[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
SOLVING THE CLIMATE CRISIS: DRAWING DOWN CARBON AND BUILDING UP THE
AMERICAN ECONOMY
=======================================================================
HEARING
BEFORE THE
SELECT COMMITTEE ON THE
CLIMATE CRISIS
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
APRIL 30, 2019
__________
Serial No. 116-3
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
www.govinfo.gov
Printed for the use of the Select Committee on the Climate Crisis
________
U.S. GOVERNMENT PUBLISHING OFFICE
36-849 WASHINGTON: 2019
SELECT COMMITTEE ON THE CLIMATE CRISIS
KATHY CASTOR, Florida, Chair
BEN RAY LUJAN, New Mexico GARRET GRAVES, Louisiana, Ranking
SUZANNE BONAMICI, Oregon Member
JULIA BROWNLEY, California MORGAN GRIFFITH, Virginia
JARED HUFFMAN, California GARY PALMER, Alabama
A. DONALD McEACHIN, Virginia BUDDY CARTER, Georgia
MIKE LEVIN, California CAROL MILLER, West Virginia
SEAN CASTEN, Illinois KELLY ARMSTRONG, North Dakota
JOE NEGUSE, Colorado
------
Ana Unruh Cohen, Majority Staff Director
climatecrisis.house.gov
C O N T E N T S
----------
Statements of Members of Congress
Page
Hon. Kathy Castor, a Representative in Congress from the State of
Florida, and Chair, Select Committee on the Climate Crisis:
Opening Statement............................................ 1
Prepared Statement........................................... 2
Hon. Garrett Graves, a Representative in Congress from the State
of Louisiana, and Ranking Member, Select Committee on the
Climate Crisis:
Opening Statement............................................ 3
Witnesses
Diana Liverman, Regents Professor of Geography and Development,
University of Arizona
Oral Statement............................................... 6
Prepared Statement........................................... 8
Christopher Guith, Acting President and CEO, US Chamber of
Commerce, Global Energy Institute
Oral Statement............................................... 16
Prepared Statement........................................... 19
David Foster, Distinguished Associate, Energy Futures Initiative
Activities
Oral Statement............................................... 27
Prepared Statement........................................... 28
Hal Harvey, CEO, Energy Innovation
Oral Statement............................................... 33
Prepared Statement........................................... 35
Submissions for the Record
Article from the Climate Policy Initiative Report, submitted for
the record by Mr. Casten....................................... 58
Graphic from Lazards Levelized Cost of Energy Analysis, submitted
for the record by Mr. Graves................................... 97
Appendix
Questions from Hon. Kathy Castor for Diana Liverman.............. 102
Questions from Hon. Garrett Graves for Christopher Guith......... 106
Questions from Hon. Kathy Castor for David Foster................ 109
Questions from Hon. Kathy Castor for Hal Harvey.................. 112
Questions from Hon. Ben Ray Lujan for Hal Harvey................. 117
SOLVING THE CLIMATE CRISIS: DRAWING DOWN CARBON AND BUILDING UP THE
AMERICAN ECONOMY
TUESDAY, APRIL 30, 2019
House of Representatives,
Select Committee on the Climate Crisis,
Washington, DC.
The committee met, pursuant to call, at 10:02 a.m., in Room
2247 Rayburn House Office Building, Hon. Kathy Castor
[chairwoman of the committee] presiding.
Present: Representatives Castor, Bonamici, Huffman,
McEachin, Levin, Casten, Neguse, Graves, Griffith, Palmer,
Carter, Miller, and Armstrong.
Ms. Castor. Good morning. Welcome to the April 30, 2019
meeting of the Select Committee on the Climate Crisis. The
committee will come to order. And without objection, the chair
is authorized to declare a recess of the committee at any time.
Today, we will set the table for the select committee's
work on the biggest challenge before us: how to decarbonize the
economy, in accordance with climate science, while creating
family-sustaining jobs and building a more equitable society.
For the benefit of the witnesses, I want to note that
members will be coming in and out of the hearing, Mr. Lujan is
with the Speaker, meeting with the President about
infrastructure, and several members are chairing, or trying to
fit in multiple hearings. I recognize myself for 5 minutes for
an opening statement.
This is the first of many select committee hearings that is
focused on solutions to the climate crisis. The need for
solutions is increasingly urgent. The first major warning
Congress received about the impending climate crisis was in
1988, but the Congress didn't act then. Today, we know that oil
companies' own scientists warned them about climate change too.
But instead of action, executives chose to tell Congress and
the American people to ignore the scientists and that we could
afford to wait.
Well now, the climate science is too unequivocal to deny.
What is clear from the science and what diverse voices,
including many young people across America are telling us every
day is that if Congress continues to delay, we lose. If
Congress chooses the status quo, we lose. In fact, scientists
have told us that the world needs to hit net zero carbon
emissions by 2050 to avoid the worst consequences of the
climate crisis. Getting there means cutting greenhouse gas
pollution 45 percent below 2010 levels by 2030. To get there,
and to give ourselves a chance of avoiding the most
catastrophic consequences of climate change, we have to cut
carbon pollution smartly, and soon. Taking action now gives us
the best opportunity to transition to a clean energy economy,
efficiently and equitably.
We still have time to solve the climate crisis, because we
have made some good choices. Raising fuel economy standards,
supporting wind and solar jobs, investing in research and
development, that is coming to fruition now. America chose to
lead the world in the Paris Climate Agreement, an agreement
vital to the clean energy jobs and innovations underway in
America right now. But every time Congress and the
administration choose delay, American families and businesses
are asked to pay a higher price, whether it is through climate
catastrophes, extreme heat, dirtier air, or higher electric
bills. But as daunting as the climate crisis is, we can make
choices and rise to the challenge.
Many businesses and communities across America have been
leading the way. More than 3 million Americans work in the
clean energy economy, existing energy efficiency standards will
save consumers and businesses $2 trillion on utility bills by
2030, and fuel economy standards will save the average
household another $2,800 a year at the pump.
Still, there is no substitute for bold Federal policy
initiatives that meet the scale of the challenge we face. When
we choose clear policies with clear goals, businesses innovate;
they reduce cost, they put clean technology to work.
Our witnesses today will help us examine and prioritize our
policy choices. We are going to look at infrastructure, at
deploying more wind and solar, at electrifying home heating and
transportation, at cutting the most powerful climate pollutants
and more. We are also going to look at funding research and
development, and establishing public private partnerships that
move technology from the lab to the market. We are going to
look at capturing and storing carbon and pulling it out of the
atmosphere. But we have to be clear: Technological
breakthroughs are not guaranteed. Choosing to invest in
innovation doesn't give us an excuse to choose the status quo
elsewhere. At the end of the day, technology is just a tool. It
is people who will solve the climate crisis.
The clean energy economy employs millions of people, and we
can choose policies that will make those jobs family-sustaining
jobs. That includes elevating transition for workers in the
fossil fuel industry. They deserve a clean energy economy that
delivers for them in their communities. We need good and
patriotic policies for them, too, and we need climate solutions
that work. We have to pursue many options to meet our goals by
2030 and 2050. The one option we don't have anymore is delay.
We must choose climate action now.
And at this time, I will yield to my friend and colleague,
the ranking member, Mr. Graves, for an opening statement.
Opening Statement (As Prepared for Delivery)
Rep. Kathy Castor (D-FL)
Chair, U.S. House Select Committee on the Climate Crisis
Solving the Climate Crisis: Drawing Down Carbon and Building Up the
American Economy
April 30, 2019
This is the first of many Select Committee hearings that is focused
on solutions to the climate crisis. The need for solutions is
increasingly urgent.
The first major warning Congress received about the impending
climate crisis was in 1988. But the Congress didn't act then. Today we
know that oil companies' own scientists warned them about climate
change, too. But instead of action, executives chose to tell Congress
and the American people to ignore the scientists . . . and that we
could afford to wait.
Now the scientific consensus is too unequivocal to deny. What is
clear from the science and what diverse voices, including young people
across America, are telling us every day is that if Congress continues
to delay, we lose. If Congress chooses the status quo, we lose.
In fact, scientists have told us that the world needs to hit net-
zero carbon emissions by 2050 to avoid the worst consequences of the
climate crisis. Getting there means cutting greenhouse gas pollution 45
percent below 2010 levels by 2030.
To get there--and to give ourselves a chance of avoiding the most
catastrophic consequences of climate change--we have to cut carbon
pollution smartly and soon. Taking action now gives us the best
opportunity to transition to a clean energy economy efficiently and
equitably.
We still have time to solve the climate crisis because we've made
some good choices: raising fuel economy standards, supporting wind and
solar jobs, and investing in research and development that is coming to
fruition now. America chose to lead the world in the Paris Climate
Agreement, an agreement vital to the clean energy jobs and innovations
underway across America now.
But every time Congress and the administration choose delay,
American families and business are asked to pay a higher price whether
it's through climate catastrophes, extreme heat, dirtier air or higher
electric bills.
But as daunting as the climate crisis is, we can make choices and
rise to the challenge.
Many businesses and communities across America have been leading
the way. More than 3 million Americans work in the clean energy
economy. Existing energy efficiency standards will save consumers and
businesses $2 trillion on utility bills by 2030. And fuel economy
standards will save the average household another $2,800 a year at the
pump. Still, there is no substitute for bold federal policy initiatives
that meet the scale of the challenge we face.
When we choose clear policies with clear goals, businesses
innovate. They reduce costs. They put clean technology to work.
Our witnesses today will help us examine and prioritize our policy
choices. We're going to look at infrastructure, at deploying more wind
and solar, at electrifying home heating and transportation, at cutting
the most powerful climate pollutants and more.
We're also going to look at funding research and development and
establishing public-private partnerships that move technology from the
lab to the market. We are going to look at capturing and storing carbon
and pulling it out of the atmosphere.
But we have to be clear: technological breakthroughs are not
guaranteed. Choosing to invest in innovation doesn't give us an excuse
to choose the status quo elsewhere.
At the end of the day, technology is just a tool. It's people who
will solve the climate crisis.
The clean energy economy employs millions of people and we can
choose policies that will make those jobs family-sustaining jobs.
That includes elevating transition for workers in the fossil fuel
industry. They deserve a clean energy economy that delivers for them,
in their communities. We need good and patriotic policies for them,
too.
And we need climate solutions that work for people who are on the
front lines of the climate crisis. That means putting an end to
environmental racism and making sure the jobs at the heart of the clean
energy economy are accessible to everyone.
We have to pursue many options to meet our goals by 2030 and 2050.
The one option we don't have any more is delay. We must choose climate
action now.
Mr. Graves. Thank you, Madam Chair. I appreciate the
opportunity to address the committee. I hope everybody had a
fantastic Easter, and welcome back.
Witnesses, I want to thank you all for being here. I
apologize, I didn't come tell you hello this morning, but thank
you all for submitting testimony. I did have a chance to go
through all your testimony, and I appreciate you making the
effort to be here today.
Madam Chair, first of all, I want to reiterate what I have
talked about in the past: Climate change is real, humans are
having a contribution to it. And the congressional districts,
like the one that I represent, that Congressman Carter
represents, the effects of sea rise and other challenges, are
having real impacts on our communities today.
I think that what we have to do moving forward is be very
thoughtful, be responsive, and make sure we are bringing people
to the table that actually have experience working in these
fields, as opposed to folks setting targets, objectives, and
goals that lack any degree of science or reality. Importantly,
what we have to do is we have to very carefully think about
some of these multilateral agreements like Paris, and look at
the cumulative effect of them and determine whether or not
these truly will provide a global benefit, a global and
environmental benefit, or have adverse consequences.
For example, Madam Chair, I think it is important to note
that you can look at what the European Climate Action Network
determined. They determined that all European countries are
currently not, they are not on a trajectory to actually hit
their Paris Accord targets, that they would have to triple
their efforts today in order to come into compliance with those
targets, and that their targets, to begin with, are
insufficient.
So let me say that again, the European Union nations are
not hitting their targets; they are not on a trajectory to hit
their targets, that they would have to triple their efforts and
that their targets, to begin with, were insufficient.
Something else that is really important for us to think
about, and one of the biggest flaws in the Paris Accord is the
fact that you have China that doesn't even have to reduce
emissions, doesn't even have to reduce emissions for several
years, and is already more than offsetting the impact of
emission reductions in the United States.
Now, I also think that it is important to make note of
another really important fact: The IEA, the International
Energy Agency, in their recent global energy and CO2
status report, I want to read a quote from it, because we can
sit here and continue demonizing the United States, or we can
talk facts. In their report they say: In the United States,
emission reductions seen in 2017 were reversed. Our emissions
reductions were reversed with an increase of 3.1 percent of
CO2 emissions in 2018. You have seen lots of
reporting on that. So folks were looking myopically in 2017 and
2018.
Let's actually look even farther back. Despite this
increase, emissions in the United States remained around their
1990 levels, 14 percent at 800 metric tons of CO2
below the peak in 2000. Now, here is the kicker statement: This
is the largest absolute decline among all countries since 2000.
We have got to stop this ridiculousness of beating up on the
United States. We have got to recognize that we are actually
doing extraordinary things without mandates requirements that
we are doing--experiencing extraordinary reductions in the
United States. We have got to stop these utopian concepts like
Green New Deal and other things that lack any degree of
reality, that lack any input from actual experts in these
fields. We have got to realize that the Paris Accord what the
China, India developing country targets. Calling China a
developing country is fascinating to me, using entirely
different metrics on how they are reducing emissions. All this
is doing is resulting in a net adverse impact to our global
environment, while undermining the competition, or the
competitiveness of the U.S. workforce and the U.S. economy.
Madam Chair, I look forward to working with you, to build
upon some of the successes, and also, learning from some of the
failures of previous administrations to try and reduce
emissions, particularly looking at the impacts of Ms. Miller's
district, looking at the impacts of Mr. Griffith's district, of
some of these flawed policies, and moving forward in a
direction like we are seeing in Louisiana, where we are
exporting natural gas to 35 countries today, and resulting in
lower emissions.
Mr. Foster, I want to particularly thank you for your
thoughtful testimony. I think that you have come across very
balanced and being very realistic. I enjoyed reading your
testimony, I thought it was very good; Mr. Guith, you as well.
I want to thank you all for just being thoughtful and realistic
in your testimony. We often have people come in here that just
throw out these things that aren't based. And I am not beating
up on you all in anyway, but you had a very balanced and
thoughtful realistic approach in your testimony, and I do
appreciate you being here.
I am over time, so I am going to go ahead and shut up, but
I want to thank you all again.
Ms. Castor. Thank you very much to the ranking member. The
United States of America has been a world leader and we should
keep it that way.
Now I want to welcome our witnesses. First, we have Dr.
Diana Liverman, who is a Professor of Geography at the
University of Arizona. Dr. Liverman served as a lead author for
the Intergovernmental Panel on Climate Change's report on
limiting warming to 1.5 degrees Celsius. Her research focuses
on how climate change affects people, including historically
disempowered groups, and how society can adapt to climate
change.
Mr. Hal Harvey, here at the end, is CEO of Energy
Innovation, an energy and environmental policy firm. Harvey
founded the Energy Foundation, and has served on Federal energy
panels under the George H.W. Bush and Bill Clinton
administrations. In 2018, he received the United Nations' Clean
Air and Climate Change Award, and he is the author of two books
on energy and climate.
Mr. David Foster is a distinguished associate with the
Energy Futures Initiative, a think tank started by energy
security former Energy Secretary Ernest Moniz. Foster served as
a senior adviser to Secretary Moniz at the Department of
Energy, and was the founding executive director of the
BlueGreen Alliance, a partnership between unions and
environmental organizations. From 1990 to 2006, Foster was
director of the U.S. steelworkers district 11, a 13-State
region based in Minneapolis, welcome.
And Mr. Christopher Guith is acting president and CEO of
the U.S. Chamber of Commerce's Global Energy Institute.
Previously, Guith had served as a Deputy Assistant Secretary in
the George W. Bush administration, and worked in the offices of
Representatives Bob Barr and Tim Murphy.
Without objection, the witnesses' written statements will
be made part of the record. With that, we will go to Dr.
Liverman, then to Mr. Guith, and then go down the table this
way. So without objection, the witnesses' written statements
will be part of the record. Dr. Liverman, you are now
recognized to give a 5 minute presentation on your testimony.
Thank you.
STATEMENTS OF DR. DIANA LIVERMAN, REGENTS PROFESSOR OF
GEOGRAPHY AND DEVELOPMENT, UNIVERSITY OF ARIZONA; HAL HARVEY,
CEO, ENERGY INNOVATION; DAVID FOSTER, DISTINGUISHED ASSOCIATE,
ENERGY FUTURES INITIATIVE; AND CHRISTOPHER GUITH, ACTING
PRESIDENT AND CEO, U.S. CHAMBER OF COMMERCE, GLOBAL ENERGY
INSTITUTE
STATEMENT OF DIANA LIVERMAN
Dr. Liverman. Thank you, Chairwoman Castor, Ranking Member
Graves, and distinguished members of the committee. Good
morning and thank you for the invitation to give testimony at
today's hearing.
My name is Diana Liverman. I am a professor at the
University of Arizona, where we are proud to host federally
funded centers for the climate assessment for the southwest
with NOAA, and the Department of the Interior Regional Climate
Science Center. We also have a Center for Climate Adaptation,
Science, and Solutions, that made many contributions to the
U.S. National Climate Assessments.
I studied climate change and its impacts for 40 years. I
wrote my Ph.D. on climate change and food security at UCLA and
the National Center for Atmospheric Research in Colorado. I
worked for the University of Wisconsin, Penn State, and Oxford
University. And although I have been a U.S. citizen for 30
years, I have retained my British accent because students in my
classes apparently are finding it more interesting and more
convincing.
You invited me to speak about the recent special report of
IPCC on global warming of 1.5 Celsius, requested by countries
as part of the decision to adopt the Paris Agreement. I was a
lead author for chapter 5 of the main report, nominated by the
U.S. Government, and I also contributed substantially to the
summary for policymakers. We released the report written by 91
authors from 40 countries in October 2018. We assessed more
than 6,000 scientific studies, and received over 40,000
comments from governments, scientists and other expert
reviewers that helped us improve the report.
What did the report conclude? My written testimony provides
much more detail, but let me summarize some of the key
messages: First, the Earth is already warmed on average by 1
degree Celsius, that is about 1.8 Fahrenheit, even more over
land and towards the poles. And we are already seeing impacts
and losses from the warming. In the U.S., the warming has been
greatest in Alaska, but also in the southwest where I live,
where the annual average temperature has increased since 1901,
with parts in southern California and Arizona warming by more
than 4 degrees Fahrenheit.
Warming has led to lower flows on the Colorado, increased
the risk of wildfires across the west. It is altering our
ecosystems, and stressing the electrical grid and agriculture.
It has already increased the risk of species extinction,
shifted agricultural zones, and affected human health. Tucson,
where I live, now has 25 more days above 100 degrees Fahrenheit
than it did in 1970. This heat has especially affected our most
vulnerable citizens, the poor, the elderly, children, as well
as tribal members, people of color and folks who work outdoors.
Many people can't afford the increased air conditioning and
water costs.
Secondly, every bit of warming matters. The IPCC found
significant differences in climate and impacts between 1.5
Celsius and 2 Celsius, that is 2.7 and 3.6 Fahrenheit. For
example, sea level rise by 2100 would be 6 inches more at 2
degrees with added risks if ice sheets become more unstable.
Even a few inches of sea level rise increases the risks of
coastal flooding, salt water intrusion, and damage to
infrastructure.
The loss of habitat for many insects, plants and animals
doubles, even with that extra half degree. Fire risk is higher,
and fisheries are more disturbed. At 1.5 degrees Celsius, we
lose about 70 percent of tropical corals, at 2 degrees they
disappear. Poverty increases by several hundred million, and in
many regions, water stress and heat wave deaths double,
agricultural production declines, and diseases can increase.
My third point is that we can reduce losses now, and at 1.5
degrees Celsius, if we focus on adapting to ongoing warming.
Limiting warming to 1.5 Celsius makes that adaptation easier
and less costly. U.S. communities and businesses are already
making costly adaptations to cope with observed warming.
The University of Arizona is working with stakeholders
across the southwest, water managers, conservation scientists,
farmers and communities to develop and implement adaptation
solutions.
Fourth, limiting warming to 1.5 is possible. The world is
not on track if we want to limit warming to 1.5. The IPCC
concluded that the voluntary commitments pledged so far under
the Paris Agreement still take us to 3 degrees. But there is a
chance to stay under 1.5, if we cut emissions in half by 2030,
and reach net zero emissions by 2050.
The U.S. can make important contributions to the rapid and
far-reaching transitions in energy, land, urban infrastructure,
and industrial systems that could help limit warming to 1.5.
Delaying emission reductions could be very costly. If we choose
to delay, we may lose the chance to stay under 1.5 degrees
Celsius, or we will have to make deeper and more expensive cuts
in emissions, rely on untested technologies, experience greater
losses, or adapt to higher temperatures. Halving emissions by
2030, starting now, sets us on the path to success. The world
will not end if we don't make these emission cuts by 2030, but
that world will be much harder for us to live in. Thank you.
[The statement of Dr. Liverman follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Castor. Thank you very much.
Mr. Guith, you are now recognized to give a 5-minute
presentation on your testimony.
STATEMENT OF CHRISTOPHER GUITH
Mr. Guith. Thank you.
Good Morning, Chairwoman Castor, Ranking Member Graves and
members of the committee. The U.S. Chamber appreciates the
opportunity to testify today on the important role of
technology and innovation in addressing climate change. Global
climate change is one of the most complex and far-reaching
issues facing governments in the business community. The
Chamber recognizes the climate is changing, humans are
contributing to these changes, and these changes pose risks.
The question for business and policymakers is how best to
manage these risks, capture opportunities, and maintain our
global economic leadership. But inaction is not an option. The
Chamber believes there is much common ground on which all sides
of this discussion could come together to craft a practical,
flexible, predictable, and durable approach to climate change
that acknowledges the cost of action and inaction and the
competitiveness of the U.S. economy. Because the business
community will be integral to developing and providing cost
effective solutions and building resilient infrastructure, it
will continue to be at the table.
The Chamber believes that technology and innovation are
integral to managing climate risks and reducing emissions
across the U.S. as well as the globe. Instead of regulating our
way to lower emissions, a realistic, effective and lasting
climate policy should focus on innovating our way to
technological solutions. Breakthroughs and commercially viable
technology are necessary to enable significant cuts in
emissions without harming economic growth or competitiveness of
energy intensive and trade exposed industries.
Existing technologies have started us on the path, but they
are not capable of significantly reducing greenhouse gas
emissions on a global scale at an acceptable cost. New, and in
some cases, revolutionary technologies, will have to be
developed and adopted commercially, along with the
infrastructure to support them.
Some of these technologies may never reach viability, but
that does not mean we shirk the duty of trying to develop them.
A technology neutral, solutions-focused climate policy is best
positioned to stand the test of time and deliver cost
effective, achievable, and meaningful greenhouse gas
reductions.
In the meantime, we should continue to develop our domestic
energy resources which provide our businesses a critical
operating advantage in today's intensely competitive global
economy. We should work to preserve that advantage, recognizing
that disproportionate international commitments could cause
American industrial capacity to move to other countries through
carbon leakage.
A policy that promotes continued economic growth and
environmental progress through sustained focus on technology
development where what we at the Chamber call the cleaner,
stronger approach, is much more popular with the voting public
compared to an approach centered on expanding government
regulation. Last month, we commissioned a national poll that
found 79 percent of voters agreed that the best way to address
climate change is through investment, and innovation, and
technology, which was a 24-point advantage over increased
government regulation. Additionally, voters prefer a cleaner,
stronger focus to a Green New Deal approach by more than three
to one.
And finally, more than 64 percent of voters would spend no
more than $10 a month to address climate change. These results
underpin the Chamber's efforts to promote bipartisan Federal
policies and investments that spur technologies that can reduce
environmental impact and compete on price and reliability.
It will largely be up to the business community to develop,
finance, build, and operate the solutions needed to power
economic growth worldwide, while mitigating greenhouse gas
emissions. Thousands of businesses already have made emissions
commitments and are taking action to reduce emissions in their
own operations and along their value chains. To draw attention
to what the energy industry is doing, last summer, we launched
a new initiative to highlight that the energy industry has been
one of, if not the most innovative industries, over the last
decade. Our program, called Energy Innovates, highlights
specific innovative projects and technologies, as well as the
forward thinkers, engineers, and manufacturers responsible for
further development.
This summer, the Chamber is hosting an energy innovation
summit to help policymakers here in Washington better
conceptualize the exciting development happening across the
country.
Climate change is a global challenge, and U.S.
technological leadership will be vital in addressing developing
country emission trends. Virtually, all future greenhouse gas
emission growth is expected to come from developing countries.
Much of these increases are related to a sharp increase in
coal-fired electricity generation expected to be built there.
As such, technology and innovation will be even more important
in addressing developing country emission trends.
Make no mistake, the developing world's desire for greater
energy access is not an argument for inaction. As we stated,
inaction is not an option. However, failure to recognize the
global nature of climate change leads to a solution set that is
ineffective. Advanced technologies that compete with
traditional fuels on cost, reliability and scalability can
reconcile the sometimes competing quest for energy access and
desire for emissions reductions.
Technology supported by sound policy will be essential to
tackling the challenges and capitalizing on the opportunities
presented by climate change. The Chamber will continue to
support an accelerated program to improve performance, lower
the cost, and increase scalability of energy technologies.
There are a number of near-term legislative actions on which
there is broad consensus, such as technology and innovation
that the Chamber supports, and on which Congress could act.
I listed several in my written testimony, and we encourage
all of you to cosponsor these bills. America's business
community is ready, willing and able to continue to provide the
solutions to reduce emissions while growing the economy. With
the sensible policy environment that plays to America's
strengths and business leadership, we can continue making our
economy cleaner and stronger. An approach focusing on solutions
offers a practical path forward that makes good sense and good
business sense.
Thank you, Madam Chairman.
Ms. Castor. Thank you very much.
[The statement of Mr. Guith follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Ms. Castor. Mr. Foster, you are new recognized for 5
minutes.
STATEMENT OF DAVID FOSTER
Mr. Foster. Thank you. Good morning, Chairwoman Castor,
Ranking Member Graves, and Hal Harvey for turning the mic on. I
am pleased to be here today on behalf of the Energy Futures
Initiative to speak to the important issue of the energy and
energy efficiency workforces. Twelve years ago, in 2007, I
testified to the Select Committee on Energy Independence and
Global Warming. At that time, I stated one of the most famous
American industrialists of the 20th century, Henry J. Kaiser,
once observed, quote, ``Problems are just opportunities in work
clothes.'' While 12 years later, I am pleased to report that
millions of Americans have put on their work clothes and got
about the business of solving climate change. Today, of the 6.7
million Americans who work in the energy and energy efficiency
industries, over 3.5 million, more than 50 percent, are
contributing to a lower emissions economy. 350,000 of them do
this in the wind and solar energy industries; another 63,000 in
nuclear power plants; 66,000 in hydro; 70,000 in low emissions,
advanced natural gas generating plants; and thousands of others
in geothermal, combined heat and power, battery storage, and
many other technologies including several hundred at the first
coal-fired power plant retrofitted with carbon capture
technology at the Petra Nova generating station, just south of
Houston, Texas.
If it is done right, with the interest of America's middle
class and working families at heart, there will be a place at
the table, a job, and a paycheck, for every American while we
solve the climate crisis. But we do have to do it right. Most
of the Americans whose jobs are reducing greenhouse gas
emissions today are working with energy efficiency
technologies. In fact, almost 2.35 million people work in
energy efficiency in the United States, retrofitting our
buildings, installing LED lighting systems, and manufacturing
high efficiency HVAC systems and hundreds of other ENERGY STAR
certified products.
In transportation, almost 254,000 Americans now work
manufacturing hybrids, all electrics, and plug-in hybrids,
while another 486,000 work in the motor vehicles component
parts industry, specifically on those products that make our
automotive fuel consumption more efficient. This is how we
solve climate change, by doing the hard work every day and
getting a paycheck from construction work, factory jobs, for
mining critical minerals like copper, iron ore and palladium
and designing, financing, and permitting the systems and
products that create our low carbon economy.
So what are some of the effective job strategies for
dealing with the disparities that are inevitable in the
transition to a low carbon economy? First, we need to embrace
an all-of-the-above flexible strategy towards climate
solutions. There is no silver bullet that can guide our economy
to a low carbon endpoint guaranteeing CO2 reduction
and a decent job for every American. But we can invest in a
range of technologies and options that preserve flexibility and
encourage participation in every form of energy and in every
community during the next decade. From renewables and battery
storage in California, to carbon capture and sequestration in
Appalachia, to small modular reactors in Idaho.
Second, we need to accelerate our investments in energy
efficiency with a special priority on those regions of the
country negatively impacted by declining use of fossil fuels.
The third strategy is to invest in energy infrastructure. The
existing DOE loan program office, with $39 billion of existing
loan authority, could be particularly helpful in jump-starting
such an initiative.
Fourth, we need to focus on the manufacturing supply chains
that our new energy technologies are creating. The ENERGY STAR
brand promoted by the U.S. EPA is one of the strongest product
marketing brands in the world, recognized as the gold standard
for efficiency, using a new ENERGY STAR, Made in America
procurement policy to support the manufacturer of best in class
products would be one of best paths forward to a resurgence in
American manufacturing. Carbon performance should be a
universal procurement standard for government spending in the
U.S., similar to what California recently did with its Buy
Clean standard.
Finally, we need to address the workforce development
crisis across all energy technologies, but particularly in
energy efficiency. In 2017, energy efficiency construction
employers have projected hiring at 10.6 percent for over
120,000 new jobs. But the reality of hiring difficulty got in
the way, and they added only 21,000 jobs in 2018. This was a
failure of our workforce development system with very real-
world consequences. From the environmental perspective,
millions of tons of CO2 went into the atmosphere
that could have been prevented. But from the human perspective,
this represented over 100,000 families that could have entered
the middle class with some of the best paying jobs in America.
I want to close by thanking the committee, again, for the
opportunity to testify. With sound economic analysis, accurate
jobs data and a collaborative approach, we can manage our path
to a low-carbon economy by investing in new opportunities and
new jobs first before we put old technologies on the shelf.
Thank you very much.
[The statement of Mr. Foster follows:]
Testimony to the House Select Committee on the Climate Crisis
David Foster, Distinguished Associate, Energy Futures Initiative
April 30, 2019
Good morning, Madame Chairwoman Castor and Ranking Member Graves.
I'm pleased to be here today on behalf of the Energy Futures Initiative
to speak to the important issue of the energy and energy efficiency
workforce in our country during a time of considerable technological
change and policy debate, both of which can have consequential effects
on the lives of the men and women who work throughout our energy
economy.
Twelve years ago, in 2007, I testified to the Select Committee on
Energy Independence and Global Warming. At that time I reflected, ``One
of the most famous American industrialists of the 20th Century, Henry
J. Kaiser, who built an innovative manufacturing enterprise that
included aluminum, steel, and ship building and created the health care
delivery system that still bears his name, once observed that
``Problems are just opportunities in work clothes.''
Twelve years later, I'm pleased to report that a lot of Americans
have put on their work clothes and got about the business of solving
climate change. Today, of the 6.7 million Americans who work in the
energy and energy efficiency industries over 3.5 million, more than
50%, are contributing to a lower emissions economy. 350,000 of them do
this in the wind and solar energy industries, another 63,000 thousand
in nuclear power plants, 65,000 in hydro and 70,000 in low emissions
advanced natural gas generating plants, and thousands of others in
geothermal, combined heat and power, battery storage, and many other
technologies, including several hundred at the first coal-fired power
plant retrofitted with carbon capture technology at the Petra Nova
generating station, just south of Houston, TX. If it is done right,
with the interests of America's middle class and working families, at
heart, there will be a place at the table, a job and a pay check for
every American while we solve the climate crisis. But we have to do it
right.
Most of the Americans whose jobs are reducing greenhouse gas
emissions today are working with energy efficiency technologies. In
fact, almost 2.35 million people work in energy efficiency in the
United States, retrofitting our buildings, installing LED lighting
systems, and manufacturing high efficiency HVAC systems and hundreds of
other EnergyStar certified products. They provide the design and
engineering plans to restructure our built environment. They reduce the
energy consumption in our energy intensive industries and in every way
they are changing the way we interact with our environment.
In transportation, almost 254,000 Americans now work manufacturing
and designing alternative fuels' vehicles including all electrics,
hybrids, and plug in hybrids, while another 486,000 work in the motor
vehicles' component parts industry, specifically on those products that
make our automotive fuel consumption more efficient. This is how we
solve climate change--by doing the hard work every day and getting a
pay check from construction work, factory jobs, from mining the
critical minerals like copper, iron ore, and bauxite, and designing,
financing, and permitting the systems and products that create our low
carbon economy.
For 31 years I worked with the United Steelworkers union, the last
16 as the Director of the 13-state District #11, based in Minnesota. In
2006 with the Steelworkers support, I was the founding executive
Director of the Blue Green Alliance, a national organization that
unified 10 labor unions and five environmental organizations with over
14 million members around a vision of a fair and just transition to a
low carbon economy that would put money in working families' pockets
and make America the leader in low carbon technologies. I also served
for three years as Senior Advisor on energy, economic development,
climate, and workforce issues to U.S. DOE Secretary Moniz from 2014-
2017. I currently serve as a Distinguished Associate at the Energy
Futures Initiative, an energy policy think tank, founded by the former
Secretary and a consultant to the Roosevelt Project at the
Massachusetts Institute of Technology. I also serve on the boards of
two manufacturing companies, Kaiser Aluminum and Evraz, NA, a steel
company.
While I was at the U.S. Department of Energy (DOE), I was
responsible for overseeing the design and production of the U.S. Energy
and Employment Report, an employer survey-driven study of how new
energy technologies were affecting labor markets in the U.S. in five
critical sectors--Fuels; Electric Power Generation; Transmission,
Distribution and Storage; Energy Efficiency; and Motor Vehicles. We
focused on these sectors because they were at the core of the system
through which we create, distribute, and consume most of the energy in
the American economy. After producing two editions of the U.S. Energy
and Employment Report, I have continued this work at the Energy Futures
Initiative in partnership with the National Association of State Energy
Officials (NASEO). This partnership has produced two subsequent reports
on the energy workforce, using the identical methodology we created at
DOE, released in the spring of 2018 and most recently, the spring of
2019.
Energy jobs data is critical to measuring the economic success of
any climate change mitigation program, pinpointing any adverse economic
consequences, and crafting solutions for working people and communities
that may be upended by changing energy technologies.
Here are some of the key findings of our reports:
Although the energy sector in the U.S. has steadily declined as a
percentage of U.S. Gross Domestic Product (GDP) since the Oil Embargo
of the 1970's, with one notable exception during the 2006-08 period,
energy occupies a unique position in the American economy. It is the
sector upon which every other sector is dependent.
Today's energy and energy efficiency sectors employ 6.7 million
Americans, with 35% of those employees focused on energy efficiency,
19% engaged in transmission, distribution and storage of fuels and
electricity, 17% producing fuels, another 13% producing electricity,
and 15% working in gas stations.
For the last four years, the energy and energy efficiency sectors
have out-produced the rest of the American economy, creating jobs at a
more rapid rate than the economy as a whole. In 2018, the U.S. economy
increased jobs by 1.8%, while the energy and energy efficiency sectors
added jobs at 2.3%, creating 7% of all new jobs.
It is critical to understand that an economy whose energy sector is
constantly becoming more productive, more efficient and more cost
competitive not only creates jobs itself, but also stimulates job
creation in every other sector of the economy including in
manufacturing, construction, agriculture, health care, or IT services.
Energy is a critical cost component that links systems, enables
innovation, and stokes global competitiveness. We need only look to
neighboring economies where the cost of energy, inefficient energy
systems, and unreliable delivery infrastructure disrupt and slow
economic activity.
Our energy system starts with the production of fuels which today
employ 1.13 million Americans, an increase of 52,000 in 2018. Most of
this increase was a result of the resurgence of oil and gas production
in the U.S. While some advocates for aggressive action on climate
change may see the growth of domestic oil and gas production as a
threat, I see it as an opportunity that affords us the economic
stability to plan the transition to a low carbon economy over the next
thirty years without the disruption that spikes in fossil fuel prices
or lack of availability would cause. Just remember the problems that
accompanied the 2007-8 spike in oil prices to $140/barrel. Agriculture,
manufacturing, and transportation, worldwide, faced serious
consequences.
The luxury of our current energy abundance also allows us to attack
the much more difficult problems of reducing GHG emissions from the
industrial, agricultural, and transportation sectors without dealing
immediately with the social dislocation that would be caused in those
sectors and in more rural parts of the country, all of which are more
heavily dependent on fossil fuels.
Although most fuels' production in the U.S. is fossil today, it is
important to note that the 2019 USEER identified over 106,000 Americans
who work in renewable fuels, an increase of almost 2,300 jobs.
Electric Power Generation (EPG) employed 876,000 people in the US
in 2018, a decline of some 8,000 from 2017, but roughly 8,000 more than
in 2016. The declines were clustered in the solar, coal and nuclear
generating technologies and were partially offset by gains in natural
gas, wind, CHP, and geothermal. While the number of overall jobs in EPG
has remained relatively stable, the fuel source of those jobs has
changed dramatically and resulted in significant reductions in GHG over
the last decade. Today, 640,000 people, or roughly 73% of the EPG
workforce are employed in low emissions technologies--including wind,
solar, geothermal, nuclear, hydro, combined heat and power, biomass,
and low emissions natural gas. In addition to including almost \3/4\ of
the workforce, these technologies produce almost 60% of our country's
electricity. 242,000 work in the solar industry, 111,000 in wind, and
63,000 in nuclear generation and 66,000 in hydro, our four principal
zero emissions' technologies. This is the clearest proof I know that
the transition to a low carbon economy can be done in a way that
produces jobs, ensures reliability, and provides affordable electricity
to consumers and business.
However, it would be misleading not to point out that this success
is dependent upon the continued production of natural gas, the largest
single source of generation in the country today and the employer of
over 270,000 Americans on the extraction side alone. Another 352,000
work in the distribution and generation side of natural gas, for a
total of almost 625,000. The shift of generation fuels from coal to
natural gas has been one of the most consequential steps to reduce GHG
emissions in both the electrical and industrial sectors over the last
decade. The flexibility of natural gas has also been an important
factor in accelerating the deployment of variable renewable energy
technologies like wind and solar.
Our energy infrastructure workforce--the men and women who build
and maintain the fuels' and electricity transmission, distribution and
storage systems--is the scaffolding around which the rest of our
economy is built. Without the ``on time'' delivery of reliable and
affordable energy every other aspect of our economy would grind to a
halt. Today, in addition to a million people employed in gas stations,
our energy infrastructure workforce is composed of another 1.4 million
Americans who build and service 642,000 miles of high voltage
transmission lines, 2.6 million miles of interstate pipelines, and 6.3
million miles of distribution lines, as well as the ports, railway
lines, and other essential infrastructure assets. According to the
American Society of Civil Engineers, our country's energy
infrastructure would get a D+ if given a high school grade. This
translates into a $177 billion funding gap over a 10 year period for
the electricity system alone. We lose a significant portion of
generated electricity to the inefficiency of our grid. Upgrades in the
grid are another example of how efficiency investments can directly
lead to GHG reductions by simply reducing the need for generation,
regardless of source.
Finally, our energy efficiency workforce is critical to the success
of any effort to address climate change, and its workforce challenges
are key to the successful management of an overall energy workforce in
transition. With 2.35 million workers, our energy efficiency workforce
is composed of 55% construction workers, 21% professional and business
services, 14% or over 320,000 manufacturing employees, 10% in wholesale
trade and other. Our energy efficiency workforce has added over 275,000
jobs in the last three years and is the fastest growing sector of the
low carbon economy.
Unlike fuel production and some renewable resources which tend to
be geographically specific, our energy efficiency workforce is located
in every state in our country. In my home state of Minnesota, there are
EE workers in every one of our 87 counties.
It is especially important to note that we are facing a hiring
crisis in energy efficiency technologies in our country that is the
worst in the entire energy sector. According to our recent survey, 84%
of employers in the construction side of EE found it either very
difficult or somewhat difficult to hire new employees in 2018. This
represented a 5-percentage point jump in intensity over 2017 with 52%
of EE construction employers saying it was ``very difficult'' to hire
new employees, citing a lack of experience, training and technical
skills as the main reasons. EE employers had predicted 9% job growth
for 2018 and yet were only able to grow by 3% last year. The skills'
shortage has become critical and addressing it is key to creating a low
carbon economy that benefits all working people in America and rapidly
reduces GHG emissions.
I want to turn now to one of the key disparities in today's energy
economy and one of the great challenges to the successful transition to
a low carbon economy. That is the geographic uniqueness of key energy
resources. Coal is concentrated in Appalachia, Wyoming, Montana, and
the lower Ohio River basin. Petroleum resources are strongest in TX,
LA, ND, and OK. Natural gas jobs are clustered in the Gulf Coast and
the Marcellus Shale. Solar resources are strongest in the Southwest.
Wind is concentrated in the Central Plains corridor. What benefits the
deployment of one resource may negatively impact another.
So what are some of the effective job strategies for dealing with
the disparities that are inevitable in the transition to a low carbon
economy, to minimize dislocation, and maximize opportunity? Here are
five key strategies.
First, we need to embrace an ``all-of-the-above'', flexible
strategy toward climate solutions. There is no silver bullet, no single
technology, nor one perfect policy that can guide our economy to a low
carbon endpoint, guaranteeing CO2 reductions and a decent
job for every American. But we can invest in a range of technologies
and options to preserve flexibility and participation by every form of
energy and every community during the next decade while we pursue every
technological solution--from renewables and battery storage in
California to carbon, capture, utilization, and sequestration in
Appalachia to small modular reactors in Idaho.
This is the scientifically prudent approach and it is also the
economically inclusive approach. It is especially important when we
think about how to decarbonize the industrial, agricultural and
transportation sectors of the economy which are responsible for almost
70% of total emissions. It also means that our coal and gas dependent
communities have jobs and a path forward. It means our rural,
industrial communities have a role to play. That agriculture is an
ally. It means our coastal communities can look to offshore wind, and
our renewables-rich communities can prosper. The low carbon economy
doesn't need winners and losers. It needs collaborators.
Second, we need to accelerate our investments in energy efficiency
with a special priority on those regions of the country negatively
impacted by declining use of fossil fuels. Numerous local clean energy
development funds have demonstrated the effectiveness of energy
efficiency financing mechanisms as a vehicle to pay for building
retrofits through energy cost savings while also creating well-paying
construction jobs. Such agencies as the New York State Energy Research
and Development Authority, the St. Paul, Minnesota Trillion BTU
initiative, the many utility administered programs, PACE and on bill
financing mechanisms have all demonstrated this success.
A third strategy is to invest in energy infrastructure. Energy
infrastructure is necessary to and crisscrosses every community. It is
also closely linked to energy efficiency GHG reductions on the
electrical side and to methane emission reductions on the natural gas
side. In addition to enhancing resilience and national security, these
investments provide access to some of the best jobs in America and
provide pathways to lifelong skills and job security. Inevitably, such
infrastructure investments lead to broader economic development.
As a former DOE employee and board member of DOE's Loan Program
Office, I would be remiss in not stressing the immediate and important
role that the DOE Loan Program Office could play in jumpstarting
investments in our country's energy infrastructure and creating
thousands of well-paying construction jobs and learning opportunities.
With $39 billion of unused low interest loan and loan guarantee
authority, the LPO could move rapidly into the much needed space of
helping to finance America's next generation of energy infrastructure.
The Energy Futures Initiative has provided an analysis of this subject,
published in March, 2018, entitled, ``Leveraging the DOE Loan Program:
Using $39 Billion in Existing Authority to Help Modernize the Nation's
Energy Infrastructure'' which is attached to my testimony. The LPO
could also play a role in supporting the use of regional clean energy
lending institutions, accelerating the deployment of energy efficiency
technologies.
Both energy efficiency and energy infrastructure investments are
applicable for every community in the country. However, by investing,
first, in these critical aspects of the energy system in those
communities and regions impacted most significantly by the loss of jobs
in fossil fuels, we can provide economic development support where it
is needed most, a critical choice at a time when new energy
technologies are displacing some long-standing energy production
systems. The sequencing and timing of how we solve a problem can
ultimately determine the support it achieves from our fellow Americans.
Fourth, we need to focus on the manufacturing supply chains that
our new energy technologies are creating. Nothing is more frustrating
than looking back over the years of American technological innovation
and recording the history of American applied research being handed off
to other countries for commercialization. Such was the story of wind
and solar technologies, developed here in the U.S., before being ceded
to Europe and Asia. We do not need to repeat this history with the next
generation of low carbon technologies.
Especially with energy efficiency products, such as high efficiency
appliances, lighting systems, industrial motors, or water pumps, one of
our clear goals, when introducing new regulatory requirements, should
be assuring a manufacturing policy that encourages ``Made in America.''
Much of the infrastructure is already in place but we need to nurture
it and aggressively support it. The EnergyStar brand, promoted by the
U.S. EPA is one of the strongest product marketing brands in the world,
recognized as the gold standard for efficiency. Using a new EnergyStar
Made in America procurement policy to support the manufacture of ``best
in class'' products in the global economy would be one of the best
paths forward to a resurgence in American manufacturing.
EnergyStar not only certifies products, it also certifies
commercial buildings, single family residences, and industrial
processes. We already have the least carbon intensive steel industry in
the world, for instance, and that should be a cause for celebration and
recognition. Carbon performance should be a universal procurement
standard for government spending in the U.S., similar to what
California recently did with its ``Buy Clean'' standard. Such a policy
would provide a significant boost for domestic manufacturing.
Finally, we need to address the workforce development crisis across
all energy technologies, but particularly in energy efficiency. During
the four years of the production of the U.S. Energy and Employment
Report, I have watched with alarm as the reports of employer hiring
difficulty have steadily gone upward from 75% in 2015 to 80% in 2016 to
83% in 2017 and finally to 84% last year. At the same time the
disparity between projected hiring growth rates and actual hiring rates
from employers in key industrial sectors has grown wider and wider.
Consider these examples. In 2016 EE construction firms projected a
growth rate in 2017 of 11%, but actual employment in those construction
firms declined by 7% that year. Overall, energy efficiency employment
still grew by 67,000. Two years later hiring difficulty by these same
construction firms had risen to 84% with 52% saying it was very
difficult to hire new employees. Employers had projected hiring 10.6%
or over 120,000 jobs but the reality of hiring difficulty got in the
way and they added only 21,000 jobs. This was a failure of our
workforce development system with very real world consequences. From
the environmental perspective, millions of tons of CO2 went
into the atmosphere that could have been prevented. But from the human
perspective, this represented over 100,000 families that could have
entered the middle class with some of the best paying jobs in America.
I want to finish my testimony with some comments about our energy
system and job quality in America. We have recently heard much more
discussion about income and wealth inequality in America, often from
surprising sources. At EFI we recently completed a wage survey of
energy sector employment to better understand the effect that
technology shifts were having on job quality, access and inclusion in
our energy workforce. We expect to publish a full report on this
subject later in the spring.
Let me share some preliminary findings with you today. First, with
a handful of technology exceptions, our energy and energy efficiency
workforce is racially as diverse or more diverse than the American
workforce as a whole. Thus, in Fuels, Electric Power Generation, TDS,
and EE these sectors of the economy are places where all Americans can
feel welcome. In Electric Power Generation and in Transmission,
Distribution, and Storage, the workforce is 35% more diverse. Gender
equity, however, does remain an issue. Energy and energy efficiency
jobs also pay substantially more than equivalent occupations outside of
the energy field. For instance, an electrician working in the electric
power generation area gets paid, on average, $1.49 per hour more than
an electrician generally, a construction laborer in EPG gets $.95 more.
In TDS those premiums rise to $2.66 and $1.70. Interestingly, across a
range of manufacturing positions, Energy Efficiency workers earn from
$.82-$1.39 an hour more.
Another important factor underlying this wage differential is the
higher degree of unionization in America's energy sector. In
Transmission, Distribution, and Storage, the unionization rate is
almost three times higher than the average private sector rate. In
Energy Efficiency it's double, while in Electric Power Generation it is
generally higher except in the wind and solar technologies. Fuels
production is below the average.
The quality of energy jobs is very often the anchor to the social
and economic quality of a community. Consider for instance the
relatively rural, isolated nature of most of the communities where
America's 90+ nuclear generating stations are located, producing 20% of
U.S. electricity, all of it carbon free. The nuclear sector happens to
have the highest median wage of any technology in the energy sector. It
is not surprising that these employers and their employees are among
the most highly valued in any community. Regardless of your personal
views on the value of nuclear to our overall energy system, it should
be our aspiration that every job in energy in America has the same
value to its community that those nuclear jobs do.
I want to close by thanking the Committee again for this
opportunity to testify about the importance of America's energy
workforce and our collective responsibility to those men and women to
ensure their safety and economic security since the rest of our economy
depends on them. As I said earlier, the problem of climate change is an
opportunity in work clothes. That means it's a paycheck not a layoff
slip. With sound economic analysis, accurate jobs data, and a
collaborative approach we can manage our path to a low carbon economy
by investing in new opportunities and new jobs first before we put old
technologies on the shelf.
Thank you very much.
Ms. Castor. Thank you, Mr. Foster.
Mr. Harvey you are recognized for 5 minutes.
STATEMENT OF HAL HARVEY
Mr. Harvey. Thank you, Madam Chair, thank you Ranking
Member, and all the other members here. It is a great honor to
be here today.
I am an engineer by education. I have decades of experience
in finance, in technology, in public policy, and in engineering
and construction. And I have come here today to offer options
that I think are practical and that will appeal to both sides
of the aisle. As honored as I am to address this, I guess,
body, I have to stay it is especially important, I have my son
with me today. So he can witness my work, but, especially,
because we all have a deep obligation to our children to give
them a planet as bountiful as the one we inherited. We cannot
shirk that duty. My approach in thinking about energy policy is
to think about the four qualities that Americans need with
their energy. They need affordable, reliable, clean and safe.
It is these attributes that are the public policy goals, not a
specific technology. And the right kinds of policy can produce
those attributes.
Here is the big picture, and it is pretty terrific: It is
now cheaper to save the planet than to ruin it. I appreciate
the testimony from the Chamber of Commerce, it should have been
written 10 years ago, because the technologies are here today.
We have had amazing advances in batteries, in electric
vehicles, onshore wind, offshore wind, 3-D printing, solar, LED
bulbs, industrial control systems, heat pumps and more. And so,
it is now cheaper, in many, many circumstances, to drastically
reduce climate change than to keep going with business as
usual.
The key missing ingredient is the right kind of policy. We
want to reward those characteristics of affordable, reliable,
clean and safe, or do we want to protect income and
technologies? Let me offer an example. My team analyzed every
single coal-fired power plant in America, the economics of
them. Three-quarters of them now cost more simply to operate
than replacing them within 35 miles with solar and wind. So it
is cheaper to take those same locations, those same
transmission lines and the same workers, and give them a better
job in clean energy than to keep running those old power
plants. It is also better for the economy because it saves
consumers money.
People worry about reliability with clean energy. The
states in America, and this is our great experiment in
democracy, that have adopted strong wind energy standards have
more--have increased the reliability of their grid. It moves
you in the proper direction not the wrong direction.
So let me offer four policy ideas, but also mention in my
written testimony, we worked on a comprehensive strategy that I
urge you to take a look at. The first policy I would recommend
is to require that the Federal Energy Regulatory Commission be
a merit-driven, technology-neutral, adjudicatory body required
to run the power system at the lowest cost. That seems straight
forward and that seems like a bipartisan idea. And in fact,
that is the way the FERC has worked for years. But in the last
2 years, they have started to put the thumb on the scale for
certain technologies. In my mind, that is a Soviet-era
thinking. That is not what America should be all about.
Second, we should set performance targets for our grid. I
would argue for 80 percent zero carbon electricity by 2035.
This is ambitious, but it is realistic, and it is cost
effective. It will save consumers money. If you don't believe
me, check out Iowa, or Kansas, or Texas, or Oklahoma, or
California, which have different geographies, different
policies, different political situations, but are all
benefiting from incredible rapid adoption of clean energy
technology.
We worked in Texas when George W. Bush was Governor. He
signed the first--the second renewable portfolio standard in
the country. And it has been a huge success.
The third option I would offer for your consideration is
let's make sure America builds the most efficient clean cars on
the planet. We need to accelerate the energy efficiency
standards and accelerate the transition to zero emission
vehicles.
Ranking Member Graves, I have traveled to China more than
70 times. I have worked in a dozen countries on energy policy.
And I tell you, they have a lot of bad stuff to fix, but they
are working hard on it. And they are moving in the transition
to electric vehicles, I am afraid, a lot faster than we are. We
don't want to have China on that technology, that should be an
American technology, in my opinion.
The fourth recommendation I would offer is to make sure
that the affected communities in this transition are treated
properly. So think of the coal mining towns in West Virginia,
we should have an environmental restoration project of
significant scale, so that the same people in the same
communities with similar skills can be part of the solution and
can be supported for that. They have helped deliver low cost
electricity to this country for 100 years, let's not walk away
from that now, let's begin a serious environmental restoration
project.
I see my time is running out. Let me offer a concluding
thought. My work is organized around solutions, practical
solutions, based on economics, based on engineering. But I must
have done something horrible in a previous life, because I also
have to keep up on the climate science. And I am here to tell
you that if we don't act, and don't act rapidly, we will leave
a much impoverished Earth to our children. We will walk away
from the America we recognize and create FEMA world, and nobody
here wants that. So we need to do the right thing and we need
to do it rapidly. Thank you.
[The statement of Mr. Harvey follows:]
Federal Policies To Slash Greenhouse Gases
Hal Harvey, et al.,
April 2019
Federal policies could reduce the United States' greenhouse gas
(GHG) emissions by at least a third below 2005 levels by 2030, and at
least 80 percent by 2050, according to modeling in the Energy Policy
Simulator (available at https://www.energypolicy.solutions).
Ultimately, we must get to zero, but this package would be a great
start, using only federal policy levers that we believe should have a
reasonable chance of passing. This package would also kick-start
innovation, opening up further options to drive emissions to zero in
the coming years. However, this is a comprehensive package, not a menu
from which to select. Only enacting policies that address emissions in
every sector creates a reasonable chance to avoid the worst impacts of
climate change.
The electricity sector has the greatest emission reduction
potential by 2050, given the recommended policies below--the path to
zero is relatively clear, and we know the technologies and approaches
that can deliver it. The faster we decarbonize the power sector, the
more we can use it to decarbonize other sectors--like transportation
and buildings, by converting fossil fuel burning to electricity.
The next largest opportunity lies in addressing super-pollutants
(methane and fluorinated gases), which tie closely with other policies
to reduce emissions from the U.S. industrial sector. Heavy industry
produces a large share of U.S. GHGs today, but the path to zero is less
clear for industry--policies included here will get us a good start,
but more research and development (R&D) is needed to support industry
decarbonization.
Major opportunities to reduce GHG emissions via policy also exist
in the transportation sector--including a mix of electric vehicle
incentives, supporting infrastructure, and strong standards for
traditional internal combustion engine vehicles.
Another important chunk of emissions reductions comes from
upgrading the energy efficiency of existing buildings and also
switching from burning gas or oil on-site to using electricity.
Agriculture also presents emission reduction opportunities, and
support for agriculture-related R&D can help identify options to drive
additional emissions reductions.
A carbon price adopted at the federally-estimated social cost of
carbon would offer additional potential emissions reductions alongside
these sector-specific policies.
Finally, the list of policies below includes important enabling
policies, such as support for rural Americans in the energy transition,
as well as expanded clean energy and carbon reduction R&D.
Electricity
The electricity sector is currently the second-largest source of
U.S. GHG emissions, but it has the clearest path to zero emissions. We
have the technology (and it's increasingly cheaper to deploy clean
rather than polluting power plants), we have the know-how, we just need
to get this moving--and quickly.
Leaning into this sector where we are already making progress will
have knock-on benefits for other sectors: A decarbonized electricity
system can be used to replace fossil fuels in other parts of the
economy, via electric vehicles, electrifying buildings that would
otherwise burn natural gas, and electrifying parts of factories that
would otherwise burn fuel onsite.
create a 100 percent national clean energy standard
A 100 percent clean energy standard for the electricity sector by
2045 \1\ is one of the most effective policies for reducing U.S. GHGs.
The standard could include all sources of zero-carbon electricity
(solar, wind, biomass, hydro, geothermal, nuclear, carbon capture and
storage, and any other source of zero-carbon electricity developed
between now and 2045). It should include interim targets at least every
five years, or better yet, an annual improvement rate of two percent
per year from 2020-2045. Special attention must be paid in early years
to develop low-cost options for squeezing the last 10 percent of GHGs
out of the power system.
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\1\ Note that it would be useful to structure this as an incentive-
driven race to the top; in the past, state officials have balked at
federal requirements on their electricity mix.
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extend and expand tax credits for solar, wind, and energy storage
Extending tax credits \2\ for solar, wind, and energy storage is
another strong mechanism to support clean electricity, particularly if
a national clean energy standard is not part of a final policy package.
These kinds of incentives help spur the market for newer technologies
with great potential, driving sufficient scale to bring down costs and
make new options available for Americans. Offshore wind and energy
storage are two of these newer technologies, but have huge market
potential if they can achieve enough scale to bring costs down just a
bit more.
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\2\ Note that taxable cash incentives are much more efficient than
tax credit structures--with some analyses suggesting the same federal
dollar could achieve twice as much in the form of a taxable cash
incentive as in the form of a tax credit (see https://
climatepolicyinitiative.org/wp-content/uploads/2012/09/Supporting-
Renewables-while-Saving-Taxpayers-Money.pdf). The financial efficiency
of tax credits may even decline further given recent tax reform, as
large businesses have less tax appetite and the already-tight market
for tax equity will likely become even tighter.
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In addition to traditional tax credits, the federal government
could address up-front capital costs for clean energy technologies by
leveling the playing field with fossil fuel infrastructure through
additional financing mechanisms such as Master Limited Partnerships,
Real Estate Investment Trusts, Clean Renewable Energy Bonds, and
securitization of project debt (similar to how Fannie Mae does this in
the housing market).\3\
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\3\ For more on what would need to be done to make these structures
as useful as possible, see: https://www.nrel.gov/docs/fy14osti/
60413.pdf.
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issue a stronger mandate for ferc to modernize power markets and make
them technology neutral
The wholesale power markets regulated by the Federal Energy
Regulatory Commission (FERC) were established in an era when coal and
other fuel-burning power plants dominated the U.S. electricity system.
Naturally, rules and structures were designed with the power plants of
the day in mind, but many more options are available today and the
power markets must evolve to take advantage of them. FERC should
inventory market rules and structures with an eye toward updating them
to be truly technology neutral given the swath of new options available
today.\4\ FERC should also consider complementary reforms to the
governance of regulated power markets to ensure decision-making
processes reflect today's needs.
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\4\ See this paper we wrote: https://energyinnovation.org/wp-
content/uploads/2017/10/A_Roadmap-For-Finding-Flexibility-In-Wholesale-
Power-Markets_FINAL.pdf.
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The federal government should further clarify that FERC should
consider benefits of GHG emission reductions in its gas infrastructure
and electricity market design rulemakings. In the absence of a clean
energy standard, the federal government should articulate its intention
that FERC-jurisdictional markets assist state efforts to reduce GHG
emissions.
spur transmission: get more from the existing system, smooth the way
for more
Transmission is the platform that allows our nation's electricity
system to function. As renewables provide increasing amounts of the
U.S. electricity supply, we need to move it from the places with the
greatest solar and wind resources to the places where people and
businesses need to use it. We can do that by getting more out of our
existing system,\5\ and by adding new lines.
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\5\ Dynamic line rating gets more out of the system than existing
practices in much of the country (for more, see https://
issues.nawindpower.com/article/using-grid-weve-got). Where needed, we
can beef up transmission capacity on existing rights of way.
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The federal government could build on the National Interest
Electric Transmission Corridors \6\ to overlay priorities for GHG
reduction goals, aligning transmission incentives with GHG objectives,
then partner with states to increase capacity on existing rights of way
or build new lines. President Lyndon Johnson provided a model for this
in the 1960s with the build-out of the Pacific Intertie.\7\ Texas also
provides a model by pre-approving and building out transmission to
``Competitive Renewable Energy Zones'' where clean energy resources are
abundant. Market mechanisms can then select the lowest cost projects to
build clean power in those zones.
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\6\ See this factsheet from the Department of Energy: https://
www.energy.gov/sites/prod/files/edg/media/NIETC_Fact_Sheet.pdf.
\7\ See this article from the board chair of PJM, the nation's
largest electricity market: http://www.orkas.com/the-future-of-
electric-transmission/.
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While transmission allows electricity to travel across space,
energy storage can allow electricity to travel across time, alleviating
congestion on transmission lines. The federal government could direct
FERC to consider establishing structures to plan and pay for energy
storage in a similar way to transmission.
create a national demand response program
``Demand response'' is the term for when consumers and businesses
shift when they use electricity to take advantage of low-cost or low-
emissions sources. This can reduce the need to build costly new power
plants, and can help get the most from renewable energy. A national
program focused on scaling demand response could kick start the
market--perhaps via pay-for-performance matching funds for states or
municipalities that establish programs. Loans may also be considered
since well-designed demand response programs should pay for themselves
in short order.
Super Pollutants
Bolstering efforts to reduce carbon dioxide with programs to
address methane and fluorinated gases (``F-gases'') is an efficient way
to drive near-term reductions in U.S. contributions to climate change.
Per molecule emitted, methane warms the climate at least 28 times more
than CO2, and F-gases can be thousands of times stronger
contributors to climate change.
rapidly phase out f-gases by ratifying the kigali amendment and give
epa authority
Ratifying and implementing the Kigali Amendment to the Montreal
Protocol would create a requirement to reduce F-gas consumption in
America. The U.S. Environmental Protection Agency (EPA) has already
attempted to regulate F-gases under the Significant New Alternatives
Policy (SNAP), but the ruling was remanded. Expressly directing EPA to
regulate these gases, with the flexibility to use other approaches
beyond SNAP, would allow it to move forward with requiring the use of
lower GHG-emitting substitutes. U.S. companies would be at a
competitive advantage with a strong new F-gas phase-out policy, as they
are the primary manufacturers of the chemicals that could substitute
for climate-warming F-gases.\8\
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\8\ For example, the case brought against EPA resulting in remand
of SNAP was brought by Mexichem Fluor, Inc., a Mexico-based chemicals
manufacturer.
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set a steadily declining standard for methane emissions from oil and
gas, including extraction and distribution
The federal government could strengthen Obama-era standards for
methane leakage, methane leak detection, and mitigation systems to push
methane leakage rates toward zero. A 2050 target of zero leakage
throughout the system, along with strong interim targets, will
encourage the natural gas industry to invest in the system upgrades and
monitoring equipment necessary to significantly cut emissions. Canada's
methane rules could serve as a template for early action--it aims to
reduce methane emissions from the oil and gas sector 40-45 percent from
2012 levels by 2025.
The federal government could dedicate resources to measuring
methane leakage, include leakage estimates into GHG inventories, and
reward gas utilities for targeting leakiest equipment first.
Industry
Federal options for reducing industry sector GHG emissions are less
well-established than some of the other economic sectors. However, it
is very important for any comprehensive climate plan to address
emissions from the industry sector, as industry produces about as many
GHGs as the whole U.S. transportation sector today, as well as a large
share of the projected remaining GHG emissions in 2050. The U.S. needs
a plan to address this sector and develop further options to drive down
emissions. The following policy proposals are a good start.
establish carbon intensity standards for cement, steel, chemicals, and
natural gas and petroleum systems; allow tax credits for some share of
upgrade costs
New emissions intensity standards could drive industry energy and
emissions savings.\9\ A program that sets new output-based standards
every few years based on the top industry performers could drive a race
to the top and encourage continuous improvement in U.S. factories.
Standards could be set based on emissions or energy per unit of output
(e.g., CO2 per ton of cement or BTU per ton of ethylene
produced). Tax credits based on performance could be made available to
businesses that invest to meet new standards. This policy could be
coupled with a border adjustment to level the global playing field for
U.S. industries.
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\9\ Note that this has not been done in the U.S. to date, but other
countries have used this approach with some success. For example, see
Ontario, Canada's proposed industry performance standards: https://
prod-environmental-registry.s3.amazonaws.com/2019-02/EPS%20Regulatory%
20Proposal%20%28EN%29_0.pdf.
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create a federal ``buy clean'' program
A federal ``Buy Clean'' program would set standards for cement,
iron, steel, and other products used to build federally-funded
infrastructure, based on the emissions intensity of those inputs. A
model policy is in place in California (Assembly Bill 262), which
includes suppliers' emission intensities in government procurement
decisions.\10\ The federal government could ensure a national program
considers material substitution opportunities (e.g., using timber
instead of steel for buildings less than 20 stories).\11\
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\10\ See https://buyclean.org/2017/10/16/gov-jerry-brown-signs-buy-
clean-law/.
\11\ See http://www.energy-transitions.org/sites/default/files/
ETC_MissionPossible_FullReport. pdf.
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incentives for industrial cogeneration and waste heat recovery
New incentives for industry facilities to cogenerate electricity
and heat, and to use waste heat, would improve the efficiency of U.S.
factories. Incentives for cogeneration should not be offered for coal-
fired industrial equipment.
increase incentives for carbon capture and storage and provide
financing and technical assistance
Carbon capture and storage (CCS) could be a critical part of
decarbonizing the industry sector. Section 45Q tax credits were
recently increased and expanded to cover smaller industries, but these
tax credits could be increased to kick-start industrial sector CCS,
which has fewer decarbonization options than the electricity sector.
Complementing these tax credits with loan guarantees and technical
assistance would help industries access the capital and expertise
needed to install CCS, which is a relatively new technology with high
upfront capital costs and little monetized payback.
Buildings
Improving America's buildings can result in better comfort and
energy service for citizens and business owners, while also reducing
greenhouse gas emissions. Buildings can be a tough nut to crack since
there are so many dispersed decision-makers, but that is precisely the
reason this sector provides a way to reach voters with something
tangible that can make their lives better.
incentives for building electrification and efficiency retrofits, with
some important exclusions
Buildings can decarbonize by using energy more efficiently, and
then converting essential uses to clean energy. Because the majority of
existing U.S. buildings will still be standing in 2050, the federal
government must find ways to incent retrofits combining appliance
electrification, efficiency, and on-site clean power generation (e.g.,
rooftop solar) if practical. By and large, existing buildings could be
much more efficient, but the upfront cost of upgrades dissuades
building owners.
A national program with financial incentives including low interest
loans or on-bill financing for building retrofitting could
significantly accelerate the pace of retrofitting; current programs
vary in their effectiveness but generally reach only a fraction of one
percent of eligible customers each year.\12\ A national program to
target a package of decarbonization retrofits in one percent of U.S.
homes per year would be reasonable and in line with Germany's retrofit
rate.
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\12\ See https://link.springer.com/article/10.1007/s12053-018-9661-
5.
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Such programs should encourage efficiency retrofits to include
electrification and clean on-site generation, reducing the total cost
of all decarbonization measures. Programs should also encourage pay-
for-performance, increasing the value of efficiency measures to the
grid.\13\ On the flip side, gas appliance retrofits should not receive
federal funding; while they reduce emissions in the short term only in
coal-heavy states, they also lock in gas consumption for the 15-20 year
appliance lifespan, and create upstream methane leakage.
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\13\ https://www.brookings.edu/research/advancing-inclusion-
through-clean-energy-jobs/.
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Like renewable energy 20 years ago, all-electric retrofits come at
a premium today, but hold huge long-term potential for cost and carbon
reductions. When contractors get in the door of a building for an
efficiency retrofit, they should also seize the moment to drive
electrification. Building electrification incentives could include tax
credits for demand response-enabled heat pumps for space and water
heating and cooling (which in addition to replacing natural gas, enable
a huge efficiency improvement for space and water heating), heat pump
clothes dryers, and electric induction stoves, at the point of
sale.\14\ The federal government can also increase customer access to
these technologies by encouraging utilities to finance them on
customers' bills.\15\
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\14\ It would be important to only offer these incentives for heat
pumps that use working fluids with very low global warming potential--
otherwise, some of the chemicals in heat pumps can be dangerous for
climate change.
\15\ https://aceee.org/sites/default/files/pdf/conferences/eeff/
2016/Weeks_Session4A_FF16_5.24. 16.pdf.
---------------------------------------------------------------------------
Electrification-induced efficiency improvements of this kind have a
knock-on benefit of lowering household energy costs while delivering
the same comfort and service. In addition, as more of these products
are deployed, costs are likely to decline. A higher incentive could be
offered to electrify buildings with oil-fired space and water heating,
which is more polluting and less efficient than natural gas. To measure
progress, the federal government can set a target for the carbon
footprint of the U.S. building stock (e.g. 50 percent below 2020 levels
by 2035), and delegate authority for sizing the incentives to the U.S.
Department of Energy (DOE) to achieve the target as cost-effectively as
possible.
direct doe to accelerate the standards process for appliances and
equipment
DOE has a strong appliance and equipment standards program, but it
is underfunded and years behind schedule in keeping standards up-to-
date. This may sound like a small opportunity, but it can deliver
energy savings, cost reductions for citizens, and pollution reduction.
Additional funding for this critical program, along with a directive to
accelerate this process would improve appliance and equipment
efficiency.
repair and accelerate the building code process
The federal government could maintain and promote an advanced model
code for states and regions to choose to adopt, and a federal code
could even serve as a backstop for the remaining states with no
code.\16\ A national model code could be based on California's model,
where today's most efficient approaches become the standard every seven
years and the building code is automatically reviewed and revised every
three years. Advanced codes also offer alternative compliance pathways
based on performance, rather than the usual list of prescriptions.
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\16\ Building codes are adopted and enforced at the state and city
levels, but a federal code could act as a model for smaller
jurisdictions to adopt.
---------------------------------------------------------------------------
Finally, codes may need to be updated to include GHG considerations
in addition to efficiency. Codes should support fuel switching in
buildings from oil and gas to electricity, and restrict the build-out
of new natural gas infrastructure and hook-ups. They should also
require building electrical equipment to be sized to accommodate an
appropriate level of on-site EV charging.
make funds available for states and cities to adopt stretch building
codes and train builders and inspectors
Federal matching funds could encourage states and cities to adopt
stronger building codes to make buildings even more efficient. Funds
could also be made available to train builders and inspectors, which
would allow more regular building inspections and help drive best
practices into building construction, increasing the share of buildings
that actually adhere to code.
Transportation
The U.S. transportation sector has eclipsed the power sector and is
now the largest source of GHG emissions. The move to electric vehicles
(EVs) is exciting and many policies can accelerate the shift, but
millions more fuel-burning vehicles will still be sold, so we cannot
take our foot off the pedal of efficiency improvements for those
vehicles, even as we electrify. A complementary infrastructure program
focused on transit can reduce emissions by supporting alternatives to
personal cars and charging stations for electric vehicles of all kinds.
set an annual improvement rate for vehicle emission standards and move
authority to epa
Vehicle standards (i.e., fuel economy or GHG emission standards)
are key to reducing transportation sector CO2 emissions.
Even with aggressive policies to promote EV sales, millions of internal
combustion engine cars will still be sold between now and 2050, and
efficiency standards can help drive down emissions from these vehicles.
Rather than specify a mile-per-gallon target in the future, standards
should specify an annual improvement rate, building on existing
standards for light- and heavy-duty vehicles. An annual improvement
rate of about seven percent per year from 2026-2040 for light-duty and
1.7 percent per year from 2028-2040 for heavy-duty vehicles \17\ would
enable U.S. vehicles to become super-efficient, while pushing
manufacturers to ramp up sales of plug-in hybrid electric and full
electric vehicles.
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\17\ Note these annual improvement rates assume compounding
improvements, not a simple division of improvements through a final
year.
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Moving authority over these standards from the National Highway
Traffic Safety Administration to EPA would drastically decrease the
administrative burden on the auto industry for following these
standards.
establish a transportation infrastructure program for public transit,
non-motorized transport, and ev charging infrastructure
An infrastructure program could help reduce transportation
emissions. U.S. cities need improved public transit options and support
for a new wave of EVs. The federal government could provide matching
funds (or even greater than 50 percent cost sharing) for states or
cities that want to invest in EV chargers at public and multi-family
buildings, electric buses, electric light rail, bike lanes, and efforts
to make cities more walkable. On interstate highways, an exception
could be made in the prohibition of commercial activities at rest stops
for fast-charging EV infrastructure, and federal funds could support
highway fast-charging infrastructure to help make it easier for drivers
to go electric.
repair ev tax credits by eliminating 200k sale cap
EV incentives have been a major contributor to growth in recent
years. Incentives should continue to be offered at existing levels by
eliminating the current cap of 200,000 credits per manufacturer, at
least for the next five years. To increase accessibility for low- and
middle-income Americans, the tax credit system should be amended to
allow for cash grants at the point of sale.
Agriculture
The U.S. agricultural sector produces about the same amount of
emissions as our nation's buildings sector, but the path to zero
emissions in agriculture is much less clear. The following policies can
help.
increase incentives for agricultural practices to reduce greenhouse
gases
Increased incentives can expand low-GHG agricultural practices,
such as low-till methods, cover crops, and water conservation.
Conversion to these practices may have high upfront or ongoing costs as
well as some loss of revenue, so government incentives can encourage
farmers to adopt these practices. The federal government could fund a
national experiment to explore whether farmers could be paid directly
for increasing the carbon content of their soil.
increase technical assistance for precision agriculture deployment
The federal government could increase technical assistance for
deployment (e.g., farmer-to-farmer workshops) of precision fertilizer,
soil supplements, and other practices aimed at reducing costs, chemical
input, fertilizer, and soil erosion. Government assistance in the form
of incentives and cooperative formation can also help increase
precision agriculture deployment.
fund r&d and implementation of cow methane emissions reductions
Cows are a major source of agriculture sector GHG emissions, but
the best management practices typically suggested are rotational
grazing--which creates struggles with accurate deployment and
scalability--and expensive feed change. New R&D is needed for improved
options.
Carbon Pricing
consider a hybrid cap-and-trade/carbon pricing system
Carbon pricing would create an additional incentive to decarbonize
the economy, particularly the electricity and industry sectors. The
federal government could consider establishing a hybrid cap-and-trade
system with cap levels reflecting scientifically based targets, a price
floor and ceiling to manage price variability, and a significant
investment of revenue in reductions from sectors that respond less to
price changes (such as transportation, buildings, and agriculture).
Another option is a hybrid carbon tax, whereby the tax level varies
based on progress reducing emissions.
An important caveat: Existing sector-specific policies should be
not discarded in favor of carbon pricing. Rather, carbon pricing should
be used as a complementary policy to help achieve additional emissions
reductions. It is not a substitute for performance standards.
Rural America and the Energy Transition
Federal support for rural Americans can be very powerful. These
supports include taking care of frontline communities where polluting
energy infrastructure has made an impact over the years, as well as
sharing the new energy economy's benefits with those who host its
infrastructure.
matching funds for rural communities hosting energy and transmission
infrastructure
To the extent that new energy and transmission projects include a
payment to local communities for hosting infrastructure, a federal
matching fund could be created to help support these communities. This
can compensate communities and increase public support for these
projects.
federal funds for transition support for coal miners and power plant
workers
The clean energy transition will result in fewer Americans working
in coal mines and coal power plants. The total number of Americans
working in these industries is already relatively small roughly 50,000
Americans are employed in the coal mining industry \18\--so a federal
fund would not need to be large to assist communities and individuals
through this transition.
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\18\ See https://data.bls.gov/timeseries/CES1021210001.
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create investment incentives for clean energy in coal and fracking
communities
Local clean energy resources are cheaper than keeping two-thirds of
U.S. coal plants running,\19\ and can sustain economic development
through the clean energy transition. Incentives for clean energy
manufacturers and developers to invest in communities that have
historically hosted fossil fuel infrastructure can help those frontline
communities during this transition. New investment can help create jobs
and reinvigorate local economies affected by the transition.
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\19\ https://energyinnovation.org/publication/the-coal-cost-
crossover/.
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health care for coal miners
Federal support for health care for coal miners can help those most
harmed by helping America achieve the economic prosperity we enjoy
today.
Research and Development
triple clean energy and carbon reduction r&d from $2.5 billion to $7.5
billion per year
The U.S. lags far behind on spending on clean energy and carbon
reduction R&D. The budget for clean energy and carbon reduction R&D--
note this is not the total energy research budget, but just the share
going to clean energy and carbon reduction--should be tripled to at
least $7.5 billion per year. Research areas that need more attention
include: software advancements to plan and run a zero-carbon grid;
opportunities to decarbonize heavy industry; hydrogen generated from
clean electricity and used to meet both stationary and mobile energy
needs; biochemistry and synthetic chemistry; materials efficiency and
advanced recycling; new materials like low-carbon cement, steel, and
plastic substitutes; as well as carbon capture and
removal.20}21
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\20\ See: http://www.energy-transitions.org/sites/default/files/
ETC_MissionPossible_FullReport. pdf.
\21\ On carbon removal programs, see also: https://www.wri.org/
blog/2018/12/wanted-325-million-federal-rd-jumpstart-carbon-removal.
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expand cradas
The federal government could support broader use of cooperative
research and development agreements (CRADAs) between the private sector
and national labs. CRADAs demand commitment from the public and the
private sector, and are effective at stimulating private research,
patents, and accelerating important technologies toward
commercialization.
Ms. Castor. Thank you very much. Thank you to all the
witnesses for your outstanding testimony.
At this time, I will recognize myself for 5 minutes for
questions.
Dr. Liverman, the Intergovernmental Panel on Climate Change
said that the global community needs to achieve net zero
emissions by 2050 to limit warming, but it doesn't specify the
country-by-country reductions. You have heard some of the
comments up here that gosh, the U.S. can't do it on its own.
But what does the scientific literature say about what the U.S.
needs to do in order to achieve that global goal? And what is
your response to gosh, throw up our hands because other
countries may not be moving fast enough either?
Dr. Liverman. Well, the scientific literature is
considerable, looking at different countries' responsibility
for emissions, and what criteria one might use to decide what
an equitable or a politically feasible response might be. So
one of the issues is that carbon dioxide stays in the
atmosphere for a number of years. So what we emitted 50 years
ago, it is still around contributing to warming.
So there are several alternatives, several choices that
might distribute responsibility for emissions. If you use
current emissions, then, certainly, China is now higher than
the United States. But historically, in terms of accumulated
emissions, the U.S. still is the highest. We have done more to
contribute to warming than any other country. We also have
higher per capita emissions, 20 tons compared to a world
average of about 6. So depending on which of those allocation
criteria we look at in our research, the U.S. could bear a
larger responsibility for emissions than a 50 percent reduction
by 2030. But that negotiation is something that is done in the
political arena, scientists are just pointing out what the
various choices would be and what the implications might be in
terms of the fair responsibility of the United States.
Ms. Castor. Well, clearly, we are behind the 8 ball,
because the U.S. has put off climate action for so long that
dramatic transition to the clean energy economy.
Mr. Foster, you say this is an outstanding opportunity to
create clean energy jobs and lower utility bills for consumers.
Help us prioritize as we look to putting together a report for
the United States, and for citizens in the Congress. Where do
we start?
Mr. Foster. Well, one of the projects that we started when
I worked at the Department of Energy was the collection of jobs
data on energy jobs and energy efficiency, an annual study that
we have continued for the last 4 years. What I think it shows
us is that the big bulk of an immediate economic impact on
Americans is in the field of energy efficiency. We have an
outstanding record, we have 2.35 Americans who work in that
area, very heavily dominated by construction, but over 320,000
manufacturing jobs. Many of those manufacturing jobs, making
that energy efficient equipment, are located in coal States;
six of the top 15 are among those. It is no accident that
places where we once mined coal produce cheap energy and led to
a manufacturing cluster in all those States, so to speak. So
investments, picking up projects like the old 48(c), advanced
energy manufacturing tax credit, to spark the growth of
manufacturing and clean energy, energy efficiency technologies
would be one of smartest things we could do to drive economic
development in places that have been negatively impacted.
Ms. Castor. And Mr. Harvey, you have laid out some
significant recommendations for us. You also have authored a
book ``Climate Solutions,'' that is a very good roadmap for
policymakers. You highlight that we better get started in the
energy sector. Could you elaborate please?
Mr. Harvey. Certainly. There are four big sectors in
American energy, or any country's energy, which is the electric
grid, transportation, buildings, and industry. They have
separate pathways, although obviously connected, and one needs
to have policy for each one that understands the dynamics of
that one.
The technology advancement off of the electric grid has
been dramatic, and it is now driven so that the lowest cost
electricity on the planet is solar and wind. And we have many
more options on the way. By the way, I am completely in favor
of technology, the more advanced technologies. I want to use
what have already right away, and keep developing the next
generation.
So the electric grid can be decarbonized at a savings to
consumers, so long as the policy is proper designed. And what
do I mean by that? This is very important. You need a long-term
target that has high certainty. Companies need flexibility on
how to get there. The target should be technology neutral and
there should be price finding. It should not be driven by
arbitrary dicta. If you do those things, you liberate the free
market and all its innovation to find a solution. It doesn't
mean you softened the goal at all. It means you create enough
of a horizon and enough certainty and enough flexibility that
you achieve it at the lowest possible cost.
Ms. Castor. Thank you very much. Mr. Graves, you are going
to yield to Mr. Carter.
Mr. Carter, good morning.
Mr. Carter. Good morning.
Ms. Castor. You are recognized for 5 minutes.
Mr. Carter. Thank you, Madam Chair. And thank each and
every one of you for being here. We appreciate this. This is
very, very helpful to us as a committee, and we all take that
very seriously, climate change is real. The climate has been
changing since day 1, and protecting our environment is real.
We all understand that.
Mr. Guith, I am going to start with you. As Ranking Member
Graves mentioned, I read your report as well and found it to be
very interesting and very balanced. And I appreciate that. I
wanted to ask you specifically about something you mentioned.
You mentioned a number of private sector businesses that are
already making investments in their own right to fight climate
change. Can you just talk a little bit about that and maybe
just a few examples?
Mr. Guith. Absolutely. Thank you for the opportunity. I
didn't get a chance to go over it in the oral testimony. But in
my written testimony, I highlighted a couple of specific
projects that I think are emblematic of what U.S. business has
been doing over the last decade. And we feature these in our
energy debates program. The most recent one we just--module we
just put on our website last week was San Diego Gas & Electric
who constructed, what at the time was the world's largest
stationary storage facility. It has now been surpassed by one
in Australia, but I am sure there will be a race to the top to
see who can make the most efficient and, frankly, largest
dispatchable battery. Advanced reactor at new scale, it is a
small module reactor. It is revolutionary design that can be
used globally, and in places where you wouldn't necessarily put
a large scale reactor like we use right now. And then, one that
is incredibly important, just outside of Houston, Texas, a
project being built by a consortium of companies that stands to
be the first zero emissions natural gas plant, that would be
competitive----
Mr. Carter. I have actually seen that.
Mr. Guith [continuing]. With off-the shelf natural gas.
That power, yes. It is a great project.
Mr. Carter. And you bring out some great examples. Let me
ask you this: As is often the case in Congress, with the best
of intentions, we put in government regulations to encourage
these type of things. Do you think that it is possible that the
government putting more requirements on these businesses to
fight climate change in specific ways could do just the
opposite, and that is, it could hinder their ability?
Mr. Guith. Absolutely. I think, even with the best
intentions, American history, and probably the history of
democracy globally, is littered with unintended consequences. I
mean, we see State by State, and sometimes even national
policies are creating headwind for nuclear power right now.
Nuclear power remains the backbone of our emissions-free
generation. It is the leading source of round-the-clock
baseload generation. I don't think those policies were intended
to harm nuclear, but----
Mr. Carter. Exactly.
Mr. Guith [continuing]. That is what happened.
Mr. Carter. And as you point out, quite often that does
happen, with all the best of intentions.
At the same time, if we put in policies that--if we allow
policies that harm our economy, isn't that going to hurt
business' ability to address and to make investments to fight
climate change?
Mr. Guith. Absolutely. I mean having private conversations
with many of my members, especially in the generation sector,
they have all made significant commitments to emissions
reductions over the next 30, 40, 50 years. But they are
concerned that specific policies might deny them the capital
they need to invest in the technologies they would need to
actually meet those commitments.
Mr. Carter. Absolutely. And let me reach just a little
further, we have established the fact that China is accounting
for 30 percent of all the emissions in the world, the United
States, only 15 percent. But even with China and their
international emissions, and what they are putting into the
environment, does the business community have a role in working
with China, do you think, in trying to reduce emissions?
Mr. Guith. Absolutely it is a great economic opportunity.
The reality is, is that emissions from developing countries,
and whether you consider China one or not, are going to
continue to rise. And unless we or someone else bring the
technologies to bear that are scalable to the extent that we
are talking about globally--we are not talking about a single
state or a single community in this country, where resources
are relatively accessible, we are talking about scalable
globally. They are going to keep burning coal. So unless we
have a way to capture the emissions from that, we are going to
continue to be at a net negative as far as reductions.
Mr. Carter. Well, again, thank you all for being here.
Thank you, Mr. Guith. And again, I can't stress, as I have in
the past the opportunity that lies here. We have the brightest
minds, the greatest innovators, right here in America. That is
why I am so excited about this. I mean, people look at this,
the sky is falling. Actually, this is one of the greatest
opportunities I think we have had in this country in many, many
years, and I look forward to seeing it what results from this.
So thank you very much, and I yield back.
Ms. Castor. Thank you, Mr. Carter.
Ms. Bonamici, you are recognized for 5 minutes.
Ms. Bonamici. Thank you, Chair Castor, Ranking Member
Graves, and thank you to our witnesses. We know what we are
facing. We have already seen heat waves, droughts, wildfires,
surge in extreme weather events, more acidic oceans, rising sea
levels, and certainly, the intergovernmental panel on climate
change emphasizes that it is time, it is past time to take bold
action. And we do, here in the United States, have the ability,
and, I submit, the obligation as well, to be a leader in
curbing greenhouse gas emissions. Certainly our commitments
under the Paris Climate Agreement are an important first step,
but there is so much more that we can do, and we must accept
this challenge.
We know it is going to require innovation, leadership and
the responsible use of our vast resources. I just had the
opportunity to tour the manufacturer of a wave buoy that is
going to help tap the power of the ocean.
So, Mr. Harvey, in your testimony you highlight examples of
advances in clean energy technology, wind, solar, battery
storage. Significant Federal investments in research and
development have been critical in developing and deploying new
and advanced clean energy technologies, programs like ARPA-E,
supporting high risk, high reward energy research that is not
being addressed by the private sector.
So I am going to ask Mr. Harvey and Mr. Foster, what
sectors would benefit from additional R&D resources and in what
other areas would additional Federal funds be effective in
spurring innovation and research?
Mr. Harvey. So thank you for the question. I think it is a
very important one. Everybody on this panel, I think everybody
in this room agrees, technology is the key to success here.
Right now, the United States of America spends less than 1 half
of 1 percent of its energy budget on R&D. That is pitiful. That
is the wrong number. For IT, it is 10 percent, for
pharmaceuticals, it is 20 percent.
More than 10 years ago I founded something called the
American Energy Innovation Council, which was about 10 CEOs
including Bill Gates, the CEOs of GE, McDonnell Douglas, and a
number of other companies. We urge the trebling of Federal R&D.
I think if you trebled clean energy R&D from roughly 2.5
billion to 7.5 billion you would create an amazing downpayment
on the future.
With that said, there is development of new ideas and then
there is deployment. Innovation happens all the way along that.
You need a different policy for innovation in the deployment
phase. You need large-scale purchase. And in the beginning you
are going pay a little more, but over time, you drive the price
down. So you are creating options for all of humanity. We have
done that successfully with solar, with wind, with many aspects
of geothermal, with fracking, with many other technologies. The
learning curve, as it is called in scientific parlance, is our
friend. But if you let technologies die on the vine before you
get to those price reductions, then you fail to create those
options for future generations.
Ms. Bonamici. I appreciate that very much. I also serve on
the Science, Space, and Technology Committee, so it is very
helpful.
Mr. Foster, climate change, as we know, is affecting our
entire economy, and solution must include the creation of good-
paying jobs. My other committee is the Education and Labor
Committee where we do work on a lot of workforce issues at
advocated for on-the-job training programs.
And I know, Mr. Harvey, you mentioned people who work in
coal power plants. My grandfather was a coal miner in
Pennsylvania. I am sure he worked very hard in that coal mine
trying to support his family. He lost his leg and then he died
of lung cancer, so he had severe health problems. So we want to
have good, safe jobs for workers, and that needs to be central
to a clean energy economy.
So Mr. Foster, you talked about the workforce development
crisis across all energy technologies, especially in energy
efficiency. And you highlight energy efficiency jobs paying
substantially more than equivalent occupations outside of the
energy field. So how can Congress better support workforce
development in the energy sector in our transition to a clean
energy economy? Mr. Foster.
Mr. Foster. Well, first, let me just add that in my
opinion, there is no technology more important to invest in
right now than carbon capture sequestration, simply because we
have no other paths to decarbonization in the industrial sector
and it is extremely important that we contribute to that. It
also has other applications that from a political point of
view, I think open up the subject of climate change to a much
broader discussion in this country because it then talks about
what is the future of coal, what are the future of fossil
fuels. If we have that technology it becomes very, very
important to otherwise abandoned communities.
In terms of what can be done on the energy workforce
crisis, I think a deep look at how our Federal agencies
collaborate and coordinate on how they develop curriculum that
supports energy efficiency technologies, how the National
Science Foundation, how the Department of Education, how the
Department of Defense, Department of Labor, and the Department
of Energy, all work on how they create a uniform, standard-
driven energy efficiency technology that can be spread out
around the country to our benefit. That was a project we worked
on when I was at the Department of Energy. And I think it is
something of extreme importance to solve this crisis.
Ms. Bonamici. Thank you, very helpful. I yield back.
Ms. Castor. Thank you very much.
Mrs. Miller, you are recognized for 5 minutes.
Mrs. Miller. Thank you, Madam Chair and thank all of you
for being here today. We all care about taking care of and
protecting Mother Earth.
In the past century, we have seen unparalleled economic
growth around the world. This boom is in part because people
have access to energy, increased access to affordable
electricity to power our homes, our schools, and our places of
work correlates directly to the improved quality of life for
people all around the world. Any recommendation this committee
makes must ensure that we maintain access to affordable energy.
Dismantling coal, oil, and natural gas will not only hurt our
economy, but it will also make energy less affordable and set
society back. I can personally attest to the effect of policy
that can decimate an economy.
One of the many aspects that makes our country great is our
entrepreneurial spirit. So many of our Nation's small
businesses and corporations have taken steps to be good
stewards of the environment, and to give back to their
communities, without the direction of the Federal Government
because it is the right thing to do.
It is a good reminder of what can be done when the
government takes a backseat, and lets businesses run
themselves.
Mr. Guith, in your experience with the private sector, what
is already being done to lower carbon emissions while
preserving and promoting our Nation's diverse energy mix?
Mr. Guith. Where do I begin? If you look across the many
commitments that have been made, some of them have been within
the companies themselves. There has been billions of dollars
invested in greater efficiencies within the manufacturing
sector.
If you look at the advent of the shale revolution and what
that has meant to fuel diversity, and efficiency, and frankly,
emissions. But ultimately, as you pointed out, we have seen
great economic growth over the last century. If you look over
just the last 40 years, we have seen our own economy grow by
170 percent, while simultaneously reducing the criteria air
pollutants by 70 percent. That was driven by innovation, that
was driven by science, and that was driven by the
entrepreneurial and ingenuity of the business community.
Mrs. Miller. What technologies can and should be deployed
to mitigate carbon?
Mr. Guith. I think there is a pretty wide consensus across
every scientific body that has looked at this that the three
core technologies that are essential from a scalability
standpoint globally are carbon capture sequestration, whether
it is utilization or otherwise, stationary storage. Renewables
have made a huge dent in our emissions profile, but until we
can bring them to a parity, as far as baseload replacement,
they are going to have a glass ceiling.
And then finally, advanced nuclear. I mean, everybody that
I have looked at, that has looked at this, all say that those
are the three. And, obviously, efficiency is going to continue
to be integral to all of them.
Mrs. Miller. In 2017, the United Sates led the world in the
reduction of climate emissions. However, other countries, even
those who are signatories to multilateral agreements, are
canceling out our efforts. Can you speak to how we can, in
America, do--help to counteract what these other countries are
doing?
Mr. Guith. As I mentioned in my testimony, the developing
world is projected to continue to have emissions increases,
while the developed world is projected to continue to decrease
them. Unfortunately, they are not equal and we look--we expect
emissions to continue to increase globally on the net.
What can be done is what we are doing now, and that is,
investing in the technology to a much greater scale. We have
consistently been disappointed with OMB's budget when it comes
to innovation and technology. We agree that there is lot more
that needs to be done at the Federal level, both from an R&D
standpoint, but also from a commercialization standpoint, as
well as structurally within the Federal Government itself, to
focus on these core technologies. But right now, U.S. business
continues to lead the way.
Mrs. Miller. Thank you.
I yield back my time.
Ms. Castor. Thank you very much.
Mr. Huffman, you are recognized for 5 minutes.
Mr. Huffman. Thank you, Madam Chair, and thanks to our
witnesses.
I am intrigued and a little bit skeptical about this notion
of carbon capture and sequestration that we keep coming back
to, and several of the witnesses have referenced. Mr. Foster, I
can stipulate that if we have got a natural gas power plant
that comes online and is truly zero emissions, because it has
implemented cutting edge carbon capture sequestration, that
will be a good thing. My understanding is that plan is not yet
producing electricity. And my concern is that this notion of
CCS has always been that thing just around the corner that we
keep pointing to to avoid bolder action in support of clean
renewables and efficiency and other things. But I want to, for
a moment, imagine that this really is near and deployable at
scale. And I guess my question for you is, I get that that is
appealing to folks that want to minimize disruption to fossil
fuel infrastructure and to fossil fuel interests. But why would
anyone do it in the absence of regulations, in the absence of
some cap on emissions, in the absence of some price on carbon.
It is not going to happen out of the goodness of people's
heart. Would you agree with me?
Mr. Foster. I would agree with that. From the studies that
we did when I was at DOE, it was a combination of baseline
policy, combined with forward leaning tax credits. And those
things have generally been the combination in driving claim
policy forward that I have been the most struck by. So that,
for instance, the Clean Power Plan, coupled with the ITC and
PTC taxes for wind and solar, along with the new technologies
of hydraulic fracking lowering the cost of natural gas, very
quickly according to the National Renewable Energy Lab within
less than 1 year after the adoption of the Clean Power Plan,
market forces had taken over and were driving the reduction of
the C02 emissions faster than policy alone. So I
think that combination of things is really the magic spot.
Mr. Huffman. All right.
Mr. Harvey, I think I am hearing you say that if we take
our thumb off the scale for fossil fuels, and put in place some
of the incentives, like the one Mr. Foster and I were just
talking about, either carbon pricing or some caps that begin to
move the market towards low emission solutions, that clean
energy competes just fine, and, in some cases, actually saves
money. Would you elaborate on that, please?
Mr. Harvey. Yes, absolutely. There is a problem with
unintended consequences of regulation, and that's been raised
already, and we need to pay attention to that. In my mind, the
best way to achieve reductions is to think about public
standards. We have public standards so that our meat isn't
poisoned, so that our water is clean. You mentioned the Clean
Air Act, fantastic unleashing of technology in business
innovation, but it came about because of public standards,
because we said we are going to emit fewer carcinogens and
fewer lung-damaging particulates into the atmosphere. That is
what we need in carbon dioxide as well; is set clear public
standards, and let the market find the best way to achieve
them. Don't choose technology, don't choose prices--that is a
communist idea--choose what the public needs and let the market
do its job.
Mr. Huffman. Can you give us an example of the standards
that might be set? For example, there is a lot of talk about
net zero emissions by 2050. Is that the kind of standard that
you could build incentives around?
Mr. Harvey. It is. Although, I wouldn't argue for that one
precisely. There are 30 states now with renewable portfolio
standards. The best of them say, ``Hit the target, go.'' I
don't care--by the way----
Mr. Huffman. Technology neutral.
Mr. Harvey. Technology neutral absolutely. I would make it
clean energy. I wouldn't make it renewable per se. Every one of
those, every single one of those has been hit at a lower cost
than projected, and some of them at dramatically lower costs.
And by the way, they are not R things or D things, they are
both sides of the aisle, these renewable portfolio standards.
So for the country, I mentioned 80 percent by 2035, it is
feasible. It would set a clear signal. It creates enough of a
time horizon that business can get to it. It would be very
powerful.
Mr. Huffman. All right. Thanks.
I don't have a lot of time, but Mr. Guith, I am drawn to
the fact that you are saying inaction is not an option. And
believe me, I am encouraged by that statement as far as it
goes, but my challenge is, I am looking at a couple of decades
of action by the Chamber here in Congress and elsewhere that is
all about preventing action on addressing climate change.
In 2007, you spearheaded the defeat of a very modest
climate bill, Lieberman-Warner; you spearheaded the opposition
to Waxman-Markey. You turned around, you targeted Members of
Congress that voted for that climate solution. In the next
election, you defeated them. And when your allies came into
power, they have done nothing for a decade on this issue, and
you were just fine with that. I guess what I am trying to
understand--oh, and you also funded studies that attacked the
Paris Climate Agreement and Donald Trump cited those studies,
even though they have been debunked by independent scientists.
So after all of this effort, you have put in defending the
status quo and preventing climate action, as you testify today
telling us that inaction is not an option, has there been a
change in the Chamber's position?
Mr. Guith. No. I mean----
Mr. Huffman. Well, that is really what I was asking. And so
reserving my time--reclaiming my time, I want to urge you----
Ms. Castor. The gentleman's time has expired, and I think
we will be able to get back to that issue. So at this point, we
will recognize Mr. Griffith for 5 minutes.
Mr. Armstrong will be recognized for 5 minutes.
Mr. Armstrong. Thank you. I take a little exception with
the talk that carbon capture isn't feasible. We are dealing
with whether it is ELM cycle research, we have a thing called
Project Tundra in North Dakota. We have great partnership
between the coal industry, the wind industry, the oil and gas
industry, and utilizing it because we have--it is North Dakota,
but we have some advantages of geography in that they are both
there, and not to mention up in the Weyburn Field in Canada has
been doing this now for over a decade. So as we continue to
work forward with that, I--Americans want clean air, they want
clean water. And sometimes, I think we get into a situation
where our policies get counterintuitive based on politics. And
I don't think there is a better answer than that than
pipelines. Transportation is obviously one of the lead drivers
in carbon emissions, whether it is trains, whether it is cars,
whether it is anything, it is not as safe to move product on
rail or on the roads as it is in pipelines. But more
importantly, we are trying to move natural gas through--it
would be nice to get a quorum on FERC, that would be pretty
good moving forward. But we try, moving our gas to the east
coast, we end up having a really bad winter. Carbon emissions
actually go up, because State water laws trumping FERC citing
on a pipeline, and so we are using heating oil instead of
natural gas to burn. And I think we do this a lot. Perfect is
the enemy of good when we continue to have this conversation.
So--and just with the Bakken shale revolution in North Dakota,
we have invested $12 billion in gas infrastructure. We probably
need another $5 or $6 billion more. So as we continue to
capture carbon from North American Coal, or the Wolf Creek
station, all that is going to do without the infrastructure
is--I mean, it is still better. We are capturing the carbon,
but we are producing more oil and gas, and we don't have the
infrastructure in place to process the gas, and then we run
into these kind of issues.
So I guess my question for Mr. Foster, you were the one
that talked about carbon capture, what incentives, what
advantages can we do so--and I agree with you, it is clean
energy, so we can do this in a realistic manner that is
allowing industries to compete and also protect the reliability
of the grid.
I mean, that is a part of the conversation I don't think we
have enough, is that given certain storage limitations and
weather limitations, if you live in a State like mine where it
is 35 below for 45 days in a row, and windmills don't turn if
it is more than 20 below, we have to have reliable energy. And
one thing you can't do with a coal plant is just turn it on and
off very quickly.
Now, there is some quick combustion engines with natural
gas and we can do those things. So how do we really truly
incentivize--I mean, we do some stuff with our research arm at
the EERC and do a lot of projects, but from a Federal level,
how do we not pick winners and losers, and just start talking
about whether it is sequestration, enhanced oil recovery, and
those types of things.
Mr. Foster. I believe that a properly constructed Federal
clean energy standard, coupled with improvements to the 45Q tax
credit, would provide the kind of architecture to help make
carbon capture sequestration more commercially viable in the
electric sector. But beyond that, I think it is absolutely
critical that we drive the cost of deployment of that
technology down so it can be usable in industrial applications,
because we have no other way to remove emissions from blast
furnaces and steel mills, or from cement kilns, or a host of
other industrial applications that are going to be needed the
world over. So what better economic driver than to be the
leaders in producing, applying, commercializing this technology
across all its different uses.
Mr. Armstrong. To understand how this works on the ground
sometimes, I mean, innovation happens in really interesting
places. So we have an ethanol plant that is immediately located
next to a coal plant, and they use the coal plant to heat the
ethanol plant. So they are capturing, they are increasing
efficiencies, they are driving down the cost; instead of a
waste product, now they are creating two different things.
I will have a question for Mr. Guith. How do we do any of
these things that doesn't just export our pollution? If we are
going to go back and ban the export of oil, ban the export of
LNG, ban the export of coal when we are dealing with developing
countries and doing those things. I mean, if we are serious
about this conversation, isn't the conversation also have to
include that part of the conversation? Because the last thing
we want to do is export our pollution to countries that don't
have the regulations we have here.
Mr. Guith. It is not just the production side, it is on the
consumption side, too. I mean, we know full well that climate
change is a global issue. And if it is not addressed globally,
it is not going to be addressed. If we don't have technologies
in place that the rest of the world can use, whether it be
sequestration or otherwise, then we are going to continue to
see emissions rise.
And I would also point out, to follow up on Mr. Foster's
answer, right now, the USE IT Act is an incredibly important
regulatory change that has tremendous bipartisan support in the
Senate, and hopefully, we will see it passed there and come
over here to help facilitate greater use of sequestration.
Ms. Castor. Thank you very much.
Mr. Levin, you are recognized for 5 minutes.
Mr. Levin. Thank you, Chair Castor, and thank you to our
witness for providing such thorough testimony. Many of your
statements make it clear that the planet is heading towards
huge costs associated with climate change. However, it is
heartening to see you have done a lot of work to chart the best
path forward that can help the United States and the rest of
the world to avoid those costs.
Dr. Liverman, I would like to begin with you, and also
begin by saying my wife is a proud University of Arizona
graduate. She would be very mad if I didn't offer Bear Down. In
this committee, we have discussed that there will be a
significant financial cost if nations, including the United
States, don't take action on climate change. So I would offer
that any recommendations the committee makes must be compared
to that baseline.
In your testimony, I was struck when you said that limiting
warming to 1.5 degrees Celsius rather than 2 degrees could
avoid up to $38 trillion, that is with a T, $38 trillion
worldwide in damages by the end of the century.
On this figure can you estimate how many dollars of those
damages might take place in the United States?
Dr. Liverman. The IPCC didn't look at that, but the U.S.
National Climate Assessment did provide some figures. They
suggested that if warming continues, that damages could be up
to .6 percent higher, if we go up 2 degrees in the U.S. And
that would be 2.3 percent of GDP per degree of warming. So if
we continue to warm, if we don't act, it will have a
significant impact on our GDP.
Mr. Levin. So it would be terrific if you could track down
the number in trillions of dollars in direct economic impact,
the cost of inaction of the United States and provide that to
the committee.
Dr. Liverman. I would be happy to do so.
Mr. Levin. Thank you.
Mr. Harvey, in fairness to my wife, I notice you went to my
alma mater, Stanford University, so go Cardinal. I was
interested to read your finding that multiple midwestern States
that derive more than 25 percent of their generation from wind
power have more reliable grids than their neighbors that don't.
This week, you are probably aware the House is voting on a
bill that would keep the U.S. in the Paris Agreement. And I
have offered an amendment to that bill underscoring the fact
that cleaner and more reliable forms of energy like wind don't
necessarily mean less reliability or higher costs. In fact,
often the opposite is true.
Could you elaborate on how wind power and other renewables
integrated into the grid of future, don't necessarily equate to
higher costs or less reliability.
Mr. Harvey. Certainly, Congressman Levin, and thanks for
the opportunity.
I studied power systems planning in my graduate program in
engineering at Stanford. And we were taught to turn on power
plants in ascending economic dispatch order to meet whatever
the demand was, and that people still refer to baseload power,
shouldering power and peaking power. That paradigm is giving
way to a new management strategy, which is system optimization.
So a grid operator should have a whole suite of resources
at his or her fingertips, ranging from the conventional power
plants to renewable energy, to demand side opportunities as
well. And then wheeling power across large distances. The more
options you have, the more robust your system is. If something
goes down and you have a good transmission line, you can bring
in electricity from another part of the country. When it is
freezing cold in North Dakota, it is probably reasonably warm
in Arizona. When San Diego has a peak demand, Seattle doesn't
and vice versa. And so, by hooking together heterogenous
systems and heterogenous power supply and optimizing across the
suite, you create a much more robust system and a much more
reliable system. It is what other industries are used to doing,
the electric power industry is just learning to do that.
I will just mention one last word, the head of the
California Independent System Operators, Steven Berberich, is
somebody you should consider as a witness, because he is
running one of the largest grids in the fifth largest economy
in the world, and he is pushing into these frontiers and he is
not breaking a sweat.
Mr. Levin. I think a field trip to Folsom would be great
for the committee to see CAISO.
Mr. Guith, I noted your mention of a San Diego Gas &
Electric project. And I commend the work at SDG&E, that is in
my neck of the woods. But I note that it didn't happen in a
vacuum, it happened only after tough regulatory oversight by
the California Public Utilities Commission. I wanted to turn to
the Paris Accord and get your take on it for just a minute.
I noticed the Chamber has a position saying, and I quote,
``The Chamber believes in an effective climate policy should
encourage international cooperation,'' end quote. And also,
quote, ``The United Nations Framework Convention on Climate
Changes Paris Agreement established a comprehensive framework
for international action,'' end quote. Mr. Guith, do you
believe the United States should stay in the Paris Climate
Agreement?
Mr. Guith. I think the business community has been pretty
clear that United States needs to remain at the table
internationally, and that includes the Paris Agreement itself.
Mr. Levin. Great. I agree and every member will have the
opportunity to vote this week to keep the United States in the
Paris agreement when H.R. 9 comes to the floor.
Thank you.
Mr. Guith. But if I may, though, the legislation is not
just about Paris. It is also about the commitment and how by we
get there. That is a completely separate issue.
Mr. Levin. Well, I find any discussion of H.R. 9, or
questioning of H.R. 9, hard to reconcile with the Chamber's
position. I actually think it is quite consistent, and I think
my colleagues across the aisle will agree if they take the time
to read the legislation. I thank you for your time.
Ms. Castor. Thank you, Mr. Levin. Mr. Griffith, you are
recognized for 5 minutes.
Mr. Griffith. Thank you, Madam Chair. I have to respond. I
read the legislation, and I am not voting for it. So there.
All right. Mr. Foster, thank you so much for being here
today and thank you--you are probably the only person on the
panel today who has actually been to my district. And it was
one of those rare moments when while we didn't agree on
everything, Secretary Moniz sent you and a team down to see
what was going on in coal fields. I greatly appreciated that.
We had a seminar as you recall at the University of Wise,
University of Virginia at Wise. And then you all went over to a
high school in one of my poorest counties, Dickenson County. My
district, for those of you who don't know, abuts to West
Virginia, Kentucky, North Carolina, and Tennessee. And we have
a significant coal mining investment in part of the district,
it is a very large district. And so I was very appreciative of
your comments on page four of your written testimony that says
we need--first we need to embrace in all-of-the-above flexible
strategy toward climate solutions. There is no silver bullet.
You said this in your oral testimony, too. No single
technology, no one perfect policy, which is why I believe we
have to continue to invest in research. I would suggest when--I
appreciated you both pronouncing Appalachia, for those of us
from central Appalachia, correctly. And for recognizing there
are some things we can do in Appalachia, one that was not on
your list because we hadn't really thought about when you all
were down to visit, is close loop storage inside of a coal mine
using the water. Obviously there is nothing living down there.
We bring the water in from outside, there is not an
environmental consequence, and we can use that as a giant
battery sitting in the same areas. Mr. Harvey said we want to
put some of the jobs in the area where the jobs are going to be
lost, and my district has suffered heavily.
Further, I would also have to say that one of the things we
talked about at that seminar was the fact that we are going to
continue to use coal. Everybody today has been talking about
the grid and electricity. A large amount of the coal out of my
district makes steel, and I know you have a lot of interest in
steel as well having worked with the unions in that industry.
And so, we are going to continue to mine that high quality
coal, and we have to find ways to make sure that the American
public understands that not every coal is equal to other coal,
but a lot of the coal around the world is dirtier than our
coal. And we have to come up with new research and ways to do
that.
Now, I am excited and will tell you that one of the
participants there--and you heard the testimony from Dr. Yoon
at Virginia Tech--they just have taken some of their technology
and they were looking at rare Earth minerals, and separating
that from the carbon in central Appalachia. But they also can
make poor coal better. And so they have licensed that
technology to steel plants in India, and I think this is how we
solve some of these problems, so that they can take that poorer
coal that they are mining in India, and upgrade what they are
doing because they are going to make steel.
Other nations, particularly in the developing world, they
are not going to impoverish their people because we have
decided we don't want it to be warmer. No matter what the
consequences may be, they are not going to have their people
living in the dark or living in poverty. But if we can get
technologies that we can then license with these two steel
mills that they have licensed their technology are going to do
is lower the carbon footprint, because even in the developing
world they want to have jobs, they don't want to be
impoverished, but they also want clean water and clean air. So
this is where I think we can find the win and I appreciate you
saying that.
And I am concerned, and I will give you an opportunity to
give me some help, that the DOE's loan program that you worked
with, and you said in your testimony, there were 39 billion of
unused low interest and loan guarantees authority that could
move rapidly to help finance some of this research that I am
very positive about. Tell me why aren't we using that? What can
we do to speed that up?
Mr. Foster. Well, I submitted, along with my testimony, a
research paper that had been done by the Energy Futures
Initiative about a year ago, and a whole range of suggestions
on how the loan program office could be applied, particularly
to energy infrastructure investments, and a variety of other
issues like that. I do think with the budget constraints that
Congress may have on it, this is authorized $39 billion worth
of loan guarantees, and low interest loans that could be
applied without further authorizations.
So, I think looking deeply at ways in which the loan
program office could be used to accelerate additional
technologies, particularly energy infrastructure, look at the
research paper we did, and we strongly encourage the committee
to investigate that.
Mr. Griffith. I appreciate that.
Mr. Guith, you heard my spiel on developing countries. What
can we do to increase their use of technologies? Because they
are going to continue to use fossil fuels, we know that. In
fact, the World Bank said we are not going to lend any more
money for building coal-fired power plants, so China is
investing all over the world, particularly in Sub-Saharan
Africa, in building new coal-fired power plants. What can we do
to encourage these countries to use the new technologies and to
make it cleaner?
Mr. Guith. That is a great example right there. I mean, the
technology that the Chinese are financing is subcritical, and
so you have more emissions.
Mr. Griffith. Subcritical means poor?
Mr. Guith. Yes. If the United States would have remained as
part of that financing mechanism, we would have been using
ultra critical technology, and, therefore, lower emissions. But
ultimately, we need to develop and commercialize the
technology. If we make it available as we have so many
technologies that we are using right now, the rest of the world
will use it. But the rest of the world generally, especially
developing world, does not have the resources that we have.
Mr. Griffith. Thank you.
Ms. Castor. Thank you very much. Mr. Casten, you are
recognized for 5 minutes.
Mr. Casten. Thank you, Chair Castor. Thank you so much to
the panel.
I want to focus my comments on--the question is on
economics, and I just want to start with something that is, I
think, non controversial, but too rarely said, and that is that
fossil fuel is an inherently high marginal cost source of
energy relative to every other option. And when you use less
fossil, you reduce less CO2 and you save money. It
is not complicated, but we don't mention it often enough.
The one exception, of course, is in the extractive
industries, and the jobs in the extractive industries have a
rooting interest in higher cost energy. The entire rest of the
economy from steel production to bitcoin mining to airline
flight attendants has a vested interest in lower cost energy.
Mr. Foster, can you give me a rough estimate of how many
jobs have a rooting interest in higher cost energy in the
country relative to the numbers that have a rooting interest in
lower cost energy?
Mr. Foster. Well, I can give you rough numbers of a number
of them according to the U.S. energy and employment report. So
for the coal industry, which includes their entire value chain
it would be about 200,000 jobs; for the natural gas industry,
it would be about 650,000; and for the petroleum industry, it
would be about 900,000. So if you try to put that in
comparison, I mentioned wind and solar, solar if you are
looking at the majority time jobs, it is about 240,000 wind. It
is about 107,000. You look at the other zero carbon energy, I
think I mentioned nuclear is in the range of 63,000, hydro
66,000.
Mr. Casten. Is it safe to say that even those pale beside
those industries like steel making, all the manufacturing
sector, that actually employs the bulk of the economy and has a
rooting interest in lower cost energy?
Mr. Foster. Well, I think just about every sector of the
economy has an interest in lower cost energy. And one of things
I found interesting is following how in the era of really
unparalleled growth in the United States, we have seen a
constantly diminishing share of gross domestic product going to
energy. So it is down to about 5.4 percent today of gross--
overall of gross domestic product.
Mr. Casten. I am sorry to interrupt, but I know we are am
tight on time. Is it safe to say that investing in lower
marginal cost energy sources is a net job creator and is net
stimulative to the economy?
Mr. Foster. That is a very big generalization that I
wouldn't necessarily jump to.
Mr. Casten. I certainly would, but fair enough. Part of the
reason I say this is because I spent 20 years in the energy
industry before I got here. And I am of the opinion that the
single biggest explanation for the falling CO2
emissions in the electric sector was the 1992 Energy Policy
Act, and FERC order 888, which, for the first time, encouraged
us to preferentially deploy lower cost assets, which, oh, by
the way, are the more efficient and less fossil fuel intensive
assets.
I was delighted to hear your comments on that, Mr. Harvey.
And I wonder if you would chat a little bit about what more we
might be thinking at, specifically at the FERC level, to better
incentivize lower cost production, and to better value
ancillary services like voltage stability and other mechanisms
to accelerate this transition to cheaper and cleaner energy.
Mr. Harvey. Representative Casten, you just proved yourself
to be an energy nerd, sir. Congratulations.
Mr. Casten. Not the first time.
Mr. Harvey. So the FERC has a very important job to do now,
wholesale markets in America are FERC-regulated, but they are
not generally FERC-controlled, they are controlled by
independent nonprofit associations that are answerable to no
one, and that is a bit of a problem.
What happens is, and you are absolutely correct with rule
888, it opens the doors for lowest marginal cost energy
dispatch. However, the FERC and other independent markets have
the ability to set conditions for those sales, and the ability
to reward other attributes, so spinning reserve, ancillary
services, capacity factors, and so forth.
Some of those things you need to reward, others of those
are basically fake ways to give a lot of money to certain
industries, and I am being blunt here, because one needs to be.
That is exactly what is it going on right now.
The proper answer is to define those characteristics based
on physical and economic need, not based on arbitrary made up
numbers. I think the FERC just needs a stronger instruction
about what its role is in creating a truly fluid market, a
truly liquid market.
Mr. Casten. So with the little time I have left, and I
really, really enjoyed your testimony, I want to introduce for
the record with unanimous consent if I could, climate policy
initiative report supporting renewables while saving taxpayer
money.
Madam Chair, I would like to ask unanimous consent to enter
this into the record.
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Mr. Casten. There specifically is a rich discussion in here
about the benefits of using cash incentives as opposed to tax
credits, which you talked about. Can you give us a little bit
of an education on the differential ways that cash incentives
versus tax incentives drive investments in clean energy?
Mr. Harvey. Certainly. So whenever you give somebody cash,
they get a $1 worth of benefit for every $1 you give them. If
you give them a tax credit, they have to find a way to use that
tax credit. And most startups and most new technology companies
don't have profits, or don't have excess profits, so they don't
need the tax credit, so they sell it on a secondary market. The
price of that tax credit is always going to be less than $1,
because of transaction costs. In many cases, because of
restrictions on the tax credit, it is as low the 50 cents,
which means the Federal Government is getting 50 cents for
every dollar it gives up. That is a terrible bargain.
So the answer is either direct grants, or highly fungible,
highly liquid tax credits.
Mr. Casten. Thank you. I wish I had more time, but I think
I am out.
Ms. Castor. And we will ask Mr. Harvey to get back to the
committee with greater detail on that point.
At this time, I recognize the ranking member.
Mr. Graves. Thank you, Madam Chair.
Dr. Liverman, thanks again for being here. You made
reference to IPCC and Paris Accord earlier. Do you believe that
the metric measuring China and India's emissions is the
appropriate one meaning including GDP or an economic unit as
opposed to an absolute reduction?
Dr. Liverman. I think we need to use all of the measures to
assess what is happening in China, whether it be their absolute
emissions, their historic emissions, their carbon intensity.
Most scientists will look at all of those.
Mr. Graves. So just doing economic is not an appropriate
metric?
Dr. Liverman. I think the research suggests that we should
look at multiple metrics because each metric gives us a
different insight into what China's doing and where it is
going.
Mr. Graves. Thank you. Number two, I want to make sure I
understood what you said before, so please correct my statement
if I get this wrong, but you made mention of the greenhouse gas
concentrations in the environment and talked about how much of
that is attributable to what we released over the last 50
years. And so, I want to take it a step further and make sure I
got this right. So there is sort of a momentum within the
environment of these greenhouse gases. And so, effectively, if
we could stop all emissions today in the United States, and
those concentrations that are there are there. And so the
corresponding temperature changes would result because of those
greenhouse gas concentrations that are in the environment from
previous emissions, is that accurate?
Dr. Liverman. Yes, unless, of course, we look at what the
IPCC calls the negative emissions. And the discussion that we
had so far has focused very much on the technology of carbon
capture and storage, this sort of new technology, but we have
very long-standing technology of carbon capture and storage
which is forestry and farming for carbon capture.
Mr. Graves. Biogenics, yeah.
Dr. Liverman. And so, that we could make a dent in the
emissions that are already there, and the U.S. can play a major
role if we manage our forests and manage our farmland in order
to capture carbon.
Mr. Graves. I read an interesting article this week, I
think it was the Salk Institute on how they are working on
plant technology in order to increase the sink that results. In
fact, I used to work on coastal resiliency issues. We were
looking at how to change the vegetation in some of our
diversion, water diversion receiving areas, to increase the
uptake of phosphates and nitrates to help reduce the dead zone
that was occurring, the hypoxic conditions in the Gulf of
Mexico. So I agree there are other technologies and I think
some of the extraction of carbon capture utilization are
important ones.
Do you believe that we should be using a metric of looking
at sort of best return on investment whenever we make
recommendations ultimately out of this committee, looking at
which recommendations are going to get best return on
investment in terms of preventing temperature increases and
preventing sea rise and things along those lines?
Dr. Liverman. Yes, we need a metric of return on
investment, but I would say that IPCC and many other scientific
assessments do identify the challenge of putting a financial
cost on some losses, loss of life, loss of farms.
Mr. Graves. Sure.
Dr. Liverman. Loss of infrastructure. It can be quite hard
to put a dollar value on that. And also, the uncertainty about
discounting the future.
Mr. Graves. But it is important for us to use some type of
metric in looking at jobs, at economic and return on investment
and others.
Dr. Liverman. Yes, yes.
Mr. Graves. Thank you. Moving on. Mr. Harvey, I want to--
you talked a lot about renewables. You talked about wind and
solar and others, and certainly those are important all-of-the-
above strategies or components of a comprehensive strategy. But
you didn't talk about storage, and obviously, that is an
important part, the sun doesn't shine at night, right? And so I
was looking at some statistics the Manhattan Institute put
together, they determined that the gigafactory, Tesla's
gigafactory, the largest battery manufacturing facility in the
world. That its annual production is capable of storing 3
minutes of U.S. energy. If they produced batteries for a 1,000
years we would be able to store enough energy for 2 days in the
United States. Fifty to 100 pounds of rare Earth materials are
mined for every 1 pound of battery. How do you reconcile that
and the environmental impacts? And let's keep in mind 15 of the
top 23 commodities we are importing, minerals we are importing,
including rare Earth, are actually from China, Russia and other
countries like that, or China and Russia alone are involved in
providing those materials to the United States.
Mr. Harvey. So electricity storage and batteries is really
expensive, and it is true we are not going to get to long-term
grid scale battery storage at a cost-effective number any time
soon. Fortunately, we don't need to, there are half a dozen
strategies to balance the grid given variable renewables. I
mentioned wheeling power. The grid is a kind of battery because
we never have the same demands across the United States or the
same supplies. We need to use some of our other resources
better. The Bonneville Power administration uses its
hydroelectricity for bulk power instead of peaking power. That
is economically insane, right? We should use it at its highest
value use.
Onshore wind has a different operating regime than offshore
wind. Offshore wind operates much longer and for different
times. So the more varieties you have, and the more they are
hooked together, the less you need battery storage. All that
said, I think storage is one realm where we need to do a lot of
R&D, and we can use spot storage to alleviate tensions and
problems on the grid. But your main point about bulk storage is
correct.
Mr. Graves. Madam Chair, I want to ask unanimous consent to
include in the record a graphic from the Manhattan Institute
that indicates that $1 million invested in shale and $1 million
invested in solar and wind would actually produce at least six
times as much energy over a 30-year period as compared to just
wind or solar.
I yield back.
Ms. Castor. Any objection? And I failed to rule on Mr.
Casten's unanimous consent request. So without objection, we
will admit into the record Mr. Casten's material and the
ranking member's material.
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Ms. Castor. At this time, Mr. Neguse, you are recognized
for 5 minutes.
Mr. Neguse. Thank you, Chairwoman Castor, thank you for
holding this important hearing. Thank you to the witnesses. I
reviewed your testimony, your written testimony as well as I
know my colleagues have, and found each of you, in your
respective testimonies, to be incredibly helpful and
thoughtful, and certainly educational for us and our work, so I
appreciate the work that you have done.
I would say with respect to the ranking member's comments,
and I certainly appreciate them regarding energy storage, begs
perhaps the larger question, for this committee and for this
Congress to debate, which is to say, why not invest more
resources in research on energy storage, and that seems to be
an area where there is some bipartisan support. And I
appreciate the Chamber of Commerce's written testimony in terms
of recommending increased investments in ARPA-E and so forth,
which I imagine can be incredibly productive from an energy
storage standpoint. So I hope that my colleagues would join us
in that effort.
I am a FERC nerd as well, and so, like Mr. Armstrong and
Mr. Casten, I wanted to talk to you, Mr. Harvey, a little bit
about your recommendations. Before I do so, I do just want to
touch on a comment made by Mr. Carter at the beginning of
hearing, with you, Mr. Guith--I hope I am pronouncing that
right, my name is a tough one, so--my understanding of Mr.
Armstrong's comment was essentially that Federal standards, or
international standards, for that matter, from a renewable
energy standpoint, that those could have unintended
consequences and they could impede economic growth and so that
is why, perhaps, some folks on the other side of the aisle
oppose them and perhaps your organization as well. Am I
understanding that right, that exchange?
Mr. Guith. No. I made the point that policymakers have to
be careful in how they develop policy, because there could be
especially as relates to climate far-reaching impacts. I mean,
the example that we were discussing is focusing on one specific
type of non-emitting energy that might therefore have a
negative impact on another non-emitting energy. In that case it
was nuclear.
Mr. Neguse. I appreciate your response. What I would was
say is part of why I am struggling, and I suspect my colleague,
maybe my colleague, Representative Huffman, feels the same way,
is some your written testimony seems to indicate, in fact, a
preference for some of these standards. A good example of this
is the Kigali Amendment, right? An amendment that has been
ratified by 66 countries, that a variety of business entities
in our country are advocating for passage of here, right,
because we know there would be a substantial economic impact in
terms of the tens of thousands of jobs that would be created by
virtue of committing to the reduction 80 percent over the next
30 years of HFCs, right? Billions of dollars of economic impact
here in the United States. And so, I guess the point I am
making is that standards imposed at the Federal level or by
international agreement can be quite a boon to our economic
growth. And I would hope the Chamber would appreciate that
given that you all have been very supportive of the Kigali
Amendment.
Mr. Guith. I think it is a great example where the business
community was involved, so that policymakers understood what
was achievable, versus what was hypothetical. And that is why I
think you got to a point with Kigali, where it was a win-win
across the board. And that is why, I mean, to go back to Mr.
Huffman's original question, I mean the Chamber hasn't changed.
Certainly, the business community has evolved, but we have been
pushing for these types of advanced technology investments
certainly since I have been involved with the Chamber a decade
ago. I mean, without developing these technologies, if you go
back 50 years----
Mr. Neguse. I appreciate your comments. I don't want to
interrupt. I would say in Representative Huffman's defense,
while I certainly can't speak to the Chamber's activities in
the last 10 years, and I am new to Congress here for all told
of 112 days, I suppose, I think that the Chamber has had a long
history that has been well documented in terms of opposing a
variety of different important legislative efforts at the
congressional level to try and move the needle in the fight
against climate change. But as I said, I appreciate your
support to the Kigali Amendment and hope you can join many of
my colleagues here in the Congress that are urging the Trump
administration to agree with the vast majority of the
international community that are pushing on that front.
Mr. Guith. We have, voicefully.
Mr. Neguse. Thank you. Mr. Harvey, with respect to FERC,
just following up on the point that Mr. Casten made, your
written testimony articulates, I think, in an effective way,
the realities of the ways in which FERC has been far from
technology neutral, and I guess I am curious, what
recommendations you believe we should take in terms of trying
to give FERC that better, quote, unquote ``instruction'' that
you referred to in your answer to Mr. Casten.
Mr. Harvey. I will first acknowledge it is difficult to
specify a set of rules that are going to guide all future
rulemaking. But I do think emphasizing again that it is the
FERC's requirement to be technology neutral to set performance
standards, that the performance standards should be based on an
explicit physical or economic need. Not one that is made up. It
might be worthwhile for the FERC to have a scientific or
technical advisory board made up of utility engineers and
national lab experts, something like that to ascertain whether
the decisions they made are made for a thumb on the scale
reason, or for system balancing and legitimate purpose. But you
do not want the Federal Energy Regulatory Commission to be the
handmaiden of a certain industry. It will wreck our electric
system in the long run and it will impose unnecessary costs.
Ms. Castor. Thank you.
Mr. McEachin, you are recognized for 5 minutes.
Mr. McEachin. Thank you, Madam Chair. Let me start by
apologizing to you. We had a hearing on robocalls in Energy and
Commerce. It was a bit repetitive, but there we were, so I
apologize for my tardiness.
Mr. Foster and Mr. Harvey, I am hopeful that the House of
Representatives will consider infrastructure legislation in the
next few months. To that end, Mr. Foster, your testimony has
discussed the importance of investing in energy efficiency and
infrastructure, both of which spur economic development. What
would you prioritize for investments and why?
Mr. Foster. Well, in terms of energy infrastructure, I
think almost any investment that you make is going to create
good, high-paying jobs in the energy sector, the transmission
distribution and storage system has almost three times the
unionization rate of any other part of the private sector. So
you are dealing with highly skilled, highly trained
construction workers, good-paying jobs. So rebuilding a
transmission, expanding transmission to allow more renewables
onto the grid, a whole range of those kinds of activities will
be very good for the economy, lowering energy costs and very
good for job creation.
So, especially, if you were to prioritize areas that have
been negatively impacted by some of the changes that we have
experienced in our evolving energy technologies, that would be
a great place to start.
I will just repeat again that we have, in the loan program
office, $39 billion worth of unused loan authority that with
the proper supervision, could be used to jump-start a big
energy infrastructure spending program in America.
Mr. McEachin. Thank you for that. Mr. Harvey, what about
you? What should the infrastructure bill include to make a dent
in our greenhouse gas pollution?
Mr. Harvey. One element I would propose is expanding
transmission lines across the country to help balance
renewables and balance the whole system. In fact, I think we
should look at ways to streamline permitting. I advocate pre-
zoning into red, yellow and green zones, where red, you are
just not going to build anything; green, you get a permit in 90
days if you meet the proper specs; and yellow is like
everything today, it is an all out war. So we just need to
clean that up and save a lot of time and a lot of trouble.
I would recommend extending tax credits for clean energy, a
bunch of them are set to taper down, starting now. Right when
we are building momentum, that is the wrong time to do that. So
I would push those back another 5 years or something like that.
I think also we need to look at transportation. One interesting
opportunity would be to offer matching funds to utilities to
build an electric vehicle charging infrastructure. And in
general, transportation infrastructure, one of the iron laws of
transportation is if you build it, they will come. If you add
freeway lanes, you get more cars. If you add things like bike
paths, you get more bikes. There is a revolution in
transportation options which we should take advantage of what
they call micromobility to bikeshare to autonomous vehicles, or
electric vehicles. We neglected our transportation
infrastructure for decades now, and it is starting to fail us.
And that is going to be very costly to the American economy.
Mr. McEachin. Let me ask you as quickly as I can about your
red, green, and yellow pre-zoning, is that what you called it?
Mr. Harvey. Yes.
Mr. McEachin. I experienced that problem in Virginia with
local governments, a particular area loses its coal industry,
but when we try to put up a wind farm, they are concerned about
their view shed. So I understand some of the problems, with
zoning particularly in your red area--I mean, in your green
area, are you saying to those areas no matter what their zoning
laws are, we can come in? Explain to me how that would work in
1 minute and 3 seconds?
Mr. Harvey. The cognizant jurisdiction, be they local,
State, or national, need to set whatever standards they want to
set. But then, if in a green zone a project meets those
standards and gets a permit in 90 days.
Mr. McEachin. I see.
Mr. Harvey. I saved you 48 seconds.
Mr. McEachin. There you go.
Madam Chairwoman, I give you 45 seconds back.
Ms. Castor. Very good. Thank you, Mr. McEachin. Mr. Palmer,
you are recognized for 5 minutes.
Mr. Palmer. Thank you, Madam Chairwoman. My question is for
the entire panel. If the United States completely eliminated
its carbon emissions, would that stop global climate change?
Mr. Foster. If the question is ``we,'' meaning the United
States of America, if we did that, the answer is no, it clearly
wouldn't.
Mr. Palmer. If the entire world stopped its carbon
emissions, would that stop global climate change?
Dr. Liverman. No. We have some built-in warming, but if we
focused also on taking carbon out of the atmosphere, it could
do so.
Mr. Palmer. Have we ever seen a case where sea levels rose
more than are predicted, for instance, by the scientists now?
Dr. Liverman. My understanding is that what we are
observing is consistent with what the science had projected,
but sea level rise does take a number of years. So much of that
is still to come.
Mr. Palmer. Well, the reason I ask that is apparently, some
folks take as the gospel truth whatever these esteemed
scientists project in, for instance, in his book, Farewell to
Ice, Peter Wadhams, a professor of ocean physics at Cambridge
University, predicted that polar ice and the Arctic would be
gone by mid decade. Not only is the ice still there, but at
points in 2012 and 2016, it actually increased by about 50
percent. It went from 2.2 million square miles to 3.3 million
square miles. So I guess my question is, do each of you believe
that the science on climate is settled?
Dr. Liverman. The science on climate has reached
considerable consensus. There is still areas where we are not
completely clear about what is going to happen, partly because
we don't know what policies we are going to pursue. And with
regard to using one paper, one of the things----
Mr. Palmer. That is not one paper.
Dr. Liverman [continuing]. That the IPCC tries to do is to
look at a whole range of research papers and assess and judge
what those say collectively, rather than looking at just one
paper.
Mr. Palmer. And it is not just one paper. There are a
number of--there is a number of examples that indicate that the
science is not completely settled. Although, I think the
consensus is, is that the climate is changing. I am not sure
that the consensus is that it is all anthropomorphic. I am
certain it is not the consensus that it is all anthropomorphic,
and when we talk about eliminating all carbon emissions from
the United States in the next 10 years, even Senator--former
Secretary of State John Kerry admits that that will not
mitigate climate change, it will not mitigate warming,
basically has us standing alone. And there are obviously
consequences for the policies that we develop.
In California right now, there is a lawsuit that has been
filed by minority group against the California Air Resources
Board, because of the harm that it is doing to low-income
people. Since the effective date of California's greenhouse gas
reduction law, the Global Warming Solutions Act, 41 States have
reduced their per capita greenhouse gas emissions more than
California, but it had enormous negative impact on people in
California. So, I think, we have got to look at this in the
broader spectrum of how this affects everybody, and the U.S.
obviously I think we continue the best in the technologies to
reduce our carbon emissions. I am all for that.
I think we have to look at the whole picture of climate
change, because I think that natural variation is going to be
the bigger factor in this. And if we are not taking steps to
engineer solutions, use our technology engineer expertise to
adapt and mitigate, and we just focus on the carbon side of
things, we are going to be in big trouble. We will not be
prepared for the consequences of that inaction.
Dr. Liverman. I would agree, and so would IPCC, and the
National Climate Assessment that we need to do a lot to focus
on how we cope with extreme climate and global warming, whilst
at the same time, looking at reducing our carbon emissions. The
importance of adaptation is very important, both for the
disadvantaged and for businesses across the United States.
Mr. Palmer. Well since I got an agreement, I will yield
back.
Ms. Castor. Well, I want to thank the witnesses here today
I think you helped us set the table, Dr. Liverman, to review
the--your work and the scientific consensus across the globe
that we are not on track to reducing carbon emissions. Yes, we
must and we will have hearings focused on solutions regarding
adaptation and mitigation, but there is simply not a substitute
for tackling the source of the problem, and that is the
increase in greenhouse gases. So thank you to the witnesses for
your testimony. And the committee is adjourned.
[Whereupon, at 11:53 a.m., the committee was adjourned.]
United States House of Representatives Select Committee on the Climate
Crisis
Hearing on April 30, 2019 ``Solving the Climate Crisis: Drawing Down
Carbon and Building Up the American Economy''
Questions for the Record
Dr. Diana Liverman, Regents Professor of Geography and Development,
University of Arizona
Dear Congresswoman Castor: Thank you for your letter with follow up
questions about my testimony before the Select Committee on the Climate
Crisis on Tuesday, April 30, 2019. It was a privilege to meet you and
the committee and receive such thoughtful and important questions. I
provide answers to the questions below, including some research that
has been published since the release of the IPCC 1.5+C report.
Sincerely,
Diana Liverman,
Regents Professor of Geography and Development, University of
Arizona.
The Honorable Kathy Castor
1. Is the US emissions trajectory consistent with limiting warming
to 1.5+C or even 2+C?
The most recent research shows that the US emissions trajectory is
not consistent with limiting warming to 1.5+C or 2+C.
The IPCC Special Report on 1.5+C (August 2018) did not examine
emissions by country. The report does assess the consistency between
the current Paris commitments (NDCs or Nationally Determined
Contributions) and scenarios that would limit warming to 1.5+C, and
concludes that the full implementation of the current Paris commitments
would produce a global average temperature increase by 2100 of 2.9-
3.4+C (5.2-6.1+F) above preindustrial levels at 66% probability.
IPCC finds that there is high agreement that the current Paris
commitments are not in line with pathways to achieve either a 1.5+ or
2+C target.
The UNEP Emissions Gap report (November 2018) supports the 2.9+C-
3.4+C of warming estimate by 2100 under a scenario where Paris
commitments are fully implemented.
UNEP reports that US emissions decreased from 2004 to 2017, and in
2017 were 13.1% of total global greenhouse gas emissions. UNEP states
that the United States Paris target was to reduce emissions 17% below
2005 levels by 2020, and 26-28% by 2025, but noted that with the
current intention to withdraw from the Paris agreement the US is
unlikely to meet either target.
The latest analysis of the Global Carbon Project (Dec 2018)
estimates that global carbon dioxide emissions rose by 2.7% between
2017 and 2018, projecting US emissions as 2.5% higher in 2018 than 2017
after several years of decline as coal was displaced by gas, solar and
wind.
The US Energy Information Administration (USEIA) Monthly Energy
Review for May 2019 reports that energy related carbon dioxide
emissions, which were around 6 billion metric tons in 2005, had fallen
to 5.17 billion metric tons in 2017, a reduction of 14.4% from 2005 and
approaching emission levels for 1990 (5.04 billion metric tons).
However, 2018 reversed this trend increasing by 2.7% over 2017 to 5.26
billion metric tons.
In March 2019 the USEIA Annual Energy Outlook projected that US
energy consumption will remain near current levels of 5 billion metric
tons through 2050 (see figure below) if there are no changes in laws
and regulation and if current trends shifting from oil and coal to gas
consumption continue.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Some recent studies (e.g. America's Pledge Initiative on Climate
2018, Kuramuchi et al 2017) suggest that actions by non-Federal actions
by states, cities and business could contribute to emission reductions
of up to 21% below 2005 levels by 2025, approaching the Paris reduction
commitment of 26-28% even without new Federal policies.
The IPCC 1.5+C report concludes that for a chance of limiting
warming to 1.5+C, global CO2 emissions must decline by about
45% from 2010 levels by 2030, and reach net zero emissions by 2050. For
2+C emissions would need to decline by 20% between 2010 and 2030 and
reach net zero around 2075.
According to the Energy Information Administration, US
CO2 emissions from energy consumption were about 6 billion
metric tons in 2010. To be consistent with the IPCC 1.5+C pathway, and
if the US were to follow this global average pathway, emissions would
need to decline to 3.2 billion metric tons by 2030. Given that we are
now in 2019, and emissions are at 5.3 billion metric tons, energy
related emissions would need to decline annually by at least 3-4%.
Finally, the research literature on responsibility for emissions
suggests that the U.S. should be making even steeper cuts than the
global average because of our historical responsibility for emissions
and high per capita current emissions (e.g. Holz et al, 2018; Van Den
Berg, 2019). Carbon dioxide, once emitted, has a long residence time in
the atmosphere (between 20 and 200 years according to IPCC) and thus
some analysts believe that cumulative emissions should be the basis for
emission reductions. This implies that those having greatest historical
emissions making greater cuts. The US is the largest historical emitter
with responsibility for around 25% of accumulated CO2
emissions, compared to 12% for China (WRI 2019).
2. Please provide more information on the economic damages
associated with global warming of 1.5+C and 2+C and how many dollars of
those damages might take place in the United States?
Assessing the economic damages of global warming is extremely
challenging. They depend on detailed and robust estimates of the
impacts across regions and for key sectors such as agriculture, coastal
infrastructure, and health, and assumptions about how to convert non-
market impacts, such as those on ecosystems and disease, into dollar
values. Results also vary with assumptions about discount rates and
future economic growth.
The IPCC 1.5+C report discusses several major studies of economic
damages. First, Warren et al (2018) estimate that by limiting warming
to 1.5+C rather than 2+C damages are reduced by 22% (range 10-26%) and
are reduced by 87% (range 74% to 91%) compared to the current
trajectory that would take warming to 3.5+C. Damages included are costs
associated with climate change-induced both market and non-market
impacts, impacts due to sea level rise, and impacts associated with
large scale discontinuities This the source of the $54 trillion at
1.5+C and $69 trillion at 2+C estimates of the IPCC, and also estimates
cumulative damages of $551 trillion if temperatures rise to 3.7C by
2100. Global GDP in 2017 was about $80 trillion, of which the US was
responsible for almost 25% ($20 trillion). If losses were equally
distributed and proportional to GDP then the damages to the US, based
on this paper, would be about $13 trillion at 1.5+C and $16.6 trillion
at 2+C by 2100, compared to more than $130 trillion at 3.5+C.
IPCC also discusses research by Burke et al (2018) that finds that
``limiting warming to 1.5+C instead of 2+C would save 1.5-2.0% of Gross
World Product (GWP) by mid-century and 3.5% of gross world product
(GWP) by end-of-century''. Under a 3% discount rate this corresponds to
avoided damages of $8.1 trillion--$1.6 trillion by 2050, and $38.5
trillion by 2100 (this is the source of the number included in my
original testimony).
More recent research by Jevrejeva et al (2019) examines the global
economic costs of coastal flooding and conclude that annual global
flood costs will be $10.2 trillion a year (1.8% of GDP) in 2100 at
1.5+C (projecting .52m of sea level rise) and 11.7 trillion (2% GDP)
under a 2+C scenario (projecting .63m of sea level rise) if no further
adaptation is undertaken. The US annual flood cost is reported as $394
billion a year at 1.5C (0.9% of GDP) and 446 billion at 2C (1% of GDP)
IPCC discusses two studies focusing only on the USA which find that
economic damages are projected to be higher by 2100 if warming reaches
2+C than if it is constrained to 1.5+C. The first study is that of
Hsiang et al. (2017) concluded that the USA could lose 2.3% Gross
Domestic Product (GDP) each year per degree of global warming. They
find that the baseline if no further action is taken to reduce
emissions results in economic damages reaching 4.5% (range 2.5% to
8.5%) of GDP per year by 2100. Avoided damage from achieving a 1.5+C
temperature limit is 4% of GDP (range 2.0%-7.0%) by 2100. Avoided
damages in the US from achieving a 2+C temperature limit are 3.5% of
GDP (range 1.8%-6.5%). The second study by Yohe (2017) finds an annual
GDP loss in the US of 1.2% per degree of warming, or approximately 0.6%
for a half a degree increase from the current 1+C warming to 1.5+C.
Economic damage estimates for the US are also provided in the 4th
US National Climate Assessment (NCA4). The technical report for NCA4
(EPA 2017) compares annual economic damages in 2090 for two IPCC
scenarios, RCP8.5 which approximates to a no further action scenario
(e.g. a 3.5+C (range 2.6-3.8) global warming by 2100) and RCP4.5 which
approximates to a 2+C (1.1 to 2.6) scenario (by 2100). Damages are
estimated for sectors that include air quality, extreme temperature
mortality, loss of labor, health, agriculture, infrastructure, energy
and fisheries. For example, annual damages in 2050 under the RCP4.5
(2+C) scenario include $6.9 billion in air quality, $32 billion from
extreme high temperature mortality, $35 billion in lost labor hours,
$1.8 billion to fisheries, $9.5 billion to roads, bridges and rail, and
$69 billion in damage to coastal property. This totals $154 billion and
rises to $262 billion in annual damages by 2090. $56 billion (85%) of
the coastal property losses estimated for 2050 under the 2+C scenario
would occur in the Southeastern United States if no further adaptation
occurs.
Since this question was asked Representative Levin from
California's 49th congressional district, I include a regional example
of damages to the US from the recent California Climate Assessment
(August 2018, Appendix B). The estimates of economic damages to
different sectors in California by the middle of this century (2050)
due to climate change include those to health from high temperature
mortality ($50 billion a year), transport ($1 billion from 2040-2070),
inland flooding ($42 billion/yr), sea level rise ($18 billion/yr to
replace flooded property), and water shortages (around $3 billion a
year) (see Table 6 for California below from Bedsworth et al. 2018).
The California assessment notes that ``many other important impacts
have not been quantified, including public health and property damage
from wildfires, impacts on human morbidity from high temperatures,
impacts of drought on water quality, and impacts to habitat and other
ecosystem services. All of these damages are likely to be costly''.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
references cited
Alcaraz, O., Buenestado, P., Escribano, B. et al. Distributing the
Global Carbon Budget with climate justice criteria Climatic Change
(2018) 149: 131. https://doi.org/10.1007/s10584-018-2224-0.
Bedsworth, Louise, Dan Cayan, Guido Franco, Leah Fisher, Sonya
Ziaja. (California Governor's Office of Planning and Research, Scripps
Institution of Oceanography, California Energy Commission, California
Public Utilities Commission). 2018. Statewide Summary Report.
California's Fourth Climate Change Assessment. Publication number:
SUMCCCA4-2018-013.
EPA. 2017. Multi-Model Framework for Quantitative Sectoral Impacts
Analysis: A Technical Report for the Fourth National Climate
Assessment. U.S. Environmental Protection Agency, EPA 430-R-17-001.
Global Carbon Project (2018) Carbon budget and trends 2018.
[www.globalcarbonproject.org/carbonbudget]
Holz, C., Kartha, S., & Athanasiou, T. (2018). Fairly sharing 1.5:
national fair shares of a 1.5 C-compliant global mitigation effort.
International Environmental Agreements: Politics, Law and Economics,
18(1), 117-134.
Kuramochi, T., Hohne, N., Sterl, S., et al. (2017) States, cities
and businesses leading the way: a first look at decentralized climate
commitments in the US. NewClimate Institute and The Climate Group.
Available at: https://newclimate.org/wpcontent/uploads/2017/09/states-
cities-and-regions-leading-the-way.pdf.
America's Pledge Initiative on Climate (2018) ``Fulfilling
America's Pledge: How States, Cities, and Business Are Leading the
United States to a Low-Carbon Future.''
UNEP (2018). The Emissions Gap Report 2018. United Nations
Environment Programme, Nairobi
US Energy Information Administration (May 2019) Monthly Energy
Review
US Energy Information Administration (March 2019) Annual Energy
Outlook
Van den Berg, N.J., van Soest, H.L., Hof, A.F., den Elzen, M.G.,
van Vuuren, D.P., Chen, W., Drouet, L., Emmerling, J., Fujimori, S.,
Hohne, N. and Koberle, A.C., 2019. Implications of various effort-
sharing approaches for national carbon budgets and emission pathways.
Climatic Change, pp. 1-18.
United States House of Representatives Select Committee on the Climate
Crisis
Hearing on April 30, 2019, ``Solving the Climate Crisis: Drawing Down
Carbon and Building Up the American Economy''
Questions for the Record
Christopher Guith, Acting President, Global Energy Institute, U.S.
Chamber of Commerce
The Honorable Garret Graves
1. Has the Chamber's position on climate change changed?
The Chamber has long supported sensible action to address
anthropogenic climate change, with special emphasis on the fundamental
role technology, supported by sound, durable policies, will play in
mitigating it and adapting to it. That has not changed. We welcome the
renewed emphasis on bipartisan solutions that can preserve American
jobs and economic growth, maintain the international competitiveness of
our businesses and industries, increase energy access to the nearly one
billion people living in energy poverty, and improve the environment.
America's business community is ready, willing, and able to provide
the solutions that will continue to reduce emissions while growing the
economy. Our companies and entrepreneurs will continue to lead by
bringing innovation, technology, and ingenuity to this challenge, just
as they have done with other environmental challenges. With a sensible
policy environment that plays to America's strengths and business
leadership, we can continue to make our economy cleaner and stronger by
leveraging the America's edge in energy, technology, and innovation
going forward. The Chamber looks forward to working with members on
both sides of the aisle to fashion climate solutions that are sensible,
effective, and durable.
2. It was mentioned that the NERA report the American Council on
Capital Formation and the Global Energy Institute sponsored examining
the costs of meeting the Obama Administration's pledge under the Paris
Agreement has been ``debunked.'' Could you respond to this statement.
The NERA report was a solid and in many respects groundbreaking
piece of analytical work. First, the business community supports the
Paris framework, and continues to do so. It should be noted that had
the Obama Administration laid out a plan to meet its Paris pledge and
conducted an economic analysis of it, hiring NERA to do such an
analysis would not have been necessary. Concerning the report itself,
reproduced below is a response to critics of the report that GEI posted
in June 2017 and that should put to rest any claims that it has been
debunked:
June 3, 2017
Setting the Record Straight on the NERA Report
By Dan Byers & Stephen Eule
summary
Over the last few days, there has been a lot of attention given
to a report that the Energy Institute co-sponsored that examined the
costs of meeting the Obama Administration's Paris pledge. The report by
NERA Economic Consulting, Impacts of Greenhouse Gas Regulations on the
Industrial Sector, examines the costs of filling the gap between what
President Obama committed to--a 26% to 28% reduction in net greenhouse
gas emissions by 2025 compared to 2005--and the plans he proposed to
accomplish it.
President Trump cited some of the results of the study. Some
media outlets and others have mischaracterized the report and its
findings. Here we set the record straight on two key critiques. (For
more in-depth analysis read beyond this summary.)
The first erroneous claim is that the policies modeled by NERA
were based on ``worst-case assumptions'' that would ``inflate the cost
of meeting U.S. targets under the Paris accord.''
This is not true.
The NERA study generated five unique scenarios using realistic
and reasonable cost estimates based on Department of Energy baseline
forecasts--not the one scenario with ``worst-case assumptions'' as has
been claimed. The data from the study cited by President Trump were
from the scenario that most closely followed the Obama Administration's
regulatory approach. In addition, other analyses--by Hillary Clinton's
campaign and the Energy Information Administration, for example--show
impacts of meeting the goal similar to the range of outcomes in the
NERA study.
The second erroneous claim is that study does not count the
economic benefits from constructing and operating new renewable
generating facilities. This claim, too, is false.
The NERA model used in the study does NOT ignore positive
economic contributions from renewable energy projects. It simulates ALL
economic interactions in the U.S. economy, including the economic
benefits from renewable energy projects. The model calculated benefits
from the building and operating of renewable energy projects. However,
in the model, these economic benefits were outweighed by increased
costs.
The model design is discussed extensively in the report. It makes
it clear that it captures all types of responses and benefits from the
various regulatory decisions that would be made to meet the pledge.
The reason the study was conducted in the first place was to
undertake the analysis the Obama Administration failed to do before and
after it made its Paris pledge. It makes sense to at least understand
what the impacts of that pledge would be and how it might be achieved.
The report is transparent in its assumptions and its data, explains its
methodologies, and provides multiple scenarios which take into account
both the benefits and costs of meeting the pledge.
There will be considerable debate about the President's decision,
but criticism of the NERA report is unwarranted.
We have addressed other critiques of the NERA report here
and here
, and readers interested in a more detailed response to the
critiques describe above should see below.
detailed analysis
Claim One: The policies modeled by NERA were based on ``worst-
case assumptions'' that would ``inflate the cost of meeting
U.S. targets under the Paris accord.'' This is false.
This argument isn't new--some environmental groups made it
when the report was first released. While we've addressed it
here and here, let's take another stab at it.
First and foremost, the NERA report didn't just look at one
``worst case'' scenario--it actually examined five, including
one that set a price on carbon as a way to achieve the
emissions reduction the U.S. has committed to. All of those
scenarios produced different results, which were included in
the report.
The numbers cited by President Trump were specific to one
particular scenario, which reflected the reflected the
regulatory approach being taken by the Obama Administration and
that most likely would have been taken by a Clinton
Administration has Hillary Clinton won the election.
There is solid evidence to back this up. The Obama
Administration's fiscal year 2015 budget request for the
Environmental Protection Agency included funding to develop
this scenario--new greenhouse gas regulations on industrial
sectors. And in official meetings with stakeholders, the Obama
Administration did not hide its intention to regulate
industrial emissions. InsideEPA reported on White House meeting
where, ``administration officials were candid in their plans to
regulate manufacturing GHGs to address an emissions gap'
between current and proposed climate rules and President
Obama's INDC pledge to cut GHGs 26 to 28 percent from 2005
levels by 2025.''
While we're on the subject of assumptions, critics have also
asserted that the NERA results are out of line with results
from other analysts. That's not the case.
During the election, it turns out that the Clinton campaign
undertook modeling to estimate the costs of closing the Paris
gap. It set a greenhouse gas fee at $42 (2012$) per ton of
carbon dioxide from energy use in 2017 and increased it by
roughly 2% a year thereafter. This study found significant
economic impacts: ``In our analysis, for example, a $42/ton GHG
fee increases gasoline prices by roughly 40 cents per gallon on
average between 2020 and 2030 and residential electricity
prices by 2.6 cents per kWh, 12% and 21% above levels projected
in the EIA's 2014 Annual Energy Outlook (AEO) respectively.
Average household energy costs would increase by roughly $480
per year, or 10% relative to the levels projected in EIA's 2014
Outlook.''
The NERA results also are consistent with those from
modelling runs performed by EIA under President Obama. Among
the many side case modelling runs in the AEO 2016 was the
``Industrial Efficiency High Incentives'' side case, which EIA
describes this way: ``Uses a price on carbon dioxide emissions
as a proxy for higher energy costs as a way to increase energy
efficiency in all industries except refining. The carbon
dioxide price is phased in gradually, starting in 2018,
reaching $35.00 in 2023 (2015 dollars per metric ton), and
increasing by 5% per year thereafter.''
Why is this model run interesting? Because it produces cuts
in economy-wide energy-related carbon dioxide emissions in 2025
of about 30% below the 2005 level, entirely consistent with
President Obama's Paris economy-wide greenhouse gas pledge.
When compared to EIA reference case model run (without the
Clean Power Plan), this scenario produces the following results
(all dollar figures in 2015$):
Change in GDP in 2025: -$269 billion Cumulative
Change in GDP from 2018-2025: -1.92 trillion
Change in Employment: Trough of -1.4 million in 2023
and -955,000 in 2025
Change in Average Electricity Price in 2025: +19%
Change in Cumulative Electricity Expenditures from
2018-2025: +$350 billion
Change in Average Gasoline Price in 2025: +11%
As these other studies make plain, the NERA study we co-
sponsored is not an outlier by any extent of the imagination.
Claim Two: The study guilty of not counting the economic
benefits from constructing and operating new renewable
generating facilities. This claim is false.
The NERA model used in the study simulates ALL economic
interactions in the U.S. economy, including the economic
benefits from renewable energy projects. The model calculated
benefits from the building and operating of renewable energy
projects, but in the model these were far outweighed by higher
costs on producers, consumers, and the overall economy due to
broader greenhouse gas regulations on other sectors.
The model design and description is detailed extensively in
the report. One section notes the following: ``Throughout the
time horizon of the module run, in order to meet any increase
in electricity demand, increase in reserve margin requirements,
and/or replacement of retired generation, the electric sector
must build new generating capacity. Future environmental
regulations, system constraints (e.g., reserve margin
requirements), capital costs, and forecasted energy prices
influence which technologies to build and where. For example,
if a national RPS policy is to take effect, some share of new
generating capacity will need to come from renewable power. On
the other hand, if there is a policy to address emissions, it
might elicit a response to retrofit existing fossil-fired units
with pollution control technology or enhance existing coal-
fired units to burn different types of coals, biomass, or
natural gas. All of these policies may also affect retirement
decisions. The NewERA electric sector module endogenously
captures all of these different types of decisions.'' [Emphasis
added]
So that criticism doesn't hold water, either.
3. Concerning H.R. 9, are the Nationally Determined Contributions
other nations have offered up part of the Paris Agreement.
No. Parties to the Paris Agreement have a binding obligation to
submit periodically Nationally Determined Contributions (NDC). The
goals in the NDCs themselves, however, are not binding in any way, and
they are not part of the Paris Agreement itself (unlike pledges under
the Kyoto Protocol, for example, which were negotiated and appended to
the treaty).
United States House of Representatives Select Committee on the Climate
Crisis
Hearing on April 30, 2019, ``Solving the Climate Crisis: Drawing Down
Carbon and Building Up the American Economy''
Questions for the Record
Mr. David Foster, Distinguished Associate, Energy Futures Initiative
The Honorable Kathy Castor
1. In your testimony, you said, ``We need to accelerate our
investments in energy efficiency with a special priority on those
regions of the country negatively impacted by declining use of fossil
fuel.'' Can you provide more detail on the types of energy efficiency
investments we should make in these communities?
Fossil fuel production is concentrated in those states with readily
accessible resources. Currently, 73% of all coal production jobs are
located in just 10 states; 74% of all oil production jobs are also
located in just 10 states; and 84% of all natural gas production jobs
are similarly concentrated in 10 states. Compounding this problem is
the fact that two states, Texas and Pennsylvania, are in the top ten in
all three fossil fuel production jobs while eight others--West
Virginia, Louisiana, Oklahoma, Illinois, Wyoming, Colorado, New Mexico,
and California--are in the top 10 in two fossil fuel resources.
While jobs in oil and natural gas fuels production rose in 2018 by
over 50,000 jobs and have increased significantly from a decade ago,
the opposite is the case for coal fuels' production. As a result, the
states and communities impacted by the loss of coal fuels' jobs, along
with those states and communities with the most coal power generation
jobs, should receive special attention in economic development
resilience planning. There are four ways that energy efficiency
investments can benefit these highly impacted communities.
The four response areas are energy infrastructure, the industrial
sector, commercial buildings, and residential buildings. Energy
efficiency investments are needed to meet carbon emissions reduction
targets in every part of the country and in each of these sectors.
However, by targeting those communities whose employment has been
adversely impacted by the decline in coal production first, jobs can be
provided in labor markets already suffering from higher than average
unemployment. Given the demonstrated hiring crisis in energy efficiency
(especially in its largest sector--construction--where a majority of
employers reported that it was very difficult to hire new employees in
2018), a focus on introducing energy efficiency technologies into these
communities is a sensible response to worker dislocation.
A four-pronged energy efficiency initiative in these communities
and regions provides the added benefit of reducing residential consumer
energy costs and making businesses and real estate more economically
competitive.
In the first edition of the Quadrennial Energy Review focused on
Transmission, Storage and Distribution and released in April, 2015, the
Department of Energy recommended that DOE should,
Provide state financial assistance to promote and integrate
TS&D infrastructure investment plans for electricity
reliability, affordability, efficiency, lower carbon
generation, and environmental protection. In making awards
under this program, DOE should require cooperation within the
planning process of energy offices, public utility commissions,
and environmental regulators within each state; with their
counterparts in other states; and with infrastructure owners
and operators and other entities responsible for maintaining
the reliability of the bulk power system.
Implementation of such a program, focusing first on Appalachia and
other coal-impacted communities, would provide immediate economic
support, job creation, and greater efficiency and resilience.
In many of the communities that were originally built around the
availability of coal resources, manufacturing also plays a more
significant role in local economies. A focus on industrial energy
efficiency would preserve the competitiveness of the existing
manufacturing ecosystem while also creating demand for energy
efficiency industrial products, particularly electrical motors, one of
the largest consumers of energy in manufacturing. Many of the top 10
coal producing states--PA, OH, IL, IN, KY, and WV--have significant
manufacturing employment in both energy intensive industries such as
steel and aluminum, but also in the production of energy efficiency
products. These kinds of industrial energy efficiency investments,
thus, have the twin benefit of reducing costs while increasing product
demand. Programs such as DOE's Industrial Assessment Centers which
provide energy efficiency assessments to small and medium sized
manufacturers could be expanded in these communities.
Commercial and residential energy efficiency building retrofit
programs could also be significantly expanded in the target areas,
financed through federally guaranteed revolving loan programs with the
loans paid back through energy savings.
This kind of focused investment on energy efficiency in multiple
sectors of the economy provides affected communities with the skills
training needed for the jobs of the future. Increased deployment of
energy efficiency technologies is going to be needed for at least the
next 30 years to meet carbon reduction targets. Perfecting the model
for concentrated investment in energy efficiency in coal communities
today will provide a model for similar investments in other geographies
where unemployment levels are endemically high.
2. In your testimony, you said: ``Carbon performance should be a
universal procurement standard for government spending in the U.S.,
similar to what California recently did with its Buy Clean standard.''
Can you provide more detail on what a federal ``buy clean'' procurement
standard would entail and how it would work?
The California legislation amended state contracting provisions as
follows, ``The Buy Clean California Act, (Public Contract Code
Sec. 3500-3505), states the Department of General Services (DGS) is
required to establish and publish the maximum acceptable Global Warming
Potential (GWP). It targets embedded carbon emissions of structural
steel (hot-rolled sections, hollow structural sections, and plate),
carbon steel rebar, flat glass, and mineral wool board insulation.
These materials must have a GWP that does not exceed the limit set by
DGS.'' https://www.dgs.ca.gov/PD/Resources/Page-Content/Procurement-
Division-Resources-List-Folder/Buy-Clean-California-Act.
Industrial emissions make up approximately 21% of all global
greenhouse gas emissions with \2/3\ of industrial energy consumption
coming from five key sectors, commonly known as ``energy intensive,
trade exposed'' industries or EITE's. A federal ``buy clean''
procurement standard would require that all prospective bidders for
federal government projects provide a life cycle assessment of the
direct and indirect emissions associated with all materials proposed
for use in an awarded contract that fall within the definition of EITE
products. By limiting the coverage of the ``buy clean'' standard to
those products that produce the majority of industrial greenhouse gas
emissions, the standard will achieve maximum effectiveness with a
minimum of regulatory oversight.
A ``buy clean'' standard would play a dual role, reinforcing carbon
reduction policies in the industrial sector, while, at the same time,
promoting the economic competitiveness of high performing, energy
efficient U.S. businesses which are already among the lowest emitting
producers of energy intensive products in the world. That is why a
broad coalition of California stakeholders supported passage of this
legislation including environmental organizations, unions like the
United Steelworkers, and California steel producers such as Gerdau
Steel.
3. In your written testimony, you say: ``sequencing and timing of
how we solve a problem can ultimately determine the support it achieves
from our fellow Americans.'' As we look how to decarbonize the
electricity sector, how would you recommend we sequence policy
implementation to maximize emissions reduction and public support?
There are several policies that I think would increase public
support for decarbonizing the electricity sector. The first would be
the enactment of a federal clean energy standard (CES) such as was
recently introduced by Senator Smith (MN) and Representative Lujan
(NM). A CES that uniformly provides incentives for carbon reductions,
even partial ones such as achieved by high efficiency natural gas or
carbon capture sequestration technologies, removes any doubt from the
public mind about the actual goal of decarbonization. It's not about
rewarding one technology over another such as wind or solar; it's about
finding the most cost efficient, secure, and reliable approach to
decarbonizing over a 30 year glide path.
Second, I would recommend a national initiative to modernize the
electrical grid to achieve significant efficiencies by reducing current
power loss. Such an initiative, focused first on those regions and
states suffering from job loss in coal communities, would demonstrate
the federal government's commitment to use our energy transition to
promote economic opportunity, job creation, and skills' training for
high unemployment regions. Initial funding for such an infrastructure
program could come from the U.S. Department of Energy's Loan Program
Office. See the analysis on this issue from the Energy Futures
Initiative at: https://static1.squarespace.com/static/
58ec123cb3db2bd94e057628/t/5b4e7494758d463f2a81294a/1531868312531/
Leveraging+the+DOE+Loan+Program_SG_v4_TB+CLEAN.pdf.
Third, I would recommend a special initiative on reducing
industrial emissions and building domestic clean energy supply chains
to demonstrate that federal policy is focused on making the U.S. the
global leader in clean energy manufacturing. Components of such a
policy would include restoring the 48C Advanced Energy Manufacturing
Tax Credit, passing a ``buy clean'' federal procurement policy,
establishing an industrial energy efficiency tax credit, and
integrating carbon-based border adjustments for EITE's. Implementation
of an EITE border adjustment policy could be done as part of the
current USMCA or the original NAFTA and would provide an initial global
mechanism for encouraging reductions in industrial emissions while also
rewarding existing American companies in these critical sectors--iron
and steel, aluminum, pulp and paper, chemicals, cement, brick, and
glass--for their relatively high environmental performance.
Manufacturers and their employees have played a critical role in
resistance to decarbonizing the electrical sector out of concern for
competitiveness in global markets. Addressing these concerns directly
by providing economic incentives to decarbonize manufacturing would
turn this resistance into support.
Fourth, I would recommend making energy efficiency investments,
particularly in negatively impacted coal communities and in high
unemployment pockets whether in rural or urban areas, the center piece
of a national effort to reduce carbon emissions by the creation of
energy efficiency jobs. Since this sector exists in virtually every
county in America and has already produced over 2.3 million jobs, this
positive focus on new job creation presents the public with a powerful
reason to support the transition to a low carbon economy. In addition,
the majority of energy efficiency jobs are in construction, and pay
better than similar jobs in the economy at large because of higher
unionization rates and skills' requirements. They also rely on skills
that are readily transferable to other sectors of the economy. There
are many local examples of how to fund energy efficiency investments
such as green banks, revolving loan funds, etc., but the federal
government should adopt a complete menu of tax credits, supports for
utility-funded programs, and grant programs to bring energy efficiency
investments to scale.
Finally, I would recommend reauthorizing the Energy and Advanced
Manufacturing Workforce Initiative (EAMWI) started by the U.S.
Department of Energy in 2016 to coordinate the workforce development
efforts of the Departments of Energy, Labor, Commerce, Education,
Defense and the National Science Foundation. EAMWI activities would
insure maximum success in energy efficiency job training curriculum
development, realization of job training activities in the field, and
successful deployment of new energy efficiency and energy technologies.
4. In your written testimony, you say: ``We need to focus on the
manufacturing supply chains that our new energy technologies are
creating. Nothing is more frustrating than looking back over the years
of American technological innovation and recording the history of
American applied research being handed off to other countries for
commercialization.'' What can Congress do to ensure U.S. workers
manufacture the components needed to build a cleaner energy economy?
There are several pieces of legislation that Congress could
consider to address this issue. First would be the restoration of the
48C Advanced Energy Manufacturing Tax Credit which was significantly
oversubscribed when it was first introduced and successfully created
tens of thousands of new jobs before it expired.
Second would be the creation of a collaboration between the
Advanced Manufacturing Office (AMO) of the DOE, National Institute of
Standards and Technology (NIST), and the Manufacturing Extension
Partnership (MEP) that would be required to perform periodic supply
chain analyses of all new energy technologies, prepare qualification
assessments of OEM's for parts production, and deliver workshops on the
qualification process and standards for small manufacturers at the
state level.
Third would be the creation of domestic content standards for the
production of critical energy equipment similar to the rules that exist
for other products of national security importance under the Buy
America Act.
Fourth would be the restoration of funding for Mission Innovation,
the pledge to double government investments in clean energy research
and development in five years, led by the U.S. and announced at the
time of the Paris climate agreement. The maintenance of high levels of
R&D funding is critical to a healthy manufacturing economy.
United States House of Representatives Select Committee on the Climate
Crisis
Hearing on April 30, 2019, ``Solving the Climate Crisis: Drawing Down
Carbon and Building Up the American Economy''
Questions for the Record
Mr. Hal Harvey, CEO, Energy Innovation LLC
Dear Representative Castor: I appreciate the chance to respond to
questions from yourself and Congressman Ben Ray Lujan. Your questions
and our responses follow, but please note that we would be happy to
elaborate on any point, or consider other issues.
The Honorable Kathy Castor
1. In your written testimony, you say the following about cleaning
up the electricity sector: ``We have the technology (and it's
increasingly cheaper to deploy clean rather than polluting power
plants), we have the know-how, we just need to get this moving--and
quickly.'' What are the primary barriers standing in the way of faster
deployment of clean energy technology?
Technology and cost are no longer major barriers to deep
electricity sector decarbonization--institutions and information are.
Conventional wisdom that wind and solar require 100 percent redundancy
from dispatchable power plants is not accurate. Numerous studies
including some by federal agencies \1\ and our national laboratories
\2\ show we can reliably operate very high penetrations of renewable
electricity using today's technologies at a similar cost as today's
electricity system. Further advancements in energy storage and
renewable energy technologies, coupled with digitized devices able to
respond to real-time grid needs, hold tremendous promise to further
reduce costs as we decarbonize the electric grid. With such
technological tailwinds, we now must turn our attention to overcoming
four barriers: slow infrastructure development, incumbents preventing
uneconomic fossil retirement, market barriers to renewable energy, and
fossil fuel-dependent communities impacted by transition.
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\1\ https://research.noaa.gov/article/ArtMID/587/ArticleID/542/
Rapid-affordable-energy-transformation-possible.
\2\ https://www.nrel.gov/analysis/re-futures.html, https://
www.nrel.gov/docs/fy18osti/71465.pdf.
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Our grid infrastructure has been slow to adapt to the fundamentally
new characteristics of clean electricity technologies. Renewable energy
is always available somewhere, and long-distance transmission lines
enable excess in one part of the country to compensate for deficits
elsewhere. Despite clear consumer benefits from expanding transmission
lines to access low-cost renewables and sharing resources over large
areas, developing new long-distance transmission lines often takes more
than 10 years, and many promising projects never materialize.\3\ At the
local distribution level, demand-side resources like storage are unable
to participate meaningfully in grid management, restricting a crucial
source of flexibility \4\ to support renewable energy. New data
management systems and advanced rate designs are needed, yet monopoly
distribution utilities lack proper incentives to innovate and improve
efficiency under conventional cost-based revenue regulation.
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\3\ See answer to Question three below for ideas on how to
jumpstart transmission development.
\4\ https://energyinnovation.org/wp-content/uploads/2018/07/
OrvisAggarwal-WholesaleMarketsFlexibility-June2018.pdf.
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Legacy rules, procurement, and market products also favor incumbent
fossil fuel-based technologies and make it more challenging for new
technologies to participate in energy markets. Uneconomic fossil
generators are not retiring as fast as they should, as backward-looking
market designs (described in more detail in the answer to Question Two
below) keep inefficient coal and natural gas units online. At the state
level, utilities owning these assets resist retirement, and regulators
lack the financial tools to accelerate retirement of uneconomic coal
assets without harming customers \5\.
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\5\ https://energyinnovation.org/publication/managing-the-utility-
financial-transition-from-coal-to-clean-2/.
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Grid operators including utilities stack the deck against new
renewables. In electricity markets, renewable energy, demand-side
resources, and storage face significant barriers--in the form of
obsolete rules--to participation and often cannot provide their full
range of value to the market. In monopoly jurisdictions, utilities use
outdated cost assumptions and trumped-up integration cost estimates to
prevent competition from renewables in procurement processes. As
evidence of the market potential, 280 gigawatts of wind and solar
projects are stuck in queues for interconnection wholesale markets
alone, enough to treble U.S. renewable generation capacity. Developers
and financiers are ready, but cannot access the market.
A rapid renewable energy transition risks leaving behind entire
communities dependent on coal mining and fossil power plants. These
communities often rely on mining and power plants for both jobs and
local tax revenue to support social services. But viable local clean
alternatives exist--local wind or solar could replace three quarters of
existing U.S. coal capacity at a lower cost to consumers,\6\ and the
federal government could support this just transition with financing
and worker retraining programs in partnership with local utilities.
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\6\ https://energyinnovation.org/publication/the-coal-cost-
crossover/.
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2. In your testimony, you say: ``The first policy I would recommend
is to require that the Federal Energy Regulatory Commission be a merit
driven, technology neutral, adjudicatory body required to run the power
system at the lowest cost.'' Would Congress need to make changes to
authorizing statutes to implement the technology neutral FERC idea?
Describe.
Congress does not need to make changes to the Federal Power Act,
which provides FERC's legal authority, but it does need to insist that
FERC actually satisfies its obligations to ensure just and reasonable
rates and avoid undue discrimination. In other words, Congress needs to
hold FERC accountable to its obligation to be merit-driven and
technology neutral while ensuring fair prices and reliability. As
Commissioner Glick recently pointed out,\7\ FERC has historically
interpreted its just and reasonable rate authority and obligation to
avoid undue discrimination as requiring technology neutrality.
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\7\ page 15 https://www.eba-net.org/assets/1/6/
%5BGlick_and_Christiansen%5D%5BFinal%5D. pdf.
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FERC precedent and court interpretations clearly maintain that
FERC's duty is to create a level playing field for all grid resources
to compete on their technological and cost merits. Of course, if
Congress wants to emphasize a certain aspect of that duty, for example,
that FERC require grid operators to take proactive steps to develop (as
transmission assets) and deploy (as grid services) distributed energy
resources when they are the lowest cost option, additional legislation
could accelerate those changes.
One recent FERC decision approving a pernicious policy in two FERC-
regulated wholesale electricity markets \8\ punishes states taking
action on greenhouse gas emissions. These markets impose a Minimum
Offer Price Rule (MOPR), the original intent of which is to mitigate
against buyer-side market power, on renewable power plants receiving
state support through a renewable portfolio standard (RPS). In effect,
the MOPR requires renewables to bid in at an administratively
determined price greater than the actual cost of running these plants,
which is zero. This in turn raises the wholesale electricity price and
supports fossil-fueled plants which otherwise would retire.
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\8\ PJM Interconnection and ISO-New England.
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The MOPR undermines state choice--states are being forced to pay
for fossil-fueled power plants that constituents don't want and market
operators don't need for reliability. Congress should clarify that the
MOPR should not be applied to resources receiving state policy support.
The root of these backward-looking market design policies is
institutional lag behind the economic and political realities driving
the U.S. toward more renewable energy. Markets using the MOPR still see
renewables as undermining the integrity of markets, rather than
redesigning the markets to fairly accommodate these resources.
Reliability services markets are based upon, such as peak capacity
needs, respond to the existing system's performance attributes. MOPR
ensures that fossil resources receive revenues through capacity
markets, even when a high renewables system would not need that same
service. As renewable energy output varies with weather, complementary
resources can and should provide flexibility, especially the underused
resources of responsive demand, efficiency, and storage. Rather than
defining new services to accommodate state constituents' preferences
for low-cost renewables, market operators have kept one foot in the
past, and FERC has been loath to correct them.
Serious technological changes are hitting the electricity grid, but
the concomitant changes in market incentives and rules are lagging
behind, as are the mechanisms to allow more demand side participation.
FERC and the ISOs/RTOs wholesale electricity markets have done little
to accelerate this transformation, instead in many cases setting rules
prejudiced against clean energy. As new technologies come online at
lower prices and higher volumes, Congress should consider examining
whether existing wholesale electricity market structures are equipped
to handle today's technology.
3. During Q&A, you stated the following in response to a question
from Rep. McEachin: ``One element I would propose is expanding
transmission lines across the country to help balance renewables and
balance the whole system. In fact, I think we should look at ways to
streamline permitting. I advocate pre-zoning into red, yellow, and
green zones, where red, you are just not going to build anything;
green, you get a permit in 90 days if you meet the proper specs; and
yellow is like everything today, it is an all-out war. So we just need
to clean that up and save a lot of time and a lot of trouble.'' Can you
provide more detail on how to design a red/yellow/green zoning process
for transmission?
The National Renewable Energy Laboratory (NREL) recently completed
a study \9\ of the value of interconnecting the entire country with
high-voltage direct current (HVDC) transmission, modern transmission
technology widely used by China to build out and improve the efficiency
of its grid. NREL's study calculated up to a 3-to-1 benefit to cost
ratio from a transmission overlay connecting East and West so that
clean energy can reach cities and factories anywhere across the
nation.\10\ A similar study from the National Oceanic and Atmospheric
Administration (NOAA) found that reducing carbon emissions 80 percent
using today's technologies was possible at negligible incremental cost
if we build out a national HVDC grid to support renewable development
and integration.\11\
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\9\ https://cleanenergygrid.org/wp-content/uploads/2018/08/NREL-
seams-transgridx-2018.pdf.
\10\ Unfortunately, DOE has refused to release the study. https://
cleanenergygrid.org/interconnections-seam-study/.
\11\ https://research.noaa.gov/article/ArtMID/587/ArticleID/542/
Rapid-affordable-energy-transformation-possible.
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In the U.S., a HVDC transmission overlay linking the country's
three electric grids and remote high-quality wind and solar resources
with demand centers would reduce overall costs to consumers, open up
massive opportunities for new renewable resources to access the market,
and provide grid operators with additional tools to balance an
increasingly variable electricity mix.
Reducing permitting and siting problems by pre-screening federal
and state lands for transmission corridor suitability is crucial to
enabling this transmission overlay. This is already ongoing in the
Western U.S., through the federal West-wide Energy Corridors \12\
planning process, and should be expanded to the rest of the country.
The planning process identifies continuous strips of federal land
across jurisdictional boundaries suitable for transmission development.
Robust stakeholder engagement minimizes environmental, cultural, and
other stakeholder conflicts. Eventually, this process will streamline
federal siting, review, and permitting processes for transmission
developers. Parallel efforts to engage with private landowners crucial
to completing many of the corridors will increase the likelihood of
success.
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\12\ http://corridoreis.anl.gov/.
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Data is also key to pre-screening transmission. The Western
Electricity Coordination Council has developed the Environment Data
Viewer,\13\ a tool that should be expanded for the rest of the U.S. to
enable smart infrastructure development. The tool uses Geographic
Information Systems (GIS) data for different land conflicts, enabling
users to create maps of low-conflict land. For example, lowest conflict
existing rights of way are green; low-conflict undeveloped land is
yellow; and land with explicit environmental, infrastructure, or
cultural conflicts ranges from orange to red. The tool uses
professional judgment of transmission planners, Bureau of Land
Management and U.S. Forest Service, environmental leaders, and even
archaeologists to build the tool's classifications .
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\13\ https://ecosystems.azurewebsites.net/WECC/Environmental/.
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Some obvious ``green'' zones exist--along existing transmission
corridors or highways, for example. These should be promptly identified
and so-designated. Some places should be labelled ``red,'' such as
wilderness study areas, or areas with ecologically important biota.
Making these strictly off limits can reduce time and money spent on
fruitless pursuits.
Note that this recommendation does not contemplate relaxing
environmental standards, but instead doing the work to designate these
three classes in advance to reduce uncertainty, time, and money.
Besides providing corridors and data, the federal government can
also facilitate inter-state cooperation on transmission development.
Though all consumers should benefit from a more robust HVDC
transmission network, these benefits are often not distributed equally
among states. The largest beneficiaries of HVDC transmission are likely
the producer state and the load center on the other end of the line,
making states between the two reticent to accept transmission
development without compensation. The federal government can facilitate
dialogue between states involved.
4. During the hearing, Rep. Palmer stated the following: ``In
California right now, there is a lawsuit that has been filed by
minority group against the California Air Resources Board, because of
the harm that it is doing to low income people. Since the effective
date of California's greenhouse gas reduction law, the Global Warming
Solutions Act, 41 states have reduced their per capita greenhouse gas
emission more than California, but it had enormous negative impact on
the people in California. So, I think, we have got to look at this in
the broader spectrum of how this affects everybody, and the U.S.
obviously I think we continue the best in the technologies to reduce
our carbon emissions.'' As an energy expert living and working in
California, what is your response to this statement?
As the world's fifth largest economy, California is a global leader
on climate change and a model of successful greenhouse gas reduction
policy. As of 2016, only New York and the District of Columbia have
lower per capita energy-related carbon dioxide emissions than
California.\14\ Rep. Palmer cites data related to per capita emissions
reductions that ignores California's thirty-plus years of environmental
leadership before enacting the Global Warming Solutions Act. In 2006
when the bill passed, California was already a national leader in
renewable energy and used virtually no coal-fired power, the reduction
of which accounts for the vast majority of U.S. emissions reductions
since 2006. California has much work left to reduce emissions to meet
its goals, but is well on its way to creating an equitable, affordable,
low-carbon future.
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\14\ https://www.eia.gov/environment/emissions/state/analysis/pdf/
stateanalysis.pdf at page 4.
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Low-income community opposition to California's Global Warming
Solutions Act is vastly overstated. The lawsuit takes issue with
proposed measures in a planning document from the California Air
Resources Board specifying measures that can reduce greenhouse gas
emission in line with the state law--40 percent below 1990 levels by
2030. The group backing the lawsuit, the Two Hundred, is represented by
a law firm whose work has focused on fighting environmental protections
in California for the last 30 years. Masquerading as a civil right
issue, this lawsuit creates a pretext for removing the very
environmental protections low-income residents depend on.
Recent polling \15\ indicates low-income residents are more likely
to support cap-and-trade than not. Disadvantaged communities and the
organizations representing them recognize that climate change and
pollution pose a real threat to the lives and economic security of low-
income communities, and California has built vital protections for our
communities into our climate laws. That's why dozens of disadvantaged
community representatives support California's climate change policies
and work constantly to ensure that they address poverty and pollution
at the same time.
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\15\ 44 percent of California residents with incomes under $40,000
favor cap-and-trade, while 39 percent oppose it. https://www.ppic.org/
wp-content/uploads/ppic-statewide-survey-july-2018.pdf at 21.
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Of course, the revenue stream that pays for these programs is
California's cap-and-trade program, which some have argued has a
negative impact on the very same priority populations where climate
investments are being made. The latest data show $1.9 billion (more
than 57 percent) of all implemented dollars raised by cap-and-trade are
benefiting state-identified disadvantaged communities and low-income
communities.\16\ These investments are creating new affordable housing,
improving accessible and affordable mobility, lowering energy bills,
and creating new jobs, while also reducing greenhouse gases.
Legislation established parallel programs to improve air quality in
historically disadvantaged communities \17\ and study low-income
barriers to adopting clean energy technologies.\18\
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\16\ https://www.arb.ca.gov/cc/capandtrade/auctionproceeds/
2019_cci_annual_report.pdf?_ga= 2.14451895.
1868598449.1553707432092139052204.1553538057 at viii.
\17\ AB 617 is the most recent effort by the state to improve air
quality, particularly in EJ communities. The law is in the early stages
of implementation but it was achieved due to a high level of engagement
by priority communities on the issue of air pollution.
\18\ SB 350.
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5. During the hearing, members raised Chinese carbon pollution
levels on numerous occasions. China's emissions now, and their future
trajectory, are critical to addressing the climate crisis. Given your
experience working in China, is the Chinese government implementing
policies that will curb and ultimately reduce Chinese carbon pollution?
Please explain.
It is true that without continued heroic public investment from the
Chinese government, the world will fail to meet international emissions
reduction goals necessary to limit warming to safe levels. It is also
true that China has experienced rapid economic growth dependent on
burning coal for industrial processes and electricity, resulting in
citizens with higher incomes who now drive gasoline-powered cars. One
cannot be sanguine or naive about the environmental problems China
faces, nor the vast Chinese contribution to climate change.
But in many ways, China's efforts to combat climate change have
dwarfed those of the U.S. Despite its rapid rise to the world's largest
greenhouse gas emitter, the Chinese government has systematically
implemented policies to curb its greenhouse gas pollution for more than
a decade, and remains committed to doing so in the future.
The Chinese government began including explicit climate change
targets in its Five-Year Plan (FYP) in 2011. China's initial greenhouse
gas reduction goals were aimed at reducing carbon intensity (carbon per
unit of GDP). By 2017 China had cut carbon intensity 46 percent from
2005 levels, honoring its voluntary international commitment to reduce
carbon intensity 40 to 45 percent from the 2005 level by 2020--three
years ahead of schedule. Under the Paris Accord, China agreed to
further reductions of carbon intensity 60-65 percent below 2005 levels
by 2030, and will make ``best efforts'' to peak carbon emissions by or
before 2030.
Through ambitious policy and public investment, China is now the
world leader in two key clean energy technologies--renewable
electricity and electric vehicles (EVs). Almost 30 percent of the
world's renewable power capacity is in China, and in 2017, China added
almost half the world's renewable power capacity. In China's 13th Five-
Year Renewable Energy Development Plan, the government announced $373
billion in total renewable energy investment by 2020. This historic
renewables investment played an outsized role in driving down the
global solar module costs 90 percent since 2008.
China is also responsible for more EV sales annually than the rest
of the world combined, and boasts the only city in the world with all-
electric bus and taxi fleets: Shenzhen. BYD, the international leader
in electric bus manufacturing, trails only Tesla in EV sales. As the
world economy continues toward low-carbon development, China's
industries are well positioned to take advantage.
China is evolving its command and control economic and emissions
policy centered on mandates and subsidies into more sophisticated
market approaches, starting with the world's largest carbon market,
which will launch later this year (2019). Its current first phase only
covers power generation accounting for some than 3.5 gigatons of annual
carbon dioxide emissions, more than half of U.S. total annual
emissions. The Chinese government plans to expand the market to cover
other energy-intensive sectors.
Despite these policies, without more action China's emissions will
continue to rise. Chinese climate goals are deeply influenced by
international norms and leadership by other nations, and the loss of
U.S. leadership in controlling greenhouse gases is definitely softening
China's ambition. China begins designing new policies first by learning
the best practices of other countries, often seeking to emulate
innovative U.S. market design. U.S. leadership on low-carbon technology
development and emissions reduction goals provides strong motivation
for the Chinese government to continuously push for more aggressive
goals.
The Honorable Ben Ray Lujan
1a. How does a Clean Energy Standard, such as the Clean Energy
Standard Act of 2019, put the United States on a trajectory towards
producing electricity with net-zero carbon emissions by mid-century?
A clean energy standard (CES) such as the CESA of 2019 is an
excellent way to decarbonize the power sector. The CESA of 2019 is a
particularly good example of a CES, in that it allows for all types of
clean energy technologies, and sets long-term targets with continuous
improvement along the way, which will drive and sustain innovation.
Such a bill would help rapidly decarbonize the power sector, and would
incentivize clean energy companies to accelerate research and
development, to meet a clear and aggressive long-term target.
By including all zero-carbon technologies, a CES provides a high
degree of flexibility that helps decarbonize the power sector at the
lowest cost. Additionally, it is already cheaper \1\ in much of the
country to build and run new clean energy than to simply pay for the
operating costs of fossil plants, so a CES would actually help lower
costs--right from the start.
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\1\ https://energyinnovation.org/wp-content/uploads/2019/04/Coal-
Cost-Crossover_Energy-Innovation_VCE_FINAL2.pdf.
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An initial analysis of the bill using the Energy Policy Simulator
(EPS) \2\--assuming the share of clean electricity increases linearly
to reach 90 percent in 2040, then pushes toward 100 percent by 2050--
suggests the CESA of 2019 would reduce power sector emissions from 2005
levels by about 75 percent in 2035. By 2030, according to the EPS, this
CES would save around 20,000 lives due to cleaner air. By 2040, that
number rises to about 38,000; by 2050, it reaches about 70,000.
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\2\ https://us.energypolicy.solutions/.
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1b. How would it stimulate good, well-paying jobs? How can a clean
energy standard help to promote U.S. technological leadership and R&D
efforts and how would leading on this the climate benefit domestic
businesses?
The renewable energy industry has become a major U.S. employer.
E2's recent Clean Jobs America report \3\ found nearly 3.3 million
Americans working in clean energy--outnumbering fossil fuel workers by
3-to-1. Nearly 335,000 people work in the solar industry and more than
111,000 work in the wind industry, compared to 211,000 working in
fossil fuel extraction, of which only 50,000 are coal miners. Clean
energy employment grew 3.6 percent in 2018, adding 110,000 net new jobs
(4.2 percent of all jobs added nationally \4\ in 2018), employers
expect 6 percent job growth in 2019.
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\3\ https://www.e2.org/wp-content/uploads/2019/03/E2-2019-Clean-
Jobs-America.pdf.
\4\ https://www.whitehouse.gov/articles/2018-ends-312000-jobs-
created-december-strong-year-job-market/.
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Clean energy jobs offer higher wages than the national average, and
are widely available to workers without college degrees, according to
new Brookings Institution research.\5\ Landing a clean energy job can
equal an 8-19 percent increase in income, and 45 percent of all workers
in clean energy production (e.g. electricians, installers, repairers,
and power plant operators) have only a high school diploma, while still
receiving higher wages than similarly educated peers in other
industries.
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\5\ https://www.brookings.edu/research/advancing-inclusion-
through-clean-energy-jobs/.
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E2 reports the fastest-growing jobs across 12 states were in
renewable energy during 2018, and the U.S. Bureau of Labor Statistics
already forecasts \6\ the country's two fastest-growing jobs through
2026 will be solar installer (105% growth) and wind technician (96%
growth).\7\ While we have no jobs estimate from this CES, it is
reasonable to expect significant acceleration of these already
encouraging trends, since the CES requires more than doubling current
annual installations of wind and solar. Because the best wind and solar
resources are available in the Great Plains, Southeast, and Southwest,
opportunities abound for economic development in rural as well as urban
areas.
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\6\ https://www.bls.gov/ooh/fastest-growing.htm.
\7\ https://www.bls.gov/ooh/fastest-growing.htm.
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1c. What other policies would complement a clean energy standard?
Congress should focus on three policy areas to enable a cheaper,
faster clean electricity transition: Maximize existing transmission
while streamlining future development, spur investment in flexible
zero-carbon resources, and invest in building and end-use efficiency
and electrification.
Maximize existing transmission while streamlining future
development--Transmission is the platform that allows our nation's
electricity system to function. As renewables provide increasing
amounts of electricity in the U.S., we need to move it from the places
with the greatest sun and wind resources to the places where people and
businesses need to use it. We can do that by getting more out of our
existing system,\8\ and by adding new lines. The federal government
could build on the National Interest Electric Transmission Corridors
\9\ to overlay priorities for greenhouse gas reduction goals, reforming
and aligning transmission incentives with greenhouse gas
objectives.\10\ The federal government could then partner with states
to increase capacity on existing rights of way, as well as build new
lines. President Lyndon Johnson provided a model for this in the 1960s
with the build-out of the Pacific Intertie.\11\ Texas also provides a
model--pre-approving and building out transmission to ``Competitive
Renewable Energy Zones,'' where clean energy resources are abundant.
Market mechanisms can then be used to select the lowest cost projects
to build clean power in those zones.
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\8\ Dynamic line rating gets more out of the system than existing
practices in much of the country (for more, see https://
issues.nawindpower.com/article/using-grid-weve-got). Where needed, we
can beef up transmission capacity on existing rights of way.
\9\ https://www.energy.gov/sites/prod/files/edg/media/
NIETC_Fact_Sheet.pdf.
\10\ See also transmission answer for Rep. Castor.
\11\ http://www.orkas.com/the-future-of-electric-transmission/.
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Spur investment in flexible zero-carbon resources and get more out
of existing assets--Solar and wind power are the cheapest new zero-
carbon generation sources today, but their production varies with the
availability of sunlight and wind, so they require a more flexible
power system to realize their value as power system decarbonizers.
Fortunately, many options are already available to draw additional
flexibility out of the power system, including improved grid and
transmission operations. Grid flexibility can also come from physical
assets, such as batteries and fast-ramping natural gas plants, better
co-optimization power supply and power demand.\12\ Congress
incentivizes the investment in storage and demand response needed to
balance a high-renewables grid, while also leveraging the national labs
to partner with system operators to integrate better weather
forecasting and market optimization software.
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\12\ https://energyinnovation.org/wp-content/uploads/2017/10/A-
Roadmap-For-Finding-Flexibility-In-Wholesale-Power-Markets.pdf.
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Invest in building and end-use efficiency and electrification--
Using electricity more efficiently is a key policy for reducing the
overall cost of a national CES. Because the majority of U.S. buildings
standing today will still be standing in 2050, Congress must find ways
to incentivize whole-building efficiency retrofits. To reduce overall
costs and leverage the clean grid to decarbonize building heating,
retrofits should combine appliance electrification and on-site clean
power generation (e.g., rooftop solar), if practical and applicable.
A program with financial incentives including low-interest
loans,\13\ on-bill financing,\14\ property tax financing,\15\ and cash
rebates at the point of equipment sale \16\ for building
decarbonization retrofitting could improve economics and stimulate
investment. Programs should also encourage pay-for-performance,
increasing the incentive for efficiency measures that reduce grid
costs.\17\ Incentives should cover electrification for the big end-
uses--building heat, water heat, and clothes drying, while implementing
appliance standards that ensure maximum efficiency and customer
savings.
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\13\ https://www.energy.gov/savings/low-interest-energy-loan-
programs.
\14\ https://aceee.org/blog/2019/04/bill-financing-gains-ground-
faces.
\15\ https://www.energy.gov/eere/slsc/property-assessed-clean-
energy-programs.
\16\ https://www.smud.org/en/Rebates-and-Savings-Tips/Improve-Home-
Efficiency.
\17\ https://www.brookings.edu/research/advancing-inclusion-
through-clean-energy-jobs/.
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2. Would a low-carbon grid be as reliable and resilient as a
predominately fossil fuel driven grid? Please explain.
Cleaning up the electricity supply brings different but manageable
resilience and reliability problems. To reduce outages and improve
security, policymakers should focus on the main causes of outages--the
aging and vulnerable transmission and distribution systems.
A more distributed and decentralized grid relying on local solar
and storage can be more resilient to centralized threats. Relying on
smaller, uncorrelated power generators over a larger footprint improves
reliability. At the same time, widening grid balancing areas and
strengthening interregional transmission connections also reduce the
risk associated with single generator or transmission failures.
With respect to a low-carbon power generation mix, the transition
from fuel-based power to higher shares of renewable energy affects bulk
power system reliability and resilience in a blend of both positive and
negative ways.
For human-caused events, such as cyber or physical attacks,
renewables can help to reduce fuel supply risk. Coal relies on rail
delivery, which is subject to physical attacks, since roughly 40
percent of U.S. coal comes from Wyoming's Powder River Basin, and
nearly all via the 103-mile Joint Line rail corridor.\18\ And natural
gas pipelines are vulnerable to cyber and physical attacks.\19\ As
demonstrated during the recent polar vortexes, coal piles on-hand can
freeze,\20\, and co-dependence on natural gas for heating and
generation during extreme cold can threaten resource availability.
Prolonged heat waves can leave nuclear unusable \21\ if cooling water
is too hot.
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\18\ https://www.nap.edu/read/11977/chapter/7.
\19\ http://docs.house.gov/meetings/HM/HM07/20160419/104773/HHRG-
114-HM07-Bio-ParfomakP-20160419.pdf.
\20\ https://www.greentechmedia.com/articles/read/as-extreme-
weather-forces-coal-to-falter-where-will-resilience-come-
from#gs.frgowa.
\21\ http://www.unisdr.org/files/1145_ewheatwave.en.pdf.
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But renewable energy sources are not automatically resilient. A
robust grid requires strategies to deal with natural events, such as
adverse weather. Hydroelectric generation is drought-vulnerable, while
cloud cover from intense storms and hurricanes can threaten solar
availability. Extreme winds may force partial wind curtailment for
short periods of time.
Resilience can be achieved first by strengthening the distribution
system for utilities--which causes by far the most power
interruptions.\22\ Second, by making the transmission grid more
``islandable,'' meaning that grids can automatically isolate blackouts
in small areas so they do not cascade through the system. Third, having
a heterogenous set of clean energy sources and geographically dispersed
supplies provides insurance against failures. Smart strategies to
manage demand via demand response technologies gives many more options
to grid operators. And of course, energy efficiency dramatically
reduces stresses on the grid, and allows for more ``ride through'' in
the case of disruption.
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\22\ https://rhg.com/research/the-real-electricity-reliability-
crisis-doe-nopr/.
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The upshot is that with smart operations and policy, the grid can
be made more resilient and more reliable, even as we move to clean
energy at scale.