[Senate Hearing 113-796]
[From the U.S. Government Publishing Office]
S. Hrg. 113-796
LEGISLATIVE HEARING TO EXAMINE S. 2911, SUPER POLLUTANTS ACT OF 2014
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HEARING
before the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
DECEMBER 2, 2014
__________
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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
DECEMBER 2, 2014
OPENING STATEMENTS
Boxer, Hon. Barbara, U.S. Senator from the State of California... 1
Murphy, Hon. Chris, U.S. Senator from the State of Connecticut... 3
Thomas, Hon. Carper R., U.S. Senator from the State of Delaware,
prepared statement............................................. 103
WITNESSES
Zaelke, Durwood, President, Institute for Governance &
Sustainable Development........................................ 7
Prepared statement........................................... 9
Responses to additional questions from Senator Boxer......... 19
Fay, Kevin, Executive Director, Alliance for Responsible
Atmospheric Policy............................................. 22
Prepared statement........................................... 25
Shindell, Drew, Ph.D., Professor of Climate Sciences, Nicholas
School of the Environment, Duke University..................... 43
Prepared statement........................................... 45
Responses to additional questions from Senator Boxer......... 51
Peiser, Benny, Director, The Global Warming Policy Foundation.... 56
Prepared statement........................................... 58
Response to an additional question from Senator Boxer........ 71
Responses to additional questions from Senator Vitter........ 72
Moore, Stephen, Chief Economist, Institute for Economic Freedom
and Opportunity, The Heritage Foundation....................... 74
Prepared statement........................................... 76
Response to an additional question from Senator Boxer........ 84
Responses to additional questions from Senator Vitter........ 84
ADDITIONAL MATERIAL
Article; The New York Times, In Step to Lower Carbon Emissions,
China Will Place a Limit on Coal Use in 2020................... 105
LEGISLATIVE HEARING TO EXAMINE S. 2911, SUPER POLLUTANTS ACT OF 2014
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TUESDAY, DECEMBER 2, 2014
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The committee met, pursuant to notice, at 2:15 p.m. in room
406, Dirksen Senate Building, Hon. Barbara Boxer (chairman of
the committee) presiding.
Present: Senators Boxer, Vitter, Whitehouse, Merkley,
Boozman.
Also present: Senator Murphy.
OPENING STATEMENT OF HON. BARBARA BOXER,
U.S. SENATOR FROM THE STATE OF CALIFORNIA
Senator Boxer. The committee is in order. I am delighted to
call us to order, because we are looking at a bill written by
two of my colleagues, Senator Murphy and Senator Collins, the
Super Pollutant Act of 2014, S. 2911, which is a bipartisan
bill that supports innovative technologies and policies to
reduce short-lived climate pollutant emissions, otherwise known
as SLCPs, which if you can pronounce that, OK. Because I won't
even try.
These emissions, we are talking about black carbon,
methane, hydrofluorocarbons. And recent headlines have sounded
the alarm on the mounting impacts of climate change. The reason
I am so excited about this bill, when Senator Murphy talked to
me about it, is it is really a bipartisan breakthrough. That is
very important, because we are not going to get anywhere if we
just have a partisan divide on climate.
Over the past few months, we have seen everything, from the
hottest August, the hottest September, the hottest October on
record, to historic droughts and extreme wildfires, ravaging my
home communities, to vanishing wildlife habitat in Alaska, to
toxic algae blooming out of control and contaminating drinking
water in Toledo, Ohio. I think it was 500,000 people had to
drink bottled water because of this toxic algae, which is
directly related to the heat in the water.
Yesterday, I read a story in the New York Times, it was
actually the lead story, and it summed up what scientists are
now telling us. They are saying if we stay on this path, our
grandkids will face a grim future. They actually lay it out
even in a more stark fashion, they say our grandchildren will
either have a planet that is unpleasant to live in or a planet
that is not inhabitable. Those both are bad choices, but we see
where we are heading. That is why I am so grateful, because
maybe we can start to take congressional action here. The
President is taking action, and bless him for doing it. I say
that sincerely, because I know he cares so much about the
future. He looks into his daughters' eyes and he knows that he
in many ways has a chance to make the planet a better place.
And he is doing it, despite all the opposition and hysteria
about it.
Well, this hearing will focus on some common sense steps we
can take to address this critical threat. S. 2911, the Murphy-
Collins bill, identifies a number of practical steps by the
private sector and policy measures on the Federal level that
can be taken to limit pollutants that cause climate change.
Action to limit these super pollutants can help slow climate
change over the next several decades while also providing
important co-benefits to public health. That is so key. When we
cut back on climate pollution, we have co-benefits that involve
making the air cleaner and less asthma and less heart disease
and strokes and all those things. So it is a win-win.
Now, black carbon is a fine particulate matter that is
harmful to human health and the environment. If we address
that, we can help avoid the worst impacts of climate change and
also reduce exposure to air pollutants, again, that cause all
these respiratory and cardiovascular ailments and premature
deaths.
Similarly, reducing methane leaks and emissions can prevent
increases in ground level ozone pollution, which will reduce
the threat to public health. We know the President has put out
a really good policy on this ground level ozone pollution,
which we know is smog that can worsen bronchitis, emphysema and
asthma. I often say, and I will say it again, if any of us, as
a Senator, visits the schools, and I know, Senator Murphy, how
old are your boys now?
Senator Murphy. Six and three.
Senator Boxer. Six and three. I say the next time you go
visit their class, the older one, ask the class, how many of
you kids have asthma, or how many of you kids know someone with
asthma. You will be stunned to see, well, maybe you won't be
stunned, I was stunned when I asked that question, I was in a
school in San Francisco with Hillary Clinton way back in the
1990's. We asked the class, and way more than half of the class
raised their hands. She had asked that question. And it just
tells you the story. We have to protect our children from
bronchitis and asthma.
So S. 2911 has all these benefits and it also supports U.S.
companies that are in the forefront of producing innovative
chemical substitutes for HFCs and new technologies to control
black carbon and methane leaks. And it is a real win-win when
we can have our private sector stepping up to the plate, doing
good things and doing well financially. That is the ticket
here. And that is what S. 2911 does, because they establish an
interagency task force to mitigate short-lived climate
pollutants, they ensure Federal agencies have plans in place to
reduce HFC and methane at Federal facilities. We are the
biggest landlord in the Country. If we start doing these
things, it has a real impact.
It also says we should use existing Federal authorities to
phase in these alternatives to HFCs and encourage HFC recovery
and recycling. And also encourage substantial black carbon
pollution reduction efforts in developing countries as part of
the State Department's programs. It also calls for directing
Federal agencies to assess whether the pipeline transmission
rates and new standards for pipeline systems can reduce methane
leaks.
This is incredible. I once looked at this issue, how many
people we could put to work just going after these leaks and
have that win-win benefit. It is so good.
And I want to welcome our witnesses, and Chris Murphy, I
want to particularly say thank you so much. I think what you
have done is a breakthrough. Because not only is it important
in addressing climate, but it is a bipartisan effort.
So would you start off, and then we will go to the rest of
the panel.
OPENING STATEMENT OF HON. CHRIS MURPHY,
U.S. SENATOR FROM THE STATE OF CONNECTICUT
Senator Murphy. Thank you very much, Chairman Boxer. Thank
you for calling this hearing today. Thank you for your
encouraging words with respect to our legislation. I am pleased
to share the panel here, at least kick it off with some very
able experts. Thanks to Ranking Member Vitter as well for
making this hearing possible today.
We are here to discuss, as you very aptly described, SLPCs,
short-lived climate pollutants. These are substances that do
grave damage to the climate, often at a rate that is tens of
hundreds of times the damage on a time-to-time basis that
carbon dioxide does. But frankly, they are a lot less well-
known than carbon dioxide. The problem posed by SLPCs, they
represent an opportunity, it is an opportunity to save lives,
to create a lot of jobs and to protect fragile ecosystems.
They also represent a political opportunity. I am honored
to have this considered as a breakthrough, but phasing down
these pollutants can be done more quickly and relatively easily
when compared to the hard but desperately necessary work that
we have ahead of us to slow CO2 emissions.
As members of the committee well know, we are talking here
about black carbon, methane, and hydrofluorocarbons, or HFCs.
The first is a byproduct of combustion. The second is a fuel.
The third is an industrial chemical.
None of them are as vital to the functioning of the world's
economy as carbon dioxide. That means that adopting sensible,
money-saving policies to phase down emissions of all of these
will require an effort that is relatively manageable compared
to the scale of the other global challenges that we face.
So that is why Senator Collins and I worked together to
draft the legislation that is under consideration by the
committee today, the Super Pollutants Act. If enacted, this
legislation would expand existing programs to launch new
initiatives needed to tackle the many ways in which SLPCs are
emitted.
We are not talking about revolutionary change here. We are
just talking about some common sense steps that can bring
Republicans and Democrats together around cleaning up our
climate. Our bill encourages USAID and development agencies to
consider methane and black carbon emissions when financing
projects overseas. Our bill would urge modifications in the
Energy Star program to recognize refrigeration systems that use
non-HFC chemicals while still achieving energy savings. We
would help coordinate interagency SLPC initiatives, so that
individual departments are working in tandem when it comes to
these pollutants.
Both Senator Collins and I realize that considerable
obstacles confront the enactment of this or any legislation in
this present congressional environment. However, we believe
this legislation represents an opportunity to have an important
foundation for bipartisan cooperation on climate and public
health issues. That is because one can favor reductions in
methane, black carbon and HFCs for reasons that frankly have
little to do with climate change. There is a huge climate
change component to this legislation, but Senator Collins has
been a leader in pushing for the expansion of clean-burning
cook stoves in the developing world. Because indoor burning of
wood and animal dung kills millions and millions of people
every year. Installing filters diesel truck engines similarly
reduces soot emissions, while promoting the use of American-
made technologies, an effort that Senator Inhofe has strongly
supported for years.
Transitioning away from HFC compounds, both here and
abroad, promotes the use of American technologies and
manufacturing know-how. The economic benefit to this Country is
great. The demand for air conditioning in India alone is
anticipated to grow by a factor of 50 by 2013. Wouldn't it be
better if Indians were able to meet that demand by embracing
technological solutions developed in partnership with U.S.
firms?
Limiting methane leaks can actually save considerable sums
of money for companies and governments that are willing to
recapture it and burn it themselves. Indeed, man-made methane
emissions are expected to grow by 25 percent over the next 15
years. In the oil and gas industry, it is a win-win for
distributors and consumers to make sure that less product leaks
out of wells and pipes on its way to the end users, as Senator
Boxer said.
Now, I say this not to belittle the climate impacts that
reducing SLPCs could produce. Estimates show that aggressive
action could prevent nearly a half a degree Celsius of warming
in the atmosphere. Instead, I am making this case because
tackling climate change needn't be as fiercely and reflexively
partisan an issue as it has become in recent years. We can do
immense good for the climate while doing good for our health
and our businesses as well. SLPCs can and should represent the
beginning of much-needed bipartisan goodwill on this topic.
So I would like to thank both the business and non-profit
communities who have been a part of drafting this bill, for the
members of the committee who have already reviewed or co-
sponsored the legislation, I thank you. For those who haven't
examined it in detail, I hope that they will and their staffs
will do that in the coming weeks. If they think it can be
improved, Senator Collins and I would love to work with the
committee to do that.
Madam Chair, I have with me a statement from Senator
Collins. She has another hearing today, but she would love to
have entered into the record a very strong statement of support
for our bill.
Senator Boxer. Without objection, so ordered.
[The prepared statement of Senator Collins follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Murphy. So I look forward to testimony today.
Again, I thank you, Chairwoman Boxer, for bringing us together
and again express my gratitude for the attention and the time
of the committee today.
Senator Boxer. Thank you so much, Senator. You are free to
stay, I know you have a crazy schedule as well.
But I will move on, with Mr. Durwood Zaelke, President,
Institute for Governance & Sustainable Development. Welcome,
sir.
STATEMENT OF DURWOOD ZAELKE, PRESIDENT, INSTITUTE FOR
GOVERNANCE & SUSTAINABLE DEVELOPMENT
Mr. Zaelke. Thank you, Madam Chair, for the opportunity to
testify today.
Solving climate change may be hard. But getting started is
easy. The Super Pollutants Act that we are discussing today
gets us started solving the fast half of climate change. And it
will help us build the on-ramp, the bipartisan on-ramp, to
solving even more difficult parts of climate change involving
fossil fuels and CO2 emissions.
As Senator Murphy said, there are many reasons to support
this bill. Climate is the first and perhaps the most important.
But if you want to see other reasons, look to the public health
benefits. The World Health Organization tells us that seven
million people a year die from black carbon air pollution and
millions more are made so sick they can't go to work, they
can't go to school, the asthma that the Chairwoman mentioned.
Cutting black carbon can save at least two million of these
lives and it can make other citizens of the world healthier and
more productive.
There is no dispute about the health benefits of black
carbon. You can see it, you can taste it. It kills people and
cutting it will save lives and improve health. California has
already done this. California has cut black carbon by 90
percent and it has pioneered the development of the technology
that the rest of the world needs to cut its black carbon.
China, for example, has just mentioned that they are going
to be putting $277 billion into cleaning up their air
pollution. That is a tremendous market for U.S. technology. The
rest of Asia needs the same technology, India in particular,
but also Africa and Latin America. The whole world does. This
is a tremendous opportunity.
We could also look to the benefits for crop productivity.
Methane and the photochemical smog it creates damages crops.
When we lose crops around the world, we create conflicts that
often our military has to go help solve. So we can bring
tremendous benefits on that side as well.
Finally, the Super Pollutants Act will help us reduce this
third super pollutant, the HFCs. There are some efforts
underway already in the U.S. and elsewhere. Europe, for
example, has a law that goes into effect next month that will
cut HFC emissions by 79 percent by 2030.
At the global level, the U.S. has led the effort to use the
Montreal Protocol to phase down HFCs. This will level the
playing field and prevent a patchwork of regulations that our
industries would have to face. The Montreal Protocol was first
negotiated under President Ronald Reagan. It is widely regarded
as the most efficient and effective international environmental
agreement we have ever created. It has already phased out
nearly 100 damaging chemicals by nearly 100 percent. It has
ever country of the world as a party, developing and developed.
And they all have mandatory obligations under this treaty. They
all have nearly 100 percent compliance as well.
As we phased out the prior chemicals, the CFCs under the
Montreal Protocol and now the HCFCs, no one noticed. No one was
inconvenienced. No one's air conditioner didn't work or
refrigerator didn't work. In fact, they became more efficient
and the consumer saved money. So this treaty has been
incredible, not only in putting us back on the path to solving
this stratospheric ozone challenge but also in helping us with
climate. This treaty has already done five to ten times more in
climate mitigation than the Kyoto Protocol. And it stands ready
to do even more by phasing down the HFCs.
Just to give you the scale, the combined effort to phase
down the short-lived climate pollutants will avoid about .6
degrees of warming by the mid-century. That is compared to an
aggressive effort to cut CO2 , which will avoid
about .1 degree, a lot less. By the end of the century, they
begin to equalize. We have to do both, of course.
So we are ready to do the next big piece with HFCs. And it
will give us perhaps the single biggest and fastest piece of
climate mitigation in the world, and it will incredibly
inexpensive.
If you go back to the early efforts----
Senator Boxer. I am going to ask you to wrap up your
statement.
Mr. Zaelke. I will wrap up, and thank you.
In conclusion, the Super Pollutant Act can help save
millions of lives, improve crop yields, promote U.S. industry,
cut near-term warming in half through the middle of the
century. Just as important, the Act can help create the
bipartisan momentum that we so desperately need to solve the
rest of climate change.
Thank you, Madam Chair.
[The prepared statement of Mr. Zaelke follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Thank you, Mr. Zaelke.
I am going to just tell you what the plan is here. Senator
Whitehouse is going to run this hearing. I have been called to
a hearing on sexual assault on college campuses, and I need to
run there. My hope is to run there and back, but one never
knows. He has graciously said he is going to take this.
Colleagues who are here, Senator Boozman, Senator
Whitehouse, Senator Murphy was here, Senator Murphy started
off, he gave his statement. He also put in the record a
statement by Senator Collins and made the point this is our
first real bipartisan breakthrough on an issue dealing with the
climate. But as was pointed out, it is a lot more than climate,
it is about a lot of other things as well.
So I am going to hand this over to Senator Whitehouse and
he will run this. I just want to thank you all so much. I am
excited about this bill.
Senator Whitehouse, why don't you take it from here.
Senator Whitehouse.
[Presiding] Very well, and Mr. Fay, we will turn to you.
STATEMENT OF KEVIN FAY, EXECUTIVE DIRECTOR, ALLIANCE FOR
RESPONSIBLE ATMOSPHERIC POLICY
Mr. Fay. Thank you, Senator.
I serve as Executive Director of the Alliance for
Responsible Atmospheric Policy. We appreciate the opportunity
to testify today.
The Alliance, originally organized in 1980, is a coalition
of manufacturers, businesses and trade associations which make
or use fluorinated gases in their course of business. Today,
Alliance member companies are leading the development of next
generation, climate-and ozone-friendly technologies and
applications.
The U.S. fluorocarbon using and producing industries
contribute more than $158 billion annually in goods and
services to the U.S. economy, and provide employment to more
than 700,000 individuals.
S. 911 would help to focus government activities on the so-
called short-lived climate pollutants, including HFCs, further
congressional understanding and identify potential future
steps. Our comments today are specifically in relation to the
provisions governing HFCs.
The Alliance commended the sponsors of the legislation upon
its introduction. We did so because the legislation would one,
recognize the appropriate role of the Montreal Protocol in
advancing ozone protection while reducing greenhouse gas
emissions calibrated to the pace of technology developments and
the availability of proven energy efficient alternatives. Two,
acknowledges the important role of effective refrigerant
management and recovery and re-use of refrigerant as near-term
approaches that can achieve significant HFC emissions
reductions. And three, close the HCFC-22 exception that permits
the use of ozone-depleting residential air conditioning units.
The legislation promotes both ozone protection and improved
energy efficiency of newer systems.
The highly successful Montreal Protocol Treaty is grounded
in scientific understanding, includes an effective technology
and economic assessment process and recognizes the special
needs of developing country economies. The Protocol identifies
long-term objectives and achieves its environmental protection
benefits in a sensible approach, guided by economic
feasibility.
As a result of our experience under the Protocol over the
last 27 years, we believe it can play an instrumental role in
also reducing the greenhouse gas contributions of ODS
substitutes. This approach is far preferable for uniform
treatment of HCFs than command and control regulations by the
United States and other nations, or the market-fracturing
approach that will result if the major economies were all to
choose different means of achieving HFC greenhouse gas
reductions.
We believe with the appropriate policy signals and flexible
implementation, it is possible to achieve a substantial
reduction of HFC greenhouse gas contribution over the next
several decades. That is why in September of this year, the
Alliance announced its intent to ``take actions and support
policies to achieve an 80 percent reduction of global HFC
emissions on a GWP-weighted basis by 2050.''
The legislation acknowledges the Protocol's success and
encourages addressing HFCs through an amendment. We would
concur.
The bill also encourages the utilization of Section 608 of
the Clean Air Act as a means of reducing service emissions of
current HFC-using equipment and promoting refrigerant recapture
and re-use. We know that the majority of HFC emissions occur
during the service, maintenance, repair and disposal of air
conditioning and commercial refrigeration units. Moreover, this
equipment operates most efficiently when properly charged and
maintained, minimizing energy consumption and related
greenhouse gas emissions. In reducing the contribution of HFCs
to climate change, initiating proper refrigerant management
practices remains the lowest-hanging fruit.
The legislation also calls attention to the important role
of the fluorocarbon compounds with regard to energy efficiency
of the air conditioning units and refrigeration equipment in
which they are utilized. Ninety-five percent of the greenhouse
gas contribution of this equipment is derived indirectly as a
result of its lifetime energy consumption.
In the transitions achieved to date, and the pending
transition to low-GWP compounds, it is imperative that this be
part of the technology assessment process, and must include
coordination with energy efficiency standards processes and
appropriate modifications to building codes and standards.
The last item highlighted in S. 2911 is language to close
an exception for what are known as the dry-22 units. In a
rulemaking 5 years ago, EPA defined uncharged condensing units
to be a service component not otherwise subject to the Clean
Air Act prohibition to place in commerce equipment that relies
on HCFC-22, which is phased out under the protocol. As a result
of this rule modification, the manufacture of these units
increased significantly at a time when their phase-out was
nearly complete. The manufacturing community has recently
advised EPA of its unanimous position that the manufacture of
these units should be phased out. The language in the bill
would effect this change and the Alliance would be supportive.
U.S. industry has been at the forefront of the technology
advances over the last several decades on ozone protection and
climate protection. We are now investing in the innovation of
low-GWP compounds and technologies that will allow us to
achieve ozone protection, climate protection and energy
efficiency goals. We have embraced this new challenge. However,
much work remains to be done. Technology pathways have not been
identified for all the critical uses. Industry leaders recently
highlighted the multi-billion dollar investments to be made
over the next decade in order to achieve these goals. U.S.
industry leadership and an effective global approach on the
Montreal Protocol will be key to this achievement.
S. 2911 is a useful legislative vehicle with regard to HFCs
because it helps focus the attention of the relevant U.S.
Government departments and agencies on key issues in that
regard, including effective assessment of low-GWP alternatives
for responsible refrigerant management and the market support
of Montreal Protocol amendment as an appropriate path forward.
We appreciate the opportunity to testify before you today.
We look forward to working with you in the next Congress as
these issues are addressed and will be happy to answer any
questions.
[The prepared statement of Mr. Fay follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Whitehouse. Thank you, Mr. Fay. I appreciate your
testimony.
Before we turn to Dr. Shindell, would it be possible to get
a list of the membership of the Alliance for Responsible
Atmospheric Policy? You have some pretty strong participants,
and I think it would help if there was a record of that.
Mr. Fay. Surely.
Senator Whitehouse. Thank you.
Dr. Shindell, if you please.
STATEMENT OF DREW SHINDELL, PH.D., PROFESSOR OF CLIMATE
SCIENCES, NICHOLAS SCHOOL OF THE ENVIRONMENT, DUKE UNIVERSITY
Mr. Shindell. Thank you for the opportunity to testify.
We have heard that the World Health Organization has
recently estimated that seven million die every year from poor
air quality, making it the leading environmental cause of
premature death worldwide. In many parts of the world, it is
the single leading cause for women and children. It is a silent
killer, but it is out there. In the United States it is
responsible for over 100,000 deaths per year.
Of all the sources of the emissions that lead to poor air
quality in the United States, coal burning is the single
largest, causing, by my calculations, about 47,000 premature
deaths per year. That happens to be larger than the total
number of Americans killed in all the years of the Vietnam War
by hostile fire. So we hear a lot up here on Capitol Hill about
things like the war on coal; what we forget is coal's war on
us. There is a heavy toll, not just from coal and not just in
terms of death from air quality. One hundred eighty thousand
non-fatal heart attacks per year, 150,000 cases of
hospitalization for respiratory and cardiovascular disease, all
of these health care costs are passed on to the American
people.
And it is not just the American people, it is American
business, 18 million lost work days every year due to poor air
quality, 11 million missed school days for our children. Air
quality is a pressing issue at the same time that climate
change's toll continues to mount.
The good news here is that there are solutions in many
cases, especially when it comes to the short-lived climate
pollutants that are the heart of this bill. In the study for
the U.N. environment program that I led, we found that
aggressive action to reduce methane and soot, along with the
related emissions that come out with soot, would, as we have
heard this morning, reduce climate change over the next, by
mid-century or so, by about half a degree. The climate has
already warmed by nearly a degree, and most of the nations of
the world have pledged to reduce, to keep the warming to about
2 degrees. So although half a degree may not sound like much,
it is really a big deal.
At the same time, the other benefits of targeting these
pollutants have enormous consequences. Over the next 25 years,
they would save about a billion tons of agricultural yield. In
the United States alone, more than a hundred million tons of
crop losses due to ozone pollution could be saved by phasing in
strong reductions in methane and soot and its related
emissions. Over a quarter million American lives could be saved
by phasing in these same aggressive measures to reduce
emissions of these pollutants.
I am gratified to see that the bill that has been proposed
and that we are discussing here today looks at many of the
exact same measures that were included in the study that I have
just quoted from, specifically targeting methane emissions from
the oil and gas industry, from coal mining and from municipal
waste, and targeting emissions of soot and related compounds
from diesel engines, from cook stoves and from small
industries.
It is also particularly important to look at emissions in
the Arctic, a particularly sensitive region of the planet to
warming, and a place where particles can have an extra powerful
effect on leading to a warming planet.
Some areas in particular, as Senator Boxer mentioned this
morning, have solutions where the finance and the industrial,
or the economic motivation is especially strong. In particular,
for the oil and gas sector, what is being proposed in many
cases is simply the best practices that are already put into
place by much of American industry being extended to the rest
of the industry that is not yet using those and around the
world. So sharing our technology, our industries' practices
that already have been shown to work, taking those and
spreading those around for the common benefit.
At the same time, use of low-sulfur fuels allows greater
control of particulate emissions. A recent study that we
completed on the use of kerosene for lighting in the developing
world shows that in many countries, for example in India,
kerosene is heavily subsidized by the government. The financing
required to adopt an alternative is already there and simply
needs to be redirected. U.S. leadership can help make that come
to pass.
I would just like to close by pointing out that we pay a
great deal of attention to problems and catastrophes when they
are local and when they occur suddenly. An example, the faulty
ignition switches in the General Motors cars. These killed
approximately 20 people, the precise number is still a bit
debated, over the last decade or so. At the same time, the cars
manufactured by GM produced air pollution that killed about
40,000 Americans. We don't pay attention to that nearly enough,
so I am grateful to see a bill that targets this pollution that
is leading to climate change, air quality, agricultural loss.
I thank you for your efforts.
[The prepared statement of Mr. Shindell follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Whitehouse. Thank you, Dr. Shindell.
Our next witness is Dr. Peiser. Please proceed, sir.
STATEMENT OF BENNY PEISER, DIRECTOR, THE GLOBAL WARMING POLICY
FOUNDATION
Mr. Peiser. Thank you. First of all, I would like to thank
the Chairman and committee for the opportunity to testify
before your committee on, and I make that absolutely clear, on
unilateral policies to tackle climate change, in particular
greenhouse gases. So I am not going to talk today about real
air pollution, but about the challenge to come to a global
policy which is the only policy that would actually tackle
greenhouse gases.
My name is Benny Peiser. I am the Director of the Global
Warming Policy Foundation, a non-partisan think tank based in
London. And as the name suggests, our main concern are the
policies adopted by governments. That is what I would like to
draw your attention to, particularly the experience we are
having in Europe with unilateral climate policies.
The European Union has long been committed to unilateral
efforts to tackle climate change, and in the last 20 years has
tried very hard, felt a duty to set a kind of example through
radical bills such as this one. We have had it, as I said, for
many, many years, very radical climate policymaking at home.
But it was just Europe.
As a result, European governments have advanced the most
expensive forms of energy at the expense of the least expensive
forms of energy. And about 14 years ago, the EU adopted the so-
called Lisbon Strategy with a goal of making ``Europe the most
competitive and dynamic knowledge-based economy in the world,
capable of sustainable economic growth and more embedded jobs
and greater social cohesion.'' In the same year, the EU also
adopted the European Climate Change Program, which developed
the EU implementation of the Kyoto Protocol.
Today, 14 years after having adopted these key policies,
the economies of most EU member states are stagnating or in
decline. Instead of sustainable economic growth, instead of
more jobs, instead of greater social cohesion, the OECD warned
last week that the crisis-ridden EU has become a major threat
to the world economy. So much for Europe becoming the most
competitive place on earth.
Europe's unilateral climate policies have played a crucial
role in the EU's economic decline. And it is this experience
with unilateral action that I want to focus upon. The other
thing is, even though Europe has managed to reduce
CO2 emissions domestically, this has only happened
because it shifted essentially energy-intensive and heavy
industries and their emissions overseas to nations where there
are no similar emission limits, where energy and labor is cheap
and which are now growing much faster than the EU. As a result,
Europe's manufacturers are rapidly losing ground to
international competition.
The EU's unilateral climate policies pose an existential
threat to Europe's industrial base. This threat is real, as the
EU's outgoing industry commissioner, Antonio Tajani, has warned
in no uncertain terms, that is the EU industry commissioner:
``We face a systemic industrial massacre. We need a new energy
policy. We have to stop pretending, because we can't sacrifice
Europe's industry for climate goals that are not realistic, and
are not being enforced worldwide.'' That is the crux of the
problem.
There is another problem, a problem that is hitting
Europe's poorest most, energy poverty. In the EU, hundreds of
billions of Euros for climate policies have been paid by
ordinary families and small and medium sized businesses in what
is undoubtedly one of the biggest wealth transfers from poor to
rich in modern European history. As wealthy homeowners and
landowners install wind turbines on land and solar panels on
their homes and commercial buildings, low income families all
over Europe have to foot skyrocketing electricity bills. This
winter, millions of poor families will have to choose between
eating and heating. And many can no longer afford to pay. So
the utilities are cutting off their power.
Let me conclude. Europe's climate policy has burdened
families and businesses with astronomical costs while shifting
its heavy industry and its CO2 emissions to other
parts of the world. The EU's climate fail demonstrates beyond
doubt in my view unilateral policies are a complete fiasco and
don't really solve anything. Europe is ground zero for failed
climate policy and here is a lesson: don't make the same
mistake or you will suffer the same consequences. Thank you.
[The prepared statement of Mr. Peiser follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Whitehouse. Thank you for your testimony, Dr.
Peiser.
Our final witness, Mr. Steve Moore. Please proceed.
STATEMENT OF STEPHEN MOORE, CHIEF ECONOMIST, INSTITUTE FOR
ECONOMIC FREEDOM AND OPPORTUNITY, THE HERITAGE FOUNDATION
Mr. Moore. Thank you, Senators, for the opportunity to
testify this afternoon.
I am the Chief Economist at the Heritage Foundation. I am
not an environmental expert, but I am an expert on what is
happening with the U.S. economy. I thought I would spend my
time and devote my remarks to how the fossil fuel revolution
that is going on in this Country has really so dramatically
changed the economic outlook in our States. I know some of you
represent States that are part of this oil and gas revolution
that has played such a vital part in our economic recovery.
Let me start by stating a simple fact that is almost
undeniable, that the whole world of energy production changed
almost overnight six or 7 years ago with the introduction of
shale oil and gas and the technologies that allow us to get at
oil and gas in the United States that has been stored there for
hundreds of thousands of years but we never had the technology
to get at it.
If you look at the chart in my testimony, the first chart,
you can see the ramifications of this for our energy production
and also our energy imports. This has been a seismic change.
The United States over the last 6 years has increased its oil
and gas output by almost 50 percent in the last 6 years. That
is something, by the way, that no one would have predicted
possible as recently as four or 5 years ago.
President Obama, just as recently as two or 3 years ago,
said the United States was running out of oil and gas. I would
amend that to say, Mr. President, with all due respect,
American isn't running out of oil and gas, we are running into
it big time. We have hundreds of years of supply.
You can also see the big reduction in imports, which is a
huge lift to the American economy.
The second point I would like to make is maybe the most
important, that without the shale oil and gas revolution, it is
quite possible the United States never would have exited the
recession. That is how important this energy revolution has
been to the American economy.
And if you look at the second chart in my testimony, I
think it underscores this point. If you look at all employment,
this goes through the end of 2013, you can see that virtually
on net, all the new jobs created in the U.S. economy over the
last six or 7 years have come from the oil and gas industry. We
just 2 months ago got to the point where in all industries
where we replaced all the jobs that were lost during the
recession. Without the oil and gas industry, we would have been
in a much, much worse situation and the recession would have
lasted much, much longer.
The third point I would like to make is that many people a
number of years ago bet on green energy. Dr. Peiser made a
great point on this, that European countries did go all in on
green energy 10 or 15 years ago and it hasn't worked. What you
are seeing is right now if you look at what is happening in
Germany, Germany's industrial production fell the last quarter.
This is the second quarter in a row that Germany has had net
zero industrial growth and many of the experts believe that one
of the reasons that German manufacturing and Germany industrial
production has fallen so dramatically, so far behind the United
States, is because of the fact that they are trying to use
green energy, which is much, much more expensive. When you are
competing in international markets and your energy prices are
much higher, you suffer.
By the way, I would make a side point that one of the real
strong elements of the U.S. economy today is the U.S. economy
is going through a manufacturing renaissance that a lot of
people would not have predicted. It is going on in Michigan, it
is going on in Indiana, my home State of Illinois, it is going
on in Ohio and Pennsylvania. A lot of this industrial
manufacturing rebound in autos and steel and other vital
industries like plastics and chemicals is a direct result of
the energy boom.
The next point I would like to make is that shale gas is
reducing U.S. greenhouse gas emissions. This is something that
most Americans are not aware of, because the media doesn't talk
a lot about this. But if you look over the last 10 years, the
United States has reduced our CO2 emissions more
than any other industrialized country that we compete with.
This is according to the U.S. Energy Information Agency, and
you can see in the chart that we have reduced our carbon
emissions. The EU has reduced their emissions but not as much
as we have. And of course, China and India are out through the
roof in their CO2 emissions.
The lesson here by the way is that when you shift to shale
gas, natural gas as a form of electricity production, you
dramatically reduce your greenhouse emissions. So the shale gas
is a wonder fuel, because it is cheap, it is abundant, it is
made in America and it is clean-burning.
In my last minute or so, I would like to make this point
about income inequality. As an economist, as you all know, this
has become one of the No. 1 issues for Americans, is the gap
between the rich and poor. One of the points I would like to
stress to you all is that by making anything that makes
electricity production more expensive, it makes it more
expensive for people to heat their home, makes their utility
bills more expensive, actually makes income inequality worse.
Because the poor spend a much higher fraction of their income
on electricity than the rich do.
So we ought to look at this energy boom as also something
that is reducing income inequality in the United States. By the
way, if we adopt policies and regulations that make electricity
more expensive, we are making the income inequality problem
worse.
Thank you.
[The prepared statement of Mr. Moore follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Whitehouse. Thank you very much, Mr. Moore. I
appreciate your testimony. I thank the entire panel for being
here.
Let me first ask Dr. Shindell, you testified that
aggressive reductions in methane and black carbon could
reducing warming rates over the next decade by about half. You
are at Duke University now, which is in North Carolina, which
has a coastline which is experiencing some sea level rise.
Could you correlate the reduced warming rates as a result of
reducing methane and black carbon emissions to the sea level
rise that we are seeing in Rhode Island and you are seeing down
in North Carolina?
Mr. Shindell. Yes, thank you.
Sea level rise is a cumulative process, as heat goes
steadily into the oceans. So it is a function of how much we
have changed climate or emitted things like carbon dioxide in
the past as well as our future emissions. So it would be
somewhat less than temperature, which is a bit of a faster
response. But it would be of similar magnitude, say on the
order of maybe 40 percent rather than 50 percent. So a very,
very large difference.
Senator Whitehouse. And you have been a scientist at NASA
for the last 20 years or so?
Mr. Shindell. Correct.
Senator Whitehouse. You were at the Goddard Institute, a
pretty prestigious place?
Mr. Shindell. Yes.
Senator Whitehouse. There is a theory that is brooding
around Congress that the science of climate change is being
fabricated by a global cabal of scientists who are eager to get
their hands on research grants and get attention. You been
watching the scientific discussion on climate change for many
years now from a very prestigious location. As you have watched
this debate develop, is there any truth to that theory that we
sometimes hear here?
Mr. Shindell. There is not only no truth to that theory,
there is overwhelming evidence to the contrary. Not only did I
work at a NASA institute, but NASA along with other space
agencies around the world launches the instruments, and we
watch the planet from satellites. We see everything all around
the world. And the satellites don't lie. They tell you that the
ice caps are shrinking. They tell you that the ocean is rising.
They tell you that the temperature is going up. They tell you
that the atmosphere is getting wetter as the air holds more
water vapor.
They even show that carbon dioxide is rising and they show
that methane is increasing. All of the things we are talking
about today.
It has been analyzed by independent science bodies from
almost every country in the world, almost everybody with
credibility, with expertise in the subject matter says that
yes, the evidence is overwhelming. The IPCC group sponsored by
nations around the world says that the evidence is unequivocal.
Senator Whitehouse. Not a word one usually hears in
science.
Mr. Moore, you founded the Free Enterprise Fund with the
well-known economist Dr. Arthur Laffer, who was associated with
the Reagan administration. Your bio on the Heritage Foundation
website identifies Dr. Laffer as having a profound influence on
your thinking. Dr. Laffer has supported a carbon fee on
economic grounds, if, big if, it is offset with reductions and
other taxes.
Mr. Moore. Right.
Senator Whitehouse. Let me quote him, what we had to say in
support: ``I do it for pure economics. I am worried about
economic growth in the United States and the creation of jobs,
output and employment. If you tax people who work, you are
going to get less people working. What the carbon tax would do
is remove the tax from people who work and put it on a product
in the ground. That would be very beneficial for the economy,
pure and simple.''
Do you agree with Dr. Laffer?
Mr. Moore. I am familiar with the repot that you are
talking about that Dr. Laffer put together. There is a big
debate among conservative free market economists about whether
a swap, where you taxed carbon and you reduce taxes on, say,
capital or work, would be something that would be economically
efficient. It is something I would certainly be open-minded to.
I would have to see the details of the plan. It is certainly
true, when you tax something, you want to tax bad things and
you want to lower taxes on good things. So work and effort and
capital investment are good things, and pollution is obviously
a bad thing. So if a deal were well constructed, it might be
something there might be bipartisan agreement on.
Senator Whitehouse. You said in your testimony shale gas is
reducing greenhouse gas emissions. Why is that a good thing?
Mr. Moore. Why is it?
Senator Whitehouse. Yes.
Mr. Moore. Well, because carbon emissions, as a goal we
want to reduce carbon emissions. I am not an expert on global
warming. But other experts here know far more than I do about
that.
Senator Whitehouse. And you don't dispute them? You believe
that reducing greenhouse gas emissions is a worthy goal?
Mr. Moore. Reducing carbon emissions?
Senator Whitehouse. Greenhouse gas emissions was the phrase
you used. So I am using your own words.
Mr. Moore. I think it probably should be a goal, and my
point, when you asked me why is it that we are reducing our
carbon emissions due to natural gas is because we are
converting, as you know, Senator, we are converting electricity
production in the United States away from coal and far more
toward natural gas. I think next year will be the first year we
produce actually more electricity from natural gas than from
coal. That has been a positive development.
Senator Whitehouse. The microphone now goes to the
distinguished Ranking Member, Senator Vitter of Louisiana.
Senator Vitter. Thank you, and thanks to all of our
witnesses. I am sorry I was late. I was on the floor to
actually help pass something into law, which doesn't happen
every day. I came here as soon as I could, and thank you for
all of your testimony.
I will start with Dr. Peiser. Thank you, Dr. Peiser,
particularly for traveling so far to be with us.
You brought up with me and my staff the serious concern of
the cycle of subsidies that seems to occur once renewable
energy mandates are initiated. How has subsidizing renewable
energy led to subsidizing other energy sources and industries
in Europe? Why does this seem to occur as a direct and natural
consequence of these climate regulations?
Mr. Peiser. The problem, a lot of unintended consequences
of well-intended policies occurred mainly because most
policymakers were told that the science is settled and
therefore the policies are settled. That is, I think, the
biggest problem in Europe, that with the kind of hammer of the
science, very poorly thought-through policies were adopted.
Regardless of the science, the policies make no sense. And even
a carbon tax, if I may say so, would not make any sense if it
is just adopted by the U.S. Because it has exactly the same
effect, that it would drive energy-intensive industries to
locations where there is no carbon tax. So a carbon tax would
only make sense if it were adopted universally so that there is
a level playing field.
In Europe, what has happened is because there is now a
situation where there is a lot of renewable energy which is
expensive because of the subsidies. But what it is happening,
and that is a risk that the U.S. faces even with cheap shale
gas, is that conventional power plants are no longer running
efficiently. They are only used, or many of them used for
backup or only 70 percent. They run uneconomically, they are
loss-making.
So what is happening in Europe, the governments in Europe
are now subsidizing conventional, have to subsidize
conventional power plants to keep them open, to keep the lights
on. Now that we have subsidized renewable and we have
subsidized conventional power plants, the energy price
obviously goes up dramatically, has doubled in the last 10
years by and large. And the industry comes and says, we can't
survive with these energy prices, so they are subsidized as
well.
That is the sad, sad situation based on well-intentioned
policies, policies that have caused a lot of damage, not just
to industry but also to a lot of families.
Senator Vitter. OK. And can you also discuss exactly how
the opt-out provisions of the new EU deal on climate works, and
if you believe member states are beginning to recognize the
economic challenges they face in looking for basically a way
out, at least in the face of China and India not having
anything similar or rigorous?
Mr. Peiser. We have for the first time that I can remember
a European leadership that seems to be more skeptical about
these policies than the U.S. Administration. I can't recall any
time that that has ever happened, because Europe always adopted
much more aggressive and much more green policies. Here, the EU
leaders have made their targets for 2030 conditional on a
legally binding U.N. agreement in Paris. And they have agreed
that unless there is this agreement that is binding, and I
understand there are now big problems even as we speak in Lima
about this very issue, the Europeans will revisit their
targets.
So the targets are conditional on a binding agreement,
whereas the U.S. Administration seems to be quite happy to go
it alone.
Senator Vitter. OK. And Mr. Moore sort of related to that
in terms of unilateral versus something else. Could you comment
on President Obama's recent deal with China and what did China
get out of the United States in the deal?
Mr. Moore. I am deeply skeptical that China will ever meet
these targets that were allegedly agreed to. Actually, if you
read the statement by the Chinese president, it says we intend
to do this, which is hardly an iron-clad agreement. If you look
at that chart, Senator, it is that chart on the third or so
page of my testimony, you can see that the last 10 years, while
we have reduced our carbon emissions by about 6 percent, China
has increased theirs by 156 percent. That doesn't sound like a
country that is getting very serious about reducing their
carbon emissions.
We do know that China is building substantial numbers of
new coal-burning power plants. They are buying a lot of coal
from the United States. They also, as I am sure you read, they
have a new agreement with Russia where they are going to spend
several hundred billion dollars on pipelines to pipeline oil
and gas from Russia into China. As I said in my testimony, that
doesn't sound like the actions of a country that intends to
substantially reduce its fossil fuels production.
Senator Vitter. And in fact, beyond that, couldn't an
argument be made that they almost have an incentive to increase
their peak several years out, because reductions are measured
from a peak?
Mr. Moore. Look, if their economy continues to grow at the
rate that it has, what has happened in China over the last 25
years, one of the great economic miracles of human history,
where they have been growing at a 12 to 13 percent compounded
rate. Not many economists think they can keep that up. But even
if their growth rate falls in half, they are still growing at 6
to 7 percent.
They are going to consume a whole lot, they are going to
need coal, they are going to need oil, they are going to need
gas, they are going to need nuclear power. And they may also
use green energy as well if it can be done and produced in a
way that is cost-efficient. I think the point that Dr. Peiser
and I are making is that right now it is not cost-efficient. It
is substantially higher in cost to generate electricity from
wind and solar than it is from coal, natural gas and nuclear
power.
Senator Vitter. OK, thank you.
Senator Whitehouse. Senator Merkley and then Senator
Boozman.
Senator Merkley. Thank you.
Dr. Moore, you are familiar as an economist with the
concept of externalities. In Oregon right now we are seeing a
fire season that has grown by about 60 days over a couple of
decades. We are seeing greater pine beetle damage to our
forests. We are seeing problems with the reproduction of
seafood, particularly oysters, because of the 30 percent more
acidic ocean water. And we have a great drop in the snow pack
in the Cascades, which is leading to significant water
shortages in the Klamath Basin.
These are externalities that it didn't sound to me like you
have calculated into your analysis. Why is that?
Mr. Moore. You are right, there are externalities with any
form of energy production, no question about it. So the
tremendous amount of water that is used by modern drilling
techniques is certainly a cost. As I said, there are costs to
nuclear power in terms of the risk of accidents, there are
costs from oil in terms of oil spills. Obviously wind and solar
have external costs as well. We have to kind of balance in the
cost and the benefits.
You are quite right, taking in those costs may reduce some
of the benefit that I documented by some degree, but not
substantially in my opinion. Because we are talking about
costs, for example, of energy production from coal and natural
gas that is very substantially lower than the cost of
producing, say, from windmills or solar paneling.
Senator Merkley. I would certainly encourage you to
actually look at these externalities seriously. For example,
the impact on coral reefs around the world from the greater
acidity and the warmer oceans is having a big impact on
fisheries around the world. Just these examples, they are
multitudinous. And when you add up the costs, it suggests that
maybe the calculation is that the costs do exceed the benefit.
These are not captured in the price of carbon burning.
I wanted to turn to Dr. Shindell. I read recently, and you
mentioned space-based analysis of what is going on on the
earth. I believe that I read about satellite data that was
related to tracking methane concentrations. I think it referred
to a methane bubble in areas where fracking has occurred. There
is enough fugitive methane from fracking that it has started to
become detectable. Are you familiar with that particular part
of the problem?
Mr. Shindell. Yes, thank you. What we heard before was that
natural gas has a lower greenhouse gas emission than coal. In
fact, what is really the case is natural gas has lower carbon
dioxide emissions than coal. But methane is a much more
powerful greenhouse gas, and hence the focus of part of this
bill. Indeed, it only takes a few percent methane leakage to
more than offset any benefits that you get from carbon dioxide.
So industry tends to report, and in many cases it seems
accurate, that their leak rates are extremely low from oil and
gas operations, often less than 1 percent.
However, when you measure from aircraft flying overhead, or
look down from satellites, often you see far larger methane
amounts that are very inconsistent with those estimates derived
from industry. They imply several percent.
In fact, you even see places like some towns in Wyoming
that have severe ozone levels, greater than, say, New York or
Los Angeles, even though there is not a lot of industry, there
are not a lot of vehicles. So it is clearly all the pollution
coming from the oil and gas extraction operations in the
vicinity.
So that is the beauty of having these space-based
observations. Researchers are not allowed to go in except where
industry permits them to take measurements at the wellhead, at
the gas facility. But from the air, you can really see that
there are at least, in many cases, or at least in some cases,
there are extremely high levels, which means that natural gas
is actually contributing more to climate change than coal.
But again, we have the technology to clean it up. So if we
use best practices that are in place in some places, if we use
those elsewhere, we could really make a big difference.
Senator Merkley. Thank you.
Mr. Fay, by various analyses, there is a translation of, if
you will, gigatons of carbon dioxide that translates into
certain parts per mission, about eight gigatons, translates
into one part per million in the atmosphere. And by some
calculations, to have a 50 percent probability of staying
within the 2 degrees Centigrade, we can only burn about 500 to
600 gigatons, or create that much carbon dioxide by burning
fossil carbon.
If you look at it that way, and on our current trend, we
would expend that entire carbon budget within 16 to 20 years.
Is that a reasonable way of looking at this particular issue?
Mr. Fay. I am not the carbon guy, but I guess I would have
to say that from the industry perspective, we have tried to
look at this at longer than a 16 to 20 year timeframe. Because
some of these are very long-term issues to resolve. The
Montreal Protocol that we have dealt with in the ozone-
depleting compounds is now almost 30 years old. And we have
identified paths forward for reducing the HFCs that are
substitutes that are out there and growing rapidly between now
and 2050. It can be done in a cost-effective way, it can
increase energy efficiency which can help reduce carbon dioxide
output as well.
But I think it is important to take a long-term view in
terms of what is achievable and identify goals and objectives
that you can reach. I think that is what the industries that
are involved in the HFC side have done and have proposed.
Senator Merkley. Mr. Fay, thank you very much.
Senator Whitehouse. Senator Boozman.
Senator Boozman. Thank you, Mr. Chairman.
Mr. Moore, you mentioned the problem of income inequality
being made worse by high electricity prices impacting single
moms, people on fixed incomes. Can you talk a little bit about
heavy manufacturing, what that would do to jobs? It sounded
like in Mr. Peiser's testimony that in Europe, you have a
situation where they are moving jobs offshore to beat the
standards that are on them. Here, it looks to me like you have
a possibility of meeting the standards, but also in this global
economy making it such that without that on you, then your cost
point would make it such that you could be competitive.
Can you talk a little bit about that? And the other thing,
too, is you have a dirtier world than ever because they are
moving them to places where they are not going to do what we
do, and we can be proud of our reductions, and we need to
continue our reductions. But they are not going to do what we
do, and what Europe has done.
Mr. Moore. So let me answer the first part of our question,
which is about this issue of inequality. The big story of the
U.S. economy over the last six to 8 weeks, of course, has been
the massive and dramatic reduction in gasoline prices. We know
why that is happening, gasoline prices are falling primarily
because the United States output has increased so
significantly.
Now, I just did the calculations on this, Senator. Every
time the gasoline price at the pump falls by one penny, by one
penny, that is a $1 billion tax cut for the American consumer.
So that means that low income people who don't have to spend
$70 to fill up their tank, but are only spending say, $50,
because we had a 40 percent reduction in the gasoline price,
that means they could spend it on other things. I think
Christmas sales are going to be high as a result of these
reductions in gas prices.
So this is a big stimulus to the economy. My point was, the
people who benefit the most are people at the bottom, because
they are paying three to four times the percentage of their
income on electric utilities than a wealthy person.
Now, the other point that is related to this, which I find
interesting, you here in the Senate debate oftentimes the Low
Income Heating and Energy Assistance Program, that is a big
program of importance in the State of Rhode Island. There have
been some calculations, I can get you the studies on this, that
show that the reduction in the natural gas price, because of
fracking and horizontal drilling, that reduction in the price
in terms of utilities, that has benefited poor, low income
Americans, the bottom fifth, to three times as much as the Low
Income Heating and Energy Assistance Program.
So think of this gas boom as three times more important for
low income people than LIHEAP. So that is a big benefit to the
poor.
I think Dr. Peiser could probably answer the second part of
your question better than I can.
Senator Boozman. About heavy manufacturing moving overseas
and how that affects jobs.
Mr. Peiser. Well, we all know what happened to the textile
industry in Europe. It doesn't exist anymore, because it went
to cheap labor countries. And there was a big piece in the
Financial Times last week saying, cheap energy is the new cheap
labor. Manufacturing that requires a lot of energy moves to
countries where energy is cheap. That is happening now. The
European policymakers are desperate, not because of energy
poverty and inequality, they never care about that, but that
the industry now is moving away and that European companies,
instead of investing in Europe, are investing in North America
because of cheap energy. That drives them crazy.
And the other thing is that in Germany, heavy industry is
subsidized to the tune of $3 billion Euros per year. So they
are essentially exempt from the energy price that the ordinary
families have to pay.
So ordinary families and small businesses are hit twice
over. First they have to pay for the extremely high energy
price and then they have to pay for the subsidies for the
industry, just to stay there.
As I said in my testimony and I have explained it in more
detail, if you ever wanted to develop a policy that is most
damaging to your country and to your industry, you couldn't
make a better policy than the one Europeans have adopted. It is
as dramatic as that. And for the first time, European leaders
are willing to speak out. This was a taboo issue in Europe. It
is not like in the U.S. I understand in the U.S. it is a very
partisan issue, very, very heavily debated. In Europe, it was
whole party, complete consensus and no one dared ask awkward
questions. This has changed. People are beginning to ask these
questions, why did we do that and why did no one else follow
us.
Senator Boozman. Thank you, Mr. Chairman. I don't think
anybody on this panel minds asking awkward questions.
Senator Whitehouse. Thank you, Senator Boozman.
I appreciate very much the testimony of the witnesses. I
would ask unanimous consent that my opening statement be made a
part of the record, which it was not, because I was not here at
the beginning.
[The prepared statement of Senator Whitehouse follows:]
Statement of Hon Sheldon Whitehouse, U.S. Senator
from the State of Rhode Island
Good afternoon. Thank you Chairman Boxer and Ranking Member
Vitter for holding this important hearing, and to Senator
Murphy [and Senator Collins if she attends] for joining us
today and working across the aisle on the Super Pollutants Act.
I am pleased to be an original co-sponsor of the bill and hope
to see more practical and bipartisan legislation to protect the
environment and manage the ever-worsening problem of climate
change.
Climate change is a clear and present danger for the
American public and the world. Measurements of the atmosphere
and oceans reveal dramatic, even unprecedented, changes in the
climate. According to the National Oceanic and Atmospheric
Administration, the first 10 months of 2014 have been the
hottest since record keeping began, and 2014 is on track to be
the hottest year on record. We're already seeing that unchecked
emissions of greenhouse gases are pushing the climate into new,
costly, and potentially dangerous territory.
While we cannot ignore the dominating effect of carbon
pollution on the climate, super pollutants like HFCs, black
carbon, and methane also contribute to the problem. These super
pollutants trap much more heat, ton-for-ton, than carbon
dioxide.
Let's consider methane. The latest scientific findings show
that the warming potential of methane is 28 times that of
carbon pollution when measured over 100 years and 84 times
greater over 20 years. Methane is also the second most abundant
greenhouse gas emitted by human activities after carbon
pollution, and the bulk of U.S. emissions--about 30 percent--
are from oil and natural gas production.
Methane that's leaked, vented and flared from oil and gas
systems pollutes the environment and wastes a finite resource.
Methane is, after all, the principal component of natural gas.
Oil and gas producers who fail to prevent emissions of methane
are wasting energy and losing potential profits. According to
Ceres, in 2012 alone, North Dakota oil and gas producers flared
more than $1billion worth of natural gas in the Bakken.
Addressing methane emissions from oil and gas production and
distribution will provide significant economic and
environmental benefits.
Some super pollutants are also linked to diminished air
quality and threaten public health. For example, the list of
health effects from black carbon exposure includes asthma,
bronchitis, lung cancer, and premature death. In my home State
of Rhode Island, the number of children and adults that suffer
from asthma are both higher than the national average. We also
have one of the highest rates for lung cancer in the Northeast.
Lost school and work days, as well as the costs of inhalers and
emergency room visits, add up. Reducing black carbon emissions
has traditionally enjoyed bipartisan support in this committee
and I believe this bill provides us another opportunity to work
together in a bipartisan manner to address this public health
threat.
Until there is an economy-wide price on carbon pollution,
methane, and other greenhouse gases, we need to use all the
tools at our disposal to deal with climate change. This bill
aims to do just that. By supporting common-sense measures to
reduce the emissions of these powerful greenhouse gases, it can
help us reduce the threat of climate change and improve
environmental quality.
Thank you Chairman Boxer and Ranking Member Vitter for
holding this hearing, and to our distinguished panel of experts
for joining us today to help us understand to the risks of
super pollutant emissions as well as how we stand to benefit
from reducing them.
Senator Vitter. Mr. Chairman, if I could follow you with
the same unanimous consent, request for my opening statement.
Senator Whitehouse. Absolutely. That will be done.
Senator Whitehouse. And there is a Politifact that was done
with respect to the minority leader's statement that the U.S.-
China climate deal means China won't have to do anything for 16
years. And the conclusion of Politifact was that that was a
mostly false statement. I ask unanimous consent that the
relevant Politifact be made a part of the record as well.
Without objection.
[The referenced information follows:]
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Senator Whitehouse. Anything further to be made a part of
the record?
The record of the hearing will remain open for an
additional 2 weeks for anything else that anybody cares to add.
I know Mr. Fay is going to be sending us the list of his
membership. I appreciate very much the association's testimony
in support. I know a lot of work went into this.
This was a potentially kind of an interesting breakthrough
moment, to have a bipartisan bill that actually addresses
climate change. So I will close by remarking on that. I think
that is a good sign that the wall that has divided us is
starting to come down in a few ways, the reality of climate
change is being acknowledged, the forcing role of greenhouse
gases is being acknowledged and now we are debating solutions,
which I think is a much healthier conversation than having
parallel realities.
With that, we will be adjourned.
[Whereupon, at 3:29 p.m., the hearing was adjourned.]
[Additional material submitted for the record follows.]
Statement of Hon. Thomas R. Carper, U.S. Senator
from the State of Delaware
I would like to thank the Chairman for holding this hearing
and thank Senators Murphy and Collins for their legislation
that addresses so called short-lived climate pollutants.
I've been working across the aisle for years to address
many of these pollutants and welcome this legislation.
Pollutants such as HFCs and black carbon are called short-
lived climate pollutants because they don't stay in the air for
a long time. But despite their short time in the air, we know
they do great damage to our health and to our climate.
That is why reducing these harmful pollutants are a win-
win-win. We lessen the threats posed by climate change; we
improve public health; AND we create economic opportunities in
this country.
And though short-lived climate pollutants isn't the easiest
thing to say, some of these pollutants are the easiest and most
cost effective climate pollutants to clean up.
For example, the No. 1 source of black carbon in the United
States is old, dirty diesel engines. We can retrofit or replace
these old, diesel engines with new, American-made technology
and reduce black carbon emissions by more than 90 percent.
Without assessing climate benefits, our diesel retrofit
programs authorized through the Diesel Emissions Reduction Act
are some of the most cost-effective clean air programs we have
today. In fact, DERA provides more than $13 in health and
economic benefits for every Federal dollar spent.
I've been proud to work with former Senator Voinovich and
Senator Inhofe on reducing black carbon pollution from our
diesel engines.
This bill takes another approach to addressing black carbon
and I look forward to hearing more.
Before I finish, I would be remiss not to mention the
benefits of reducing the short-lived climate pollutant called
hydrofluorocarbons--or HFCs. I am pleased to see language in
this bill that addresses these pollutants.
As many of you remember, in the 1970's and 80's we faced
another global environmental crisis--there was a hole in the
ozone and it was growing at an alarming rate. Most scientists
believed many of the compounds used globally in refrigerants,
aerosols and solvents were to blame.
As a result, the global community came together to phaseout
ozone depleting compounds --known as the Montreal Protocol.
Since the ratification of the Montreal Protocol, we have seen a
97 percent reduction in the global consumption of controlled
ozone depleting substances.
Because HFCs are easy to use, efficient, and safe for the
ozone many countries, including ours, transitioned ozone-
depleting substances to HFCs. Unfortunately, HFCs have a high
global warming potential.
If HFCs usage continues unchecked, HFCs could account for
approximately 20 percent of greenhouse gas pollution by 2050.
So by using HFCs, we are address one global environmental
problem, while contributing to another.
Luckily, companies in this country are already producing
replacements for HFCs that can be used just as safely without
damaging our climate.
Since 2007, I've worked with my colleagues, stakeholders
and the EPA to find a glide path to reduce the usage of HFCs in
this country. Although we haven't passed legislation, I am
heartened to see the Administration work with industry and the
international community to reduce HFCs here at home and
globally.
In closing, I believe the Murphy-Collins legislation is an
important next step to building on the work we've done here at
home--through programs like DERA--and globally to reduce short-
term climate pollutants
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