[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
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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.]
[all]