    [Senate Hearing 114-53]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-53

     THE IMPACTS OF EPA'S PROPOSED CARBON REGULATIONS ON ENERGY COSTS FOR
    AMERICAN BUSINESSES, RURAL COMMUNITIES AND FAMILIES, AND A LEGISLATIVE
                               HEARING ON S. 1324

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

                                    HEARING

                                   before the

                           SUBCOMMITTEE ON CLEAN AIR
                               AND NUCLEAR SAFETY

                                     of the

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 JUNE 23, 2015

                                   __________

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

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

           Available via the World Wide Web: http://www.gpo.gov/fdsys

                                   __________

                             U.S. GOVERNMENT PUBLISHING OFFICE

    95-744 PDF                     WASHINGTON : 2015
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                              Washington, DC 20402-0001

                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                        ONE HUNDRED FOURTEENTH CONGRESS
                                 FIRST SESSION

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

                     Ryan Jackson, Majority Staff Director
                   Bettina Poirier, Democratic Staff Director
                                  ----------

                  Subcommittee on Clean Air and Nuclear Safety

                 SHELLEY MOORE CAPITO, West Virginia, Chairman
    DAVID VITTER, Louisiana              THOMAS R. CARPER, Delaware
    JOHN BARRASSO, Wyoming               BENJAMIN L. CARDIN, Maryland
    MIKE CRAPO, Idaho                    BERNARD SANDERS, Vermont
    JEFF SESSIONS, Alabama               SHELDON WHITEHOUSE, Rhode Island
    ROGER WICKER, Mississippi            JEFF MERKLEY, Oregon
    DEB FISCHER, Nebraska                EDWARD J. MARKEY, Massachusetts
    JAMES M. INHOFE, Oklahoma (ex        BARBARA BOXER, California (ex
        officio)                             officio)

                                C O N T E N T S

                                  ----------
                                                                       Page

                                 JUNE 23, 2015
                               OPENING STATEMENTS

    Capito, Hon. Shelley Moore, U.S. Senator from the State of West
      Virginia.......................................................     1
    Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..    98
    Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma,
      prepared statement.............................................   264

                                   WITNESSES

    Trisko, Hon. Eugene M., Attorney at Law, on behalf of the United
      Mine Workers of America........................................     4
        Prepared statement...........................................     6
        Response to an additional question from Senator Capito.......    21

    Cicio, Paul, President, Industrial Energy Consumers of America...    25
        Prepared statement...........................................    27

    Alford, Harry, President and CEO, National Black Chamber of
      Commerce.......................................................    65
        Prepared statement...........................................    67

    Martens, Joseph J., Commissioner, New York State Department of
      Environmental Conservation.....................................    75
        Prepared statement...........................................    77

    Rice, Mary B., M.D., MPH, Instructor in Medicine, Harvard Medical
      School, Division of Pulmonary, Critical Care and Sleep Medicine    84
        Prepared statement...........................................    86

     THE IMPACTS OF EPA'S PROPOSED CARBON REGULATIONS ON ENERGY COSTS FOR
    AMERICAN BUSINESSES, RURAL COMMUNITIES AND FAMILIES, AND A LEGISLATIVE
                               HEARING ON S. 1324

                                  ----------

                             TUESDAY, JUNE 23, 2015

                                   U.S. Senate,
             Committee on Environment and Public Works,
                  Subcommittee on Clean Air and Nuclear Safety,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 2:05 p.m. in
    room 406, Dirksen Senate Building, Hon. Shelley M. Capito
    (chairman of the subcommittee) presiding.
        Present: Senators Capito, Carper, Barrasso, Crapo,
    Sessions, Fischer, Merkley, Markey, and Inhofe.

            OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO,
              U.S. SENATOR FROM THE STATE OF WEST VIRGINIA

        Senator Capito. I am going to go ahead and begin.
        I know Senator Carper is planning to be here. When he gets
    here, we will make time for him to make his opening statement.
    In the interest of the panelists and other Senator, I think it
    would be best to go ahead and move on.
        I want to welcome everyone to the hearing of the Clean Air
    and Nuclear Safety Subcommittee. The hearing is entitled The
    Impacts of EPA's Proposed Carbon Regulations on Energy Costs
    for American Businesses, Rural Communities and Families, and a
    Legislative Hearing on my bill, S. 1324, better known as the
    ARENA Act, Affordable Reliable Electricity Now Act.
        I introduced ARENA in May and am proud to have more than 30
    co-sponsors, including Leader McConnell, Chairman Inhofe, and
    all my fellow Environment and Public Works Committee
    Republicans. I introduced ARENA and am holding this hearing
    today because of the devastating impact that EPA's proposed
    regulations will have on the families and businesses in my home
    State of West Virginia and across the Nation.
        I am not exaggerating when I say almost every day back home
    in West Virginia, there are new stories detailing closed
    plants, lost jobs, and price increases. I have a letter here
    sent to me by Ammar's Inc., a family owned company that
    operates 19 Magic Mart stores in West Virginia, Virginia and
    eastern Kentucky. The letter is accompanied by a petition
    signed by 26,000 Magic Mart customers, calling on EPA to end
    its war on coal and catastrophic impact on local economies.
        Ammar's Inc. has been active in the region for 95 years,
    and according to this letter, the present economic crunch is
    the most difficult challenge the company has faced. Let me
    quote directly: ``There was a time when your greatest obstacle
    was your competitor, but if you worked hard, took care of your
    customers and offered quality merchandise at a fair price, you
    could compete successfully. Unfortunately, that is now not the
    case. The largest impediment we have to operating our business
    successfully is our own government, particularly the EPA. The
    rulings issued by the EPA have devastated our regional
    economy.''
        Coal provided 96 percent of West Virginia's electricity
    last year. West Virginia had among the lowest electricity
    prices in the Nation. The average price was 27 percent below
    the national average, but that advantage will not survive this
    Administration's policies. Studies project our electricity
    prices will between 12 and 16 percent.
        Earlier this month, 450,000 West Virginians learned of a 16
    percent increase in the cost of electricity. While there were
    multiple factors that contributed to this rate increase,
    compliance with previous EPA regulations played a significant
    part. If we allow EPA's plan to move forward, last week's rate
    increase will only be the tip of the iceberg.
        Affordable energy matters. The 430,000 low and middle
    income families in West Virginia, nearly 60 percent of our
    State's households, take home an average of less than $1,900 a
    month and spend 17 percent of their after-tax income on energy.
    These families are especially vulnerable to the price increases
    that will result from the Clean Power Plan.
        This is not just about the impacts on coal producing States
    like West Virginia. This is about the impacts across the United
    States.
        It is important to note that all electricity has to come
    from somewhere. In many States, odds are that it is being
    imported from a State that relies on coal, but no one talks
    about that.
        We will learn from some of the testimony about the Regional
    Greenhouse Gas Initiative, RGGI. One of the witnesses we will
    hear from today, Mr. Martens, thank you for coming, is
    affiliated with RGGI, a program of nine northeastern States
    that uses market principles to reduce greenhouse gas emissions
    from the power sector.
        Mr. Martens may not mention that RGGI's nine States consume
    five times more energy than they produce. My little State of
    West Virginia produces twice as much energy as all nine of the
    RGGI States combined.
        There are energy-producing States and there are energy-
    consuming States. Only 13 States produce more energy than they
    consume. West Virginia ranks second and Wyoming ranks first.
    For 10 of the 13 States that export energy, coal is critical to
    maintaining that net positive result.
        Put simply, there is no way that this massive, largely EPA-
    driven reduction in coal-fired electricity generation is going
    to impact only coal States. It is going to impact the majority
    of States, the families and businesses within them. Often, the
    poorest and most vulnerable populations will bear the brunt of
    this increase.
        I look forward to hearing in greater detail from our
    witnesses about the impact of these proposed regulations and
    the need for clean air policies that do not overburden our
    States and cripple our economy.
        With that, we will begin testimony of our panelists. Our
    first panelist is Mr. Eugene M. Trisko. Welcome and thank you
    for coming.
        [The prepared statement of Senator Capito follows:]

                    Statement of Hon. Shelley Moore Capito,
                  U.S. Senator from the State of West Virginia

        Welcome to this hearing of the Clean Air and Nuclear Safety
    Subcommittee entitled ``The Impacts of EPA's proposed Carbon
    Regulations on Energy Costs for American Businesses, Rural
    Communities and Families, and a legislative hearing on S.
    1324''. S. 1324 is better known as the Affordable Reliable
    Electricity Now Act, or ARENA. I introduced ARENA in May and am
    proud to have more than 30 cosponsors, including Leader
    McConnell, Chairman Inhofe, and all my fellow EPW Republicans.
        I introduced ARENA and am holding this hearing today
    because of the devastating impact that EPA's proposed
    regulations will have on the families and businesses in my home
    State and across the Nation. I am not exaggerating when I say
    almost every day back home in West Virginia, there are new
    stories detailing plants closed, jobs lost, and price
    increases.
        I have a letter here sent to me yesterday from Ammar's
    Inc., a family owned company that operates 19 Magic Mart stores
    in West Virginia, Virginia and Kentucky. The letter is
    accompanied by a petition signed by 26,000 Magic Mart
    customers, calling on EPA to end its war on coal and
    catastrophic impact on local economies.
        Ammar's Inc. has been active in the region for 95 years,
    and according to this letter, the present economic crunch is
    the most difficult challenge the company has faced. Let me
    quote directly:
        ``There was a time when your greatest obstacle was your
    competitor, but if you worked hard, took care of your customers
    and offered quality merchandise at a fair price, you could
    compete successfully. Unfortunately, that is now not the case.
    The largest impediment we have to operating our business
    successfully is our own government, particularly the EPA. The
    rulings issued by the EPA have devastated our regional
    economy.''
        Coal provided 96 percent of West Virginia's electricity
    last year. West Virginia has among the lowest electricity
    prices in the Nation: last year, the average price was 27
    percent below the national average. But that advantage will not
    survive this Administration's policies. Studies have projected
    the Clean Power Plan will raise electricity prices in West
    Virginia by between 12 and 16 percent.
        Earlier this month, 450,000 West Virginians learned of a 16
    percent increase in the cost of electricity. While there were
    multiple factors that contributed to this rate increase,
    compliance with previous EPA regulations played a significant
    part. If we allow EPA's plan to move forward, last week's rate
    increase will only be the tip of the iceberg.
        Affordable energy matters. The 430,000 low and middle
    income families in West Virginia--nearly 60 percent of our
    State's households--take home an average of less than $1900 a
    month and spend 17 percent of their after tax income on energy.
    These families are especially vulnerable to the price increases
    that will result from the Clean Power Plan.
        But this isn't just about the impacts on coal producing
    States like West Virginia. This is about the impacts across the
    United States.
        It is important to note that all electricity has to come
    from somewhere. In many States, odds are that it is being
    imported from a State that relies on coal. But no one is
    talking about that.
        Turning to the Regional Greenhouse Gas Initiative (RGGI)
    States. One of the witnesses we will hear from today, Mr.
    Martens, is affiliated with RGGI, a program of nine
    northeastern States that uses market principles to reduce
    greenhouse gas emissions from the power sector. Mr. Martens
    probably won't mention that RGGI's nine States consume five
    times more energy than they produce. Or that my little State of
    West Virginia produces twice as much energy as all nine of the
    RGGI States combined.
        There are energy producing States, and there are energy
    consuming States. Only 13 States produce more energy than they
    consume. West Virginia ranks second, behind only Wyoming. And
    for 10 of the 13 States that export energy, coal is critical to
    maintaining that net positive result.
        Put simply, there is no way that this massive, largely EPA-
    driven reduction in coal fired electricity generation is going
    to impact only coal States. It's going to impact the majority
    of States, and the families and businesses within them. Often,
    the poorest and most vulnerable populations will bear the brunt
    of this increase.
        I look forward to hearing in greater detail from our
    witnesses about the impact of these proposed regulations and
    the need for clean air policies that don't over burden our
    States and cripple our economy.

    STATEMENT OF HON. EUGENE M. TRISKO, ATTORNEY AT LAW, ON BEHALF
                 OF THE UNITED MINE WORKERS OF AMERICA

        Mr. Trisko. Thank you very much, Chairman Capito, Chairman
    Inhofe and distinguished members.
        I am Eugene Trisko, an energy economist and attorney in
    private practice. I am here today to summarize the findings of
    a study of the impacts of energy costs on American families.
        I have conducted household energy cost studies periodically
    since 2000 for the American Coalition for Clean Coal
    Electricity and its predecessor organizations. The study I will
    summarize today, Energy Cost Impacts on American Families,
    estimates consumer energy costs for households in 2016.
        The principal findings of this study are as follows. One,
    some 48 percent of American families have pre-tax annual
    incomes of $50,000 or less, with an average after-tax income
    among these households of $22,732 or a take-home income of less
    than $1,900 per month.
        Second, 48 percent of households earning less than $50,000
    devote an estimated average of 17 percent of their after tax
    incomes to residential and transportation energy. Energy costs
    for the 29 percent of households earning less than $30,000
    before taxes represent 23 percent of their after-tax family
    incomes, before accounting for any energy assistance programs.
    This 23 percent of income is more than three times higher than
    the 7 percent of gross income paid for energy by households
    earning more than $50,000 per year.
        Third, American consumers have benefited recently from
    lower gasoline prices, but higher oil prices are now reducing
    consumer savings at the gas pump. Meanwhile, residential
    electricity prices are continuing to rise. Residential
    electricity represents 69 percent of total household utility
    bills.
        A 2011 survey of low-income households for the National
    Energy Assistance Directors Association reveals some of the
    adverse health and welfare impacts of high energy costs. Low-
    income households reported these responses to high energy
    bills.
        Twenty-four percent went without food for at least 1 day.
    Thirty-seven percent went without medical or dental care.
    Thirty-four percent did not fill a prescription or took less
    than the full dose. Nineteen percent had someone become sick
    because their home was too cold. The relatively low median
    incomes of minority and senior households detailed in the study
    attached to my statement indicate that these groups are among
    those most vulnerable to energy price increases.
        Recent and prospective increases in residential energy
    costs should be assessed in the context of the long-term
    declining trend of real income among American families. The
    U.S. Census Bureau reports that the real pre-tax incomes of
    American households have declined across all five income
    quintiles since 2001, measured in constant 2013 prices. The
    largest percentage losses of income are in the two lowest
    income quintiles. In 2014, the average price of residential
    electricity in the U.S. was 32 percent above its level in 2005,
    compared with the 22 percent increase in the Consumer Price
    Index.
        DOE projects continued escalation of residential
    electricity prices due to the cost of compliance with
    environmental regulations and other factors. Moreover, DOE,
    EPA, NERA and others project that electricity prices will
    increase even more because of EPA's proposed Clean Power Plan.
        Lower income families are more vulnerable to energy cost
    increases than higher income families because energy represents
    a larger portion of their household budgets. Energy costs
    reduce the amount of income that can be spent on food, housing,
    health care and other basic necessities.
        Fixed income seniors are among the most vulnerable to
    energy cost increases due to their relatively low average
    incomes and high per capital energy use. Senior citizens and
    other low income groups will bear the burden of higher energy
    costs imposed by EPA's Clean Power Plan but will be among the
    least likely to invest in or to benefit from the energy
    efficiency programs the proposed rule envisions.
        Thank you for the opportunity.
        [The prepared statement of Mr. Trisko follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you very much.
        Our next witness is Paul Cicio, President of the Industrial
    Energy Consumers of America. Welcome.

    STATEMENT OF PAUL CICIO, PRESIDENT, INDUSTRIAL ENERGY CONSUMERS
                               OF AMERICA

        Mr. Cicio. Thank you, Chairman Capito, Ranking Member
    Carper and members of the subcommittee. Thank you for this
    opportunity.
        The Industrial Energy Consumers of America is a trade
    association whose members are exclusively large companies who
    are energy intensive trade exposed. These industries, often
    referred to as EITE industries, consume 73 percent of the
    manufacturing sector's use of electricity and 75 percent of the
    natural gas. As a result, small changes in energy prices can
    have relatively large impacts to our global competitiveness.
        As a manufacturing sector, we use 40 quads of energy and
    this has basically not changed in 40 years. Meanwhile,
    manufacturing output has increased 761 percent. This is a true
    success story.
        The industrial sector is the only sector of the economy
    whose greenhouse gas emissions are 22 percent below 1973
    levels. These industries are very energy efficient. IECA
    supports action to reduce greenhouse gas emissions so long as
    it does not impact our competitiveness. We must have a level
    playing field with our global competitors.
        Several countries we compete with control electric and
    natural gas prices to their industrials. Two of them are China
    and Germany. They provide subsidies and practices to give them
    competitive advantages.
        If we were military, one would say we are engaged in hand
    to hand combat in competitiveness. All costs of unilateral
    action by the United States through the Clean Power Plan will
    be passed on to us, the consumer.
        As proposed, the Clean Power Plan will dramatically
    increase the costs of power and natural gas, accomplish little
    to reduce the threat of global climate change and provide
    offshore competitors an economic advantage, potentially
    creating an industrial greenhouse gas emission leakage with
    harmful effect to the middle class, the economy and the
    environment.
        The EPA cannot look at the Clean Power Plan in isolation
    from the significant cumulative cost that it will impose on the
    industrial sector either directly or indirectly through a
    number of recent rulemakings.
        Since 2000, the manufacturing sector is still down 4.9
    million jobs. Since 2010, manufacturing employment has
    increased 525,000 jobs. We are still in the early stages of
    recovery. We do fear that the Clean Power Plan and also the
    ozone rule are going to threaten this recovery.
        In contrast, for example, China, our primary competitor,
    has increased employment by 31 percent since 2000. The U.S.
    manufacturing trade deficit since 2002 has grown $524 billion,
    70 percent with one country, China.
        China's industrial greenhouse gas emissions have risen over
    17 percent since 2008 alone. China produces 29 percent more
    manufactured goods than we in the United States and emits 317
    percent more CO2. That is over three times the
    amount of CO2 than the U.S. industrial sector.
        Despite our low greenhouse gas emission levels, the EPA
    will increase our costs and will make it easier for China's
    carbon intensive products to be imported, which means the Clean
    Power Plan will be directly responsible for increasing global
    emissions.
        There are consequences to increasing energy costs on the
    industrial sector and it is called greenhouse gas leakage. The
    EPA has failed to address this issue and thus, the costs are
    under-estimated. For example, when a State's electricity costs
    rise due to the Clean Power Plan, companies with multiple
    manufacturing locations will shift their production to States
    with lower costs, along with the greenhouse gas emissions
    creating State winners and losers. When they do, it will
    increase the price of electricity to the remaining State
    ratepayers, including the households.
        If these companies cannot be competitive, they move
    offshore, moving jobs and greenhouse gas emissions,
    accomplishing nothing environmentally. One only needs to look
    at California.
        Since AB32, to our knowledge, there is not a single energy-
    intensive trade-exposed company that has built a new facility
    in California. The same goes for the EU under the ETUS.
    California is importing their energy intensive products and
    they are losing or forfeiting jobs.
        It is for this reason we would urge policymakers to hold
    offshore manufacturing competitors to at least the same carbon
    content standard as we in the United States.
        Thank you.
        [The prepared statement of Mr. Cicio follows:]

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you very much.
        Our next witness is Mr. Harry Alford, President and CEO of
    the National Black Chamber of Commerce. Welcome.

     STATEMENT OF HARRY ALFORD, PRESIDENT AND CEO, NATIONAL BLACK
                          CHAMBER OF COMMERCE

        Mr. Alford. Good afternoon, Chairman Capito, Ranking Member
    Carper and distinguished members of the subcommittee.
        My name is Harry Alford. I am President and CEO of the
    National Black Chamber of Commerce.
        The NBCC represents 2.1 million Black-owned businesses
    within the United States. I am here today to testify about the
    Environmental Protection Agency's proposal to regulate
    greenhouse gas emissions from power plants and the potential
    impacts of those proposed regulations on energy costs for
    American businesses, rural communities and families.
        In particular, I would like to focus on the potential
    adverse economic and employment impacts of the Clean Power Plan
    on low income groups and minorities, including individuals,
    families and minority businesses.
        While increased costs often come with increased regulation,
    the Clean Power Plan in particular seems poised to escalate
    energy costs for Blacks and Hispanics in the United States.
    According to a recent study commissioned by the National Black
    Chamber of Commerce, the Clean Power Plan would increase Black
    poverty by 23 percent, Hispanic poverty by 26 percent, result
    in cumulative job losses of 7 million for blacks, nearly 12
    million for Hispanics in 2035, and decrease Black and Hispanic
    median household income by $455 to $550, respectively, in 2035.
        For these minority and low income groups, increased energy
    costs have an even greater impact on their lives, jobs and
    businesses because a larger percentage of their incomes and
    revenues are spent on energy costs.
        What may seem like a nominal increase in energy costs to
    some can have a much more harmful effect on minorities and low
    income groups. Our members are very concerned about these
    potentially devastating economic impacts of the Clean Power
    Plan. We appreciate the opportunity to highlight them for the
    committee. In light of these concerns, the National Black
    Chamber of Commerce undertook an effort to examine the
    potential economic and employment impacts of the Clean Power
    Plan on minorities and low income groups.
        On June 11, 2015, the NBCC released a study on the threat
    of the EPA regulations to low income groups and minorities. The
    study finds that the Clean Power Plan will inflict severe,
    disproportionate economic burdens on poor families, especially
    minorities. In particular, the rule imposes the most harm on
    residents of seven States with the highest concentrations of
    Blacks and Hispanics.
        The EPA's proposed regulation for greenhouse gas emissions
    from existing power plants is a slap in the face to poor and
    minority families. These communities already suffer from high
    unemployment and poverty rates compared to the rest of the
    Country. Yet, the EPA's regressive energy tax threatens to push
    minorities and low income Americans even further into poverty.
    I want to highlight some of the key findings of the study.
        The EPA rule increases Black poverty by 23 percent and
    Hispanic poverty by 26 percent. In 2035, job losses will total
    7 million for Blacks and 12 million for Hispanics. In 2035,
    Black and Hispanic median household income will be $455 and
    $515 less respectively.
        Compared to Whites, Blacks and Hispanics spend about 20 and
    90 percent more of their income on food, 10 percent and 5
    percent more on housing, 40 percent on clothing and 50 percent
    and 10 percent more on utilities, respectively. The rule will
    especially harm residents of seven States with the highest
    concentration of Blacks and Hispanics. Those States are
    Arizona, California, Florida, Georgia, Illinois, New York and
    Texas.
        The study demonstrates that the EPA Clean Power Plan would
    harm minorities' health by forcing tradeoffs between housing,
    food and energy. Inability to pay energy bills is second only
    to the inability to pay recent as the leading cause of
    homelessness.
        Business groups like the NBCC are not the only entities
    expressing concerns about the Clean Power Plan. States, which
    would be responsible for implementing the Clean Power Plan,
    have criticized the plan for numerous deficiencies.
        Officials from 28 States say the EPA should withdraw its
    proposal citing concerns such as higher energy costs, threats
    to reliability and lost jobs. Officials from 29 States have
    said EPA's proposed rule goes well beyond the agency's legal
    authority under the Clean Air Act and 50 States have already
    joined in lawsuits.
        The NBCC totally supports the ARENA Act, S. 1324. We
    certainly encourage all members of this committee to put the
    bill to vote and make it law.
        Thank you so much.
        [The prepared statement of Mr. Alford follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you very much.
        Our next witness is Joseph J. Martens, Commissioner, New
    York State Department of Environmental Conservation. Welcome,
    Mr. Commissioner.

     STATEMENT OF JOSEPH J. MARTENS, COMMISSIONER, NEW YORK STATE
                DEPARTMENT OF ENVIRONMENTAL CONSERVATION

        Mr. Martens. Thank you, Chairman Capito, Ranking Member
    Carper and members of the subcommittee. Thank you for providing
    the opportunity for me to testify this afternoon.
        My name is Joseph Martens and I am the Commissioner of the
    New York State Department of Environmental Conservation. I am
    also Vice-Chair of the Board of Directors of RGGI Inc., which
    administers the Regional Greenhouse Gas Initiative, a program
    of nine northeastern States that uses market principles to
    reduce greenhouse gas emissions from the power sector.
        I thank the committee for providing me the opportunity to
    discuss the success we have had in reducing carbon emissions in
    New York, while creating jobs and keeping energy bills in
    check.
        I have spoken with many of my colleagues from other States
    across the Country and have heard many of them discuss their
    concerns about the rule. I recognize that each State faces
    different circumstances but I think in RGGI, we have a
    successful model for reducing emissions while creating jobs and
    reducing energy bills. Other States can use similar approaches
    to comply with the Clean Power Plan tailored to their own
    circumstances.
        RGGI was started in 2005 by a bipartisan group of
    Northeastern and Mid-Atlantic Governors. It sets a declining
    cap on emissions and allows the market to determine efficiently
    where the emission reductions will occur.
        In addition to their participation in RGGI, each of the
    RGGI States has aggressive energy efficiency and renewable
    energy programs. The RGGI cap collects the reductions from
    these efforts under a single emission cap and shares the carbon
    reductions from these programs are realized and accounted for.
        Proceeds from RGGI allowance options helps fund many of
    these initiatives, creating a virtual cycle of consumer
    benefits for taxpayers and ratepayers. Our program has been a
    resounding success.
        The State greatly exceeded the original 10 percent
    reduction target, achieving a 40 percent reduction by 2012. To
    achieve even greater reduction, the RGGI States acted to
    further reduce the cap to 50 percent below 2005 levels in 2020.
        We achieved this reduction in an economy that grew 8
    percent over the period from 2005 to 2013, adjusted for
    inflation. In New York, we have realized economic benefits from
    RGGI and associated programs, including creating jobs and
    reducing energy bills. For example, Governor Cuomo's New York
    Sun program has made New York fourth in the Nation for solar
    jobs.
        As of the end of 2014, we have committed more than $550
    million in proceeds from the auction of RGGI emission
    allowances to programs that will provide energy bills savings
    of over $1 billion or other benefits to over 130,000 households
    and 2,500 businesses.
        Beneficiaries of programs funded by RGGI proceeds include
    low income families and businesses. For example, two energy
    efficiency programs targeted specifically at income eligible
    families are providing 100,000 low and moderate income families
    with more than $80 million in cumulative energy bill savings.
        To those who say reducing emissions will cause electric
    rates for businesses to rise, we have actually reduced
    industrial electricity rates while reducing carbon emissions
    from 50 percent over the national average to 13 percent below.
        We have enjoyed similar outcomes across the RGGI region. An
    independent analysis undertaken by the highly respected
    Analysis Group concludes that the reinvestment of auction
    proceeds from the first 3 years of the program is reducing
    total energy bills in the RGGI regions by $1.3 billion, adding
    $1.6 billion to regional economy and creating an estimated
    16,000 jobs.
        Reducing emissions also provides substantial public health
    benefits, including saving lives, reducing illness, health care
    costs and lost work days. Our experience demonstrates that a
    group of States can substantially reduce emissions and grow the
    economy at the same time. Therefore, instead of asking whether
    we can afford to reduce that pollution, a more pertinent
    question is whether we can afford not to act now to reduce the
    emissions that are causing our climate to change.
        In New York, we are already experiencing the destructive
    effects of climate driven extreme weather. Three years ago,
    Hurricane Sandy decimated many communities and tens of
    thousands of homes in New York and New Jersey at a cost of $67
    billion. Over 70 lives were lost in the area struck by the
    storm. A year earlier, Hurricanes Irene and Lee caused 66
    deaths and $17 billion in damage. These storms
    disproportionately harmed low income families and small
    businesses in communities located in low lying areas most
    vulnerable to flooding.
        Our choice as a Nation is straightforward. We can invest in
    clean energy, creating jobs as a result at little or no net
    cost and reap the benefits of better health, lower health costs
    and reduced risk of climate change or we can ignore the science
    and expect more frequent storm events causing tens of billions
    of dollars in damages.
        To New York, the answer is clear. We have demonstrated it
    is possible to use energy more efficiently, stimulate economic
    growth, provide healthier air and reduce the potential damage
    from climate change.
        That concludes my testimony. Thank you.
        [The prepared statement of Mr. Martens follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you.
        Our final witness is Mary B. Rice, M.D., MPH, Instructor in
    Medicine, Harvard Medical School, Division of Pulmonary,
    Critical Care and Sleep Medicine. Welcome.

     STATEMENT OF MARY B. RICE, M.D., MPH, INSTRUCTOR IN MEDICINE,
     HARVARD MEDICAL SCHOOL, DIVISION OF PULMONARY, CRITICAL CARE
                           AND SLEEP MEDICINE

        Dr. Rice. My name is Dr. Mary Rice. I am an adult
    pulmonologist and critical care physician at Beth Israel
    Deaconess Medical Center and Harvard Medical School in Boston.
        I care for adults with lung disease, most of whom have
    asthma or emphysema. I also care for critically ill adults in
    the intensive care unit.
        My message is simple. Climate change is becoming the worst
    public health crisis of modern medicine. Hundreds of research
    studies have demonstrated that greenhouse gas emissions have
    already changed our climate over the past several decades,
    causing heat waves that last longer and happen more frequently,
    dangerous spikes in ground level ozone, increased wildfire
    activity and longer, more potent pollen seasons. These effects
    hurt American families.
        My physician colleagues and I are already seeing these
    health effects among our patients. The American Thoracic
    Society recently conducted a survey of our U.S. members who are
    doctors from all around the Country, caring for children and
    adults.
        We found that the vast majority of doctors said climate
    change is affecting their patients today. Let me describe just
    a few of the health effects that my colleagues and I see.
        Consider heat waves. Several doctors commented that their
    patients with emphysema, already struggling to breathe, cannot
    handle extreme heat. Studies have found that people with asthma
    and emphysema visit their doctors more often and get
    hospitalized more often during heat waves. The elderly, who may
    already be weakened by heart and lung disease, die during heat
    waves.
        Extreme heat also increases ozone to levels that are
    harmful to the lungs of people, not only people with asthma and
    emphysema but also the lungs of babies and young children, and
    even healthy adults. Ozone spikes during heat waves have been
    found to contribute to premature mortality.
        The hot conditions promoted by climate change favor forest
    fires and grassland fires, which are at a great cost to human
    health. During a heat wave in May 2014, for example, multiple
    wildfires broke out simultaneously in San Diego County, causing
    $60 million in damage.
        This estimate does not capture the damage to the health of
    families who were affected by those fires. Wildfires can travel
    great distances and release a mixture of toxins that are
    especially irritating to the lung making it harder for people
    to breathe.
        A colleague of mine in San Diego told me that he advised
    all his patients to stay inside and keep the air conditioning
    on. Is this the future we want for American families, one where
    it is not safe to go outside? There is no doubt that wildfires
    increase hospitalization for asthma in children and adults and
    for respiratory illness among the elderly.
        Climate change is also bad for people with seasonal
    allergies, about 30 percent of all Americans and for the
    roughly 10 percent of Americans with asthma. Warmer
    temperatures lengthen the pollen season because plants bloom
    earlier in the spring and also higher levels of carbon dioxide
    increase the amount of pollen that is produced.
        In the northern States of the U.S., pollen seasons have
    lengthened by more than 2 weeks to date than they were in 1995.
    They are also more powerful. Studies have found that when
    pollen levels are higher, people use more medications, visit
    their doctors more for allergies and emergency room visits for
    asthma among children and adults go up.
        One of my patients, a single mother with a teenage son,
    both of whom have severe asthma, called me on a weekly basis
    this spring because of trouble breathing. Between the missed
    days of school for her son and missed days of work for her,
    this allergy season was a disaster for her family.
        I am a physician and a researcher, but my most important
    job is my role as a mother to three children under the age of
    6. My 1-year-old son has had two emergency room visits and a
    hospitalization for respiratory illness.
        When my son develops a cough or wheeze, I am terrified
    because this could mean the next ambulance ride. When he is
    sick, I cannot go to the hospital and take care of my patients
    or my husband cannot work.
        We are more fortunate than many Americans, many of whom
    risk losing their job or struggle to pay for the next emergency
    room visit when they or a loved one suffers an acute
    respiratory illness. My son and every American deserves clean
    air.
        I have only described a few of the threats to the health of
    Americans from climate change. Experts predict that we can
    avoid the most frightening scenarios if we reduce greenhouse
    gas emissions and better yet, when we address climate change,
    we redeem immediate health benefits right here in the U.S. When
    we reduce greenhouse gas emissions, we also reduce air
    pollutants that trigger heart attacks, asthma and emphysema
    attacks, stroke and death.
        As a mom, a doctor and a representative of the American
    Thoracic Society, I favor taking firm steps to address climate
    change because I support clean air and a healthy future for all
    Americans.
        Thank you.
        [The prepared statement of Dr. Rice follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Capito. Thank you, Doctor.
        I want to thank you all. We will begin the questions and I
    will begin.
        Mr. Trisko, you mentioned in your remarks the impacts of
    the conservation building block of the Clean Power Plan and how
    elderly citizens and those on fixed incomes would probably be
    least likely to be the ones to benefit from that or be able to
    afford to make those changes.
        It says the Energy Information Administration projects that
    consume energy prices will go up by 4 percent by 2020 which
    seems rather low since we just had a 16 percent rise in our
    prices in West Virginia.
        How do you see these two converging, the rising price and
    the lack of the conservation and deficiency aspects of this
    Clean Power Plan for the elderly citizen and those on fixed
    incomes?
        Mr. Trisko. Let me first address the observation I offered
    with respect to senior citizens being least likely to benefit
    from the energy efficiency aspects of the Clean Power Plan.
        That observation derives from two facts. First is the
    payback period that is required to support major investments in
    energy efficiencies such as replacement of windows and heating
    and ventilating systems.
        Those payback periods typically are too long to be
    economically feasible for lower income senior citizens. It is
    also true in general for the population that American houses
    tend to be owned for a period of about 7 years on average.
        If you are a homeowner looking at a $10,000 window
    replacement project that is going to save a few hundred dollars
    a year on your energy bills, that payback period is not
    consistent with the period that typical homeowners expect to
    live in those dwellings.
        Second, I have heard this from senior utility executives as
    well. One of the difficulties in securing energy efficiency
    gains from lower income consumers is the quality of the housing
    stock, the relatively poor quality of the housing stock, will
    not support investments in fairly high cost energy efficiency
    upgrades such as windows and HVAC systems.
        Certainly lower cost options, the simple things such as
    better attic insulation, weather stripping and the like have
    short payback periods and are feasible. The magnitude of the
    energy efficiency investments EPA is projecting in the Clean
    Power Plan, which NERA estimates to cost some $500 billion for
    American consumers, those investments simply will not be made
    by the elderly and the lower income consumers.
        I hope that is responsive to your question.
        Senator Capito. Thank you.
        Mr. Alford, the Energy Information Administration recently
    concluded the Clean Power Plan could reduce the GDP by $1
    trillion. Based on the analysis that you just did and
    explained, could you reemphasize for us how you think that is
    going to impact low income or even minority citizens across the
    Country?
        Mr. Alford. It is going to be very critical and tragic. As
    far as the 2.1 million Black-owned businesses we represent,
    their customer base is going to whither and I think the quality
    of life is going to hurt in our communities. I think people
    will start to short-shrift moneys that would be used for health
    care or education. I think people who would resort to crime and
    violence because they are poor and broke would increase.
        I think it would hurt our communities severely.
        Senator Capito. A final question very quickly, Mr. Trisko.
    Part of the ARENA Act says we should not move forward with
    these regulations until all the legal aspects are settled. As
    you know, States are challenging this and will challenge when
    the final rule comes out.
        If States begin to make changes in the meantime, what kind
    of scenario does that present to you in terms of how States are
    going to be able to react not knowing whether the legal issues
    have been settled as yet?
        Mr. Trisko. Senator, you have hit upon one of the most
    desirable aspects of the ARENA Act. Let me put it in the
    context of the current situation that the electric utility
    industry faces.
        With respect to EPA's 2011 Mercury and Air Toxic Standard
    Rule or the MATS rule, the MATS rule is currently before the
    Supreme Court. A decision is expected shortly within a matter
    of days.
        It is possible the Supreme Court decision could result in
    vacating the rule. And yet, utilities, in order to comply with
    that rule already have retired dozens of power plants across
    the United States and are scheduled to retire even more over
    the course of the next year.
        Wouldn't it be advisable as a matter of public policy
    before implementation of the most expensive rule ever imposed
    on the electric utility sector, $9.5 billion a year, to know up
    front whether the rule is legal?
        Senator Capito. Thank you.
        To our Ranking Member, Senator Carper, a fellow West
    Virginian, I want to say welcome and also ask if he could do
    his opening statement and then do questions which I say most
    certainly you can.
        Senator Carper.

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

        Senator Carper. Thank you, Madam Chairman. Thanks for
    holding the hearing.
        To all of our witnesses, it is great to see you and thank
    you for joining us, some of you not for the first time.
        Dr. Rice, I will think about your son and hope he grows up
    to be 101 or 102 years old and has a great life.
        One of the issues we always wrestle with here is, is it
    possible to have cleaner air, cleaner water and at the same
    time, have a strong economy. For most of my life after the
    Navy, I focused on job creation and job preservation and what
    we do to foster a nurturing environment for job creation and
    job preservation.
        If you go back to January 2009, the week Barack Obama and
    Joe Biden were sworn into office, that week 628,000 people
    filed for unemployment insurance. Think about that, 1 week in
    January 2009. In the last 6 months of 2008, we lost 2.5 million
    jobs. The first 6 weeks in 2009, we lost another 2.5 million
    jobs. That is 5 million jobs literally in a 12-month period of
    time.
        Since 2010, we have adopted new mercury regulations on
    power plants. We have adopted new carbon pollution or fuel
    economy standards on cars and trucks. We have also adopted
    across State air pollution standards. Since 2010, we have added
    762,000 manufacturing jobs and millions other jobs, but three-
    quarters are manufacturing jobs.
        This leads me to believe that maybe it is possible to have
    cleaner air and cleaner water and at the same time actually do
    better by virtue of our economy and economic growth. I would
    ask that we keep that in mind.
        As the Chairman said, I was born in Beckley, West Virginia,
    a coal mining town. I grew up there in Roanoke and Danville,
    Virginia. Now I represent the State of Delaware, the lowest
    lying State in the Country. We see every day the effects of
    climate change and global warming. Sea level rise creeps up
    higher and higher on the east coast of my State. It is very,
    very real to us.
        For decades, the fear of the cost to combat climate change
    prevented any real action on this issue in Congress. Since
    coming here, I have tried to work with my colleagues on a
    climate compromise that would harness market forces to reduce
    carbon pollution and reduce the cost of compliance.
        As part of that compromise, I worked with Senator Byrd and
    a handful of other coal State Senators on language that would
    have provided more than $10 billion in incentives to support
    the deployment of clean coal power plants.
        This language, along with other language, intended to
    buffer impacts to the coal industry, was included in the Kerry-
    Boxer bill which regrettably was not enacted into law. Instead,
    in coming to a compromise on climate change, Congress came to a
    stalemate. All the while, it is becoming clear that the price
    of inaction is much greater than the price of action.
        The EPA just released a comprehensive report that outlines
    the alarming truth that failure to act on climate change will
    result in dramatic costs for our environment and for our
    economy. Findings are pretty clear concerning low lying States
    like Florida, Delaware and others up and down the east coast.
        Without action on climate change, we are going to need to
    spend billions of dollars in this century to protect States
    from rising sea levels and extreme storms.
        The study also projects that inaction on climate change
    could lead to extreme temperatures and cause thousands of
    deaths throughout the northeast and the mid-Atlantic regions of
    our Country.
        At least it is clear to me that as each year passes without
    action, the more severe, the more costly and perhaps more
    irreversible the effects of climate change are becoming. For
    those of us who come from States already being impacted by
    climate change, I think the message is clear and that is, we
    can no longer afford inaction.
        Many States such as New York, represented here today and
    welcome, and Delaware have already taken action to reduce the
    emissions of the largest emitters of carbon pollution, power
    plant.
        As we will hear today, the economics of these States
    continue to grow at a faster rate than the States that have yet
    to put climate regulations in place. However, we need all
    States to do their fair share to protect the air we breathe and
    stem the tide of climate change.
        The EPA's Clean Power Plan attempts to do that. Under the
    Clean Power Plan, States are given their own carbon pollution
    targets and allowed to find the most cost effective way to find
    reductions. In fact, it sounds similar to the compromise I
    tried to foist on my colleagues here a number of years ago.
        I believe instead of undercutting the Clean Power Plan, we
    should be working in good faith with the agency to find ways to
    improve the regulation. For example, the regulation could be
    improved in several ways.
        One, to ensure early action, States are not penalized for
    being climate inefficiency leaders. Two, ensure that all clean
    energy, including nuclear, is treated equitably. Three, ensure
    we meet our carbon reduction goals.
        No compromise is ever perfect. The worse thing we can do is
    to do nothing while we try to find the perfect solution. We
    must act now while the ability to mitigate the most harmful
    impact is still within our grasp.
        The choice between curbing climate change and growing our
    economy is, as I have suggested here many times, a false one.
    Instead, we must act on curbing climate change in order to
    protect the future economy prosperity of our Country.
        [The prepared statement of Senator Carper follows:]

                      Statement of Hon. Thomas R. Carper,
                    U.S. Senator from the State of Delaware

        Thank you, Chairman Capito, for holding this hearing today.
    I want to welcome the witnesses to the subcommittee. In today's
    hearing we will focus on the costs and benefits of the
    Environmental Protection Agency's (EPA's) proposed carbon
    regulations, known as the Clean Power Plan.
        I was born in Beckley, West Virginia, and have spent most
    of my adult life in Delaware. As a native of a small town
    supported by coal mining, and now as a Senator representing the
    lowest-lying State in the Nation, I have a unique perspective
    on the balance that we must strike to make climate regulations
    work for each State.
        The debate on the costs and benefits of climate change
    action is not a new one. For decades, fears of the costs to
    combat climate change have prevented any real action on this
    issue in Congress.
        Since coming to the Senate I have tried to work with my
    colleagues on a climate compromise that would use market forces
    to reduce carbon pollution and reduce the costs of compliance.
    As part of a compromise, I worked with Senator Byrd and a
    handful of other coal-State Senators on language that would
    have provided more than $10 billion in incentives to support
    the deployment of clean coal power plants. This language--along
    with other language intended to buffer impacts to industry--was
    included in the Kerry-Boxer bill, which regrettably did not
    pass into law.
        Instead of coming to a compromise on climate change,
    Congress came to a stalemate. All the while, it is becoming
    clearer that the price of inaction is much greater than the
    price of action.
        The EPA just released a comprehensive report that outlines
    the alarming truth that failure to act on climate change will
    result in dramatic costs for our environment and for our
    economy. The findings are particularly concerning for low-lying
    coastal States like Delaware. Without action on climate change,
    we will need to spend billions of dollars in this century to
    protect our State from rising sea levels and extreme storms.
    The study also projects that inaction on climate change could
    lead to extreme temperatures and cause thousands of deaths
    throughout the Northeast and Mid-Atlantic regions.
        It is clear that as each year passes by without action the
    more severe, the more costly, and perhaps irreversible, the
    effects of climate change are becoming. For those of us from
    States that are already being impacted by climate change, the
    message is clear--we can no longer afford inaction.
        Many States, such as New York and Delaware, have already
    taken action to reduce the largest emitter of carbon
    pollution--power plant emissions. As we will hear today, the
    economies of these States continue to grow at a faster rate
    than the States that have yet to put climate regulations in
    place. However, we need all States to do their fair share to
    protect the air we breathe and stem the tide of climate change.
    The EPA's Clean Power Plan attempts to do just that.
        Under the Clean Power Plan, States are given their own
    carbon pollution targets and allowed to find the most cost-
    effective way to find reductions. In fact, it sounds similar to
    the compromises I tried to find with my colleagues.
        I believe instead of undercutting the Clean Power Plan we
    should be working in good faith with the agency to find ways to
    improve the regulation. For example, the regulation could be
    improved to:
        (1) ensure early action States are not penalized for being
    climate and efficiency leaders;
        (2) ensure all clean energy is treated equitable; and
        (3) ensure we meet our carbon reduction goals.
        No compromise is ever perfect, but the worst thing we can
    do is to do nothing while we try to find the perfect solution.
    We must act now while the ability to mitigate the most harmful
    impacts is still within our grasp. The choice between curbing
    climate change and growing our economy is a false one. Instead,
    we must act on curbing climate change in order to protect the
    future economic prosperity of our Country. Thank you.

        Senator Carper. Madam Chairman, thank you for letting me
    give my statement and ask some questions.
        I was delayed today because we had a caucus lunch. Part of
    our caucus lunch discussion, you would be interested to know,
    was about the transportation bill, the 6-year transportation
    bill authored by Chairman Inhofe, Senator Boxer, Senator Vitter
    and myself which I think is going to be well received. We are
    excited about that. We had a discussion about that and I got
    here a little late and I apologize for that.
        I like to joke around a bit and I thought I was going to
    come in and say I had taken a call from the Pope but I am not
    Catholic and he rarely calls me. I must say I am impressed with
    this guy.
        I am impressed with him because I think he actually read
    the New Testament and has a real commitment to the least of
    these in our society. You know, when I was hungry, did you feed
    me? When I was thirsty, did you give me drink? When I was
    naked, did you clothe me? When I was sick in prison, did you
    come to visit me? He gets that and really calls on all of us to
    do the same.
        The other thing that he gets, for those of you familiar
    with Scripture, most of you probably more than me, is we have a
    moral obligation to make sure we have a planet with a decent
    quality of life. He believes and a lot of folks believe that
    there is a real serious problem here. We have a moral
    imperative to do something about it.
        We can talk about all these other studies and everything
    until the cows come home, but I would have us keep that thought
    in mind. Now I have a couple of questions.
        First, I ask unanimous consent to submit for the record two
    items. One is the latest report from the Lancet and the
    University College London Commission on Health and Climate
    Change entitled Health and Climate Change Policy, Responses to
    Protect Public Health.
        I would also ask unanimous consent to submit the EPA's
    peer-reviewed report entitled Climate Change, the United States
    Benefit of Global Action.
        Senator Capito. Without objection.
        [The referenced information follows:]

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Carper. Thank you, Madam Chair.
        Dr. Rice, mother of three, you mentioned in your testimony
    the many different ways that climate change is already
    impacting the health of Americans. Who would you say are the
    most vulnerable to the health effects of climate change and who
    would have the most to gain from reductions in carbon
    pollution?
        Dr. Rice. Thank you for this question, Senator Carper.
        A number of groups are especially vulnerable to the health
    consequences of climate change. The ones I would identify would
    be the elderly because many of them already have chronic health
    conditions like heart and lung disease that makes them
    especially vulnerable to the health effects of high heat and
    high air pollution levels.
        Another very important group is low income people. People
    who have less income have less access to air conditioning
    during heat waves. There have been a number of studies looking
    at cities which suffer the most in some ways from extreme heat
    because of an island effect of the buildings in the cities. The
    poor neighborhoods of cities have been found to have the worse
    urban heat problem.
        People who have low income also are the same people who are
    often exposed more to higher levels of air pollution to begin
    with and have less access to health care and resources to help
    them manage climate change.
        There is a third group. I know I am short on time, but that
    is children. Asthma is especially prevalent in children. They
    are at high risk from all of the issues I identified, high
    heat, high ozone levels, air pollution from wildfire, and
    higher pollen levels. It is going to be a major consequence for
    American children.
        Senator Carper. One quick yes or no answer, if you will. In
    a study released last week by the Lancet, one of the world's
    oldest and best known German medical journals concluded that
    the impacts of climate change threaten to undermine the last
    half-century of gains in development and global health. Would
    you agree with this conclusion, yes or no?
        Dr. Rice. I certainly agree it is a major public health
    problem facing the planet.
        Senator Carper. Thank you.
        My time has expired. Thank you.
        Senator Capito. Thank you.
        Senator Fischer.
        Senator Fischer. Thank you, Madam Chairman and Ranking
    Member Carper.
        Mr. Cicio, Nebraska is a public power State. One hundred
    percent of our power is owned by the people of Nebraska. We are
    going to be hit especially hard by these regulations proposed
    in the Clean Power Plan. We are going to see rate increases
    that I believe will be substantial.
        What do you believe will be the impact of the increase we
    are going to have in the electricity rates on business
    operations like manufacturing? What will be the impact there?
        Mr. Cicio. All of these companies compete globally. There
    is almost no exception anymore. As I specifically alluded, the
    competition is very fierce. Companies win or lose business
    based on a cents a pound or pennies on a ton of product they
    make, so all of these costs are additive.
        When we get to the Clean Power Plan, it is not just the
    cost of the Clean Power Plan. Embedded in those electricity
    rates that give your State a problem, there is already the cost
    of PM2.5 and there is already the mercury rule cost.
        For us in industrials, there is already the industrial
    boiler MATS cost. Now there is the Clean Power Plan cost. On
    top of that is coming the ozone cost. It is a cumulative cost
    of doing business that our competitors do not have overseas.
        There is no way around higher costs and loss of
    competitiveness. Eventually it impacts jobs. Most of our jobs
    are middle class jobs.
        Senator Fischer. What is the impact then on American
    families? When we see these costs on businesses continue to
    increase, that has a direct cost on American families, correct?
    How would you say the ARENA Act will address some of these
    issues? What specifically is in the proposed legislation?
        Mr. Cicio. I would like to say from a commonsense
    standpoint, everyone in the Country that has followed this
    knows this is going to be litigated, 100 percent sure. There is
    no doubt about it.
        The EPA knows there are costs. The EPA does not want to
    hurt people by higher energy costs but this rule will. It is
    commonsense to say let us wait until we have this settled by
    the courts before States act to particularly shut down, as the
    EIA report of last month said, they are not going to shut down
    40,000 gigawatts, it is now 90,000 gigawatts of coal fired
    power plants prior to 2020. That will have a dramatic impact on
    increasing electricity costs.
        Senator Fischer. Thank you.
        Mr. Alford, I think most of us in this room take our
    ability to have electricity for granted. As you mentioned,
    there is a large number of Americans who are balancing whether
    they can afford an electric bill or pay rent or put food on the
    table for their families. As you mentioned, that is going to
    lead, I think, to those hard choices that people make and send
    some of them to the streets where they become homeless.
        Can you talk more about those tough choices that low income
    families have to make when they look at their electricity
    bills, why you think the costs are going to be driven up
    through this action by EPA, and why it will be so harmful?
        Mr. Alford. Dr. Rice is a mother of three. I am a father of
    six. I guess I am up to 11 grandchildren. My wife and I have
    been the godmothers and godfather of the very extended family.
        There are a lot out there who need help and we do all we
    can to connect them with some of our members who can create
    jobs for them, but it is an ongoing task. It is rough out
    there.
        I have children in Mobile, Atlanta and Los Angeles and it
    gets worse and worse and worse. Lord knows what happens to
    someone who does something wrong and gets into the judicial
    system, they will never have a job unless I create a job for
    them. It is very rough out there.
        I think we need a government that is sensitive to what is
    going on in these communities and will come up with some policy
    that builds a greater America and a more secure America and not
    put people on thin ice.
        Senator Fischer. Well said, well said. We all want clean
    air, we all want clean water, but we need to be aware of what
    these regulations will do to American families.
        Thank you, sir.
        Mr. Alford. I have been having discussions with the Omaha
    Black Chamber of Commerce too.
        Senator Fischer. Great. Thank you.
        Senator Capito. Senator Merkley.
        Senator Merkley. Thank you very much, Madam Chair.
        I wanted to follow up with Dr. Rice. The statistics that I
    have seen say that 78 percent of African-Americans live within
    30 miles of a coal-fired power plant and that an African-
    American child is three times more likely to go to an emergency
    room for an asthma attack than a White child and twice as
    likely to die from an asthma attack.
        Is there a correlation or connection between the coal-fired
    power plants and the higher death rate for African-American
    children?
        Dr. Rice. The health effects of air pollution from coal-
    fired power plants and other sources of particle air pollution
    are very well documented. It is now well established in the
    scientific community that air pollution causes increases in
    hospitalization for asthma, asthma attacks, and more medication
    to treat the asthma symptoms.
        There are also inequities in where people live and where
    the sources of air pollution are located. That is an issue
    called environmental justice. Communities of color and low
    income communities are disproportionately exposed to air
    pollution from coal-fired power plants and other sources of air
    pollution. Therefore, if we reduce greenhouse gas emissions,
    those communities stand the most to benefit locally, right
    there where the pollution is emitted.
        Senator Merkley. To summarize, you are saying yes, there is
    a connection between the coal-fired power plant pollution and
    the illnesses and deaths that are disproportionately occurring?
        Dr. Rice. The simple answer is yes. I do agree with you.
        Senator Merkley. It sounded like you were withdrawing the
    explanation of why that was indeed the case.
        You ended on the note that disproportionate benefits from
    changing the quality of the air go to those who are most
    affected and that would be those closest to sources of
    pollution. Public health and climate benefits from this law are
    estimated to be somewhere between $55 billion to $93 billion
    per year 15 years from now. That is compared to the estimates
    of $7.3 billion to $8.8 billion for the rule.
        On the order of 8 to 1 or 10 to 1 of health benefits versus
    cost, that seems a pretty good tradeoff for an investment when
    you can get an eightfold return. It is a huge quality of life
    issue. Would you share that opinion?
        Dr. Rice. Senator, I agree that the public health benefits
    of reducing greenhouse gas emissions are tremendous. They have
    been studied in a number of different ways, including the
    report you just cited that showed the public health benefits
    for mortality and other health issues far outweighed the
    implementation costs.
        That is just one study but there have been many other
    studies. There is one done by Jason West and a group at UNC,
    Chapel Hill, looking at just the mortality benefits of the
    better air quality from reducing greenhouse gas emissions, not
    even looking at all the health effects I talked about from
    climate change, but just the air pollution benefits that would
    be gained right away. They estimated that those mortality
    benefits would exceed abatement costs by 2030.
        Senator Merkley. In your testimony, you noted the impact of
    forest fires. This is particularly occurring out west where we
    have large coniferous forests that are a major part of our
    rural lifestyle with our lumber and timber industries.
        In the last 40 years, we have seen an increase in the fire
    season by about 60 days with a huge correlation of more acres
    of timber burning. In your testimony, you pointed out the
    health impacts of that smoke and the smoke plumes basically
    traveling across the Nation.
        Dr. Rice. Senator, I can give an example. Wildfire smoke
    can travel very far distances. There are health effects for
    communities right there where the fires take place, but there
    are also respiratory and heart health effects in very distant
    places.
        The wildfires that affected Russia some years ago, those
    plumes traveled the distance from Chicago to San Francisco,
    that equivalent difference. That means that thousands and
    thousands of people in the regions of wildfires are
    experiencing health effects due to the reduced air quality.
        Senator Merkley. Since the prevailing winds go from west to
    east, when our forests are burning out in Oregon, California
    and Washington State, the rest of the Nation is experiencing
    those impacts. There is also an impact on our rural economy
    because when we lose both to fire and pine beetles, and I
    realize that is not your expertise, but with the warmer
    winters, the pine beetles are doing very well and the timber
    not so well.
        I am over my time, so thank you very much for your
    feedback.
        Senator Capito. Thank you.
        I would like to turn it over to the Chairman of our full
    committee, Chairman Inhofe.
        Senator Inhofe. Thank you, Madam Chairwoman.
        I remember when we had the first appointed Director of the
    EPA, Lisa Jackson in the room. It was during the COP in
    Copenhagen. I asked her, if we are to pass the legislation that
    has been proposed here, let us keep in mind it started way back
    in 1997 when we passed the Byrd-Hagel rule by 95 to zero, that
    if you come back from Rio de Janeiro or one of these places
    with a treaty that either hurts our economy or does not require
    the same thing from China and other countries, then we would
    not ratify it. Consequently, they never put it forward for
    ratification.
        I said if we were to pass either by regulation or by
    legislation these reductions, is this going to have the effect
    of lowering CO2 emissions worldwide? Her answer was
    no, because it only affects us here in the United States. This
    is not where the problem is. The problem is in India, China,
    Mexico and other places.
        In fact, would you say, Mr. Cicio, that it would actually
    have the effect of increasing CO2 worldwide
    emissions if we were to unilaterally reduce our emissions here
    by an amount that is going to be driving our manufacturers
    overseas, where do they go, they go to places where they have
    the least restrictions. Am I missing something there?
        Mr. Cicio. No, you are not missing anything. As a matter of
    fact, I testified before the House Energy and Power
    Subcommittee, and one of the key points I made is if we want to
    be serious about reducing global greenhouse gas emissions, the
    single most important thing we need to do is increase the
    manufacturing of products in the United States versus China,
    for example.
        Senator Inhofe. Exactly.
        Mr. Cicio. When China produces goods, they emit 300 percent
    more CO2 than we do here. If energy cost goes up
    here, then it is going to result in more imports of these
    energy intensive products. As a reminder, 70 percent of our
    manufacturing imports is from one country, China.
        Senator Inhofe. That is right.
        Mr. Alford, it is good to see you again. I asked for the
    printed copy of your study. The key findings are fascinating.
    It concentrates on the regressive nature of this type of
    legislation or rule. Is that right?
        Mr. Alford. That is absolutely correct, sir.
        Senator Inhofe. I have not seen it done specifically like
    this before, so this is something we will use. Was this done
    for you by an outside group?
        Mr. Alford. It was done by Dr. Roger Bezdek of Management
    Information Systems. We do a study about every two or 3 years
    with that group. They are very on the money.
        Senator Inhofe. I appreciate that.
        Mr. Trisko, I think you made a vague reference to a study
    of decisions to middle or low income people. I asked to get the
    written copy. Could you elaborate a bit on that? I do not think
    you had a chance to do that in your opening statement.
        Mr. Trisko. The study I attached to the statement is one of
    a long running series going back to the time of the Kyoto
    Protocol. We wanted to know what American families spent on
    energy defined as residential utilities and gasoline. I have
    been updating that study more or less on annual basis ever
    since. We found, as a general matter, the percentage of after
    tax income that American households spend on energy has more
    than doubled over the course of the last 10 to 15 years.
        You mentioned the regressive aspects of energy costs and
    energy price increases. The study I have attached to my
    statement today looks in particular at the percentage of after
    tax income for energy spent by households with gross incomes of
    $30,000 or less. That is about 30 percent of our population.
    Those households are spending 23 percent of their after tax
    income on energy.
        Senator Inhofe. Of their expendable income?
        Mr. Trisko. Twenty-three percent of their after tax income
    goes to residential utilities and gasoline. That compares with
    an average of 7 percent for households earning more than
    $50,000 a year, so it is three times greater for the low income
    category of $30,000 or less.
        The impact of energy price increases is three times greater
    on those households than it is for households making $50,000 or
    more per year.
        Senator Inhofe. That is good and is almost exactly what you
    are saying, Mr. Alford, that it is regressive in that respect.
        Mr. Alford. Yes, it is. You brought up asthma. If you look
    at the Mayo Clinic, there is no prevention for asthma and there
    is no correlation of asthma and air. Asthma has been increasing
    even though through the Clean Air Act, we have been good
    stewards and decreasing and decreasing ozone and all the
    emissions, asthma continues to rise. No one knows why.
        There is this big false projection that global warming
    causes asthma. We do not know what is causing asthma. Most of
    the people who have it get out of it by the time they are
    adults because their lungs and bodies are strong enough to
    fight it off.
        I am getting very sick of people saying asthma and dirty or
    global warming. It is a myth.
        Senator Inhofe. Thank you, Mr. Alford.
        My time has expired.
        [The prepared statement of Senator Inhofe follows:]

                      Statement of Hon. James M. Inhofe,
                    U.S. Senator from the State of Oklahoma

        We are here today to talk about the President's climate
    agenda with a particular focus on its impacts to American
    businesses and families. There is no doubt, and wide reaching
    consensus that the price of power would increase under the
    President's latest regulations, with primary attribution to the
    so-called Clean Power Plan.
        Despite the rhetoric from President Obama and his EPA, his
    domestic climate agenda has nothing to do with improving the
    environment or the lives of American citizens. His carbon
    regulations for new, modified and reconstructed, and existing
    power plants are nothing more than high-cost, unprecedented
    power grabs. The Clean Power Plan alone would cost $479
    billion, result in double digit electricity price increases in
    43 States and reduce grid reliability. Some regions would not
    only be dealing with cascading outages and voltage collapse,
    but paying for long-term investments in power generation that
    is prematurely shut down.
        Although these policies make up the core components of
    President Obama's climate agenda they would have a negligible
    impact on the environment--impacts the EPA did not even bother
    to measure--and would be rendered completely pointless by
    business as usual in India in China. Further, both of these
    countries stand to inherit the economic activity and jobs that
    would be shipped overseas, which has the projected result of
    actually increasing overall emissions.
        When it comes to the climate science this President relies
    on, I would like to remind everyone that he is using the same
    science from the same institution that was caught up in the
    Climategate scandal of 2009. The UK Telegraph described
    Climategate as ``the ``worst scientific scandal of our
    generation'' when it was discovered scientists were
    manipulating temperature data to produce the outcomes they
    wanted.
        When it comes to health benefits, much of what the EPA
    relies on comes from benefits associated with reductions in
    particulate matter (PM), not carbon. Further, PM is already
    regulated under the Clean Air Act and set at a standard the EPA
    itself identifies as safe.
        When it comes to the legality of this proposal, it is on
    equally questionable ground. The EPA relies on a reimagined
    interpretation of the Clean Air Act that is counter to the
    law's historical application and extends far beyond what
    Congress ever intended.
        It makes sense that 32 States oppose the President's
    climate proposals and 16 have already challenged the EPA in
    court. While preliminary challenges have hit a minor, technical
    speed bump, once the rule is final and the courts get to the
    merits of these legal challenges, the Clean Power Plan will not
    withstand judicial scrutiny. It does not make sense for States
    to spend limited resources planning out how to comply with a
    rule that we know will ultimately be stricken down.
        As an original cosponsor to the Clean Air Act Amendments of
    1990, I know what good environmental policy looks like. It
    balances environmental improvements with economic growth. It
    improves our standard of living while strengthening access to
    the American dream. It builds on existing partnerships and
    opens up the doors for new ones. Most importantly, it comes
    from Congress.
        Good environmental policy looks nothing like the Clean
    Power Plan or any of the climate regulations this
    Administration has proposed. I thank Senator Capito for
    drafting S. 1324, the Affordable Reliable Electricity Now Act
    of 2015 to address these problems. Her bill sends the EPA back
    to the drawing board and provides a host of new requirements
    that will ensure future proposals actually improve the
    environment in a balanced and healthy way. Her bill increases
    transparency, protects the role of States, and provides
    certainty to the regulated community. Finally, it protects
    energy consumers--from industrial manufacturers to the kitchen
    table--from unnecessary costs and unjustified price increases.
        I have no doubt this Country will continue down the path of
    an ever improving and healthier environment, but these gains
    will be achieved through American ingenuity and innovative
    advancements, not Government mandates.
        I thank the witnesses for being here today and I look
    forward to your testimony.

        Senator Capito. Thank you.
        Senator Markey.
        Senator Markey. Thank you very much.
        Dr. Rice, you are here from Harvard Medical School. People
    are getting sick, are they not? They are not getting sick the
    way Harry Alford is getting sick. They are really getting sick,
    aren't they?
        Maybe you can bring to us a little bit of your information
    about the increased hospitalizations, the respiratory related
    diseases and all of the things that are actually implicated in
    having this additional pollution in our atmosphere. Can you
    talk a bit about how it is impacting especially children in our
    Country?
        Dr. Rice. Thank you, Senator Markey.
        This is certainly an area where I feel I have a lot to add
    to the discussion because I am a lung doctor, I take care of
    patients with lung disease and I also study air pollution when
    I am not taking care of patients.
        In addition to my personal observations as a doctor, I see
    patients come to see me more often because the pollen level is
    worse or the ozone levels in Boston sometimes get very high on
    very hot days.
        We also have the observations of the physicians of the
    American Thoracic Society and the survey I mentioned. Of the
    doctors completing the survey, the vast majority of them
    commented they have personally observed that their patients'
    lung function is worse and their symptoms are worse during high
    air pollution days.
        Senator Markey. There are real implications for the 12
    million Americans who already have respiratory illnesses?
        Dr. Rice. Certainly. We can look back at the incredible
    success story of the Clean Air Act. The reductions in air
    pollution as a result of the Clean Air Act have been
    astounding. We have really come a long way.
        When we look back, researchers look back at the health
    benefits of the Clean Air Act, they have been astounding, not
    just for respiratory illness or asthmatic symptom control, but
    also mortality and heart disease.
        Senator Markey. Earlier in your testimony, you mentioned
    your own son who has a respiratory illness. What can additional
    pollution that we send up, uncontrolled mean for him and for
    those others of millions of victims across the Country?
        Dr. Rice. There are a variety of sources of air pollution.
    One is the power plants through the burning of greenhouse
    gases. There is also traffic and other things.
        The reality is that if we do not do anything about
    greenhouse gas emissions, the EPA report looked at just that
    piece of the pie and found that ozone levels will increase,
    predict that we will actually have increases in ozone whereas
    ozone levels have actually declined and we have experienced
    health benefits as a result of those gains.
        Senator Markey. Thank you for putting that out there. There
    is real sickness, not metaphorical sickness, that is occurring
    because of global warming.
        Mr. Martens, you are here representing New York and one of
    the RGGI States, the Regional Greenhouse Gas Initiative States,
    all of New England, those six States, New York, Maryland and
    Delaware, nine States that banded together.
        Over the last 7 years, Massachusetts has actually seen a 40
    percent reduction in the greenhouse gases that we are sending
    up while we are seeing a 22 percent growth in our economy.
        Can you talk a bit about that virtuous cycle that seems to
    elude the observation of those who are critical of our ability
    to be able to increase the health of individuals and the
    economy simultaneously?
        Mr. Martens. As I said in my testimony, the RGGI experience
    has been an extraordinarily successful one. We had an
    independent study done by the Analysis Group that quantified
    the benefits over a 3-year period from 2009 to 2011.
        There was $1.3 billion in reductions in bills over the RGGI
    region; $1.6 billion in extra or incremental economic activity.
    It has been an extraordinarily positive experience, all the
    while, as you said, the region has experienced economic growth.
    We have reduced bills for low and moderate income families.
        Senator Markey. Say that again. You have reduced the
    electricity bills for low and moderate income people?
        Mr. Martens. Yes. The cumulative benefit to just New York
    low and moderate income bill payers has been $60 million to
    date through the first quarter of this year. Those benefits
    will continue on into the future because New York has specified
    income eligible ratepayers in two of its programs.
        The beauty of the program is that States have the
    flexibility to target the revenue from the sale of those
    allowances to a variety of programs. Industrial customers can
    benefit; low and moderate income ratepayers can benefit;
    businesses and your average homeowners can benefit. It has been
    a tremendous success story.
        Senator Markey. It is my understanding, Mr. Martens, that
    under the proposed rulemaking, for example, New Jersey or
    Pennsylvania could join our Regional Greenhouse Gas Initiative.
    They can plug into an already existing system that is working,
    that is lowering costs for low and moderate income, lowering
    the amount of greenhouse gases while seeing tremendous growth
    in our GDP. I think there is a reason to be very optimistic.
        Listening to the Pope's admonitions to us that we should be
    the global leader on this, we can use market forces to
    accomplish the goal while still enjoying tremendous economic
    growth and taking care of the poor and the moderate income
    people in our Country.
        Mr. Martens. I agree with you entirely, Senator. I think
    there are places around the Country that could benefit from
    that model. It may not be identical to the RGGI model but
    certainly States cooperating makes great sense because the
    efficiencies of dealing with multiple States and energy systems
    that cross State boundaries has obviously been a great
    advantage in the RGGI States. I think it could be elsewhere
    also.
        Senator Markey. I am afraid too many people are just
    pessimistic in general. They are just not optimistic about our
    ability as Americans to be the global leader, to use new
    technologies, to invest in the future, protect young people and
    our economy at the same time. Unfortunately, they harbor a
    great doubt about our Country's ability to do that.
        I thank the two of you for your testimony because you point
    out the problems and the solutions. You all have done it in a
    way which I think should really give people some hope.
        Thank you, Madam Chair.
        Senator Capito. I think that concludes our hearing. I want
    to thank the witnesses for bringing forth some great
    information and facts and lots for us to think about. I
    appreciate you all taking time today to be with us.
        I want to thank my Ranking Member.
        With that, we will conclude the hearing. Thank you.
        [Whereupon, at 3:19 p.m., the subcommittee was adjourned.]

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