has 
developed a proposal that builds on what States are already 
doing to reduce power plant carbon emissions. The EPA's 
proposal recognizes that what might work for Delaware may not 
work for California, may not work for Oklahoma or Alabama or 
Mississippi or Nebraska. But rather, your proposal allows each 
State the flexibility of finding the most cost-effective way to 
reduce their own emissions. As my father would say, God rest 
his soul, that sounds like common sense to me.
    After working for more than a decade on legislative efforts 
to reduce carbon emissions from power plants, I applaud the 
EPA's decision to set carbon targets that are meaningful, 
flexible and feasible. I will close by saying I encourage the 
EPA to continue to listen to the stakeholders, listen to us and 
make adjustments as needed to ensure that we get this one 
right. It is important that we do.
    I look forward to today's discussion and future discussions 
on this. Welcome and thank you.
    Senator Boxer. Thank you, Senator.
    Senator Sessions, followed by Senator Merkley, and then, 
Administrator, we are going to turn to you.

         OPENING STATEMENT OF THE HON. JEFF SESSIONS, 
             U.S. SENATOR FROM THE STATE OF ALABAMA

    Senator Sessions. Thank you, Madam Chair.
    The American economy is important; I know you know that. We 
have a decline in median family wages in America since 2007 
from $55,000 to $50,000. We have an employment rate among the 
working age population as low as the 1970's, it has been 
declining steadily. And the energy has been, a decline in the 
energy prices, one of the finest things that helped the 
American economy in recent years.
    So lower cost energy clearly creates jobs, it creates 
wealth. And every $10 a family has to pay for an electric bill 
or more for their gasoline bill does weaken the economy if it 
is for no benefit or little benefit. So we have to ask that. We 
can reach some agreement on a lot of these issues, Ms. 
McCarthy. I don't think there is any doubt about it. Things 
that are cost-effective, clean, efficiency programs, things 
that probably are done to make American healthier and a 
stronger economy. And there is common ground that we can have.
    One of those common grounds I think is nuclear power. We 
need to consider that more.
    Last month, in the Utility Air Regulatory Group v. EPA, the 
Supreme Court said this: ``When an agency claims to discover in 
a long-extant statute an unheralded power to regulate a 
significant portion of the American economy, we typically treat 
its announcement with a measure of skepticism.''
    Well, we know that Congress has never voted explicitly to 
regulate CO2. And would not vote today if given the 
opportunity. But through old statutes and interpretation you 
now as an unelected official are impacting the economy in 
extraordinary ways. And I just think we ought not to forget 
that.
    CO2 emission targets for Alabama are a reduction 
of 27 percent. But States like Arkansas and Georgia with 44 
percent reductions are really hammered every harder. South 
Carolina with a 51 percent reduction, Tennessee with a 39 
percent reduction. Those are huge economically impactful 
regulations that you are putting out that we don't get to vote 
on. The American people aren't given a voice in it.
    So I want you to know we are concerned about the problem 
that you are concerned about, in trying to make this 
environment healthy and positive. But we have to ask, what is 
the real world impact on it? We know Germany is backing off and 
reconsidering some of its very green issues. Australia recently 
scrapped its carbon tax. So I think it is a matter that we need 
to concern ourselves with.
    Additionally, I am worried about the nuclear industry. We 
only have a few plants that are going forward now. The 
Tennessee Valley Authority, which handles most of north Alabama 
and part of Mississippi and Tennessee, they are building a 
nuclear plant at Watts Bar. Under your regulations, they will 
spend billions of dollars to bring that plant online and will 
get no credit for it whatsoever. In fact, when their rule, the 
impact rule of reduction of emissions occurs, it will be even 
more burdensome from them than otherwise would be the case.
    In fact, I think it is fair to say they are penalized for 
investing now to reduce carbon emissions through nuclear power. 
And they have done it already, they have reduced emissions, 
carbon emissions by 17 percent since 2005, and are liable to 
achieve a 44 percent reduction by 2020. But they will be, I 
think, clearly unfairly impacted by the way you are calculating 
the nuclear power carbon free power generation that could 
occur.
    Madam Chair, I will wrap up, and thank you for the 
opportunity to be here.
    Senator Boxer. Senator, thank you very much.
    Last but not least, Senator Merkley, and then we turn to 
the Administrator.

          OPENING STATEMENT OF THE HON. JEFF MERKLEY, 
             U.S. SENATOR FROM THE STATE OF OREGON

    Senator Merkley. Thank you, Administrator McCarthy, for 
coming and addressing the Clean Power Plan today.
    There is no question that carbon dioxide is a terrible 
pollutant having profound impacts. We see it on the ground in 
Oregon in multitudinous ways. We see it in terms of the 
expansion of the bark beetle or pine beetle that is destroying 
vast swaths of our forests, because it is not cold enough in 
winter to kill them off. We see it in terms of our oyster 
industry that is having great difficulty with the reproduction 
of oysters because the water is 30 percent more acidic in the 
ocean than it was before the industrial revolution. We 
certainly see it in the Klamath Basin where the three worst 
ever droughts have occurred in less than a decade and a half.
    Thus, carbon dioxide is waging an assault on our rural 
resources, on our fishing, on our farming, on our forests. It 
is absolutely right that under the Clean Air Act, we seek to 
control and reduce this pollutant having such vicious 
consequences across rural America.
    So thank you for coming and addressing the details of the 
plan. I look forward to the commentary and I look forward to an 
understanding of how many jobs can be created by addressing 
non-carbon sources o power. It is clear that already in just 
the solar world, there are twice as many jobs as there are in 
the coal world, not counting other forms of renewable energy. 
But there is huge growth potential to power up living wage jobs 
across our Nation as we take on this vicious attack on rural 
America.
    Thank you for your testimony today.
    Senator Boxer. Thank you, Senator.
    Administrator McCarthy, you have heard from 12 of us, six 
and six. And I really want to say to each colleague, I thought 
each of you made your points very well and to the point. So we 
turn to you, Administrator McCarthy.

 STATEMENT OF HON. GINA McCARTHY, ADMINISTRATOR, UNITED STATES 
                ENVIRONMENTAL PROTECTION AGENCY

    Ms. McCarthy. Thank you, Chairman Boxer, Ranking Member 
Vitter and members of the committee, for the opportunity to 
testify today on EPA's recently issued Clean Power Plant 
proposal.
    Climate change is one of the greatest challenges of our 
time. It already threatens human health and welfare and the 
economy, and if left unchecked, it will have devastating 
impacts on the United States and on the planet.
    The science is clear, the risks are clear, and the high 
costs of climate inaction are clear. We must act. That is why 
President Obama laid out a climate action plan and why on June 
2d I signed the proposed Clean Power Plan to cut carbon 
pollution, build a more resilient nation and lead the world in 
our global climate fight.
    Power plants are the largest source of carbon dioxide 
emissions in the United States, accounting for roughly one-
third of all domestic greenhouse gas emissions. While the 
United States has limits in place for levels of arsenic, 
mercury, sulfur dioxide, nitrogen oxide and particle pollution 
that power plants can emit, there are currently no national 
limits on carbon pollution levels.
    EPA's proposed Clean Power Plan will cut hundreds of 
millions of tons of carbon pollution and hundreds of thousands 
of tons of other harmful pollutants from existing power plants. 
Together, these reductions will provide important health 
benefits to our most vulnerable citizens, including our 
children.
    The Clean Power Plan is built on the advice and information 
that we drew out and listened to from States, cities, 
businesses, utilities and thousands of people about the actions 
they are already taking to reduce carbon dioxide emissions.
    The plan aims to cut energy waste and leverage cleaner 
energy sources by doing two things. First, it uses a national 
framework to set achievable, State-specific goals to cut carbon 
pollution per megawatt hour of electricity generated. But 
second, it empowers States to chart their own customized path 
to meet those goals.
    We know that coal and natural gas play a significant role 
in a diverse national energy mix. The plan builds on actions 
already underway to modernize aging plants, to increase 
efficiency and lower pollution. It paves a more certain path 
for conventional fuels and a clean energy economy.
    The EPA stakeholder outreach and public engagement in 
preparation for this rulemaking was unprecedented. Starting 
last summer, we held 11 public listening sessions around the 
Country. We participated in hundreds of meetings with a broad 
range of stakeholders across the Country. And we talked with 
every State.
    Now, the second phase of our public engagement has begun. 
We have already had dozens of calls and meetings with States 
and other stakeholders in the more formal public process. Both 
a public comment period that runs through October 16th, 2014, 
and public hearings next week in Atlanta, Denver, Pittsburgh 
and Washington, DC. will provide further opportunity for 
stakeholders and the general public to provide input.
    Each State is different. So each State goal and each path 
can be different. The goals spring from smart and sensible 
opportunities that State and businesses are already taking 
advantage of right now. Under the proposal, the States have a 
flexible compliance path that allows them to design plans 
sensitive to their needs, including considering jobs and 
communities in a transitioning energy world. It also allows 
them 15 years from when the rule is final until compliance with 
the final target to consider and make the right investments, to 
ensure energy reliability and to avoid stranded assets.
    All told, in 2030, when States meet their goals, our 
proposal will result in 30 percent less carbon pollution from 
the power sector across eh U.S. in comparison with the 2005 
levels. In addition, we will cut pollution that causes smog and 
soot by more than 25 percent. The first year that these 
standards go into effect we will avoid up to 100,000 asthma 
attacks and 2,100 heart attacks. Those numbers just go up from 
there.
    In 2030, the Clean Power Plan will deliver climate and 
health benefits of up to $90 billion and for certain smog 
reduction alone, meaning for every dollar we invest, families 
will see $7 in health benefits. And because energy efficiency 
is such a smart, cost-effective strategy, we predict that in 
2030, average electricity bills for American families will be 8 
percent cheaper.
    This proposal sets targets at a reasonable schedule that 
can be achieved by every State using measures they choose 
themselves to suit their own needs. The EPA looks forward to 
discussion of the proposal over the next several months, and I 
look forward to your questions.
    Thank you very much.
    [The prepared statement of Ms. McCarthy follows:]
    
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    Senator Boxer. Thank you very much, Administrator.
    I will start off. I am going to respond to a couple of my 
colleagues and then I am going to ask you a question about how 
the States' role is so important in your rule.
    First of all, Senator Barrasso was quite eloquent in 
attacking the NRDC. So for those who don't know, the NRDC, this 
is their very, this is their goal. And see what you think of 
it. The goal is ``to safeguard the natural systems on which all 
life depends.'' It sounds like a terrific goal to me. And 
further, the ideas that the NRDC had were actually released at 
a National Press Club event in 2012, their plan. And it is true 
that EPA borrowed from that, but good for them for putting out 
some really clever ideas. Because I think the notion of States 
taking the lead and the flexibility was very, very smart.
    And I know that EPA has held public stakeholder sessions 
before the rule was even proposed. But we will hear more about 
that. I am sure there will be a lot of questions on who EPA 
discussed the rule with.
    Then my friend Senator Wicker also very eloquently says, 
the President uses unilateral action. No, he doesn't. He is 
doing what he has to do. And I will quote from Christy Todd 
Whitman, who is a Republican and headed the EPA. She said this 
right here, ``I have to begin by expressing my frustration with 
the discussion about whether or not the EPA has the legal 
authority to regulate carbon emissions. The issue has been 
settled,'' she says. EPA does have the authority, the law says 
so, the Supreme Court says so twice.
    Well, I would add that since Christy Todd Whitman said 
that, the Supreme Court acted again, a third time in the Scalia 
opinion, upholding the authorities of the EPA. So I don't know 
why we have to fight about things that have been settled three 
times by the Supreme Court. It is interesting and it is always 
a pleasure to debate my colleagues on these things. But I think 
we should move on about that.
    Now, my question is, the Clean Air Act states ``that air 
pollution prevention and air pollution control at its source is 
the primary responsibility of States and local governments.'' 
How does EPA's proposed rule on controlling carbon pollution 
for existing power plants uphold this cooperative relationship 
between the Federal Government and State and local governments?
    And adding to that, to be a little specific, as you note, 
California has been a global leader in reducing its carbon 
pollution, and its landmark climate change program is driving 
investments in clean energy, spurring new job growth and 
improving the State's air quality. And I want to make sure, 
under EPA's proposal, my State will be able to continue its 
climate change program and use the existing program as a key 
part of its State compliance plan. So if you could expound on 
the role of the States and also my State.
    Ms. McCarthy. I would be happy to. First of all, let me 
indicate that there is tremendous flexibility in this rule. And 
it is because EPA listened to every stakeholder. And when we 
met, unprecedentedly, in our outreach efforts, and really they 
were historic, to reach out to States, to utilities, to 
stakeholders, yes, to the environmental constituents as well, 
we heard from every one of them that it was important to have 
flexibility.
    I also read the Clean Air Act, which said that the law that 
I am implementing looks at where States are today and it looks 
at what reasonable, practical efforts that they can undertake 
to reduce pollution moving forward. The flexibility in this 
rule is not just the fact that we had individual State 
standards, which respected where the energy system was in each 
one of those States, uniquely. But it also provided 15 years as 
our proposal to move forward. That doesn't even begin until 
2015, in order to achieve these standards.
    So we are talking about standards being achieved in 2030. 
So it is a tremendously long time line.
    But every State gets to design their own compliance 
strategy. Every State gets to look at what they want for their 
own fuel diversity, what they want to invest in. The great 
thing about this proposal is it really is an investment 
opportunity. This is not about pollution control. It is about 
increased efficiency at our plants, no matter where you want to 
invest. It is about investments in renewables and clean energy. 
It is about investments in people's ability to lower their 
electricity bills by getting good, clean, efficient appliances, 
homes, rental units. This is an investment strategy that would 
really not just reduce carbon pollution, but will position the 
United States to continue to grow economically in every State, 
based on their own designs.
    But it also will position us tremendously internationally.
    Senator Boxer. So the State can continue its effort and 
continue for what it is doing.
    Ms. McCarthy. Well, that is the last flexibility I should 
mention, which is, we opened it up entirely to individual State 
plans or to regional plans they want to do. If California wants 
to continue with its very successful cap and trade program, it 
can do so. But in the end, what we are looking for are 
reductions at those fossil fuel facilities. But use your own 
imagination on how to get here. We are doing exactly what 
everybody has asked EPA to do for a long time, which is, you 
set the standard based on science, we will get there in the 
cheapest, most cost effective way that we can. And we are 
actually telling States to go do that.
    Senator Boxer. Thank you very much. Senator Vitter.
    Senator Vitter. Madam Administrator, it appears in the 
proposal's accompanying regulatory impact analysis that climate 
benefits are calculated using your interagency working group's 
social cost of carbon estimates. Previously, I have asked why 
the SCC estimates do not include a domestic cost benefit 
calculation as required, versus just a global cost benefit 
calculation.
    So I will ask in this context, why did EPA again not 
include that domestic cost benefit calculation in regard to 
CO2 ? And is it because, as under the Brookings 
Institution analysis, if that analysis is correct, the benefits 
are largely enjoyed by other countries, while all the cost is 
borne by the United States?
    Ms. McCarthy. Let me just make a couple of comments, and I 
am happy to answer your question. The costs and benefits 
associated with this rule are not just benefits in terms of 
reduced carbon, but also in terms of health benefits. And each 
of them far exceed the costs associated with the rule.
    Senator Vitter. I don't want to cut you off, but I have a 
very limited time. Did you all do a domestic cost benefit 
analysis as required?
    Ms. McCarthy. We did exactly the requirements for OMB and 
the law that we needed to do for the power----
    Senator Vitter. Did you do a domestic cost benefit?
    Ms. McCarthy. That was not, it was considered to be not the 
most appropriate way to look at it, it is looked at globally.
    Senator Vitter. You don't think that is required by the 
law?
    Ms. McCarthy. We actually followed all of the procedures we 
needed to do for the Office of Management and Budget.
    Senator Vitter. Well, I disagree with you about that, I 
think it is required.
    Ms. McCarthy. OK.
    Senator Vitter. I also think it is useful to know a 
domestic, a U.S., we are representing U.S. citizens, a U.S. 
cost benefit analysis.
    Let me ask you several Louisiana-specific things, which I 
am concerned about. In reviewing EPA's calculations regarding 
Louisiana performance goals, we in our State discovered that it 
appears EPA included at a capacity factor of 70 percent at 
least two, maybe more natural gas combined cycle units that are 
not operational, are not fully operational. It is a significant 
mistake that makes our burden significantly larger.
    Is that going to be corrected? Are those mistakes elsewhere 
in State plans?
    Ms. McCarthy. Senator, the reason for the comment period is 
to take a look at all of the State data, as well the framing 
that we had put out there. So we are open to comment.
    But we have not in this rule required any State to operate 
their NGCC at a 70 percent capacity. And if in fact we have 
overestimated the amount of fossil fuel pollution generated in 
Louisiana, it would be a benefit to know that for both the 
State and us.
    Senator Vitter. OK. We are certainly going to get that to 
you. But I just want to note that factored into the EPA's 
Louisiana plan are just facts that aren't there, capacity that 
isn't there, that isn't operating.
    Ms. McCarthy. Well, actually, that would be a benefit to 
the State.
    Senator Vitter. I am also concerned because Louisiana has 
some major, significant, job-producing industrial projects 
coming online in the next five to 10 years, in particular. So 
that is going to dramatically increase electricity demand. Did 
EPA factor into State emission targets that sort of economic 
growth and necessary load growth? Or did it only factor into 
State emission targets a demand destruction and reduce growth?
    Ms. McCarthy. Actually, the reason why we took this 
comprehensive approach instead of a within-the-fence line look 
at each facility was recognizing that the economy needs to 
grow, and making sure that States have the flexibility to 
design their plans for exactly this reason. So States will be 
able to continue to grow and design a plan that will 
accommodate that.
    Senator Vitter. In Louisiana's case, what demand growth did 
you build in? Because again, we don't have average demand 
growth, or we don't have growth that we are experiencing now as 
a Nation, which was very low. We have major industrial projects 
coming online.
    Ms. McCarthy. Yes.
    Senator Vitter. So is that specifically factored in?
    Ms. McCarthy. It is certainly considered, economic growth 
is part of what is considered when we look at energy prices and 
we look at the challenges associated with keeping demand down 
while the economy grows.
    Senator Vitter. Were those specific major industrial 
projects factored in?
    Ms. McCarthy. I don't believe that, they, I really can't 
answer the question in terms of the way you are posing it, 
Senator. Because clearly, the economy is going to continue to 
grow. What we looked at was what efforts can we accommodate for 
States to take credit for to keep their energy demand down. We 
believe the steps we are asking them to take are practical and 
reasonable.
    Senator Vitter. What I am hearing is you factored in 
overall national economic growth. That is not what I am talking 
about. I am talking about huge Louisiana-specific industrial 
projects that require major load growth. And what I am hearing 
is that wasn't factored into the Louisiana plan. And that is a 
big problem.
    Ms. McCarthy. Well, we are happy to take a look at it. And 
as I am sure you are aware, this is about national impacts in 
the RIA that were designed and developed. We are going to 
continue to analyze that. But the most important thing right 
now in the comment period is for us to look at this data, make 
sure that we have it. And I think as you know, EPA works very 
hard in between comment and final to make sure we get this 
right.
    Senator Boxer. OK, we will turn to Senator Cardin.
    Senator Cardin. Thank you, Madam Chair.
    Again, Administrator McCarthy, as I have indicated in my 
opening statement, thank you for your leadership on this issue 
and thank you for following the law, and thank you for giving 
adequate time for comment, which I think is important. We want 
to get this right and the comment period is extremely 
important.
    I want to talk about a State like Maryland. Maryland has 
taken steps over the years to try to reduce its carbon 
footprint. Our utilities have been cooperative and have made 
investments to reduce emissions. They have done that by making 
significant investments, and it has been very positive to our 
environment.
    But as I have mentioned previously, we are downstream from 
a lot of carbon emissions. So we can do only a certain amount, 
and therefore it is critically important that all States do 
their share for the United States to make the type of impact 
that we need to make.
    I noted in my opening comments that you have given 
flexibility and you have allowed the states to come up with a 
plan that they believe is best for their State. In Maryland's 
case, we are part of RGGI. We have been there since 2005 and 
have worked with our regional partners to try to get plans that 
can benefit the entire region.
    Could you just share with us how the proposed regulation 
deals with States that have already made progress and have 
joined with regional partners? How is that dealt with in the 
proposed regulations?
    Ms. McCarthy. Well, the proposed regulation calls attention 
to the regional partnerships that have already been developed. 
We actually allow the flexibility to go it alone or to join 
other States. We do recognize the Regional Greenhouse Gas 
Initiative in those States for their leadership on this.
    We also developed an economic analysis that took a look at 
the cost-effectiveness of going it alone, nationally, each 
State on their own versus these regional partnerships, just to 
show how cost-effective those approaches can be.
    And we have also provided important implementation 
flexibility so there is a longer window of opportunity to 
develop plans if States are looking at these regional 
approaches, which can take a little bit longer to develop and 
implement.
    So we are trying to give States flexibility to continue 
with the programs they have, which have been very effective and 
have shown significant leadership, or to develop programs as 
they see fit. But we do tremendous value in these regional 
partnerships and we want that value to continue to be basically 
available to everybody and perhaps expanded.
    Senator Cardin. So when you have neighboring States that 
have made progress in reducing their carbon footprint, that is 
allocated to their individual target under the rule? Is that 
how it works? How does that mathematically work?
    Ms. McCarthy. Mathematically, we have indicated that if 
States, let me give you an example, perhaps one of the most 
difficult is renewable. If States are using renewables as a way 
to shift to a lower carbon sources, they can do it in their own 
home State or they can build the renewable energy facility in 
another and take credit for that.
    So we are accommodating an accounting system that allows 
regional approaches to be robust, that allows them to be 
specifically designed. Even if you want to do regional just for 
renewable, but you want to do the rest in your own State, that 
is fine too.
    So one of the challenges with this rule is it is so 
flexible that States have many choices and we are trying to 
work with them individually, which we continue to meet with 
them and regionally to explain how the accounting system would 
work and how these different approaches might benefit their 
States in a way that they will think is most important.
    Senator Cardin. The flexibility issue, the States have 
pretty much carte blanche as to how they achieve their balances 
and they can, you mentioned renewable, you mentioned 
improvements to their power plants. What are the parameters 
under which the States can operate?
    Ms. McCarthy. The only obligation that the States have 
under this rule is to achieve those State targets in a timely 
way. So we have based those States' targets on carbon 
intensity. Basically it is an amount of carbon pollution you 
emit per megawatt hour of electricity you generate at those 
fossil fuel facilities. So you have a wealth of opportunity, 
you can use a traditional approach and you can set a pollution 
requirement for each of those facilities. We do that, that is 
easy to do, or you can use a different approach in which you 
actually calculate renewables and you actually look at energy 
efficiency program investments and you use those to keep demand 
down and then you calculate what you are emitting at those 
facilities and you see whether you made your target.
    Senator Cardin. I would just make a comment. This is to me 
what federalism is about. You will get States that will make 
progress in a very cost-effective way that other States will 
look at, will use, and we will get the most cost-effective way 
to reduce the emissions. So again, I thank you for your 
leadership and I thank you for the flexibility that you have 
given our States in recognizing our States can come up with 
creative ways to deal with this problem.
    Ms. McCarthy. Thank you, and Senator, I think a lot of 
States are thinking about what RGGI has done. I know the 
Western Governors are working together.
    Senator Boxer. Sorry, but we have to move forward. Senator 
Wicker.
    Senator Wicker. Thank you, Madam Chair.
    I hold in my hand a publication from the Global Warming 
Petition Project, Summary of Peer-Reviewed Research consisting 
of two pages, qualification of signers consisting of one-page 
and frequently asked questions of the Global Warming Petition 
project consisting of four pages. I ask that they be inserted 
into the record at this point.
    Senator Boxer. Without objection, so ordered.
    [The referenced information follows:]
    
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]  
  
    
    Senator Wicker. Thank you, Madam Chair. And I would read a 
portion of the petition signed by some 31,487 American 
scientists, over 9,000 of whom have Ph.Ds. ``The proposed 
limits on greenhouse gases would harm the environment, hinder 
the advance of science and technology and damage the health and 
welfare of mankind. There is no convincing scientific evidence 
that human release of carbon dioxide, methane or other 
greenhouse gases is causing or will cause in the foreseeable 
future catastrophic heating of the earth's atmosphere and 
disruption of the earth's climate. Moreover, there is 
substantial scientific evidence that increases in atmospheric 
carbon dioxide produce many beneficial effects from the natural 
plant and animal environment of the earth.''
    I say this in response to the continued drumbeat from the 
other side of the aisle that the science is over with, it has 
been decided and everyone who disagrees is somehow some sort of 
a quack. To some 31,487 American scientists who have signed 
this petition, it is not settled science and I appreciate them 
being a contrary voice to get the peer review facts before us.
    I would also point out, and I asked my first question about 
this, Madam Administrator, the attorney general of West 
Virginia recently wrote EPA, just month, and requested the 
withdrawal of the rule because, he says, EPA lacks the legal 
authority to adopt it. So while there may have been witnesses 
before this committee in recent days saying that EPA 
unquestionably has the authority to propose such a rule, the 
attorney general of West Virginia disagrees, and he points out 
this, Ms. McCarthy. He says that, ``The Clean Air Act Section 
111(d) affirmatively prohibits EPA from regulating any air 
pollutant emitted in an existing source category which is 
regulated under the national emission regime of Section 112 of 
the Clean Air Act.''
    So Section 111(d) says if it is regulated under 112, you 
can't regulate it any other way.
    Now, EPA has imposed extensive regulations on existing 
coal-fired power plants under Section 112. Is that correct?
    Ms. McCarthy. I think that the framing of the legal 
argument is incorrect, Senator.
    Senator Wicker. Well, but let me ask you this. I am not 
asking you for that. I am asking you, does EPA impose 
regulations on existing coal-fired power plants under Section 
112?
    Ms. McCarthy. We certainly do.
    Senator Wicker. OK, thank you for that. So based on that, 
Madam Chair, and members of the committee, the attorney general 
of West Virginia says, having been regulated under Section 112, 
the EPA lacks the legal authority to further regulate these 
emissions under Section 111(d).
    Let me ask you this also, time is fleeting, Ms. McCarthy. 
Did you tell Senator Vitter that your cost benefit analysis was 
done entirely on a global basis and was not----
    Ms. McCarthy. No.
    Senator Wicker. Please correct my understanding, then.
    Ms. McCarthy. The Senator I think was asking me, and at 
least this is what I answered, as to whether or not the social 
costs of carbon benefits are looked at as benefits that are 
solely gained domestically or whether they are based on global 
benefits.
    Senator Wicker. OK, well, good, so perhaps I did 
misunderstand and I am glad I did.
    You conducted a cost benefit analysis as required by law, 
is that correct?
    Ms. McCarthy. Yes.
    Senator Wicker. Was this conducted on a State by State 
basis?
    Ms. McCarthy. No, it was a national analysis.
    Senator Wicker. OK, it was not done----
    Ms. McCarthy. The challenge here, sir, is we are giving so 
much State flexibility that it can only be illustrative, 
because it really is going to be up to the individual States 
how to design the strategies to achieve these reductions.
    Senator Wicker. OK, so you didn't do it on a regional 
basis?
    Ms. McCarthy. We did the analysis, my understanding is, and 
we can certainly followup with more specifics, is that it looks 
at national impacts.
    Senator Wicker. OK, please do that.
    Ms. McCarthy. Although we will over time get more specific 
as States make decisions and comments come in.
    Senator Wicker. OK, I see my time is expired. I may submit 
a question to the record for you, Ms. McCarthy, with regard to 
the stranded costs of two projects that Mississippi has 
undertaken to comply with recent Federal regulations. These 
projects will have to be completely shut down under your 
proposed rule if it goes forward. Thank you.
    Ms. McCarthy. I would be happy to look at that for you, 
sir. Stranded assets is an important issue.
    Senator Boxer. Thank you so much, Senator. We turn to 
Senate Whitehouse.
    Senator Whitehouse. Thank you very much.
    Thank you very much, Administrator McCarthy, for being 
here, and thank you for your excellent work. Carry on.
    With respect to my colleague's point that the science isn't 
settled on this, I am afraid to say I think he is just 
factually wrong. I think that it is not just me who thinks the 
science is settled, NOAA thinks the science is settled, NASA 
thinks the science is settled, and they have rovers driving 
around on Mars right now. They know a little something about 
science. The U.S. Navy thinks the science is settled. The head 
of our Pacific Command says climate change is going to be the 
biggest threat we face in the Pacific.
    Every major American scientific society thinks that the 
science is settled. The property casualty insurance and 
reinsurance industry, which bets hundreds of billions of 
dollars on this thinks that the science is settled.
    There is an, what I would call, an eccentric fringe, that 
continues to deny and they are entitled to have their views. 
They are entitled to have their views. But we as responsible 
Members of Congress should not be basing public policy on 
eccentric fringe views. These are views that don't even hold 
traction with young Republican voters. Young Republican voters 
under the age of 35 think that climate denial is, and these are 
the poll's words, not mine, ignorant, out of touch or crazy.
    So if that is what young Republican voters think about 
this, then I really don't think that having this dispute here 
is very productive.
    Let me ask you, Ms. McCarthy, this proposal has been built 
based on an unprecedented outreach by you and by the 
Environmental Protection agency involving utilities, involving 
Republican elected officials, involving a whole wide array of 
stakeholders. How prominent, in your conversations outside of 
the United States capital, is this outright denial that climate 
change is real argument?
    Ms. McCarthy. It is not a prominent issue. I have gone to 
many, many States and there is a vast concern in each State 
over the changes in the climate they are already seeing. We are 
no longer talking about projections of change. We are talking 
about adapting to the change that is already happening and the 
devastation that that is causing.
    So there is very little doubt that I see and experience. 
The question really has always, is right now on the table, what 
do we do about it? Do we actually meet our responsibility and 
take action or do we not? And in this rule, we took very much 
to heart the fact that when States and utilities were not 
arguing the science but instead arguing the actions that we 
thought it was prudent to look at what the science told us in 
terms of technology availability, practicality and cost, what 
we are supposed to do under the Clean Air Act, and to say what 
the target should be an allow each State to get at that target 
the way they thought was best for their individual State.
    This is the most respectful rule at the Federal level that 
I have ever been involved in, either as a recipient of that 
rule or as a designer in terms of recognizing the leadership of 
States and allow them to continue to lead.
    Senator Whitehouse. I was down in Florida not too long ago 
touring the coasts, where climate change is really undeniable, 
sea level rise is something you measure with the equivalent of 
a yardstick. It is not really subject to much rational debate. 
People understand that.
    And I met with the Republican mayor of Monroe County, who 
has developed her own climate change task force, they are 
vitally concerned about what sea level rise means, particularly 
to the Keys. So in your experience, again, outside of this 
building, and outside of the influence in Washington that 
polluters bear, when you are out there as a part of your 
outreach process, this Republican mayor in Monroe County would 
not be an outlier among Republicans, in your experience?
    Ms. McCarthy. No, not at all. And Republicans and Democrats 
that I come across are worried about climate change and the 
impacts. They have kids that have asthma. They have properties 
that they are worried about from flooding, from drought, from 
fire, and they want us to take action.
    Senator Whitehouse. Last quick question. Is extreme 
weather, high winds and storms, associated with climate change?
    Ms. McCarthy. Yes.
    Senator Whitehouse. And how do extreme weather, high winds 
and storms do in terms of the electricity grid?
    Ms. McCarthy. It is very challenging. We are dealing with, 
climate change is a reason why you would want to continue to 
invest in electricity and infrastructure that supports.
    Senator Whitehouse. But even if you were only interested in 
electric grid reliability, and all the issues that this raises, 
even if you were only interested in electric grid reliability, 
you should still have a concern about climate change and carbon 
pollution?
    Ms. McCarthy. Oh, absolutely. In fact, the funny thing is 
that when people ask me about the polar vortex, some of them 
pose it like it is a reason not to take action. It is exactly 
the reason we have to take action.
    Senator Whitehouse. Thank you, Chairman.
    Senator Boxer. Thank you, Senator. We turn to Senator 
Fischer.
    Senator Fischer. Thank you again, Madam Chair, and thank 
you, Administrator, for being here. These are very complicated 
issue and I would like to bring the focus back to those issues. 
I have a question that is a bit long, it is in the weeds, I 
hope you will bear with me on it. I am going to read it to you, 
so I get all the facts in here correct as I pose it to you.
    In building block two, the EPA assumes that gas plants will 
run far more in order to run coal-fired plants far less. This 
will reduce the heat rate efficiency of coal-fired plants as 
running any plant less and on an intermittent basis always 
reduces efficiency.
    To offer an analogy, I think this is the equivalent of 
operating a car in city driving, where it is stop and go, which 
reduces the efficiency in the form of miles per gallon as 
compared to when you are on a constant rate on highway driving.
    What this means is that building block two, which calls for 
running coal-fired plants less, is directly at odds with the 
goals of building block one, which calls for improving the heat 
rate of coal-fired plants. So building blocks one and two are 
in direct opposition with each other. You can't run both coal 
plants less while running gas plants more and then turn around 
and argue that the heat rate of coal plants should be improved.
    So did the EPA consider that the amount of switching to 
natural gas effectively required by this rule would require 
coal-powered plants to operate less, thus driving up heat rates 
substantially? And I think that would just obliterate any heat 
rate improvement that we would see at these coal units.
    Ms. McCarthy. Let me give a little bit of an explanation. I 
don't want to take too much of your time. But the building 
blocks were really opportunities, practical, affordable 
opportunities to reduce carbon emissions that went into the 
setting of the State standards. None of them are requirements. 
They are not requirements. States can actually achieve and 
comply with those standards in any way they design.
    So if States are heavily invested in renewable, and they 
need NGCC or peaking units done in a way that is much more 
intermittent than the 70 percent capacity rate, they can just 
simply not do that. None of these are requirements. You need to 
do none of them. But they actually were our analysis of what we 
thought were practical and affordable steps that could be taken 
to get the system more efficient and to shift to cleaner 
sources.
    So States can use whatever creative approach they want to 
use as long as they are getting at the reductions in those 
fossil fuel plants that are required.
    Senator Fischer. You have talked a lot about flexibility 
here, the flexibility for the States. But I think that that 
flexible solution in effect is going to shut down coal plants. 
Because if you are going to avoid that conflict between that 
bucket one and bucket two, it is going to call for heat 
improvements for the coal plants in bucket one. But under 
bucket two, you are going to run it less.
    So how does that make it more flexible? I think the 
conflict there is just going to mean the retirement of these 
coal plants.
    Ms. McCarthy. Let me give you an example. I know that the 
State of West Virginia was mentioned. If you look at the State 
standard for West Virginia, the State standard is not 
enormously aggressive. In fact, many have questioned why it 
isn't more aggressive.
    Senator Fischer. I'm not questioning it.
    Ms. McCarthy. I know. And neither am I. We will take 
comment.
    But what it says, we actually looked at the fact that they 
are heavily dependent on coal, and their answer may very well 
be to invest in that coal to make it more efficient moving 
forward. In fact, if you look at our analysis, it shows that 
coal today, I am sorry, in 2012 actually generated about 37 
percent of the electricity. What we are projecting is in 2030 
that is going to be 31 percent.
    Senator Fischer. Right.
    Ms. McCarthy. So it will remain. So we think coal States, 
heavily dependent coal States will invest in coal. They will 
most likely not take advantage of the shifting to lower sources 
and they won't need to.
    Senator Fischer. I have just a few seconds, but my concern 
is that it just effectively shuts down plants. I did want to 
touch on another issue, just very quickly. I had the 
opportunity earlier this week to have a dinner with my 
colleagues on both sides of the aisle, we met with some 
officials with the Department of Defense. We talked about 
national security, we talked about global security, and the 
need that we see for that global security, especially in Europe 
with regard to the belligerent moves of Russia, and our NATO 
allies, what they face there with natural gas.
    How are we going to address not just national security but 
global security when we have such limits put on natural gas?
    Senator Boxer. Let me just say, if you can make your answer 
really brief, we have a vote started. My goal was to try to get 
everybody in prior to the vote. We might be able to do it if we 
stick to the time. So can you speak briefly to that, and then 
we are going to move to Senator Carper.
    Ms. McCarthy. Again, this is a very consistent strategy to 
support the President's all of the above energy policy. It does 
not set specific limits on any fuel. It expects all fuels to 
continue to be operated at significant levels. But it will 
provide a more efficient energy supply system, and it will 
reduce the harmful carbon pollution that is impacting us.
    Senator Fischer. Hopefully we can work with you on that 
further.
    Senator Boxer. Thank you very much. We move to Senator 
Carper.
    Senator Carper. Administrator McCarthy, can you give me 
some idea of what percentage of all electricity is generated by 
nuclear in this Country today? Is it about 20 percent? I think 
it is.
    Ms. McCarthy. It is something in that order, yes.
    Senator Carper. Right around 20 percent. Any idea of what 
percentage of zero-emission electricity is generated by nuclear 
in our Country today?
    Ms. McCarthy. Zero.
    Senator Carper. Think about that. What percentage of the 
electricity that has essentially zero emission is generated by 
nuclear? It is not zero. It has to be close to I would say 50 
percent. I was just thinking about that, because there is 
hydro, there is solar, and there is wind. That has to be close 
to 50 percent. Five zero.
    My staff and I have heard concerns that EPA does not treat 
all zero-emitting resources the same in your proposal. 
Specifically, we are starting to hear that local energy could 
be disadvantaged by this rule because of specific benefits that 
renewable enjoy over nuclear and other energy sources. We have 
even heard concerns that some nuclear power plants may be 
forced to close down because of the way that the rule is 
structured. That doesn't make a lot of sense.
    You and I have talked in the past about nuclear, and we 
both agree that nuclear has to be part of the mix so we can 
meet our climate goals. Just to make sure we are on the same 
page, do you believe that nuclear energy, do you believe that 
nuclear energy should be on an equal footing with renewable 
energy to help States meet their carbon goals set in this 
proposal? That is the first part of my question. And second, 
have you heard similar concerns from the nuclear industry? So 
can you tell us what you believe is the crux of the problem in 
the proposal and commit today to resolving this issue, please?
    Ms. McCarthy. Sure. First of all, as you indicated, nuclear 
energy is zero-emitting carbon energy generating technology. 
And for that reason, we have actually gone to great lengths in 
this proposal to make sure that States are aware of that and 
that nuclear energy is factored into the standard-setting 
process. We have also called attention to the fact that there 
are some nuclear facilities that seem to be on the fence as to 
whether or not they are competitive today in a way that would 
allow them to go through the relicensing process and make that 
process worth it, if you will.
    And so we have been highlighting that issue in this 
proposal and encouraging States to really pay attention to 
this. Because the replacement of a base load capacity unit that 
is zero-carbon emitting will be a significant challenge for 
States who are right now relying on those nuclear facilities.
    But we have heard that maybe we didn't go far enough or we 
went too far. So we will be listening to those comments, 
because we certainly have heard them.
    Senator Carper. OK. It is important that you do, thank you.
    Now that the proposal has been released, beyond the nuclear 
concerns, have you already heard back from industry and/or 
States that you think are valid concerns and could be addressed 
in the final rule? Is there any positive feedback that you want 
to share with us today, please?
    Ms. McCarthy. I think a lot of the comments that we are 
hearing are valid and we need to look at them. Some of them are 
whether or not we understood certain States' circumstances or 
whether or not the framing of the rule is as good as it should 
be. We have heard from leadership States that we didn't give 
them enough credit for their leadership. We have heard from 
other States that we have given too much credit.
    So there are a lot of valid considerations here, and we are 
going to pay attention to each and every one of them. But I 
think we have a great head start with this proposal. Because of 
the listening we did before we even put pen to paper, it gave 
us a tremendous opportunity to put out a proposal that I think 
for all intents and purposes has been very well received.
    But I know that States and utilities are rolling up their 
sleeves, trying to see whether or not they can make this work 
and how they can make it work to the advantage of their States 
and the utilities. And we will keep working with them every 
step of the way.
    Senator Carper. Madam Chair, just a closing thought. Coal 
is what, I think you said 37 percent of our generating capacity 
today from electricity, it is going to drop to 31 percent. That 
is still a lot. I would just say to my colleagues, there is a 
huge economic opportunity here. A huge economic opportunity. 
Just as there was economic opportunity in diesel emission 
reductions, created jobs, just as there was economic 
opportunity in reducing mercury emission, created jobs in 
technology that we can sell all over the world, there is 
similar opportunity here. Whoever can figure out how to 
economically, safely, smartly reduce emissions from these coal-
fired plants, we are off to the races. Just to the market alone 
in China, it would be terrific.
    So thank you very much. Carry forward.
    Ms. McCarthy. Thank you, Senator.
    Senator Boxer. OK, let me tell you what is happening. The 
floor said if we got there 11:20, 11:25, we would be OK. But I 
think what we are going to do, after we hear from Senator 
Inhofe, who wanted to go, is if it is OK with everybody, we 
will break. And then those of us who can come back, because I 
know Senator Markey is going to get some extra time, because he 
missed the opening statements. And Senator Barrasso wants to 
have another round and I would love to have another round.
    So, come back. But we are going to end this on a very high 
note with my good friend, the Senator from Oklahoma.
    Senator Inhofe. And if any of you want to go ahead and go 
on over there, I will tell you on the floor what I said.
    Senator Boxer. Well, we don't want to miss it. Stop the 
clock, put it back to 5 minutes. We allow for jokes.
    [Laughter.]
    Senator Inhofe. Good for you.
    Ms. McCarthy, there has been a lot of discussion as to what 
your authority is to do some of these things that are perceived 
to be done. So let's just suppose a State, let's say Oklahoma, 
does not submit a State plan. And you develop a Federal plan 
for the State. How could you develop that rule using only 
existing authorities? Let me be specific.
    Under existing authorities, can you currently require a 
State to have gas dispatched at 70 percent of capacity?
    Ms. McCarthy. Senator, you are way ahead of me. Those are 
considerations that aren't even on the table right now. Right 
now we are looking at proposing a rule. I have great hopes that 
we will work very effectively with the States.
    Senator Inhofe. I am talking about existing authorities 
today. Under your authority today, could you do something like 
that?
    Ms. McCarthy. Not unless this rule were passed.
    Senator Inhofe. OK, that is fine. Under the existing 
authority, you currently require a State to unilaterally 
restrict electricity demand by 1 and a half percent. Under 
current authority.
    Ms. McCarthy. No, sir. Well--
    Senator Inhofe. And under existing authority, could you 
currently mandate the use of renewable in a State?
    Ms. McCarthy. We do not.
    Senator Inhofe. OK. Now, let's say that a State does submit 
a plan and the renewable portfolio standard does apply. I would 
ask you if you could enforce it.
    Ms. McCarthy. Actually, sir, we are not, we wouldn't be 
requiring any of those things here. What we are requiring is a 
certain level of carbon dioxide emissions from electricity 
generated by fossil fuels. That is what EPA would be actually 
requiring and mandating. How the States get there is certainly 
their choice.
    Senator Inhofe. All right. So you are saying that under 
current law and policies that EPA couldn't enforce the State 
renewable portfolio standard, but under the ESPS rule that we 
are talking about, they may be able to, is that accurate?
    Ms. McCarthy. That is one of the issues that we have 
raised. Because EPA often has things in State plans, some of 
which we enforce, some of which we don't. That is an issue that 
has been discussed.
    Senator Inhofe. I'm saying under current law, you may be 
able to, under the ESPS, be able to----
    Ms. McCarthy. Actually the one certainty I have is that we 
will be able to enforce the fossil, the amount of carbon 
dioxide from fossil fuel facilities, if this rule goes as 
proposed.
    Senator Inhofe. OK. What I am trying to get to here, this 
rule would be a broad expansion of the authority that EPA has 
over States that has a broad political impact and could 
dramatically reshape an entire sector of the economy. Isn't 
that exactly what the Supreme Court ruled against in the UARG 
case, the expansion of authority that you would be having?
    Ms. McCarthy. Actually, I don't think that the Supreme 
Court indicated that we were expanding our authority in that 
case. But sir, questions have been raised about what we do with 
plans and what is included and how that can be implemented. We 
are working through those issues with the State. But all EPA is 
doing here is regulating pollution from sources that we 
regulate under appropriate sections.
    Senator Inhofe. You are proposing a rule, I am sorry to 
interrupt, but you are proposing a rule that you don't have 
authority to do and to enforce today.
    Ms. McCarthy. No, I believe we have clear authority to do 
the rule as we have proposed it.
    Senator Inhofe. No, I am talking about the authority you 
have under the current system.
    Ms. McCarthy. I don't think we are expanding our authority 
with this rule, sir, no.
    Senator Inhofe. Well, it appears to me that you are. But in 
this short period of time, let me try to get this other thing 
out of the way.
    From what I understand, the EPA relied on an academic EIA 
study. I mentioned this in my opening statement, that about 6 
percent of the nuclear fleet is at risk of shutting down. Then 
the EPA made an adjustment to the rule to help out the nuclear 
plants accordingly.
    Now, the FERC has authority under power prices, power 
reliability, power transmission. The question I would ask you, 
did the EPA talk to anyone at FERC about the adjustment of 
whether the rule would actually help nuclear plants? In other 
words, to help these 6 percent that we have found are going to 
have problems.
    Ms. McCarthy. Actually, I don't know what direct 
conversation EPA might have had with FERC over the nuclear 
facilities.
    Senator Inhofe. Did you talk to FERC about these issues?
    Ms. McCarthy. At a high level, and I know that our staff 
was working very closely with them and with DOE in particular 
in terms of our administrative actions.
    Senator Inhofe. I know your staff, and there is no way you 
can tell me today or tell this committee what your staff was 
and who they talked to. But you personally did talk to someone 
about these issues at FERC?
    Ms. McCarthy. We have been actually meeting with the 
commissioners.
    Senator Inhofe. I am talking about you personally.
    Ms. McCarthy. Yes. I have had meetings with the 
commissioners and with NARUC and with many of the DPUC 
commissioners.
    Senator Inhofe. OK. On this note, I will end. Thank you 
very much.
    Senator Boxer. Thank you so much.
    So we are going to recess briefly, come back and there is 
zero time left on the clock. So I am going to run. When we come 
back, we are going to have Senator Markey open it up and then 
Senators Barrasso, Sessions, and if there is a Democrat that 
comes back we will go back and forth.
    Thank you. We will take a brief respite.
    [Recess.]
    Senator Boxer. The committee will come to order.
    I hope everybody used that break for a good purpose.
    So we are now going to turn to our newest member, who I am 
so pleased is on our committee, Senator Ed Markey. You have 6 
minutes.
    Senator Markey. Thank you, Madam Chair.
    Administrator McCarthy, just to clarify, you have the 
authority, is that not correct, under the Clean Air Act, to set 
a carbon pollution standard for power plants? Is that correct?
    Ms. McCarthy. That is correct.
    Senator Markey. Now, when you were developing the State 
targets, you looked at four different types of actions. But a 
State does not have to follow these exactly. A State can figure 
out the best way, in their assessment, to reach the carbon 
reduction target. Is that correct?
    Ms. McCarthy. That is correct.
    Senator Markey. So you have 50 States, you could have 50 
different approaches?
    Ms. McCarthy. That is right. That is what I expect. Well, 
we may.
    Senator Markey. We may, we may not. But we are not in a 
position to tell them what to do, they have to make the 
decision.
    Ms. McCarthy. That is correct.
    Senator Markey. So they may want to have the same plan as 
another State. But they may not.
    Let me ask you another question. A lot of times you hear 
from people saying, it really hurts the economy of the United 
States when there is a clean air law that goes on the books, 
that it is too dangerous to run the risk of trying to make the 
air cleaner to reduce the number of people who get sick, to 
reduce the number of people who die from dirty air. They say 
pretty much, the air is clean enough, don't make it any 
cleaner. But we are seeing this huge increase in the number of 
people who don't die or don't get sick because of the Clean Air 
Act.
    So what I have over my shoulder is a chart from 1929 to 
today and it reflects the growth in the GDP of the United 
States of America that includes the 1970, the 1977 and the 1990 
Clean Air Acts. And with the exception of a period around 2008, 
2009, when there was a complete failure of regulation of the 
financial industry, we are seeing upward GDP growth.
    Can you talk a little bit about that, the connection 
between this clean air journey that we have been on and the 
growth in GDP? Is there a choice that we have to make?
    Ms. McCarthy. I think Chairman Boxer eloquently stated the 
kind of GDP growth we are seeing while we have been able to 
significantly reduce air pollution, basically it is an over 70 
percent reduction in air pollution under the Clean Air Act, 
while our GDP has tripled. And so every time we put a new rule 
out, that is what we often, I am sorry, what we always see, 
frankly, from some small groups. But it really has never come 
true. And in this rule, we don't expect that this will have an 
impact, other than to have jobs grow, the economy to grow, the 
U.S. to become more stable, the U.S. to take advantage of new 
technologies, innovation and investments that will make us 
stronger over time.
    Senator Markey. So I just would like to say that, and 
Senator Whitehouse is part of this Regional Greenhouse Gas 
Initiative, we have been in this plan in Massachusetts for the 
last six or 7 years. Something quite remarkable has now 
happened. Massachusetts is now fourth in solar deployment in 
the United States. We are kind of not the perfectly sunny 
State. We are more like the perfect storm State. But we have 
moved forward on that front.
    We have now created 80,000 clean energy jobs in 
Massachusetts. We are going to add another 10,000 this year, 
bringing it up to 90,000. And while nationally electricity 
rates have gone up 13 percent over the last 6 years, they have 
actually gone down in Massachusetts by 6 percent, even as we 
have had a system that is not too dissimilar from the one that 
you are now propounding for the whole Country. And we have seen 
a 23 percent expansion in the Massachusetts economy while we 
have had a cap and trade system in place in Massachusetts.
    So I just think it is important for people to understand 
that the model is already there. It can be made to work. It is 
flexible, but it does in fact have a lot of evidence that shows 
that it can be done.
    Now, I understand that some States have already surpassed 
the renewable energy production levels built into the 2030 
State targets. Are you considering building more ambition into 
some of the State targets, where States can or are already 
going further than the levels assumed in the proposed rules?
    Ms. McCarthy. Senator, we are looking at all comments that 
we receive. We have a very long comment period, 120 days. We 
are looking forwarding to four public hearings next week. So we 
will be certainly listening to those and making appropriate 
changes one way or the other.
    Senator Markey. And again, following on the Massachusetts 
model, isn't it very possible that the proposed rules that you 
are considering could wind up lowering electricity rates for 
people all across the Country? I think that is kind of 
contradictory to the way some people think about the issue. But 
we have seen in Massachusetts it has happened. Talk about 
nationally what you could expect to be seen by consumers.
    Ms. McCarthy. What we are projecting is that consumers will 
see a lowering of their energy bills. That is because we are 
getting waste out of the system. And because that is the 
cheapest most effective way to get these reductions, is to 
become more efficient, it makes the delivery efficient.
    Senator Markey. In Massachusetts, we have a funny accent 
and we just say that is working smarter, not harder. So explain 
the efficiency angle in terms of what you are giving the States 
the flexibility to implement.
    Senator Boxer. Do this as fast as you can, with your 
accent.
    [Laughter.]
    Ms. McCarthy. There are two ways to get reductions at 
fossil fuel facilities in terms of the pollution they emit for 
carbon. You can run them less or you can make them more 
efficient when they run. Both of those are part of the building 
blocks here.
    So you can actually do that by increasing efficiency at the 
facility, but you can also do that by providing consumers, and 
many low-income consumers, support for new building codes, 
weatherizing houses, more efficient appliances that they can 
use. When those things happen, their dollars go down in terms 
of how much they need to spend every month on their electric 
bill.
    Senator Markey. I think your plan is smart, it is 
effective, and it is ultimately going to be cost-effective. 
Thank you.
    Senator Boxer. OK. We are going to turn to Senator 
Barrasso.
    Senator Barrasso. Thank you very much, Madam Chairman.
    Ms. McCarthy, why did you let high-powered Washington 
lobbyists with the Natural Resources Defense Council reach into 
the EPA and essentially write your climate change rules for 
you?
    Ms. McCarthy. I did not.
    Senator Barrasso. Well, not according to the NRDC. They had 
a blog on July 8th, and Madam Chair, I would like to have this 
introduced into the record. It is by the NRDC, written by one 
of the lobbyists involved in crafting the rules, who stated, 
``The New York Times ran a very nice article yesterday about 
the NRDC's part in developing an innovative proposal for 
curbing carbon pollution for America's 1,600 fossil fuel-fired 
electric power plants.'' And then they go on to say, ``We are 
proud to have played a role.'' So they are proud of what they 
wrote.
    Let me ask you another question. Are you going to attend 
the U.N. Climate Chang Conference in Paris, 2015, as your 
predecessor did, Lisa Jackson, when she attended the Climate 
Change Conference in 2009?
    Ms. McCarthy. I have not made a decision on that, Senator.
    Senator Barrasso. Well, a key part of the President's 
climate change strategy is to have us believe that he and his 
environmental and diplomatic all-star team can arrive in Paris 
in 2015 at the U.N. Climate Change Conference and convince the 
world to follow his lead. His whole plan hinges on President 
Obama's foreign policy prowess.
    Well, his foreign policy record is a series of empty 
threats, of pivots, of resets, miscalculations, lead from 
behind failures in places like Syria, Russia, Ukraine, Iran, 
Libya and Iraq. After all those missteps, he wants us to 
believe that in 2015, he and his team can demand that China and 
India would stop burning fossil fuels.
    Even if the President was able to reach an agreement like 
the Kyoto Treaty in the 1990's, it would still have to be 
ratified here in the Senate. The Kyoto Treaty overwhelmingly 
failed in the Senate. So if the President and his team of 
officials from EPA and the State Department can't deliver in 
Paris and subsequently in the Senate, we are going to be left 
with his domestic climate action plan which includes your rules 
for new and existing coal-fired power plants.
    According to Secretary of State John Kerry in a column that 
he wrote in the Financial Times last month, he said ``Even as 
we strive to do better, we recognize that no country can solve 
this problem alone.'' He said ``Even if the U.S. somehow 
eliminated all our domestic greenhouse gas emissions, it still 
would not be enough. The rest of the world,'' he said, ``is 
spewing too much carbon pollution.''
    So that means that the President's climate action plan, 
which includes the EPA's new proposed rules, on their own, do 
not reduce global temperatures or prevent any of the serious 
impacts that are predicted by the U.N. It can't make a dent.
    So the question is, can you guarantee success in Paris? And 
if not, aren't these climate change policies all pain for 
America and the citizens of this Country and little gain 
globally?
    Ms. McCarthy. Sir, what I know about this rule is that it 
will leave the United States in 2030 with a more efficient and 
a cleaner energy supply system, and more jobs in clean energy, 
which are the jobs of the future. So no matter what happens 
internationally, this is of significant benefit to the United 
States in terms of those kids in the audience who want to 
breathe healthy air and don't want their kids to get sick.
    Senator Barrasso. So you admit that it has no impact at all 
on global climate.
    Ms. McCarthy. It will have a significant impact in the tone 
and tenor of the discussion.
    Senator Barrasso. Well, no impact on global climate, 
though, you admit that. You do. You never said anything about 
how this will impact global climate.
    The Chair. Just a moment. Could you freeze for a moment? 
Freeze the clock. I don't think we should be putting words in 
anybody's mouth. She never said what you said she said. So can 
you just refine what you said? In other words, you take from 
her response something that she didn't say what you said. It is 
just not right.
    Senator Barrasso. Thank you, Madam Chairman.
    I take from your response and from the Secretary of State's 
comments that no matter, that these proposals that you are 
putting forth will have no impact on global climate as a result 
of the failure of others to cooperate as the Secretary of State 
has stated.
    This can't be some rich person's gamble where you make a 
bad bet. This has a real impact on people. When we are asking 
coal miners, seniors on fixed incomes, families and children 
who suffer higher electric bills and the unemployed to make 
this expensive bet that you are putting forward, and I just 
have a lot of problems with doing that to people around the 
Country, because of some rich lobbyists and powerful layers in 
Washington who are now reaching into the EPA to write their 
regulations.
    Countries around the world are already abandoning anti-
fossil fuel policies because of the need for affordable energy. 
We are seeing it in Australia, their parliament just repealed 
their carbon tax. The Associated Press last week quotes the 
Australian prime minister who says, ``a useless, destructive 
tax, which damaged jobs, which hurt families, cost of living 
and which didn't actually help the environment.''
    Why aren't we following his lead?
    Ms. McCarthy. Senator, climate inaction is what threatens 
our seniors and our kids. That is what is threatening our 
communities today and that is what is threatening the viability 
of the planet in the future. What I am responding to is EPA, 
that is my job.
    Senator Barrasso. Germany is going to build ten new coal-
fired power plants.
    Senator Boxer. If you want to stay for another round of 
questions, you are welcome to. Please stay if you want.
    Senator Barrasso. Thank you, Madam Chair.
    Senator Boxer. I would like to ask unanimous consent to 
place into the record two documents. One is a poll just 
recently taken that shows that 70 percent of the people support 
your plan. So notwithstanding the fact that other Senators say 
that they are defending the people, you are defending the 
people, in my opinion.
    Second, I also want to put in the statement made by William 
Ruckelshaus, who appeared before this committee at the 
suggestion of Senator Whitehouse, who worked for Presidents 
Nixon and Reagan: ``We like to speak of American 
exceptionalism. If we want to be truly exceptional, then we 
should begin the difficult task of leading the world away from 
the unacceptable effects of our increasing appetites for fossil 
fuel before it is too late.''
    I would like these two to go back to back with Senator 
Barrasso's, if there is no objection.
    [The referenced information follows:]
    
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    Senator Boxer. Now, we are going to turn to Senator 
Gillibrand, who was not here. She gets 6 minutes, and as a 
Republican comes we will work back and forth. Then we will 
turn, I will close, so I will withhold and we will go to 
Senator Whitehouse and Senator Markey after Senator Gillibrand.
    Senator Gillibrand. Thank you, Madam Chairwoman. I am so 
grateful for Administrator McCarthy being here. I am grateful 
for your leadership. I want to thank the Chairwoman for holding 
this hearing.
    Climate change, as everyone knows, is one of the biggest 
crises we face. Having watched the destruction after SuperStorm 
Sandy, it is not only extremely costly, but people are losing 
their lives because we are not acting fast enough or bold 
enough. So we have to do more, we have to do better. The costs 
of inaction are enormous. We can continue or try to continue to 
pay for disaster after disaster, or we can make really smart 
steps to reduce carbon pollution and foster innovation for 
cleaner energy sources and more advanced technology.
    So I think there is a picture of success here that we have 
to grab hold on and achieve it. I think with your leadership, 
we will achieve that goal.
    New York State is a member of the Regional Greenhouse Gas 
Initiative. I know you are familiar with it and have testified 
about it. Today the regional greenhouse gas emissions are 40 
percent lower than in 2005. And it is projected to produce $1.6 
billion in net economic benefit, which I wish my colleague was 
still here to hear these numbers. This is an economic engine; 
$1.1 billion in electricity savings; 16,000 additional jobs per 
year; and $765 million retained in local economies due to 
reduced demand for fossil fuels. That is a huge success.
    So from your experience how can other States use the RGGI 
example to implement a successful program to cut greenhouse gas 
emissions? And can other States and regions expect the same 
type of economic benefits that we have seen in New York as a 
result of our RGGI program?
    Ms. McCarthy. I am incredibly proud of the work of the 
Regional Greenhouse Gas Initiative in all those States. I think 
it was specifically designed to take the waste out of the 
system and to continue to grow the economy. Those numbers are 
great, Senator, thanks.
    The individual States can develop their own plans or they 
can certainly join other regional approaches, like the Regional 
Greenhouse Gas Initiative. We have provided information as to 
why that is inexpensive, why that is a good thing to do and 
provide an opportunity for them to have additional time if that 
is what they so choose.
    But I think the most important thing for the leadership 
States moving out in front is that they have shown us that here 
are cost-effective, practical ways in which we can make this 
work significantly to address climate change and to grow the 
economy, not just not hurt it, but actually provide an impetus 
for growth. That has been the basis of this, our determination 
of best system of emission reduction adequately demonstrated. 
The leadership States frankly, not just the RGGI States, but 
all across the United States we are seeing States show 
tremendous leadership.
    That is what we are building on. We just want every State 
to come to the table and look at the same things and see how 
they can design it with the same idea of success in mind.
    Senator Gillibrand. I have read that there were challenges 
when other regions of the world have tried to do this. There 
was fraud that undermined the results. Can you talk about why 
we are successful and they weren't? How do we expand this more 
across all States? Should we ever have a national RGGI?
    Ms. McCarthy. I think we learned from some of those lessons 
really directly. And I think we also learned from a lot of the 
work that Congress did in trying to design a cap and trade 
program for the U.S. Those are things that you learn from and 
you don't repeat mistakes. So I think we very well understood 
how we could make sure that the reductions we were trying to 
achieve were verifiable, accountable and how we could do it in 
a way that provided the flexibility to put investments in 
things that were actually going to be beneficial economically, 
like energy efficiency.
    One of the best designs of RGGI is that money was actually 
going to support the kind of programs that are going to lower 
costs for individual consumers.
    Senator Gillibrand. I think our energy cost-savings are 
amazing. How can you in your position urge other Governors, 
other States, other regions to really try to adopt this and be 
successful as well? What tools do you have? What help do you 
need form us? How do we expand this?
    Ms. McCarthy. I think we are just trying to make sure that 
there is a table set for every State to look at these issues 
and to work together. I don't think EPA is trying at this 
point, nor should we, tell States how they should meet these 
goals. We are trying to provide them an opportunity get as much 
technical information as they can, to look at all the options 
available to them, if they want our help doing that. And we 
have been having meetings that bring energy and environmental 
regulators together in every State, so they can understand how 
they can design a strategy that works for them.
    That is the most important thing for me, is that they roll 
up their sleeves and start working. Because action right now is 
essential.
    Senator Gillibrand. We talked about all the cost savings. 
There is also obviously the health benefits that we can expect 
from these types of reforms. Can you talk a little bit about 
some of the health benefits we can expect from the 
implementation of the new clean power plant proposed rule?
    Ms. McCarthy. I certainly can. The health benefits in this 
rule are actually quite large. From reducing carbon pollution 
you actually have an opportunity to keep temperatures from 
rising, more ozone from being formed, which always results in 
more asthma attacks. But this rule also is going to be directly 
reducing particulate matter emissions, NOx emissions 
SOx emissions, mercury emissions, as we look at the 
RIA that was developed.
    And just to name a few things, we are actually avoiding 
2,700 premature deaths in 2030, up to 6,600 premature deaths. 
We are talking already just in 2020 reducing more than 100,000 
asthma attacks in our kids. And in the U.S., one out of ten 
kids faces asthma. We worry about low income, we worry about 
minorities, we worry about those in the front line of the 
changing climate, those numbers matter.
    Senator Gillibrand. Thank you, Madam Chair.
    Senator Boxer. Senator, thank you.
    Senator Sessions.
    Senator Sessions. Thank you. Well, Ms. McCarthy, the 
Supreme Court statement that when an agency, EPA, claims to 
discover in a long-extant statute an unheralded power to 
regulate a significant portion of the American economy, we 
typically greet its announcement with a measure of skepticism. 
So what our American people need to know is that you have not 
been given explicit statutory authority power to do what you 
are doing. You achieved it by, I guess, a five to four ruling 
some years ago by the Supreme Court. And it ought to be viewed 
with skepticism.
    The American people run this Country. You don't run this 
Country. EPA does not run this Country. You are accountable to 
the people for the best interests of this entire Nation. The 
Congress has never approved this, and that is one of the 
problems you face.
    EPA has proposed an emissions target for Alabama which 
would require a 27 percent reduction in the rate of 
CO2 emissions relative to 2012 levels. It reaches a 
target by assuming that it is technically feasible for Alabama 
to retire 10 million megawatt hours of coal-fired generation 
capacity which is significant, increase natural gas generation 
by an equivalent amount, generate over 14 million megawatt 
hours from renewable as well as preserve existing nuclear 
capacity, existing, not an increase.
    So first, you have been talking about consulting. Did EPA 
consult with the State of Alabama about those assumptions, 
achievable assumptions?
    Ms. McCarthy. We have been working with both the energy and 
environmental regulators in every State. I cannot name you 
specifically whether or not we have had individual meetings 
with the folks from Alabama. But I can certainly check and get 
back with you.
    Senator Sessions. I don't think you have been dealing that 
accurately or completely with them on these assumptions, these 
abilities. You are talking about a huge, 14 million megawatt 
hours from renewable.
    Ms. McCarthy. Senator, I am not sure about those numbers. 
So I am more than happy to go through them with you.
    Senator Sessions. Would you promptly respond to an inquiry 
for a correction to me on those?
    Ms. McCarthy. Of course I will, sure.
    Senator Sessions. Thank you. Now, Section 111(d) of the 
proposed rule that has been debated here references extreme 
weather six times at least, and cites claims about projections 
of increased severity of hurricanes and tornadoes. Do you have 
any data that you can show this committee to establish that we 
can expect an increased number and severity of hurricanes and 
tornadoes?
    Ms. McCarthy. I am well aware that the new national 
assessment indicates that we should be expecting more intense 
storms, more heavy precipitation. There is, I don't believe any 
assumption made about the frequency of hurricanes at this 
point. But there is certainly the severity and intensity of 
those storms is expected to increase.
    Senator Sessions. Do you know how many days it has been 
since the United States has had a Category 3 hurricane?
    Ms. McCarthy. I do not have that information.
    Senator Sessions. It is 3,200 days. That is almost 10 
years. We haven't had a Category 3 hurricane. I remember when 
Frederick hit my town of Mobile. Ten years before that, we had 
Camille, which was a 5. Frederick I think was a 3. We are not 
having increases, the data is pretty clear on that.
    So I just want to tell you, you are asking us to alter our 
policies economically at great cost, and one of the bases of 
that charge is the increased storms. And we are not seeing 
them, is all I am saying. It may happen, I don't know. But I 
don't believe you have a scientific basis, and I would like to 
see any science you have to justify that position.
    Finally, you suggest that by 2030, you predict, in your 
written statement here, ``Average electric bills for American 
families will be 8 percent cheaper.'' As I understand it, you 
assume that we will have a 1.5 percent energy efficiency 
increase every single year during that decade, 1.5 percent, 
whereas the average today, I understand, is .5 percent.
    Are you confident? How can you have confidence that that 
would occur, that we would have an actual reduction in costs of 
electricity for Americans?
    Ms. McCarthy. Sir, we feel pretty confident that the data 
indicates that energy efficiency is one of the least expensive, 
most effective ways of reducing carbon pollution, that States 
will take advantage of that.
    Senator Sessions. I totally agree that energy efficiency is 
a bi-partisan issue that we can work on together with you. I 
would just say that if you maintain that and don't do the other 
things, we would have a much lower cost of electricity.
    Senator Boxer. Thank you, Senator.
    Senator Whitehouse.
    Senator Whitehouse. Thank you very much, Madam Chair.
    While my friend Senator Sessions was speaking, I pulled up 
a story from the Birmingham News. It is 2 years old, it is from 
August 2012. At the time, it was about a guy named Bart Slossen 
in Birmingham who was one of only 27 residential customers of 
Alabama Power who were selling solar electricity back to the 
grid. He ``wondered why there is no photovoltaic presence in 
Alabama and it is full of sun,'' he said. The story goes on, 
across the Country and across the globe, solar energy is 
spreading, supported by falling prices for equipment, 
environmental sensitivity and generous incentives from 
governments and utilities. Drive across the border to Tennessee 
and solar arrays are sprouting the fields.
    Florida, the sunshine State, is a national leader in the 
production of power from the sun. In Georgia, the first large 
scale solar development came online this summer, with planned 
future projects expected to boost that State's generation to 50 
megawatts by 2015. Alabama, on the other hand, finishes at or 
near the bottom in solar surveys.
    So it would seem that there might be some potential there.
    Senator Sessions. I thank the Senator. It would be great if 
we could make solar work, but the experts tell us that because 
of our cloud cover we are not nearly as efficient as most of 
the States farther west to have clear sunshine, and it is not 
very effective.
    Senator Whitehouse. Well, we will certainly see about that. 
And certainly the costs are coming down. My concern is that 
when the alternative to solar is to burn coal, there are costs 
to that that the rest of us have to bear that aren't in that 
decision anywhere. If you are an accountant, and you are doing 
the books for a family or for a business, you have to look at 
two sides of the ledger. You look at what the costs are and you 
look at what the income is and then you get to bottom line.
    A lot of what my colleagues have been saying during the 
course of this hearing, I believe, has only looked at one side 
of the ledger. Specifically, that narrow side of the ledger 
that relates to the costs to the coal industry, as if our 
highest and most important goal in this exercise was to make 
sure that coal plants kept running.
    I think that EPA has actually tried to look at both sides 
of the ledger, looked at costs, and looked at benefits. On a 
net basis, when you actually do accounting for the cost of 
this, looking at both sides of the ledger, not just a one-sided 
view, what do you get as your net assessment of whether this is 
going to be good or bad for our economy and for our people?
    Ms. McCarthy. In 2030, it is a net benefit of somewhere 
between $48 billion and $84 billion.
    Senator Whitehouse. Between $48 billion with a B and $84 
billion?
    Ms. McCarthy. That is correct.
    Senator Whitehouse. Per year, or summed up for that time?
    Ms. McCarthy. That is per year.
    Senator Whitehouse. So in that year, it will be a net. So 
in that time period, presumably it will have added up 
considerably more than that over time.
    Ms. McCarthy. Oh, wait a minute. I will double check, but I 
believe that is the case.
    Senator Whitehouse. But that would be the minimum, 
obviously.
    Ms. McCarthy. Yes.
    Senator Whitehouse. The number gets a lot bigger if you are 
doing that annually than if that is the sum.
    Ms. McCarthy. That is right.
    Senator Whitehouse. So the bottom line is that there is a 
positive net benefit?
    Ms. McCarthy. Very much so, yes.
    Senator Whitehouse. And I just want to say, I appreciate 
very much the concern of my colleagues here. I know that 
Senator Barrasso is representing the State of Wyoming. I know 
that the State of Wyoming has a very significant coal economy. 
I believe that a billion dollars of the revenues of the State 
of Wyoming come into its coffers from its fossil fuel industry. 
So if there is going to be an interruption of that, then 
Senator Barrasso has every reason to be concerned and he has 
every reason to expect the rest of us to listen to his concerns 
and to try to work with him to see what we can do to help with 
those concerns.
    What I can't have is to have a dialog in which Wyoming gets 
its concerns ventilated but has no interest whatsoever in what 
is happening in Rhode Island, where we have kids with ozone, we 
have very serious asthma problems, where we have 10 inches of 
sea level rise, where our winter flounder fishery is virtually 
gone, where our prospects for having a ski industry are 
evaporating, such as it is. There is Yawgoo Valley, if you want 
to come to Rhode Island and ski, it is not much, but it is 
there and we would like to keep it. But the evidence appears to 
be, from the estimates that we have seen, that Connecticut and 
New York and Massachusetts are going to lose theirs. So if they 
lose theirs, it is unlikely Rhode Island is going to be a 
little sanctuary of snow down there south of them.
    So we have real costs on our side, and I hope that, Madam 
Administrator, you will bear in mind that there are costs on 
both sides of this ledger. I contend that the costs on our side 
of the ledger actually outweigh the costs of the other side of 
the ledger in pure economic value by a lot.
    Ms. McCarthy. Those were annual costs, and they are pretty 
staggering.
    Senator Whitehouse. Those were annual costs.
    Ms. McCarthy. And the benefits associated, the net benefits 
here are tremendous.
    Senator Whitehouse. Tens of billions of dollars a year.
    Ms. McCarthy. But I don't think that they by far and away 
capture all the benefits that we are going to achieve by 
addressing and stepping up on climate.
    Senator Whitehouse. So, Madam Chair, if there is that kind 
of benefit, it would seem to be reasonable that we could find a 
way, through the politics of this body, to deliver some of that 
benefit back to the States of West Virginia and Wyoming, to 
balance what is going on here. But they can't do that if we 
pretend that this problem isn't real. They can't do that if 
they pretend that the other side of the ledger doesn't exist. 
We can't do that if they continue this pretense that coal isn't 
harming people all across the Country as well as benefiting 
people in their States.
    Senator Boxer. Senator, thank you so much for your 
contribution.
    I see Senator Sanders here. I am going to do my round, then 
I am going to turn the gavel over to Senator Sanders to take as 
much as he wants and then close it down.
    Now, I will say, Administrator McCarthy, that Senator 
Sessions told you that you don't run America. Do you think you 
run America?
    Ms. McCarthy. I am not taking the blame, no.
    [Laughter.]
    Senator Boxer. Let the record show that you don't think 
that you run America.
    Are you implementing the Clean Air Act?
    Ms. McCarthy. Yes.
    Senator Boxer. Was there an endangerment finding that said 
that too much carbon pollution is a danger?
    Ms. McCarthy. Yes.
    Senator Boxer. Can you summarize for us the major dangers 
of carbon pollution?
    Ms. McCarthy. The major dangers identified in the 
endangerment finding were the dangers related to increased 
temperature, increased floods, increased droughts, disease that 
is related to this, heat strokes. There are a number of impacts 
associated with a change in climate.
    Senator Boxer. Is it your responsibility to protect the 
Clean Air Act and to protect clean air, clean water, safe 
drinking water? Isn't that what you swore that you would do 
when you took this job?
    Ms. McCarthy. Yes, I did, and I meant it.
    Senator Boxer. I know you meant it. I just want to say, 
colleagues, for all the bluster on the other side about how 
what Administrator McCarthy is doing is a danger to people, 
people don't believe it. Seventy percent of the people side 
with the EPA.
    And let me just read the groups that support EPA carbon 
pollution standards. What I want to say to everyone in the 
audience, wherever they come out on this, I want you to think 
when I mention these names, who do these people really fight 
for?
    The Alliance of Nurses for Healthy Environments, the 
American Academy of Pediatrics, the American Lung Association, 
the American Medical Association, the American Public Health 
Association, the American Thoracic Society, the Asthma and 
Allergy Foundation of America, Chicago Physicians for Social 
Responsibility, the Cleveland Clinic Asthma Center, Health Care 
Without Harm, National Association of County and City Health 
Officials, National Hispanic Medical Association, National 
Medical Association, National Nurses United, Trust for 
America's Health. I ask that unanimous consent to put this list 
into the record.
    [The referenced information follows:]
    
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    Senator Boxer. I think if everyone listened to this, you 
would say they represent the American people, the children, our 
families. So that is very, very key.
    I also would like to note, I am sorry Senator Sessions had 
to leave, that Hurricane Katrina in 2005 cost taxpayers $125 
billion, and Hurricane Sandy, as Senator Sanders has said, cost 
$60 billion. I think this whole Country lived through those 
disasters, and we want to mitigate those disasters. That is 
what your rule is all about.
    Last, I want to make a point for my colleagues, my 
colleagues, I want to make a point to my colleagues. I want to 
make a point. This is my point. And I think this gets 
overlooked. And I want to, because my colleagues are so 
informed on this, I just think this is one other huge piece of 
information that is rather new to the debate.
    Under this proposal, in 2030, air pollution benefits, not 
carbon, put that aside, the other pollution benefits will total 
$62 billion per year. What does that mean? Reduction of 
participate matter, 50,000 ton reduction. Reduction of sulfur 
dioxide, 425,000 ton reduction. Nitrogen dioxide, 410,000 
reduction. This is huge.
    And this speaks to the issue that Senator Whitehouse spoke 
to, that we can move to clean energy or cleanup the energy we 
have, which I believe is possible, and save our kids, save our 
families, save our health, premature deaths, asthma, missed 
work, missed school. So I want to say, Administrator McCarthy, 
I can't tell you how much I appreciate your taking this job as 
one who kind of suggested it, one of the people.
    Ms. McCarthy. You had a little hand in it.
    Senator Boxer. Well, I want to say, I knew that you would 
step up to the plate, that you had the experience of working 
across party aisles, that you really had in your heart exactly 
why you wanted to do this work, to help our families, and 
frankly, our economy and our leadership in the world. I just 
can't think of anyone else who could do it better. I want to 
say that. You proved it today.
    I want to say, even though my colleagues aren't here from 
the Republican side, I felt they were very respectful of you, I 
appreciate that.
    Ms. McCarthy. I agree.
    Senator Boxer. I agree. But I also agree with Senator 
Whitehouse and Senator Sanders, we shouldn't be having the 
argument about what is as clear as can be, and I am very 
pleased with this hearing. I am pleased with this plan. I know 
my people at home support you and so do 70 percent of the 
American people.
    With that, I am going to hand the gavel over to Senator 
Sanders and suggest that he sit over here and finish this 
hearing. If Senator Whitehouse wants another round, that is 
great. I need to go to a meeting and I thank everybody.
    And I especially thank the young people here today, the 
little ones, they actually were pretty good. They were pretty 
good considering all the hot air all of us were putting toward 
them. I appreciate everybody being here, it means a lot.
    Senator Sanders, the gavel is yours and the time is yours.
    Senator Sanders.
    [Presiding.] Thank you very much, Senator Boxer. Thank you 
so much for what you are doing on this issue.
    We know that Gina McCarthy does not run the world or run 
America, because if she did, she would not have to sit here for 
two and a half hours, right?
    [Laughter.]
    Senator Sanders. I just want to make a few points, then 
give the mic over to Senator Whitehouse, if he would like it. 
Just two points, and I am sorry my Republican colleagues are 
not here.
    I understand that when I was not here there was some 
argument, I think by the Senator from Wyoming, about how 
wealthy liberals have coerced you into moving forward in this 
direction. Now, I find that is really remarkable that one of my 
Republican colleagues would dare to raise the issue of campaign 
finance and the amount of money folks are putting into the 
political process.
    So let me just recite a few facts for the record. According 
to the Center for Responsive Politics, in 2013 the oil, gas and 
coal industries invested at least $170 million in lobbying the 
Federal Government. According to the Center for Responsive 
Politics, in the 2012 election cycle, the same industries spent 
more than $93 million in recorded campaign contributions, an 
enormous number, which is itself dwarfed by the amount of money 
invested in dark money SuperPAC spending.
    Then we go to another level, and it really is hard for me 
to understand these guys would raise these issues, we have the 
Koch brothers, who are today as a family worth $80 billion, who 
have spent hundreds of millions of dollars on political 
campaigns and setting up think tanks, and in fact are doing 
that in this election as well. According to the Washington Post 
and the Center for Responsive Politics, the Koch brothers, so 
where do the Koch brothers get their money? They are a fossil 
fuel industry. And they have invested $407 million, according 
to the Washington Post, supporting conservative fossil-friendly 
candidates in the 2012 election.
    So is there money coming into the political process from 
wealthy liberals? The answer is yes. But that money is clearly 
dwarfed by the amount of money coming in from the fossil fuel 
industry.
    I would also add that I find it remarkable that some of my 
Republican colleagues in this debate have expressed a deep 
concern about the needs of low-income people and the elderly. I 
would remind the people of this Country that these are the same 
folks whose compassion and love of low-income people prevents 
them from working to raise the minimum wage so people can have 
a living wage, allows them to make massive cuts in the LIHEAP 
program, which provides fuel assistance to low-income people. 
Many of them are on record as making massive cuts in Medicaid, 
Medicare, trying to end social security, privatize social 
security. So I think that their concerns today about the needs 
of low-income people might be held up to some question.
    Senator Whitehouse, did you want to add anything to that?
    Senator Whitehouse. One last question for the 
Administrator. I take the position that the costs of this 
regulation are dwarfed by the benefits. I think that is EPA's 
judgment as well. I also take the position that it is not fair 
for people to only look at one side of the ledger in evaluating 
this legislation. They can't just look at the interests of the 
coal businesses, they really need to look at America more 
broadly. There are lots of us who are on the other side of that 
equation for whom coal really is a harm. And we can work in 
rational ways to try and balance that. But please don't pretend 
that my side doesn't exist.
    The third is that there is legitimate concern and then 
there is concern that is for rhetorical purposes. There is 
probably a little bit of a blend between the two. But if we 
look at the history that EPA has seen of industry reaction to 
proposed environmental regulations, all four Republican former 
EPA Administrators who testified in those very seats, Ms. 
McCarthy, indicated that over and over, the industry concerns 
were exaggerated. They did not prove true in the actual fact. 
Whether that was because they were exaggerated for rhetorical 
purposes at the beginning or whether that was because 
innovation was brought to bear to reduce costs, both can be 
true.
    But let me ask you, you have been in this business for a 
long time, at the State level as well as the Federal level. You 
have worked for Republican Governors before. What is your view 
on what track record has been of industry projections and 
warnings about the costs and consequences of environmental 
regulation by EPA?
    Ms. McCarthy. History tells us that they always exaggerate 
the costs. They always project environmental benefits as 
somehow being contrary to economic growth and goals. It just 
simply hasn't come true. Never.
    So I think one of the points that we haven't talked about a 
little bit, Senator, that you hit on, is one of the great 
benefits of looking at setting a course for climate change that 
is long-term and flexible is that what we are actually sending 
is a tremendous investment signal in what the United States 
values and cares about. It will unleash innovation and 
investment money.
    This is not about a scrubber at the end of a pipe or a 
smokestack. This is really about investing in things people 
care about, investing in things that people will make money on.
    One of the great things, frankly, about regulating is 
seeing how the regulated community grumbles during the process 
but in the end figures out how to make money, the great old 
American way. You will see this. This proposal is designed to 
be moderate in its ask, based on what is practical and 
affordable.
    But the vision behind it, the direction that it is going to 
take, I think we will get significantly more benefit than we 
are requiring. Because we are asking for the things that the 
American public actually wants to spend money on: less waste, 
cleaner energy, jobs, economic growth. That is what this is all 
about. As you can tell, I am pretty proud of it as a proposal. 
I know we will listen to folks.
    But in the end, this is going to be something I am hoping 
we will all be proud of.
    Senator Sanders. If I could pick up on Senator Whitehouse's 
question, Administrator McCarthy. What I hear you saying is 
that you believe the United States could be a leader in the 
world in new technologies, which help us reduce greenhouse gas 
emissions, and in the process see significant economic 
development.
    Ms. McCarthy. That is correct.
    Senator Sanders. All right. I will tell you just in one 
area, in Vermont we have put some money, Federal money into 
weatherization. Do you know what we have done? We have reduced 
fuel bills for people, low-income people, cutting their fuel 
use by I think 32 percent, cut greenhouse gas emissions.
    Do you know what else we have done? We have created jobs in 
the area. And I suspect your point is that once industry gets 
moving in terms of sustainable energies, et cetera, we can be a 
leader in providing that technology, not only in the United 
States, but all over the world, and in the processing getting 
worldwide companies moving as well. Is that kind of what you 
are saying?
    Ms. McCarthy. That is what I meant to say, yes.
    Senator Sanders. You said it better than I did. All right.
    My very last question, and I will give it back to Senator 
Whitehouse, again, the issue of money in politics has been 
raised at this hearing with the suggestion that environmental 
folks are pouring huge sums of money in and I would argue that 
their money is being dwarfed by the industry. Do you have any 
thoughts on that, the amounts of money we are seeing in 
lobbying? I know campaign contributions is not your issue. But 
in lobbying that comes from the big energy companies.
    Ms. McCarthy. Senator, let me just hit the issue directly, 
because I know it had to do with a New York Times article which 
has been given surprising credibility. But I think, I know how 
hard the great staff at EPA worked to design this role, 
basically from whole cloth, listening to States and utilities 
and energy regulators and environmental regulators and 
stakeholders from all walks of life.
    I am extraordinarily proud of the work they put into it. I 
know they didn't sleep for virtually any night well for months. 
We worked weekends. I can tell you I had 2 hours of meetings on 
this rule alone every week for the past, I don't know how many 
months. And I think it is a discredit to them to suggest that 
somehow this was designed miraculously by one group, many 
months ago, and we just had it in our pocket ready to unveil.
    This was a result of hard work, a result of lots of 
listening and a result of moving 40 years of history in that 
agency and getting the science right, understanding the law and 
doing the work we need to do. That is what this is all about.
    Senator Sanders. Senator Whitehouse.
    Senator Whitehouse. And the result of a process in which 
the electric utility, the coal industry, the fossil fuel 
industry, the chamber of commerce and others also had their 
input, correct?
    Ms. McCarthy. I will also guarantee you that I have met 
many more times with utilities than I have the NRDC.
    Senator Whitehouse. Thank you. By way of a brief closing 
statement, I just want to thank Senator Sanders for raising 
this issue. I do a climate speech every week on the Senate 
floor, at least every week that we are in session. This week I 
am going to be talking about precisely the point that you 
raised.
    If you look back at our history in this body, there has 
been a very constant, strong heartbeat of bipartisan activity 
on climate. Many of our colleagues who are still here have had 
proud histories of engagement with significant bipartisan 
climate legislation. And after 2010, you see that heartbeat of 
bipartisan activity flat line.
    If you look at what happened in early 2010 that might 
explain why it suddenly ended, you find a Supreme Court 
decision called Citizens United that allowed unlimited 
corporate money, unlimited billionaire money to bombard our 
politics. What people often thing about that is that oh, they 
all came in and they beat up the Democrats on behalf of the 
Republicans and this is a partisan thing.
    But I have heard over and over from Republican colleagues, 
what are you complaining about? They are spending more money 
against us than they are spending against you. And there have 
been times, I believe, when actually the unaccountable 
anonymous dark money that Citizens United unleashed was being 
spent more in Republican primaries and against Republicans than 
it was against Democrats.
    That I think has suppressed debate and has a corrosive 
effect on our politics and has ended what was for many, many 
years a proud bipartisan tradition. So I am very glad that 
Senator Sanders raised that, and I thank Administrator McCarthy 
for being here and for all of her leadership and courage.
    Senator Sanders. Thank you, Senator Whitehouse. 
Administrator McCarthy, thank you very much. And with that, we 
adjourn the hearing.
    [Whereupon, at 12:29 p.m., the hearing was adjourned.]
    [Additional material submitted for the record follows.]

               Statement of Hon. Tom Udall, U.S. Senator 
                      from the State of New Mexico

    We've seen the impacts of global warming firsthand in New 
Mexico. Prolonged droughts, more frequent wildfires and 
increased threats to forests and agriculture present some of 
the biggest economic and public health challenges we face in 
our State and nation. And when we're faced with problems, we 
roll up our sleeves and solve them.
    For many years, I've devoted my career in public service to 
tackling the problem of global warming. I've introduced 
bipartisan legislation to create a flexible market-based system 
that provides industry with predictability and stability, and 
turns the trend of increasing emissions downward. I've worked 
with many Members of Congress across the aisle to come up with 
legislative solutions. But many other Members of Congress would 
rather just pretend the problem doesn't exist.
    The President and the Administration have refused to let 
this political reality affect our environmental reality. We've 
already wasted too much time already and the country wants to 
move forward with sensible solutions that safeguard our 
environment and advance our technological solutions. The 
proposed clean power plan is designed to help provide what 
every New Mexican wants for our children: clean air, fresh 
water and good health. And it allows each State to shape our 
own path to lower carbon emissions using the resources and 
tools available to them.
    I've always said we need a `do it all, do it right' 
strategy to balance traditional energy with new energy sources. 
Let's seize this opportunity to spur innovation and job 
creation, strengthen industries New Mexico does well, like 
solar, wind and biofuels, and build a clean energy future for 
the generations to come.

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