[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]




 
                      EXAMINING THE MACROECONOMIC

                     IMPACTS OF A CHANGING CLIMATE

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

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON NATIONAL SECURITY,
                       INTERNATIONAL DEVELOPMENT
                          AND MONETARY POLICY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 11, 2019

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 116-48
                           
                           
                           
                           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                     





                            ______                      


             U.S. GOVERNMENT PUBLISHING OFFICE 
43-316 PDF             WASHINGTON : 2020 


                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             PETER T. KING, New York
GREGORY W. MEEKS, New York           FRANK D. LUCAS, Oklahoma
WM. LACY CLAY, Missouri              BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            SEAN P. DUFFY, Wisconsin
ED PERLMUTTER, Colorado              STEVE STIVERS, Ohio
JIM A. HIMES, Connecticut            ANN WAGNER, Missouri
BILL FOSTER, Illinois                ANDY BARR, Kentucky
JOYCE BEATTY, Ohio                   SCOTT TIPTON, Colorado
DENNY HECK, Washington               ROGER WILLIAMS, Texas
JUAN VARGAS, California              FRENCH HILL, Arkansas
JOSH GOTTHEIMER, New Jersey          TOM EMMER, Minnesota
VICENTE GONZALEZ, Texas              LEE M. ZELDIN, New York
AL LAWSON, Florida                   BARRY LOUDERMILK, Georgia
MICHAEL SAN NICOLAS, Guam            ALEXANDER X. MOONEY, West Virginia
RASHIDA TLAIB, Michigan              WARREN DAVIDSON, Ohio
KATIE PORTER, California             TED BUDD, North Carolina
CINDY AXNE, Iowa                     DAVID KUSTOFF, Tennessee
SEAN CASTEN, Illinois                TREY HOLLINGSWORTH, Indiana
AYANNA PRESSLEY, Massachusetts       ANTHONY GONZALEZ, Ohio
BEN McADAMS, Utah                    JOHN ROSE, Tennessee
ALEXANDRIA OCASIO-CORTEZ, New York   BRYAN STEIL, Wisconsin
JENNIFER WEXTON, Virginia            LANCE GOODEN, Texas
STEPHEN F. LYNCH, Massachusetts      DENVER RIGGLEMAN, Virginia
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota

                   Charla Ouertatani, Staff Director
           Subcommittee on National Security, International 
                    Development and Monetary Policy

                  EMANUEL CLEAVER, Missouri, Chairman

ED PERLMUTTER, Colorado              STEVE STIVERS, Ohio, Ranking 
JIM A. HIMES, Connecticut                Member
DENNY HECK, Washington               PETER T. KING, New York
BRAD SHERMAN, California             FRANK D. LUCAS, Oklahoma
JUAN VARGAS, California              ROGER WILLIAMS, Texas
JOSH GOTTHEIMER, New Jersey          FRENCH HILL, Arkansas
MICHAEL SAN NICOLAS, Guam            TOM EMMER, Minnesota
BEN McADAMS, Utah                    ANTHONY GONZALEZ, Ohio
JENNIFER WEXTON, Virginia            JOHN ROSE, Tennessee
STEPHEN F. LYNCH, Massachusetts      DENVER RIGGLEMAN, Virginia, Vice 
TULSI GABBARD, Hawaii                    Ranking Member
JESUS ``CHUY'' GARCIA, Illinois

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    September 11, 2019...........................................     1
Appendix:
    September 11, 2019...........................................    47

                               WITNESSES
                     Wednesday, September 11, 2019

Burke, Marshall, Assistant Professor Eath Systems Science; and 
  Deputy Director, Center on Food Security and the Environment, 
  Stanford University............................................     4
Cheney, Brigadier General Stephen, USMC (Ret.); and President, 
  American Security Project......................................     7
Eady, Veronica, Assistant Executive Officer for Environmental 
  Justice, California Air Resources Board........................     9
Karsner, Alexander, Board Member, Conservation International.....    10
Kotek, John, Vice President, Policy Development and Public 
  Affairs, Nuclear Energy Institute..............................    14
Powell, Richard, Executive Director, ClearPath...................    16
Seiger, Alicia, Managing Director, Sustainable Finance 
  Initiative, Stanford University................................    12

                                APPENDIX

Prepared statements:
    Burke, Marshall..............................................    48
    Cheney, Brigadier General Stephen, USMC (Ret.)...............    52
    Eady, Veronica...............................................    59
    Karsner, Andy................................................    64
    Kotek, John..................................................    76
    Powell, Richard..............................................    84
    Seiger, Alicia...............................................    91


                      EXAMINING THE MACROECONOMIC

                     IMPACTS OF A CHANGING CLIMATE

                              ----------                              


                     Wednesday, September 11, 2019

             U.S. House of Representatives,
                 Subcommittee on National Security,
                          International Development
                               and Monetary Policy,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 2 p.m., in 
room 2128, Rayburn House Office Building, Hon. Emanuel Cleaver 
[chairman of the subcommittee] presiding.
    Members present: Representatives Cleaver, Perlmutter, Heck, 
Vargas, Gottheimer, San Nicolas, Lynch, Garcia of Illinois; 
Stivers, Lucas, Williams, Hill, Emmer, Gonzalez of Ohio, Rose, 
and Riggleman.
    Ex officio present: Representatives Waters and McHenry.
    Also present: Representative Casten.
    Chairman Cleaver. The Subcommittee on National Security, 
International Development and Monetary Policy will come to 
order.
    Without objection, the Chair is authorized to declare a 
recess of the subcommittee at any time.
    Also, without objection, members of the full Financial 
Services Committee who are not members of this subcommittee are 
authorized to participate in today's hearing.
    Today's hearing is entitled, ``Examining the Macroeconomic 
Impacts of a Changing Climate.'' I now recognize myself for 
3\1/2\ minutes for an opening statement.
    I think before I get started on my 3\1/2\ minutes, I will 
do this, because today I think we probably ought to pause to 
recognize and remember that it was on this day that our nation 
was attacked. I remember clearly that day, as most of us do. 
And the thing that happened from that attack that I have some 
appreciation for was what happened to the American people. All 
of a sudden, there was a level of unity in the country that I 
had not seen before, and, tragically and painfully, I have not 
seen it since.
    I was asked to do the opening prayer for the game between 
the Kansas City Chiefs and the New York Giants on that Sunday 
afterward. It was one of the most amazing things. The Chiefs 
lost the game, but nobody was interested in being angry. It was 
the first time I have ever seen in, Arrowhead, people helping 
each other. People left their lights on, and people were 
helping to get other people's cars started. There were no 
fights.
    The firefighters opened up the game with an unplanned 
running up the steps with American flags. There were 72,000 
people in Arrowhead, and probably half of them had teary eyes. 
I think the tragedy brought us together, and I hope that it 
doesn't take a 9/11-like tragedy to help us recapture that 
painful day in September.
    But going back to the subject of the day, our defense 
community has been warning of climate change since the 1980s. 
The 2019 Worldwide Threat Assessment highlights climate change 
as a distinct security threat to the country.
    Recent news reports are underscoring this point. Arctic ice 
melting is allowing Russian access to oil and gas fields 
previously trapped, as well as the capacity buildup of and 
launch of cruise missiles from the newly opened waters, 
threatening America's coastline. Around the world, we are 
seeing the dangers with migration flows and famine.
    In response to this, our Federal Government looks to be 
missing in action. The President withdrew the U.S. from the 
Paris Agreement and literally refuses to attend international 
forums related to this subject. There has been an assault on 
clean-water and clean-air regulations that even some fossil-
fuel companies have protested.
    CFTC Commissioner Behnam has played a leading role in 
directly confronting this crisis by creating a subcommittee in 
July focusing on climate risk. Federal Reserve Chairman Powell 
noted that the Fed is considering climate risk when it 
regulates financial institutions. The Federal Reserve Bank of 
San Francisco is advancing the notion of financial institutions 
getting extra credit through the Community Reinvestment Act for 
adapting and preparing for natural disasters.
    As financial regulators consider this topic, I have offered 
a bill before the committee today that calls for the Fed and 
the SEC to explore the cost of climate change so that we can 
best confront this crisis.
    I look forward to hearing from all of you, and working to 
confront this issue.
    The Chair now recognizes the ranking member of the 
subcommittee, Mr. Stivers, for 4 minutes for an opening 
statement.
    Mr. Stivers. Thank you, Chairman Cleaver. And thanks for 
holding this hearing.
    I also want to thank the witnesses for being here. I am 
looking forward to hearing from you.
    And, Mr. Chairman, I think we all wish for the kind of 
America we saw on September 12, 2001, and we hope it doesn't 
take a tragedy to get us there.
    Climate policy does occasionally come up in this committee, 
usually with respect to the National Flood Insurance Program 
and the securities disclosure laws, which are in the 
jurisdiction of this committee. Today's hearing, I know, will 
have a broader focus on climate policy, such as the Green New 
Deal and proposals about how we alter our sourcing of energy.
    Over the past decade, America has experienced a clean-
energy revolution, which includes the rise of natural gas as 
well as renewable energy. And, in fact, the United States has 
cut CO2 emissions enough to exceed the requirements of the 
Kyoto Accord. And yet, there is more we can do. I look forward 
to the exchange with our witnesses today.
    Something I do want to stress from the outset is the 
importance of preserving access to energy that is reliable but 
also affordable. As policymakers, we should always be mindful 
of the impact that new laws and regulations have that might be 
disproportionate among low- and moderate-income Americans.
    One of the bills today would require the Federal Reserve to 
report impacts on climate change to the economy. I think it is 
a little questionable whether the Fed has the expertise to 
conduct that analysis. But what they do have expertise in is 
financial analysis. And they have released a study that said 
that 44 percent of Americans don't have enough money to cover a 
$400 emergency cost.
    If we choose policies that make fuel and utility bills more 
expensive, these individuals will have even less disposable 
income to cover mortgages, rent, purchase of groceries, and 
medicine. And one of the ideas put forward today, the Green New 
Deal, I think would have a disproportionate impact on low- and 
moderate-income Americans.
    I think if we add cost to them, it will add cost to other 
bills as well, actually. For example, a farmer who is paying 
more for fuel to operate his tractor will have to pass on 
additional costs that would raise the cost of food at the 
grocery store. Strapped with higher energy costs, companies 
could actually reduce their jobs in America. So there are other 
impacts of the decisions we make, and I think we need to be 
mindful of that.
    When we talk about the potential damage to the economy, 
those are the human costs I think of. And so, while many of 
us--including me--acknowledge that climate change is occurring, 
we must be smart about how we address it.
    Some solutions that I plan to talk to the witnesses about 
today include negative-emissions technology, expanding research 
on battery storage that will make our renewables more 
effective, and incentivizing local communities to establish 
modern building codes that will go along with the Flood 
Insurance Program to actually adapt to things while we work to 
mitigate at the same time.
    This combination of mitigation and adaptation strategies, I 
believe, will be more effective and affordable, and we can get 
the right environmental balance while ensuring energy is both 
affordable and reliable.
    Again, I want to thank the witnesses for being here.
    And I want to yield my final minute to the ranking member 
of the full Financial Services Committee, Patrick McHenry.
    Mr. McHenry. Thank you, Mr. Stivers.
    And thank you to the panel for being here.
    Look, climate change is real, and we have to break free 
from the established partisan politics of Capitol Hill. We have 
an aggressive policy called the Green New Deal that wants to 
reorder society, which further polarizes the discussion about 
the rational, reasonable solutions that we can take on and make 
significant changes to ensure that we don't have great long-
term negative consequences for our environment and for our 
people and for our society.
    In order to do that, you can't have the same partisan food 
fight; you have to have innovation. You have to drive clean 
energy through innovative policies and innovative solutions 
that are going to change the footprint, the carbon footprint.
    We are cleaner today than Europe in the United States, and 
that is a positive thing, but it is not enough. We have to work 
together to ensure that those innovative solutions happen in 
the private sector and we have a proper risk assessment within 
our regulators to understand as policymakers the courses of 
action that we must take.
    Thank you, Chairman Cleaver, for holding this hearing.
    Chairman Cleaver. Thank you, Mr. McHenry. I have a 
bipartisan statement: I like your bow tie.
    Mr. McHenry. That is the most polarizing thing you could 
possibly say. But, thank you.
    Chairman Cleaver. Today, we welcome seven amazing 
witnesses.
    Our first witness is Marshall Burke. Dr. Burke is an 
assistant professor in the Department of Earth Systems Science; 
the deputy director of the Center on Food Security and the 
Environment at Stanford University; and a research fellow at 
the National Bureau of Economic Research.
    I will introduce the next witness before you speak.
    Dr. Burke, you are now recognized for 5 minutes to present 
your oral statement. And without objection, all of the 
witnesses' written statements will be made a part of the 
record.

STATEMENT OF MARSHALL BURKE, ASSISTANT PROFESSOR, EARTH SYSTEMS 
 SCIENCE; AND DEPUTY DIRECTOR, CENTER ON FOOD SECURITY AND THE 
                ENVIRONMENT, STANFORD UNIVERSITY

    Mr. Burke. Thank you very much, Chairman Cleaver, Ranking 
Member Stivers, and members of the subcommittee, for having me 
here to speak today.
    As the chairman said, my name is Marshall Burke. I am an 
economist by training, and a professor at Stanford University 
in earth systems science. I have a Ph.D. in economics, and my 
research focuses on using data and statistics to understand how 
changes in climate affect a lot of outcomes we care about in 
the world: economic outcomes; our livelihoods; and our health.
    My goal as an academic economist is not to make political 
statements; it is really just to make measurements. Just as we 
use a thermometer to understand whether the temperature is 
going up or down, we can use statistics to tell us what the 
impacts of those temperature changes are on a range of things 
we care about--again, economic output, economic productivity, 
and our economic livelihoods.
    And the measurements that we have taken and that others 
have taken in the last few years are starting to tell a very 
clear story about what these temperature changes mean for many 
things in the world, including many things of direct relevance 
to the jurisdiction of this committee. So, I would like to make 
five points about the impacts of climate change on the 
macroeconomy and related outcomes.
    Point number one, and I think most importantly: Climate 
change is likely to have a fundamental impact and a substantial 
negative impact on the U.S. economy in coming decades if 
unmitigated.
    Research done by me and my colleagues at Stanford and 
Berkeley finds that by midcentury, by 2050, unmitigated climate 
change will cause at least $5 trillion in damage to our 
economy, and by the end of the century, will cost tens of 
trillions of dollars in terms of lost output, so many, many 
trillions of dollars that we will be throwing away if we don't 
mitigate climate change.
    Point number two, climate change will affect nearly all 
sectors of the economy.
    I think there is a common perception that the main impacts 
of climate change will be through sea-level rise and effects on 
agricultural productivity. Now, while those effects will be 
important, they are actually a very small part of the overall 
impact picture when we look at the U.S. economy. Evidence from 
multiple studies shows that output in key sectors, including 
sectors like financial services and real estate, fall as 
temperatures rise.
    And why is this? We know, again from many studies, that 
workers are just less productive when it is hot outside. And 
this, again, has been shown in manufacturing, and this has been 
shown in service industries. Part of that is because our 
cognitive function actually declines when it is hot. Now, I 
think some of us recognize this intuitively. It actually shows 
up very clearly in the data: Hot temperatures literally make us 
dumber.
    Point number three, climate change will actually worsen 
security risks, both domestically and abroad.
    We can come back to that. I see the ranking member laughing 
at the data.
    Police chiefs in U.S. cities have long recognized that 
during days or weeks of temperatures that are hotter than 
normal, you see spikes in many different types of violent 
crime. We see aggravated assault go up, we see sexual violence 
go up, we see homicides go up. This is clearly in the data.
    And studies that we have conducted also show that hot 
temperatures increase the risk of suicide around the United 
States. And, again, we calculate that if we do not mitigate 
climate change, just this increase in suicide alone could lead 
to 10,000 to 20,000 excess deaths in the U.S. that would not 
have occurred otherwise, so a large loss of human life.
    Elsewhere in the world, we have documented large increases 
in civil conflict as temperatures rise and have shown that this 
conflict actually drives international migration. So, people go 
from poor countries to rich countries in the face of these 
climate shocks.
    Point number four, climate change is going to exacerbate 
inequality. We have strong evidence that poor places, both 
within this country and poor places internationally, will be 
more affected by a changing climate.
    And finally, point number five, and maybe most importantly, 
doing something about climate change will generate long-run 
benefits to the economy, the benefits I just mentioned, but 
crucially, it will also generate immediate benefits in terms of 
improved air quality and the benefit that those improvements 
have for human health.
    Most of the proposals around what to do about climate 
change, including investments in clean technology, generally 
reduce greenhouse gases but they also clean up the air. And 
studies have suggested that by 2030 alone, this could save 
hundreds of thousands of lives and generate, again, trillions 
of dollars of economic benefits for our country.
    So, to conclude, this evidence provides, I think, a more 
robust understanding of how much we should be willing to pay to 
do something about climate change. Climate change, for me, is 
not an environmental issue; it is an economic issue. And while 
policy proposals aimed at reducing climate change might sound 
like they have a very high cost, we need to compare these costs 
against the benefits. Focusing exclusively on the costs without 
considering the benefits is terrible economics and terrible 
policy.
    Thank you very much.
    [The prepared statement of Dr. Burke can be found on page 
48 of the appendix.]
    Chairman Cleaver. Thank you very much, Dr. Burke.
    Let me introduce the General, and then I think I will go 
ahead and introduce all of you.
    I failed to say at the beginning that each witness will 
have 5 minutes for your presentation. If you run over a little, 
I will give a gentle tap on this table, and then if you 
continue to speak, the tap will get louder.
    Brigadier General Stephen Cheney (Ret.) is president of the 
American Security Project and a member of the Department of 
State's Foreign Affairs Policy Board. He served as a Marine for 
more than 30 years. Upon retirement, General Cheney became the 
chief operating officer for Business Executives for National 
Security, and was president and CEO of the Marine Military 
Academy in Harlingen, Texas.
    Next, Dr. Veronica Eady is the assistant executive officer 
for environmental justice at the California Air Resources 
Board. She is the former Chair of the Environmental Protection 
Agency's National Environmental Justice Advocacy Council. She 
is also the former vice president and director of the 
Conservation Law Foundation in Massachusetts.
    The next witness is Alexander ``Andy'' Karsner. Mr. Karsner 
is a board member of Conservation International, and executive 
chair of Elemental Labs. From 2006 to 2008, he served as the 
Department of Energy's Assistant Secretary of Energy for 
Efficiency and Renewable Energy within the Bush Administration.
    Next, is Alicia Seiger. She is the managing director of the 
Sustainable Finance Initiative at Stanford University. In 2018, 
she was appointed by the New York Governor, Andrew Cuomo, and 
Comptroller, Thomas DiNapoli, to serve on the first-ever 
Decarbonization Advisory Panel for the $209 billion New York 
State Common Retirement Fund.
    The next witness is John Kotek. He is vice president of 
policy development and public affairs at the Nuclear Energy 
Institute. He held several positions with the Department of 
Energy Office of Nuclear Energy, including the Assistant 
Secretary, under the Obama Administration.
    Our final witness is Richard Powell. Mr. Powell is the 
executive director at ClearPath. He serves as a member of the 
2019 Advisory Committee to the Export-Import Bank of the United 
States and was previously with McKinney and Company in the 
sustainability and resource productivity practice.
    Thank you all for being here.
    And we will proceed now with General Cheney.

  STATEMENT OF BRIGADIER GENERAL STEPHEN CHENEY, USMC (RET.), 
              PRESIDENT, AMERICAN SECURITY PROJECT

    General Cheney. Chairman Cleaver, Ranking Member Stivers, 
and members of the subcommittee, thank you for inviting me to 
testify here today about the financial threats posed by climate 
change to our national security.
    Thank you for your kind comments about 9/11. That day is 
particularly poignant to me, as the pilot of American Airlines 
77 was my classmate, Navy Captain Chic Burlingame, when it went 
into the Pentagon. So God bless him, and thank you for your 
comments.
    A quick correction for the record. My tenure on the Foreign 
Affairs Policy Board expired--as far as I know, the entire 
board expired in 2017. So, I no longer serve on that board.
    I am honored to be here to speak to you about this critical 
threat. As a nonpartisan nonprofit, the American Security 
Project (ASP) has worked tirelessly on this issue since our 
founding in 2006. As president of ASP, I have presented around 
the world on this specific subject, and spent much of the last 
5 years traveling the United States, engaging with local 
business and community leaders on the risks of climate change.
    Today, I am not here to discuss specific legislation or 
technology solutions, but I am here to explain the national 
security threats of climate change.
    During my 30 years with the Marines, I learned the 
importance of preparation. In order to achieve the mission, the 
United States Military must be prepared for any potential 
threat, particularly foes that are climate- or weather-related.
    This should be familiar to those in the financial sector. 
Risk management is as important for the military as it is for 
banking. We can't afford to ignore the risk of climate change, 
just as bankers can't ignore the risks to their business.
    Unfortunately, today we are not sufficiently prepared for 
climate risk and have failed to respond to changes that are 
already occurring.
    Dating back to the George H.W. Bush Administration, in 
1992, intelligence and national security professionals warned 
us that climate change posed a direct threat to U.S. national 
security.
    The impacts of climate change are clear today and threaten 
our military installations and investments around the globe. 
The U.S. Department of Defense maintains installations 
worldwide. Together, that property is worth well over $1.2 
trillion, and is critical to U.S. national security.
    This past year's extreme weather has seriously affected our 
national infrastructure. In September of 2018, Hurricane 
Florence decimated Camp Lejeune and caused damage to Fort Bragg 
and military installations all across North Carolina. Just a 
few weeks later, Hurricane Michael leveled Tyndall Air Force 
Base on Florida's panhandle, causing damage to 17 F-22 stealth 
fighters, and major structural damage throughout the entire 
base.
    Estimates of the cost of these disasters to the military 
are significant. The Marines have requested $3.6 billion to 
rebuild their North Carolina operations, while the Air Force 
has requested an initial $5 billion for Tyndall and Offutt.
    While climate change by itself did not cause these storms, 
there is little doubt that it has added to their intensity and 
frequency.
    In addition to extreme weather events, sea-level rise is 
threatening some of our most vital military installations. 
Norfolk Naval Station is predicted to see a 2- to 5-foot rise 
in sea level by 2100, and some say it might be as high as 11 
feet. The base has already begun to build double-decker piers 
to allow maintenance workers to reach critical electrical 
cables, countering the sinking ground and the rising seas. Each 
new pier costs $100 million.
    Clearly, the U.S. military will have to invest large sums 
into rebuilding and recovery at home. The American Security 
Project is tracking these impacts to our military 
infrastructure on our new website, 
www.militarybaseresiliency.org, and I encourage you to review 
the content and examples that we list there.
    Beyond physical damage and financial burdens, climate 
change will increase global instability. Groups like Boko Haram 
and Al-Shabaab have leveraged drought and climate-related 
disasters for recruiting. While climate change may not be the 
sole cause of instability, it certainly contributes to it.
    This instability creates additional demands for U.S. 
military support. A larger, more expensive military adds 
financial burdens on the U.S. and its citizens. Climate change 
is already threatening our military readiness. There needs to 
be further monitoring of the impacts of climate change and the 
cost incurred to military infrastructure and personnel.
    Further, there needs to be additional investment and 
allocation of funds towards building back better. Storms and 
extreme weather are predicted to only intensify, and funds 
should be allocated to rebuild stronger and more-durable 
infrastructure.
    Finally, we need substantial investment in zero-carbon, 
clean-energy systems. Without investing in clean energy, all 
the money spent rebuilding will be for naught as coastal 
military installations go underwater and stronger storms level 
our critical infrastructure.
    Now is the time to invest in solutions. The United States 
has the most powerful military in the world. We have the 
opportunity to maintain that prowess, but only if we invest and 
prepare for the future that lies ahead.
    Thank you for the opportunity to testify today. I look 
forward to your questions.
    [The prepared statement of General Cheney can be found on 
page 52 of the appendix.]
    Chairman Cleaver. Thank you, General Cheney.
    The next witness is Dr. Eady. You have 5 minutes.

  STATEMENT OF VERONICA EADY, ASSISTANT EXECUTIVE OFFICER FOR 
     ENVIRONMENTAL JUSTICE, CALIFORNIA AIR RESOURCES BOARD

    Ms. Eady. Chairman Cleaver, esteemed members of the 
subcommittee, it is my great honor to be here today to discuss 
how California is addressing climate change, and how our 
programs facilitate investment in the communities most 
vulnerable to the impacts of climate change.
    I am here representing the California Air Resources Board, 
also known as CARB. It is an agency that is charged with 
protecting the California public from the harmful effects of 
air pollution, and developing programs and actions to fight 
climate change.
    From requirements for clean cars and fuels to adopting 
innovative solutions to reduce greenhouse gas emissions, 
California has pioneered a range of effective approaches that 
have set the standard for effective air and climate programs 
for the nation and the world.
    As the assistant executive officer for environmental 
justice, it is my charge to steer the agency as we promote 
environmental justice and equity in our programs.
    Despite the dramatic progress made in improving air quality 
in California, there still exists disparities in air pollution 
exposure, susceptibility, and health, particularly for people 
of color and low-income communities. This disparity reflects 
the disproportionate siting of stationary sources and highways 
in and near disadvantaged communities that were historically 
intentionally segregated.
    And although greenhouse gases are global pollutants that do 
not, themselves, harm local neighborhoods, the effects of 
climate change caused by greenhouse gases disproportionately 
impact low-income communities and communities of color. So, 
environmental justice is one of our core values and fundamental 
to achieving our mission.
    California has had programs to reduce both criteria 
pollutants and air toxics and greenhouse gases for decades. As 
California adopts increasingly ambitious goals for addressing 
climate change and air quality, it recognizes that the 
transition to a low-carbon California economy provides an 
opportunity to create a healthier environment for all 
Californians, especially those living in our most disadvantaged 
communities.
    Many of our disadvantaged communities disproportionately 
lack the financial capacity to invest in low-carbon 
transportation and climate resiliency, so we are pioneering 
targeted environmental and economic programs to help those most 
in need.
    The proceeds from our cap-and-trade program, which are 
deposited in the Greenhouse Gas Reduction Fund, also known as 
the GGRF, facilitate comprehensive and coordinated investments 
throughout California that further the State's climate goals. 
In fact, by law, at least 35 percent of those cap-and-trade 
proceeds have to benefit disadvantaged communities. To date, 
the legislature has appropriated almost $12 billion to more 
than 20 State agencies implementing over 60 unique programs 
collectively known as California Climate Investments.
    Communities where investments occur are realizing a wide 
range of benefits, including increased affordable housing 
opportunities; improved mobility options through transit, 
walking, and biking; cleaner-air zero-emission vehicles; job 
creation; energy and water savings; and greener, more vibrant 
communities.
    Many programs funded through California Climate Investments 
are specifically designed to promote equity. We have clean-
vehicle financing assistance for people who want to buy 
electric vehicles and hybrids. We have rebates, and vouchers 
with income caps that direct these programs to low-income 
households. And we have pilot projects that are aimed directly 
at improving mobility in disadvantaged communities, such as our 
car-sharing programs targeted toward low-income communities, 
agricultural worker van pools, and other new mobility options.
    Certain programs are also focused on rural communities, 
such as our Rural School Bus Program, and others, such as 
affordable-housing programs that have a set-aside for low-
income, rural communities.
    We also have a handful of targeted investments by regions 
in the areas most impacted by air pollution, such as 
communities living near major ports, and freight facilities. 
And they receive dedicated funding, ranging from heavy-duty 
vehicle change-outs from diesel to cleaner fuels as well as 
air-monitoring equipment.
    One program to highlight is CARB's new Community Air 
Protection Program, which was initiated in response to Assembly 
Bill 617, aimed at reducing air exposure in the State's most 
impacted communities through air monitoring as well as 
development of emission-reduction programs.
    The legislature has appropriated nearly half-a-billion 
dollars in incentive funding that is geared in those programs 
to change out dirtier fuels like diesel to clean or zero-
emission vehicles and other near-zero-emission vehicles. In 
addition, it has appropriated $25 million, all of this coming 
out of our cap-and-trade proceeds, for community grants to help 
communities engage.
    We also have another program called Transformative Climate 
Communities, for which the legislature has appropriated $150 
million to help the communities most impacted from climate 
change to prepare.
    I see that I am almost out of time, so I will just say, 
California Climate Investments has resulted in, and is required 
to result in quantifiable reductions in greenhouse gases. In 
addition to achieving a reduction of almost 40 million metric 
tons of CO2 equivalent to date, California Climate Investments 
projects are also achieving additional co-benefits, such as job 
creation, training, opportunities for small business, and 
things of that sort. We have achieved--
    Chairman Cleaver. Dr. Eady, your time has expired.
    Ms. Eady. Okay. I thank you very much, and I look forward 
to your questions.
    [The prepared statement of Dr. Eady can be found on page 59 
of the appendix.]
    Chairman Cleaver. Thank you, Dr. Eady.
    Mr. Karsner, you have 5 minutes.

  STATEMENT OF ALEXANDER KARSNER, BOARD MEMBER, CONSERVATION 
                         INTERNATIONAL

    Mr. Karsner. Thank you, Chairman Cleaver, Ranking Member 
Stivers, and distinguished members of the subcommittee. Thank 
you for having me here on this important day to testify about 
the confluence of international monetary policy, national 
security, and climate change.
    Your opening remarks, Mr. Chairman, reminded me that the 
last time I testified in front of Congress, more than 10 years 
ago as a public servant, was also the day that it was announced 
that, for the first time in recorded human history, someone had 
navigated the Northwest Passage. And so, 120 months later, we 
are facing all the perils in the Arctic of large commercial and 
military oceangoing vessels that you spoke to in your opening 
remarks, and it reminds me of the urgency to act.
    But of course, we are not in a position today to have the 
technology to refreeze Greenland. And, therefore, we have to 
think what it is we can do, beyond mitigation, for preparation 
and adaptation and resilience of our communities and of our 
country and how we can achieve this through conservation and 
through what we call natural capital--that is, the actual value 
that nature brings beyond the commoditized value of natural 
resources that we all take for granted.
    In my first days as a public servant, I had no government 
experience. I was encouraged to serve and had an itch to 
scratch based on 9/11. And the late Samuel Bodman, my then-boss 
at the Department of Energy, who was a scientist from MIT, 
encouraged me to go see his friend, the scientist Dr. Jim 
Mahoney, who led the U.S. Climate Science Program, on my first 
day. And so, I went to NOAA so that I could understand the 
magnitude and trajectory of the problem before I was ultimately 
tasked as a climate negotiator.
    But Sam also sent me to visit his wife, Diane, who was a 
volunteer at Walter Reed Army Hospital, on the next day, so 
that I could understand the meaning of those things.
    And from that time and during that Administration--it 
exists even to this day--I learned that we cannot separate our 
national security from our natural security. They are 
inextricably tied to one another. And they are tied to the fate 
of all of our communities.
    In all of these cases, we understood then, as we do now, 
that in President Bush's words, we have to face America's 
addiction to oil. And so, we then launched a clean-energy 
technology revolution, catalyzing unprecedented capital 
formation for the commercialization of clean power generation, 
for efficient electrification of mobility and vehicle 
drivetrains, for building and industrial efficiency, and, of 
course, LED lighting and appliance efficiencies that have 
transformed our energy use and made us more productive.
    All of this has grown exponentially in the decades since, 
but we need much, much more. We need carbon sinks and 
sequestration. We need the ability to rapidly deeply 
decarbonize our markets. We need a steady-state circular 
economy. And we need to get over the notion that we will be 
able to tithe our way out of this problem or that government 
expenditure will spend its way out of the problem.
    The only way to achieve some progress on this problem is to 
turn our capital markets and our economy to problem-solving at 
a speed and scale that is symmetrical to the problem that we 
seek to solve.
    And we have opportunities. Because as we morph from an 
industrial age into an inexorable information age, data has 
become the new oil. It is now the driver of all value and 
growth in our economy, exceeding the energy economy in ways 
that were unthinkable a decade ago.
    I am not going to talk about the clean-energy technologies. 
I am happy to respond to any questions about it. But I would 
rather turn our attention to the revolutions in data science, 
computational science, and materials science that are 
collectively giving us an opportunity to band with sensors and 
do in our natural home that which we already do in our manmade 
home: have an internet of natural things to care for the 
comfort and convenience and management in our interactions with 
nature in ways that we can measure it, manage it, and 
ultimately monetize it.
    These things have to come on to our capital markets and 
account on our balance sheets. If we have market imperfections 
to address, the best way to address them is with market-
changing rules such as those that you have proposed today on a 
bipartisan basis.
    And I hope that you will go further than asking exclusively 
for transparency and disclosure; I hope that you will trend 
into new rules that allow us to integrate the value of nature 
into our commodity trading systems, into our risk management, 
by using the revolution in information gain, by being able to 
have unprecedented insights and analytics and predictability, 
by forming the indicators based on these information and 
insights so that we can evolve and innovate new financial 
instruments that are already burgeoning, whether from Sand Hill 
Road or from Wall Street or from Main Street across America.
    Congress is lagging. The nation is leading. These tools can 
be employed. And I applaud your efforts to come together to do 
so.
    Finally, let me say, if you will indulge me, sir, that 
today is my late mother's birthday. And I was with her on 9/11 
in her home country, in her home City of Casablanca, Morocco. 
And, together, we looked at the shore where, when she was a 
child, General Patton came ashore for the first time with the 
Third Army, marking America's entry into World War II.
    It was the hardest secret, for the longest hours, I ever 
kept from anybody in my life. And when my mother found out on 
September 12th what had happened on September 11th, she wasn't 
mad at me. She simply said, ``I will never celebrate my 
birthday on that day again,'' that, in exchange, I should have 
my children always remember what happened so that the country 
she came to love and immigrated to would always be safe and 
secure and a beacon.
    Thank you for reminding us, and for holding this hearing on 
this day. And thank you for your bipartisan work.
    [The prepared statement of Mr. Karsner can be found on page 
64 of the appendix.]
    Chairman Cleaver. Thank you.
    Ms. Seiger, you have 5 minutes, please.

  STATEMENT OF ALICIA SEIGER, MANAGING DIRECTOR, SUSTAINABLE 
            FINANCE INITIATIVE, STANFORD UNIVERSITY

    Ms. Seiger. Chairman Cleaver, Ranking Member Stivers, and 
members of the subcommittee, thank you for the opportunity to 
be here to talk about such an important topic on this 
significant date.
    My name is Alicia Seiger, and I am the managing director of 
the Sustainable Finance Initiative at Stanford University. I 
teach courses on climate finance and mitigation to Stanford 
business, law, and engineering students. And I serve on the 
board of directors of Ceres, a nonprofit that works with the 
world's largest businesses and investors to manage the risks of 
a changing climate.
    The views in my testimony are my own, not necessarily those 
of Stanford University. I am here today to share my experience 
and knowledge about the ways in which investors, businesses, 
and the Federal Government can benefit from measuring the 
economic risks of a changing climate.
    Recently, I worked with the $210 billion New York State 
pension plan to help the fund better prepare for climate-
related risks and opportunities. Their investment team has 
taken many leading steps to address climate impacts on their 
portfolio already, and yet, a lack of transparency into the 
climate-related impacts of their equity portfolio, which is 
largely composed of passively managed index funds, remains an 
unmanageable risk. As we saw with the recent bankruptcy of 
PG&E, markets are not pricing the impacts of changing 
temperatures.
    New York's pensioners are not alone. This past June, 477 
investors with $34 trillion in assets signed a letter urging 
world leaders to improve climate-related disclosures in 
financial filings.
    Businesses can benefit from reporting, too. A recent study 
found that 215 of the world's 500 biggest companies faced 
roughly $1 trillion in costs related to climate change unless 
they prepare. Managers find that reporting catalyzes ingenuity, 
improves strategic thinking, and increases competitiveness. In 
other words, reporting improves resilience.
    In examining the economic impacts of climate change, it is 
important to understand that they come in two flavors: physical 
risks; and transition risks.
    Physical risks are those that stem from chronic and acute 
changes in weather patterns, including storms, sea-level rise, 
wildfires, and extreme heat. Physical impacts of climate change 
disrupt supply chains and consumption patterns, threaten real 
assets, and disturb the health and movement of people.
    Transition risks stem from a suite of factors as economies 
and enterprises transition from low to high resilience and from 
high to low carbon intensity. Price dislocations can result 
from misjudging the pace and scale of technology innovation and 
failing to prepare for abrupt shifts in policy and consumer 
behavior.
    A good deal of information exists about how physical 
impacts affect workers in communities, national security, and 
the economy. What is less studied are the impacts from the low-
carbon transition. It is important to note that, as Assistant 
Secretary Karsner has already testified, the low-carbon 
transition also presents economic opportunity.
    It is also important to remember that transition impacts 
exist irrespective of domestic policy. Highly globalized 
sectors will feel repercussions from shifts in consumer 
behavior and regulations oceans away. Major U.S. industries 
will be affected, including oil and gas, petrochemicals, 
automotive, and agriculture.
    Financial regulators also benefit from reporting in their 
effort to maintain market efficiency and ensure financial 
stability. The Network for Greening the Financial System, a 
group of 36 central banks and supervisors representing over 
half of global GHG emissions, said, ``Climate-related risks are 
a source of financial risk, and it falls squarely within the 
mandate of central banks and supervisors to ensure the 
financial system is resilient to these risks.'' Disclosure and 
reporting were highlighted among the group's six key 
recommendations to foster a climate-resilient financial system.
    Mandated reporting also serves to improve the quality of 
the current suite of physical and transition risk models. I see 
this potential at the Sustainable Finance Initiative, where we 
are working to develop next-generation integrated assessment 
models. Most of the interest in and data sources for this work 
are international, and open-source collaboration among U.S. 
research institutions, powered by a Federal mandate, would lead 
to more rapid advancement of these models.
    I think we can all agree that you manage what you measure, 
and that management improves performance. Greater SEC oversight 
of climate-related financial risks, and engaging the Fed in 
tracking the impacts of climate change will advance the 
competitiveness of U.S. businesses and investors and will 
better protect U.S. workers from the impacts of climate change.
    I applaud the committee for examining these topics, and I 
am happy to answer any questions. Thank you.
    [The prepared statement of Ms. Seiger can be found on page 
91 of the appendix.]
    Chairman Cleaver. Thank you.
    Mr. Kotek, you are now recognized for 5 minutes.

STATEMENT OF JOHN KOTEK, VICE PRESIDENT, POLICY DEVELOPMENT AND 
            PUBLIC AFFAIRS, NUCLEAR ENERGY INSTITUTE

    Mr. Kotek. Thank you, sir.
    Good afternoon, Chairman Cleaver, Ranking Member Stivers, 
and members of the subcommittee. I appreciate the invitation to 
provide testimony on the importance of nuclear energy, one of 
several low-carbon energy technologies that must be expanded if 
we are to deeply decarbonize our energy system.
    In particular, I will highlight why nuclear power is an 
essential element of any realistic strategy to mitigate climate 
change, and steps Congress can take to ensure that nuclear 
energy can fulfill this role.
    Last year, a report from the Intergovernmental Panel on 
Climate Change called for significant increases in nuclear 
power under all scenarios aiming to limit global warming to 1.5 
degrees C by 2050. The companies and States that have committed 
to carbon-free electricity by 2050 or sooner are finding that 
renewable energy technologies can only get them part of the way 
to their goal. There is a need for firm, dispatchable, carbon-
free electricity to complement renewables. Nuclear energy fills 
this role today and can do even more in the future.
    And since the electricity sector emits only about 40 
percent of the total carbon entering the atmosphere, effective 
decarbonization of our wider energy system must extend far 
beyond electricity production to address transportation, 
industrial, and residential sectors. Whether alone or 
integrated with renewables, nuclear energy can provide 
essential energy services such as hydrogen production as well 
as process heat for industrial needs or desalination of water.
    Today, nuclear power provides almost one-fifth of U.S. 
electricity and accounts for more than half of the nation's 
carbon-free power. The economics of today's nuclear power 
plants are favorable and improving. The average generation cost 
for U.S. nuclear plants was about 3.2 cents per kilowatt-hour 
last year, down from 4.2 cents per kilowatt-hour in 2012.
    Yet, despite this impressive economic performance, the U.S. 
fleet of nuclear plants is under severe pressure. Nuclear 
energy is contending with very low generation costs from 
natural-gas-fired plants that don't have to pay to emit carbon. 
The economics of today's plants are also compromised by Federal 
and State incentives provided to solar and wind and electricity 
markets that don't recognize the valuable attributes of nuclear 
power.
    So, if you start from the year 2013, nine nuclear power 
reactors will have closed by the end of this year, eight more 
will have announced plants to close by 2025, and several more 
are under threat. When these plants shut down, they will not 
reopen, and their outputs will predominantly be replaced by 
natural gas with resulting increased emissions.
    Loss of nuclear resources is a major setback if we are 
committed to reducing carbon emissions. To enable nuclear 
energy's role in meeting our climate goals, the U.S. must take 
steps to preserve the domestic fleet and develop and deploy new 
nuclear technologies in competing global markets.
    First, we must preserve the existing fleet of nuclear 
plants. Some States have enacted mechanisms to recognize the 
zero-carbon attributes of nuclear energy and avoid plant 
closures, but State actions, while important, are insufficient. 
A Federal solution is needed--options including production or 
investment tax credits and equal treatment for all clean-energy 
resources, as through a clean-energy standard, or replacement 
of renewable energy mandates with clean-energy mandates or some 
form of price on carbon emissions.
    Second, we must develop and deploy the next generation of 
nuclear technologies. Private companies, including many small 
startups backed by venture capital, lead the development and 
commercialization of these designs. We must learn from the 
success we have had in promoting the growth of wind and solar, 
and enact policies that give investors confidence that there 
will be a market for new nuclear technologies.
    Innovation must extend beyond the technology developers to 
the regulators who are tasked with assessing new designs. The 
successful deployment of these improved designs will require 
the Nuclear Regulatory Commission to succeed in its efforts to 
modernize how they assess new nuclear technologies.
    And, finally, the U.S. must compete effectively in the 
large and growing nuclear energy markets overseas. Commercial 
success in overseas markets is necessary to a healthy U.S. 
nuclear supply chain, and enables U.S. global leadership on 
nuclear safety, security, and nonproliferation. Yet, today, 
two-thirds of the nuclear plants under construction around the 
world are being led by Russia or China, which don't share U.S. 
standards.
    The U.S. must recognize the new competitive landscape posed 
by China and Russia, and remedy U.S. policies that are imposing 
competitive disadvantages on U.S. nuclear energy suppliers.
    Notably for this committee, the U.S. must enable export 
financing to support U.S. nuclear companies. Export credit 
agency support is a bid requirement for virtually every nuclear 
energy tender. U.S. competitiveness will be undermined if the 
charter of the Export-Import Bank is allowed to expire at the 
end of this month. To be competitive against Russian and 
Chinese nuclear exports, the U.S. must have a competitive and 
durable Ex-Im Bank.
    In conclusion, thank you for the opportunity to testify. 
Nuclear energy can play a significant role in meeting our 
climate goals. We look forward to working with the committee to 
ensure that nuclear energy remains a major contributor to the 
nation's and the world's clean-energy portfolio.
    [The prepared statement of Mr. Kotek can be found on page 
76 of the appendix.]
    Chairman Cleaver. Thank you very much.
    Mr. Powell, you now have 5 minutes. Thank you.

   STATEMENT OF RICHARD POWELL, EXECUTIVE DIRECTOR, CLEARPATH

    Mr. Powell. Thank you, Chairman Cleaver, and Chairwoman 
Waters. And thank you, Ranking Members Stivers and McHenry and 
members of the committee.
    My name is Rich Powell. I lead ClearPath, a nonprofit 
advancing conservative policies that accelerate clean energy 
globally. We advocate markets over mandates and innovation over 
regulation. An important note: We receive zero funding from 
industry.
    Given this committee's role in America's climate policy, I 
will cover a few topics: first, the reality of climate change 
and its pressure on our economy; second, climate solutions in 
innovation investments; third, our global realities and 
challenges; fourth, the role America can play internationally; 
and fifth and finally, how you can build on last Congress' 
bipartisan clean-energy record.
    First, the elephant in the room: Climate change is real. 
Industrial activity around the globe is the dominant 
contributor. And the challenge it poses to society merits 
significant action at every level of government and the private 
sector. It is too important to be a partisan punching bag.
    For example, the Federal Government insures mortgages 
through Fannie Mae, Freddie Mac, and the FHA/VA mortgage 
lending programs, which cover over 60 percent of the 
outstanding residential mortgage debt in the U.S., totaling 
$6.7 trillion. The risks posed to government-sponsored 
enterprises by climate change are currently unquantified, 
unmanaged, and increasing as hurricanes and severe weather 
events increase, creating a potential taxpayer time bomb on top 
of an already unsustainable National Flood Insurance Program 
that is over $20 billion in debt.
    So, where to start? Climate change is a huge issue, the 
United States has a limited budget, and any solution must be 
global. At ClearPath, we believe the key to the climate 
challenge is to make it easy for developing countries to choose 
clean technologies over traditional emitting technologies. This 
means the solutions we invest in here must focus on making 
clean energy cheaper, better-performing, and easier to build 
and buy globally. In short, we must invest in innovation.
    Unfortunately, despite some bright spots in ever-cheaper 
intermittent renewables, existing technologies are not up to 
this task. The International Energy Agency finds that over the 
past several decades, global clean development is only just 
keeping up with economic development. Clean is not gaining 
ground.
    Now, how to make America lead the world in offering better, 
cheaper alternatives to developing nations? This is the reality 
of energy innovation: Taxpayers supported all new energy 
sources in recent decades. Going forward, government should 
neither command and control a solution nor do nothing and hope. 
Government should support a wide portfolio of clean innovations 
and ramp down support as technologies mature.
    These investments must be made towards strong objectives. 
When the Department of Energy has clear goals based on market-
relevant cost targets along with strong accountability and 
steady investment, it produces breakthroughs. The work that 
enabled the shale gas revolution is a prime example.
    As we refine these technologies at home, we must prepare 
strong support for exports to the developing world. Here, 
America is at greatest risk of falling behind. China and Russia 
view the spread of their technology as a means to expand their 
power, and use their state-owned enterprises to these ends.
    China is financing $36 billion in inefficient coal plants 
in at least 27 countries. Russia has overtaken the U.S. in 
nuclear exports, with Rosatom developing 33 reactors in 
countries like India. China is close behind, increasing nuclear 
exports with questionable safeguards, under the belief that 
more nuclear proliferation will make the world more peaceful 
while supporting their economic goals.
    In other words, an American vacuum on clean-energy exports 
risks severe climate change while also threatening our national 
security and geopolitical position.
    We can reverse this trend. Starting up the International 
Finance Development Corporation, or IDFC, created by the BUILD 
Act of 2018 from OPIC, is critical. We must ensure that 
previous bans on nuclear financing at OPIC do not carry over to 
IDFC. Similarly, we should work to lift such bans at 
multilateral organizations where we lead, like the World Bank. 
As well, continued authorization of the Import-Export Bank and 
its strategic application in clean-energy exports is vital.
    We should also expand bilateral and multilateral 
engagement. We have been pleased to see this Administration's 
renewed leadership in the Clean Energy Ministerial, including 
our new initiatives on carbon capture and nuclear.
    Finally, how do we build on your strong bipartisan record 
of clean innovation? In 2018, the Fiscal Year 2018 and 2019 
appropriations bills invested historic sums in clean-energy 
R&D, and Congress provided new incentives in innovation 
authorizing programs that rivaled our last major energy 
legislation when Mr. Karsner served in the Bush Administration. 
ClearPath applauded your critical investments in advanced 
nuclear carbon capture, energy storage, and advanced 
renewables.
    Going forward, given the scale of the climate challenge, we 
must greatly increase ambition. Let's not shy away from clean-
energy moonshots. Let's create stronger incentives to 
commercialize and deploy globally. And let's remove regulatory 
barriers to rapid scale.
    Bipartisan cooperation on climate change is essential under 
divided government, and is attainable. Indeed, it is the only 
chance we have to play a significant role in the global 
solution.
    Thank you again for this opportunity, and I look forward to 
the discussion.
    [The prepared statement of Mr. Powell can be found on page 
84 of the appendix.]
    Chairman Cleaver. Thank you, Mr. Powell.
    And I thank all of you for your testimony.
    I am going to begin by giving myself 5 minutes for 
questions.
    Let me begin by just saying that I think Mr. McHenry and 
I--other than Chairwoman Waters--have been on this committee 
the longest, a decade and a half, and we have had to deal with 
the issues of flooding repeatedly and the flood bill. 
Chairwoman Waters has probably tripled whatever time we put in 
on it, dealing with the National Flood Insurance Program 
(NFIP).
    According to Marsh, which is one of our largest insurers, 
they are saying that they have paid out in excess of $20 
billion in claims over the last 20 years. In my State of 
Missouri, just for the first 5 months of the year, we have had 
262 flash floods. And it has been decimating for our farm 
community.
    What I am interested in hearing, Mr. Burke, is, what does 
climate change have to say to Midwesterners who previously 
thought, you know, we have a tornado every now and then, but we 
are not going to have the other big events, but we are having 
them?
    Mr. Burke. Thanks. That is right, Mr. Chairman. Climate 
change tells us pretty clearly that we should expect more 
extreme precipitation. So, the type of flooding that you are 
talking about will become more likely in the future, and more 
frequent. So, I think there is clear evidence from climate 
science there.
    On the coasts, what we know from tropical cyclones or 
hurricanes is, we don't have clear evidence that there will be 
more or less of them, but we know they will be more powerful 
and they will move more slowly. And that will also likely 
dramatically increase the risk of coastal flooding.
    So I think flooding--you are hitting the nail on the head 
here. This is a growing concern.
    Chairman Cleaver. What region do you think will be impacted 
the most economically if the trends continue and if this issue 
is not addressed?
    Mr. Burke. Flooding is only one part of the economic impact 
that we would be worried about from climate change. I think, 
overall, if you look within the U.S., the southern part of the 
U.S., which is already warmer, should suffer the largest 
impacts.
    The published estimates suggest that the impacts in the 
southern U.S. will be 3 to 4 times larger than that in the 
northern U.S., and that is mainly just a function of the South 
already being hot.
    Chairman Cleaver. We always have difficulty with flood 
insurance in this committee. None of us are going to jump up 
and down to hope we have to deal with that every single year.
    But, this year, the Commodity Futures Trading Commission 
(CFTC) established a Climate-Related Market Risk Subcommittee, 
under the Market Risk Advisory Committee, to examine financial 
risk related to climate change. And without objection, I would 
like to have their report included in the record.
    One of the CFTC Commissioners compared the financial risks 
from climate change to those posed by the mortgage crisis that 
triggered the 2008 economic collapse in this country.
    So I am interested in knowing if any of you or all of you 
agree with that assessment?
    Mr. Karsner. Yes.
    Ms. Seiger. Mr. Chairman, I agree.
    Mr. Burke. Yes.
    Chairman Cleaver. General?
    General Cheney. Yes.
    Mr. Kotek. Yes.
    Chairman Cleaver. Everybody? This is good.
    Mr. Karsner. Or bad, depending on how you look at it.
    Chairman Cleaver. Well, yes. I don't mean it is good for 
the country, and we will get tourists. I am just saying it is 
good that we are coming together. About 97 percent of 
scientists would agree with the assessment you just gave.
    I am going to yield now to the ranking member of the 
ubcommittee, Mr. Stivers.
    Mr. Stivers. Thank you, Mr. Chairman. I appreciate it.
    And I really appreciated all of your testimony. Clearly, we 
have a lot of work to do to try to figure out how to price the 
cost of climate change into things.
    And I am going to start with Mr. Karsner.
    Our Flood Insurance Program that the chairman just talked 
about attempts to try to price risk. And your testimony spoke 
right to that, about how we can use data and things to price it 
better.
    Can you talk about how 3-D mapping and other data that is 
available today could make the Flood Insurance Program work 
better at predicting and then helping us as we figure out how 
to both adapt and mitigate and understand the cost of the 
effects of climate change?
    Mr. Karsner. Yes, sir. Thank you.
    I think flood insurance is top of the perils with immediacy 
that we have to face with a linkage to monetary and macro risk. 
And that was the uniform agreement up here.
    Of course, insurance cuts through everything. Everyone has 
insurance--for home, for business, for transportation. And what 
I have been told by the executives across the industry is that 
they cannot have, in a single year, Houston, Miami, and San 
Juan, Puerto Rico, go down in this way with bleeding balance 
sheets. So it is imperative to them to develop new tools of 
risk management, because they are operating on very old modeled 
inputs and very, I would almost call them ancient at this 
point, legacy flood maps.
    Now, it is an intransigent tug of war to get those maps 
moved because it affects people's property values, of course. 
But devoid of that sort of behavioral reality, we have plenty 
of eyes in the sky--satellites, submersibles, things that 
float, things that fly--innumerable ways to capture new data 
with great precision that is far better at predictive analytics 
and visualization of what is happening in our floodplains.
    And they reveal something entirely different. It is not 
only that nature is dynamic and adaptive and evolves, so the 
maps would be the same even if we were using the same 
methodology, but with the level of computing that we currently 
have available, what we know about the inaccuracies is 
troublesome.
    You have some insurers who have to rebuild the same 
suburban home in a Meyerland suburb of Houston 3 times within a 
decade, a half-million-dollar home, built in the exact same 
place. Because the model will say, as a 100-year floodplain, if 
it floods 3 times, it will be 300 years until the next event. 
Models actually say this. And our insurance industry actually 
acts on this.
    So, having a much more dynamic, iterative relationship with 
the available high-performance computing capacity. Machine-
learning and modeling is something that we are intensively 
working on, and it is something that the insurance agencies and 
the finance industry, for gauging their property asset 
valuations, are absorbing.
    Mr. Stivers. Great.
    Mr. Karsner. And we would be happy to work with--
    Mr. Stivers. Thank you.
    Mr. Karsner. --the Congress on this.
    Mr. Stivers. And at the risk of embarrassing myself and 
you, I will ask you, in a 3-D environment, where does water 
always flow?
    Mr. Karsner. Downhill.
    Mr. Stivers. To the lowest point. So, 3-D maps are very 
important in making our Flood Insurance Program more effective, 
and I think it is something that we have to transition to very, 
very fast.
    Mr. Powell, you talked a lot about our renewable energy and 
the things we have already done and the strides we have taken. 
Can you talk a little bit about what battery technology can 
mean, and why the Federal Government should invest--although it 
is outside the jurisdiction of this committee--in battery 
storage technology and what it can mean to renewable energy and 
its ability to actually be more impactful in our power grid?
    Mr. Powell. Sure. First, let me thank you for your 
leadership in battery storage innovation, with your 
cosponsorship of the BEST Act as well as the USE IT Act on 
advanced carbon innovation technology.
    Storage is essential to smooth out the intermittency of 
existing intermittent wind and solar technologies. And, 
frankly, it is important for other technologies as well. For a 
baseload technology like nuclear energy that is actually better 
if it runs all the time, it may be nice to have storage 
attached to that to add flexibility and improve the economics 
of that technology.
    Today, we have a very competitive technology in lithium ion 
batteries for short-duration energy storage, but where we 
struggle is for longer-duration storage, whether that is from 
one day to another or one week to another or eventually one 
season to another.
    If we think about a grid that is going to have a very high 
percentage of renewables, 80 percent or more, that would 
require batteries that might only charge and discharge one time 
a year, and that would be technologies that we really haven't 
started to scratch the surface of yet.
    Mr. Stivers. Great.
    And one follow-up question for you, Mr. Powell. A lot of 
people talk about reducing our carbon footprint. I totally 
agree. Another piece that people don't talk enough about is 
negative-emissions technology. Negative-emissions technology 
can be plants, but there are things you could put on plants to 
make them more effectively pull carbon out of the environment 
and put oxygen into the environment. How important is that 
toward a balance?
    Mr. Powell. It is extremely important. I think in the 
future, we will think about not zero emissions, but net zero 
emissions.
    Mr. Stivers. I think that is a really important point out 
of this hearing, and it is something not enough people talk 
about. It is about a balance; it is about a net. It is not 
about just going to zero.
    Mr. Powell. Yes.
    Mr. Stivers. I think that is a really important point that 
I hope we all remember out of this hearing. Thank you very 
much.
    Mr. Powell. The USE IT legislation establishes an XPRIZE 
for that technology, which is why it is a very important piece 
of legislation.
    Mr. Stivers. Thank you.
    Thank you, Mr. Chairman. I yield back.
    Chairman Cleaver. Thank you.
    The Chair will now recognize the chairwoman of the full 
Financial Services Committee, Chairwoman Maxine Waters, the 
gentlewoman from California.
    Chairwoman Waters. Thank you very much, Mr. Chairman. And I 
am very pleased that you are holding this hearing. The issue of 
climate change must be addressed in the Congress of the United 
States, and we must move forward in ways that we have talked 
about but we have not yet accomplished. But I am very pleased 
about this hearing today.
    I don't have a lot of questions to ask. Obviously, the 
macroeconomic impacts are certainly something that we should 
all be concerned about, because we can see it unveiling right 
before our very eyes.
    I might just ask the panel if they can help me a little 
bit, as I am focused on the Bahamas and Grand Bahama and Abaco, 
and Hurricane Dorian that just lingered over Grand Bahama and 
the destruction that has caused--over 70,000 people have been 
impacted by it, and over 50 have been found dead at this point.
    And, of course, I am just heartbroken about what is 
happening in the Amazon. I was raised in school learning about 
the Amazon and its importance to the world. And I am seeing 
this destruction, and I am wondering whether or not we are 
effectively understanding what we can do about all of this.
    So anyone who just wants to help me feel a little bit 
better than I am feeling based on what I have been witnessing 
in the last few days here, please share your thoughts with me.
    General Cheney. Chairwoman Waters, thank you for coming and 
joining the testimony we have today.
    My experience on the hurricane side of the house is 
extensive, not the least of which is at Parris Island, South 
Carolina, which had to evacuate for the second time in 2 years 
because of Dorian in the past couple of weeks. And then, of 
course, Dorian moved north. I think North Carolina got spared, 
unlike with Florence last year, what that did to Camp Lejeune, 
North Carolina. It decimated that base. And these are just 
going to occur on a much more frequent basis.
    So I don't think that will make you feel any better about 
our response to it, other than to raise the alarm that it is 
impacting our national security and our bases and stations 
immensely, and that we really do have to get on board and stop 
this.
    Chairwoman Waters. Thank you.
    Anyone else?
    Mr. Burke. Thank you, Madam Chairwoman.
    Yes, two things to add about hurricanes: It is hard to stop 
a hurricane; and what we know from climate science is they are 
going to get bigger and they are going to get slower. So, 
Dorian was no surprise, in that sense. It was big and it was 
really slow, as you said. It sat there for a while, and dumped 
a lot of rain. And we expect that to happen more often.
    So the two things we can do to make that not happen are we 
can mitigate, we can reduce the amount of future climate change 
that we are going to see, that we want to see; or we can adapt. 
And we should probably do some of both.
    In terms of adaptation, we should think about how we can 
help these communities both defend against future hurricanes 
and then have the safety nets that allow us to rapidly respond. 
And I think we have seen our ability to rapidly respond in the 
Caribbean. It is not great and could be dramatically improved.
    Chairwoman Waters. We talk a lot about fossil fuel. Would 
you consider that high on the list of causes of climate change, 
the abundance of fossil-fuel use in our country and in the 
world?
    Mr. Burke. It is the cause, yes. The burning of fossil 
fuels and the emission of greenhouse gases is exactly the 
cause. Yes, ma'am.
    Chairwoman Waters. And we talk a lot about how climate 
change is manmade, for the most part. What other kinds of 
things should we be doing?
    I know you know, and this probably seems redundant to a lot 
of folks, but I think we need to ask it over and over again: 
What kind of things should we be doing, besides the elimination 
of fossil fuels?
    Mr. Burke. That would be a good start, and I think there 
has been a lot of good discussion about how we might go about 
that.
    Adaptation is the other thing we need to do. Even if we 
rapidly decarbonize, we will still expect some warming, some 
climate change, and this will make many of these impacts you 
are worried about worse. So, we need to figure out how to 
adapt.
    And I think there is a huge role for government in helping 
communities adapt and understanding what investments can help 
us adapt. Reforming the Flood Insurance Program would be a good 
place to start. But governmental investment in communities' 
ability to adapt to the climate change that we will see.
    Chairwoman Waters. Will there be an elimination of the 
insurance industry because they cannot afford to calculate the 
risk anymore, and offer insurance and premiums that would help 
to renovate and pay for the damage?
    Mr. Karsner. If we fail to act, the insurance industry 
certainly is in peril. But I don't see that the U.S. economy 
could do very well with a significant shock to the insurance 
industry. So the goal should be to enhance their capacities for 
risk management and set rules forward that allow them to 
integrate state-of-the-art technology and predictability and 
new insurance product innovation.
    Chairwoman Waters. Thank you, Mr. Chairman. I yield back.
    Chairman Cleaver. The gentlelady yields back.
    The Chair now recognizes the ranking member of the Full 
Committee, Mr. McHenry, for 5 minutes.
    Mr. McHenry. Mr. Powell, I want to continue with what Mr. 
Stivers talked about, the idea that, instead of just having 
something that is zero emissions, that we have technology and 
innovation that could be commercialized, that we are on the 
cusp of it, in order to not just have zero emissions but to 
take CO2 out of the atmosphere. Walk us through that.
    Mr. Powell. Absolutely. This is a very important concept. 
This is what matters in the climate math. The use or disuse of 
fossils fuels doesn't matter in the climate math. Net-zero 
emissions is what matters in the climate math.
    So we could continue to use fossil fuels, just so long as 
we captured those emissions at that point and did something 
else with them--put them underground, use them to make a 
product. Or we could continue to use fossil fuels, allow some 
of those to go into the atmosphere, as long as we were 
capturing an equivalent amount of carbon dioxide somewhere 
else. And, in many cases, that might actually be the most 
economic thing to do, whether--
    Mr. McHenry. So what can we do to make that happen? Because 
that seems to be better than adaptation, that we need to just 
basically walk around in rain boots all the time and batten 
down the hatches for worse hurricanes, more frequent 
hurricanes.
    Mr. Powell. There are a couple of major classes of this. 
The first, as I think as Ranking Member Stivers mentioned, is 
plant more trees and use natural-based solutions to pull more 
CO2 out of the atmosphere.
    You can also do things with mechanical solutions. There are 
a number of companies--one in Europe, two in the United States, 
and one in Canada--that are using actual mechanical, sort of, 
large machines to pull it out of the atmosphere.
    Occidental Petroleum has just announced that they are going 
to build one of these machines at very large scale that will 
eventually sequester millions of tons of CO2 in the Permian 
Basin. So they are going to be pulling CO2--it is a carbon 
engineering machine, again, from Occidental Petroleum. They are 
going to be pulling CO2 out of the atmosphere, they are going 
to be injecting it underground, and actually using it to spur 
enhanced oil recovery, so that the oil produced from those 
wells in the Permian may well be net-negative barrels of oil or 
even--so they will be fully clean barrels of oil.
    Mr. McHenry. So, focus on R&D for us to have the public 
sector working with the private sector to ensure we have next-
generation technology to directionally change the course of our 
emissions?
    Mr. Powell. Absolutely. And bills like the USE IT Act, 
which, again, does an XPRIZE for this negative-emissions 
technology; bills like the LEADING Act, which is, again, a 
bipartisan bill that focuses on zero-emission natural-gas-fired 
power plants; or bills like the Veasey-McKinley Fossil Energy 
R&D Act, which does the same for coal technology--all would use 
the resources of the Department of Energy and the National Labs 
complex, and help really bring down the cost of these--
    Mr. McHenry. Innovation.
    Mr. Powell. --technologies. Innovation.
    Mr. Karsner. If I may, sir--
    Mr. McHenry. So, Mr. Kotek--
    Mr. Karsner. Sir--
    Mr. McHenry. I will get to you. Don't worry.
    Mr. Kotek, so, nuclear, how many nuclear power plants do we 
have in the United States?
    Mr. Kotek. We have 97 operating today, although, 
unfortunately--
    Mr. McHenry. Okay. So what does that mean in terms of 
production?
    Mr. Kotek. A little less than 20 percent of U.S. 
generation.
    Mr. McHenry. A little less. So, in terms of carbon 
emissions, just for the record?
    Mr. Kotek. Yes, sir. More than half of the U.S. carbon-free 
generation comes from nuclear.
    Mr. McHenry. So, 20 percent/more than half.
    Mr. Kotek. Yes.
    Mr. McHenry. All right. So we take you offline, we 
implement the Green New Deal, take nuclear out of the mix. How 
do we replace your generation?
    Mr. Kotek. Well, what would happen today is you would build 
a bunch of gas, by and large.
    Mr. McHenry. So, we would follow the Germans and stop 
nuclear power plants, and then go to more CO2 emissions as a 
result of it.
    Mr. Kotek. Certainly, the German experience has not led to 
the emissions-reduction promise.
    Mr. McHenry. Okay. So more emissions, more expensive power. 
Okay. I just wanted to get that for the record.
    Mr. Burke, you talked about data. So, let's talk data. Is 
the Federal Government doing a good job when it comes to giving 
you the data you need, making sure that we have open-source 
data for you to use and analyze? Are we doing a good job or a 
bad job? What kind of grade would you give us?
    Mr. Burke. On economic data, doing a great job. A lot of 
data we can use. The data is pretty up to date--
    Mr. McHenry. But I mean risk data. For instance, where is 
the risk? We have the National Flood Insurance Program. Where 
are these properties? What do they look like? What is their 
elevation? Go through that basic set of data.
    We have Fannie Mae and Freddie Mac, the largest holders of 
mortgages in the world. Where are those properties? Right?
    So, would additional data like that be useful for your 
ability to analyze the risk?
    Mr. Burke. Absolutely. Yes.
    Mr. McHenry. Is that something, as policymakers, regardless 
of our view on climate or what to do about it, would that be 
useful data?
    Mr. Burke. Absolutely.
    Mr. McHenry. Okay.
    Mr. Karsner, in your experience, is that, likewise, 
something that we need to be pushing for, is greater data, 
greater transparency of that data, so that we could have better 
assessments of our risk--taxpayer risk?
    Mr. Karsner. Absolutely indispensable, sir.
    Mr. McHenry. Okay.
    Thank you all. And thank you all for letting me cover quite 
a broad base here.
    And thanks, Mr. Powell, for leaning in on the innovation. I 
think that is the key for us to conquer this issue.
    Mr. Cleaver. Thank you.
    The gentleman from Colorado, Mr. Perlmutter, is recognized 
for 5 minutes.
    Mr. Perlmutter. Thanks, Mr. Chairman.
    On the 9/11 thing--kind of, this is environmental and 9/
11--I remember we were at the construction of what was the 
Freedom Tower, also known as One World Trade Center. And I was 
thinking to myself as the construction was underway--they had 
just started it--I said, I wonder what sea-level rise might do 
to this construction project and the island of Manhattan. That 
is just a thought. But it really rang true.
    And, Mr. Chairman, I was at the Broncos versus Giants game 
the night before, on Monday Night Football, September 10, 2001. 
And I certainly can remember that, and then the next morning.
    Mr. Karsner, it is good to see you, sir. And I just want to 
thank you for your service to the country, and for working with 
me on a couple of items involving the National Renewable Energy 
Lab. Thank you for that.
    And then you also helped me--and Mr. McHenry just reminded 
me of this--we had a bill called the GREEN Act, you may recall, 
that dealt with a lot of construction, mortgage, renewable 
energy, and energy-efficiency techniques. And it actually 
passed out of the House a couple of times to the Senate. A 
number of the proposals in that bill were accepted, in effect, 
by the Bush Administration and also by the Obama Administration 
to really try to reduce carbon in the whole construction/real 
estate sphere. So, I want to thank you for that.
    I wanted to ask you a question about how you think 
policymakers can accelerate the development of something you 
call the ``Earth Dashboard.'' And can you explain what the heck 
you mean by that?
    Mr. Karsner. Yes, sir. And it is good to see you too, 
Congressman. Of course, your district in Colorado is one of the 
great epicenters of innovation, precisely working on the type 
of R&D that we just heard about.
    An Earth Dashboard is moving from the idea that I, as a 
climate negotiator, would have people talk about the air bars 
on climate-risk modeling 10 years ago, 20 years ago, even 5 
years ago, but the reality, with the amount of big data meeting 
cloud, high-performance computing, meeting sensors in the 
internet of things, means that we are collecting such an 
exponent at a high volume of data that we can move away from 
long-term projection modeling and into a real-time, current 
performance assessment of how the Earth is operating.
    Now, that is a mind-boggling concept, and something I 
couldn't have thought about 10 years ago, but we didn't have 
this level of computing 10 years ago. But today, we have the 
capacity to crunch data for enumerable things--for my daughter 
accidentally holding the photo thing down and having it go to 
five different data centers across the country to suck up 
electrons.
    But if we actually direct and harness that computing for 
the sensors and data that measure, quantify, monitor, and 
ultimately manage our ecosystem services, then not only will we 
have technological solutions for sequestration, we can begin to 
value ecosystem services for sequestration. We can understand 
with great precision why a mahogany tree breathes at 20 times 
the rate, and absorbs 20 times the carbon than a fir tree in 
the same forest.
    So we need to bring that thinking into--
    Mr. Perlmutter. In Colorado, we are more likely to have fir 
than mahogany. That I would say. So, no, I appreciate that.
    One of the things that climate scientists in Colorado--we 
have seen--and the chairwoman talked about it--is that the 
weather systems just sort of come and sit. It might be a dry 
system, or it might be a wet system like we have seen in the 
Midwest most of this summer; a hurricane languishes, sort of 
sitting out there in the Pacific.
    So, General, where do you see the real trouble spots coming 
unless we really get ahead of this climate change and these 
kinds of intense, long-lasting climate episodes, instances?
    General Cheney. Congressman, on the military side, our 
number-one poster child is the Norfolk Naval Base. It is 
literally sinking, and then seawater is coming up, and it is 
going underwater. They know it, they understand it, and they 
are working on it. In their case, it is adaptation, as the 
doctor pointed out. They are into heavy adaptation here. Long-
term mitigation to stop climate change is what the solution is, 
but that ship has already left the port, as far as they are 
concerned, because they are going underwater.
    All of our bases and stations on the coast are threatened. 
I mentioned that Parris Island floods routinely now. They had 
to evacuate for the last hurricane. We look at Tyndall Air 
Force Base, which is no more. So, all of those from the 
hurricane perspective.
    But it is not just sea-level rise; it is also heat. Many of 
our bases and stations--I will give an example. Fort Bragg in 
North Carolina has to shut down more often because of black-
flag conditions.
    Mr. Perlmutter. My time has expired, and I hope somebody 
else asks you the same question so that you can discuss those 
other things. Thank you.
    And thanks to the panel.
    Mr. Cleaver. I thank the gentleman.
    The gentleman from Oklahoma, Mr. Lucas, is now recognized 
for 5 minutes.
    Mr. Lucas. Thank you, Mr. Chairman.
    I think most of my colleagues are aware that in the real 
world, I am a farmer by trade. And in my farming program with 
my wife in rural western Oklahoma, I see the weather patterns 
changing. It is obvious; it is going on.
    But I am also aware that in my part of the world, where 
weather records date back to the land run in 1892, that we are 
kind of in a challenging place on the east side of the Rockies 
in the Southern Plains. We had a drought from the 1890s--the 
infamous drought through the 1930s, the drought of the 1950s, 
and in the first 4 years of this decade, maybe the most vicious 
drought of all.
    So I am very sensitive about not just present weather 
patterns changing, but just the nature of the part of the world 
I live in. That brings me around to the thought about the 
progress we have made in this country trying to address clean-
energy technologies and how we fit in with the rest of the 
planet in addressing this issue.
    I want to turn to you, Mr. Powell. Could you speak for a 
moment on how the United States can ensure that our clean-
energy technologies are competitive in world markets and how we 
can help the rest of the world address their problems too? We 
have competitors, like the Chinese, out there on this matter. 
Can you touch on that for a moment?
    Mr. Powell. Absolutely. And, first, thank you for your 
leadership on the Science Committee. Thank you for your 
sponsorship of the LEADING Act on natural gas CCS (carbon 
capture and storage) technologies.
    This is the key point in climate: This is a global problem. 
The atmosphere does not care whether a molecule of CO2 is 
emitted here in the United States or around the rest of the 
world. We are now only 15 percent of global CO2 emissions. So, 
historical responsibility aside, the climate math is simple. 
Unless we get the rest of the world to develop on a very 
different course and emit far less in rapidly developing 
countries, the problem of climate change cannot be solved.
    So the key is, how do we make technologies that are very 
competitive for a rapidly developing country--a Nigeria, an 
Indonesia--someone who is first and foremost focused on 
electrifying their populations and spurring economic growth to 
meet all kinds of different needs, and secondarily perhaps 
thinking about clean energy? How do we make that an easy choice 
for them?
    The reality is, today, they are very often looking at an 
older-technology, unmitigated coal plant, often financed and 
offered turnkey by the Chinese, often as part of their Belt and 
Road Initiative. And until we have a really compelling 
substitute for that, something that can be built on a small 
amount of land in a few months at relatively reasonable costs 
using fuel that is available around the world, it is going to 
be very difficult to change that trajectory. And that is the 
bogey that we need to be shooting for.
    Mr. Lucas. Well, along that very line, as you have noted 
correctly, the growing demand for fossil fuels around the 
world, let's talk more specifically about how we can work with 
the private sector to utilize and advance the things that the 
government has already started here in the United States. We 
have spent a lot of money on research.
    Mr. Powell. Indeed, we have.
    There is no better explanation or no better example of that 
than the shale gas revolution. In the United States, in the 
1980s and 1990s, the Office of Fossil Energy at the Department 
of Energy (DOE) spent somewhere around half-a-billion dollars 
on basic and applied research. It was a public-private 
partnership with Mitchell Energy--George Mitchell, a great 
pioneer in energy technology in Texas.
    They unlocked the shale gas revolution--hydraulic 
fracturing, horizontal drilling, 3-D imaging, diamond-headed 
drill bits, combined-cycle natural gas turbines. And that is a 
world-beating technology. If you didn't care about CO2 
emissions, it is perfect, right? It is very, very cheap and 
quick to build. It is extremely flexible. We have a virtually 
unlimited supply of natural gas in the United States. And it is 
cheaper than most of the alternatives.
    And so, there has been sort of a market-based 
decarbonization. We are down one-third in power-sector 
emissions. Two-thirds of that is from natural gas.
    Mr. Lucas. Let me conclude by noting that I have spent a 
good part of my career in Congress trying to mitigate the 
effects of weather, whether it is making sure that crop 
insurance works in an effective way so that producers have the 
ability to sustain their productive capacity, or things like 
the Upstream Flood Control Dam Program at USDA, where, in 
addition to the big flood control projects done by the Army 
Corps of Engineers, we attempt to use earthen dams, 
interlocking, to try and slow, to mitigate the effect of these 
sudden downpours.
    But it requires more than just that. I acknowledge that. 
And that is why I asked my questions about the research that we 
do at the Department of Energy, and how we make sure the rest 
of the world can access that, and that we have the ability to 
sell and work with and service those products.
    With that, Mr. Chairman, thank you very much for the 
hearing. And in my part of Oklahoma, rarely do we pray for dry 
weather, but I am told that occurs in some other parts of the 
country.
    Mr. Cleaver. Yes.
    Mr. Lucas. It is a most amazing concept.
    Mr. Cleaver. Yes, we do.
    Mr. Lucas. Thank you, Mr. Chairman.
    Mr. Cleaver. Absolutely.
    The gentleman from Washington, Mr. Heck, is now recognized 
for 5 minutes.
    Mr. Heck. Thank you, Mr. Chairman. Thank you for holding 
this hearing.
    And thank you to all of the panelists for your excellent 
presentations this afternoon. Mr. Kotek, Mr. Powell, by the 
way, thanks very much for calling out the Export-Import Bank, 
another issue on which I am very involved.
    I have the honor and privilege to serve on the House 
Permanent Select Committee on Intelligence, so I think about 
this issue a lot through the filter of national security.
    I would like to begin by asking each of you, if at all 
possible in a yes/no-type response, just because I don't want 
to assume anything, if you think it is worthwhile to dedicate 
time and resources to collecting and analyzing data as it 
relates to the national security implications of climate 
change. And do you think, to the degree possible, that ought to 
be coordinated across the various branches of the Armed 
Services?
    Mr. Burke?
    Mr. Burke. Absolutely.
    General Cheney. Of course, it ought to be.
    Ms. Eady. Agreed.
    Mr. Karsner. Yes. Knowledge is power.
    Ms. Seiger. Yes, Congressman.
    Mr. Kotek. Yes, sir.
    Mr. Powell. Yes.
    Mr. Heck. 7-. Thank you for your implicit endorsement of my 
bill, H.R. 3110, the Climate Security Intelligence Act, which 
would set up a climate security intelligence center at the 
Office of the Director of National Intelligence to do exactly 
what you just said you support. I promise I will not use your 
name in explicit endorsement without talking to you first.
    And the good news is that a variation on H.R. 3110 was 
included in the Intelligence Authorization Act, which passed 
the House by a large, bipartisan majority.
    General, as I want to plumb a little bit more the national 
security thing, I do want to pick up, and had intended to do so 
even before he asked this question, on the issue of where our 
vulnerabilities are, especially with respect to military 
installations.
    We have those that have already been damaged--Tyndall, 
Offutt, Lejeune, Bragg. You mentioned and added to that any 
seaport that is subject to sea rise. I would ask you to take 
that next step and identify, if you could, where you are 
particularly concerned about vulnerability, whether it is with 
respect to sea rise or weather damage or shortage of water, 
which I understand is a potentially significant compromising 
factor for some bases or camps that don't have an adequate 
water supply.
    Where else would you cite, sir?
    General Cheney. Thanks for the question.
    When you look at Alaska, we have a NORAD base that is 
sinking through the permafrost, I mean, literally sinking. It 
has to be moved. That's a dramatic impact on our national 
security.
    We have a Marine brigade's worth of equipment on Diego 
Garcia in the Indian Ocean. Diego Garcia will go underwater. We 
will have to move that brigade's worth of equipment somewhere.
    By the way, this is all on the ASP's website. We have it 
listed base by base, not just in the continental United States 
but worldwide.
    I mentioned our bases and stations in the United States. 
Camp Pendleton in California routinely would have fires--I have 
been stationed there for many, many years--but not like the 
last 2 years' worth. And, of course, you all on the West Coast 
are very familiar with the fires that are occurring now fairly 
routinely, which are impacting our bases and stations. And, oh, 
by the way, we are deploying military members to fight these 
forest fires as well. So, it is a dual problem for them.
    The sad part about all this, Congressman, is when you look 
at the documents coming out of the White House and the 
Pentagon--the National Security Strategy, the National Defense 
Strategy, and the National Military Strategy--not a single one 
of them mentions the two words, ``climate change.'' They did in 
the past, but they don't anymore.
    And I think the role of Congress in this can be to, either 
through the NDAA or other legislation, tell them that they have 
to consider this as the critical threat that it is to our--
    Mr. Heck. H.R. 3110.
    Let me ask the parallel question as it relates to 
geographic spots on the globe where you might be particularly 
concerned about increased instability.
    General Cheney. I could spend an hour on this, but I will 
try to put it down to a minute.
    Mr. Heck. I have 40 seconds--
    General Cheney. Yes.
    Mr. Heck. --and another point I want to make.
    General Cheney. You can start with sub-Saharan Africa 
where, as the climate changes because the heat is increasing, 
they predict it is probably going to be up to 140-plus degrees 
Fahrenheit in a couple of years. People can't live there. You 
are going to have millions--
    Mr. Heck. Would that be your number one, General?
    General Cheney. No. I think number one would probably be 
Southeast Asia, with the sea-level rise in Bangladesh. We are 
going to have 30 million climate refugees who are going to have 
to leave because their land is being encompassed by sea-level 
rise.
    Then, you look throughout the Mideast now as it heats up 
and there is continued drought, which was a big contributor to 
the Arab Spring and what happened in Syria.
    I would say Bangladesh, number one; Middle East, number 
two; Africa, number three; and then our bases and stations here 
in the continental United States.
    Mr. Heck. Well, my time is up, but I cannot help but 
conclude, sir, by saying that the Marine Corps is very, very 
special in my family. I honor your service greatly. I thank you 
for it. Semper fi.
    General Cheney. Well, semper fi, Congressman. Thank you.
    Mr. Cleaver. The gentleman from Texas, Mr. Williams, is 
recognized for 5 minutes.
    Mr. Williams. Thank you, Mr. Chairman.
    In early August, electricity prices in Texas surpassed the 
$9,000 price cap that forced our State's grid operator to 
declare an emergency.
    A Bloomberg News article about the incident said this: 
``This week's price spikes also underscore how dependent the 
region's power grid has become on wind farms, which now make up 
about a quarter of the generation capacity in Texas. Lackluster 
breezes contributed to the higher prices.''
    This seems like one of the many flaws of rushing to 
implement green technologies when they are not an economically 
viable solution.
    So, Mr. Powell, what do you believe is the best way to 
balance implementing clean technologies without shifting this 
cost burden to hardworking Americans?
    Mr. Powell. Well, it was an interesting summer in Texas 
with some of those power prices. I do wish I was connected to 
the grid and able to capture some of those on some of those 
days. You could have made a lot of money.
    I think this is a perfect illustration of why flexibility 
is absolutely key when we think about clean-energy technology. 
We spend a lot of time on intermittent renewables, and those 
are great and the prices are coming down, but without the 
flexibility, they can occasionally help contribute to some of 
these incidents where power prices, such as in that instance, 
spiked very high.
    So if you had something paired with that that was a highly 
flexible zero-emission technology, like a grid-scale battery or 
something like the zero-emission fossil power plant that is 
being developed in Texas, the NET Power plant, that could have 
responded to that moment, kept prices down, and actually done 
it continuously with zero-emission power.
    And, going forward, this is going to become a larger and 
larger issue as we have more and more of these other 
intermittent renewables in other parts of the country.
    Mr. Williams. Okay.
    For full disclosure, all of you need to know that I am a 
capitalist, I am from Texas, I am a car dealer, and I have a 
nuclear plant in my district.
    So, I think that innovation will play a key role in 
reducing emissions. And it won't be a government mandate; it 
won't be increased regulations; and it won't be banning people 
from eating meat that will solve this issue. It will be the 
private sector and increased research and development that will 
bring these more efficient technologies to market.
    So, Mr. Powell, again, I know that there are some success 
stories of innovation that has greatly reduced emissions over 
the years, one of which occurred in Texas. And you touched on 
Mitchell Energy during Mr. Lucas's question before me, but I 
think it is really an important point that you once again 
elaborate on how good public policy allowed for Mitchell 
Energy's innovation.
    Mr. Powell. Absolutely. I agree it is worth restating. It 
was a combination of policies and a public-private partnership.
    You had a significant tax incentive, the alternative 
production credit, through the 1980s and 1990s, which was sort 
of the gold ring that he was chasing there.
    You had a public-private partnership between Mitchell 
Energy and the Office of Fossil Energy at DOE, which enabled 
lots of basic research, and applied testing in wells on a 
number of their properties and lease areas.
    And then, you also had voluntary work from the gas 
industry. The Gas Research Institute, in a voluntary way, put 
$100 million from private industry towards helping scale that 
up.
    And all of those things came together to spur that 
breakthrough.
    Mr. Williams. Okay.
    Energy independence is a national security issue, we all 
agree. As long as oil and gas are some of the most important 
global commodities, the United States cannot afford to simply 
ban all fossil fuels and sit on the sidelines.
    So, again, Mr. Powell, what do you think the effect would 
be on the economy and our global influence if we banned all 
mineral leases and oil exploration activities on public lands?
    Mr. Powell. It obviously would have a disastrous effect on 
the economy to do all of that in that very rapid way.
    And, again, we shouldn't think about any need to ban fossil 
fuels. We should be working on lowering emissions. Emissions 
are the problem, right? If you could continue using fossil 
fuels well into the future but do it with very low or no 
emissions or offset those emissions entirely with other 
technologies, why wouldn't you keep using fossil fuels into the 
future if those were the least expensive way to go forward?
    Mr. Williams. As I said, I have Comanche Peak Nuclear Plant 
in my district in Texas. And we know nuclear power accounts for 
20 percent of the power production in the United States and 
produces zero emissions. Expanding nuclear seems like a logical 
and realistic way to obtain sustainable, low-emission energy. 
However, nuclear remains heavily criticized by many Democrats, 
even as they talk about their lofty emission-reduction goals.
    So, Mr. Kotek, do you think it is possible to achieve a 
goal of zero emissions without the use of nuclear power?
    Mr. Kotek. When you look at the system today, you need what 
nuclear delivers. You need flexible, firm, zero-emission 
generation. Right now, nuclear is far and away the leading 
source.
    So what we are advocating is developing next-generation 
nuclear systems that can address some of the challenges, 
particularly around cost, and ensure that nuclear is available 
to complement the other technologies we have heard about today.
    Mr. Williams. Okay.
    Thank you all for being here today, and thank you for 
calling this hearing, Mr. Chairman. I yield back.
    Mr. Cleaver. Thank you.
    The gentleman from Guam, Mr. San Nicolas, who is also the 
Vice Chair of the Full Committee, is recognized for 5 minutes.
    Mr. San Nicolas. Thank you, Mr. Chairman. And thank you so 
much for affording me the opportunity to serve on this 
subcommittee.
    As the Representative from Guam, I bring to the committee 
the unique perspective of having the only district that is 
actually an island. And we are in the South Pacific.
    General Cheney, I really appreciate your perspective, 
because we have significant military assets on the island, as 
well as significant military assets to our allies in the south, 
particularly the Republic of the Marshall Islands, on Kwajalein 
Atoll, that is just a few feet above sea level. And so, these 
climate change concerns are absolutely national security 
concerns.
    In listening to the conversation, however, I just get very 
disenchanted. When we hear, for example, that the U.S. 
represents 15 percent of global emissions, as you mentioned, 
Mr. Powell, and that if we don't have the rest of the world on 
board, even if we went 100 percent zero emissions, we still 
wouldn't solve the problem, that is a huge concern.
    Because the reality isthat we are getting outspent in 
Africa by the Chinese, $10 to $1. And those about $60 billion 
of state-owned enterprise investments going on in Africa aren't 
in the clean-energy sphere. They are also able to leverage 
those dollars to construct a lot of inexpensive, high-emissions 
facilities in areas that we are coming up short.
    And as I listen to all of this, I ask myself, what can we 
really do at the end-game scenario? Even if we got it right 100 
percent of the way, even if we fully recognized the national 
security concern and we dedicated more defense dollars to this 
actual national security threat, without addressing the fact 
that the rest of the world is going to continue to drag us 
down, I just ask myself, how can we actually overcome this?
    And so, I am listening to the conversation when we talk 
about adaptation, Mr. Burke, and we also talk about trying to 
stem the tide of these high-emissions facilities being built in 
developing countries.
    Mr. Karsner, is there any study that weighs the opportunity 
cost of adaptation investment versus international, developing 
nation investment and trying to stem that tide?
    Because at the end of the day, we have to weigh issues like 
homelessness and trying to solve that in this committee; we 
have to weigh issues like student loans and trying to solve 
that in this committee. And then we talk about climate change 
and the real threat that presents, and at the end of the day, 
we only have so many resources.
    We can invest in adaptation, we can invest in trying to 
bring new technologies to developing countries, but are we 
actually studying where is the most effective use of the 
limited dollars that we have right now?
    Mr. Karsner. I am confident that there are many, and I 
would invite any of my academic friends on the panel to share 
some if they have it, and I would be happy to get back to you 
for the record, sir, on that.
    I would say, as a former climate negotiator, that there is 
great sensitivity amongst those who believe there should be a 
balanced approach to adaptation and mitigation versus another 
school of thought that says, the more you are talking about 
adaptation, the more you are abandoning the probability or 
possibility of mitigation.
    And so that has led people, in my personal judgment, to not 
be as dispassionately objective with the integrity of such 
research. And I think we are in need of continuously working on 
mitigation and never abandoning that, but at the same time, 
moving with the kind of urgency that most of the panel has 
talked about on adaptation, preparation, resilience.
    Because I think we probably have underperformed those 
things over the past decade, and I think that we have a serious 
need to catch up, particularly in low-lying islands across the 
Pacific, which by population may not represent the same 
problems of migration and human crisis, but when we think of 
whole populations, like Kiribati or the Solomons, that are 
contemplating relocation--or now I would say Abacos and other 
islands, to go back to Chairwoman Waters' question--I think 
amongst the things we can do is be far more humane in 
recognizing that we are not going to be able to rebuild 
everywhere. We are not going to have populations that have 
enough funding for gray concrete and seawalls, like Manhattan 
or Amsterdam, for 500 years.
    And so, when you talk about the Bangladeshi and Nigerian 
deltas and the low-lying islands of the Pacific, we need to be 
much more direct in our planning and the kind of studies that 
you have asked about.
    Mr. San Nicolas. To close, Mr. Chairman, the reason why I 
feel like we really need to get all this data crunched and have 
these concrete things set before us is because at the end of 
the day, we have to decide, are we going to invest $3 billion 
on a seawall or are we going to invest $3 billion on cleaner 
energy in a developing nation to help stem the emissions issues 
that are creeping up there? And at the end of the day, without 
the data, without the studies, we are flying blind.
    Mr. Karsner. And the data can also characterize the value 
of green infrastructure and how green seawalls full of 
mangroves, and wetlands and prairies can absorb some of that 
and let nature act as an ally as much as a threat, in some 
cases.
    Mr. Cleaver. Thank you.
    The gentleman from Arkansas, Mr. Hill, is recognized for 5 
minutes.
    Mr. Hill. Thank you, Mr. Chairman. I appreciate it.
    And I thank the panel for your time this afternoon. I 
appreciate all your contributions to this important topic, and 
I am grateful for these views.
    I am thinking that I have enjoyed the conversation so far, 
particularly in the area of innovation and in the discussion 
about mitigation and the data necessary to plan that mitigation 
in the right way. Because for 30 years, where this climate 
change was just an unformed topic, people have been building 
more and more expensive infrastructure in places that they 
probably shouldn't have built it anyway, regardless of climate 
change.
    I think we have way overbuilt coastal islands and ravines 
and suburban L.A., and not smart building. But that is what 
county commissioners and cities wanted for tax revenue, and so 
they made some bad decisions. I think that has compounded this 
mitigation challenge that we face, and I hope that local 
governments are thinking about that as well.
    But in the innovation issue, I was so intrigued by the 
discussion. I live in Arkansas, where about 19\1/2\ percent of 
our energy is generated by nuclear through Entergy, which is a 
publicly traded company, one of the few companies that has its 
own goal to meet. It is cutting its carbon emissions over 50 
percent by 2030. And they have done that by relying on nuclear 
as a big part of their strategy, not to the extent of some 
utilities. But I am concerned they won't replace it because of 
lack of innovation, regulatory cost, lack of regulatory 
innovation, just the general expense of nuclear. And I think 
that would be a shame. They were one of the first companies--
Arkansas Power and Light and Mississippi Power and Light--to 
innovate in nuclear.
    So I hope that we can have a strategy that includes robust 
nuclear energy, and that America returns to a leadership role 
there. And we have all of these National Labs who had a little 
hand in inventing nuclear energy. It would be nice if they 
could help us roll out a low-cost nuclear reactor component for 
the Third World.
    Would you comment on that, Mr. Powell?
    Mr. Powell. Sure.
    Mr. Hill. And then, I would also like to turn it over to 
Mr. Kotek.
    Mr. Powell. This is absolutely vital. Today's nuclear 
reactors are terrific machines. They are operating, as Mr. 
Kotek mentioned, at historically low cost, and at extremely 
high reliability. And yet, given all the benefits of the shale 
gas revolution that we discussed earlier, and given the 
subsidies we have given to intermittent renewable energy, power 
prices are now so low in so many parts of the country that they 
are no longer economic to continue operating. In some cases, it 
would be cheaper for a utility to shut it down because some of 
its other attributes aren't being compensated for.
    So, we can do two routes to that. One is we can continue 
innovation on the existing nuclear fleet, and we should. There 
is a terrific program at the National Labs complex on 
increasingly lowering the cost of those and making sure that we 
can do second life extensions to those reactors so that we can 
extend their life all the way out to 80 years.
    And when, inevitably, some of them need to be replaced, we 
need to make sure that we have a more economical solution to 
replace them with. And that is why efforts like the Nuclear 
Energy Leadership Act (NELA) that Representative Riggleman is 
leading on, which set a moonshot program at the Department of 
Energy to develop new advanced nuclear reactors which would be 
smaller, cheaper, and more flexible than the existing 
generation--
    Mr. Hill. Thank you.
    Mr. Powell. That is why that legislation is so important.
    Mr. Hill. Thank you.
    Mr. Kotek?
    Mr. Kotek. Excellent point, and thank you, sir, for making 
it.
    Part of the reason we started the Gateway for Accelerated 
Innovation in Nuclear at DOE during my time there was to try to 
bring the resources of the National Laboratories more to bear 
in assisting private-sector companies in developing new nuclear 
technologies and getting them to market.
    The challenges that those innovators are facing now largely 
stem from just the large capital requirement to get a new 
technology through the licensing process and then through to 
demonstration. So laws like NELA will help greatly in making 
that a reality. Of course, then we will need the appropriations 
necessary to sort of hold up the public-sector side of a 
public-private partnership to demonstrate those technologies.
    We also need to provide a demand signal that the carbon-
free generation from nuclear is going to be valued equally with 
that from, say, wind--
    Mr. Hill. Yes.
    Mr. Kotek. --and solar, right?
    Mr. Hill. You made that point. Thank you for that.
    Mr. Kotek. Thank you.
    Mr. Hill. Well, I appreciate Entergy's leadership and 
Arkansas Electric Cooperatives. Both have been leaders also in 
the solar arena, and both have put in plants now in Arkansas 
that have significant battery storage, which is a new scene 
institutionally in our State, to have large solar arrays but 
have the storage. Because that is one of the biggest detriments 
to renewables, is we don't have the storage. And I appreciate 
DOE's significant $60 million a year of research in batteries.
    Thank you, Mr. Chairman. I yield back.
    Mr. Cleaver. The gentleman from California, Mr. Vargas, is 
recognized for 5 minutes.
    Mr. Vargas. Mr. Chairman, thank you very much. And thank 
you very much for holding this hearing.
    I think this might be a banner day. I think this is the 
first time that I have ever sat in a committee, with both 
Republicans and Democrats, where no one has disagreed that 
climate change exists.
    Mr. Chairman, you asked the question to the panel, and I 
think the panel, each and every one, answered that climate 
change is real, and it exists. I haven't heard one of my 
Republican colleagues, so far, say that that is not true. This 
is the first time.
    I am from California. We have been dealing with this issue 
for many, many years. Usually, you get ridicule from the other 
side, that it is a Chinese fake, that it doesn't exist, 
sometimes are snowballs thrown, and a whole bunch of other 
things.
    I think this is the first time--and we still have a few 
friends over here. I don't want to presume that--but it could 
be. That is why I am saying it could be a banner day, the first 
time ever that there haven't been howls from the other side on 
the notion that climate change exists and that it is real. I 
hope that is the case. And I do sense that there is a change, 
not only in my friends on the other side but I think, in 
society, that we are coming to this realization because of what 
we see.
    Someone talked about insurance earlier. There will always 
be insurance, because there is never a bad risk; there is only 
a bad price. That is what they say in insurance. But the 
reality is that insurance takes a look at events. And these 
large weather events are normally measuring 50-year, 100-year, 
250-year, 500-year, and 1,000-year events. These events are 
happening much sooner and with much more intensity. A 250-year 
event is happening every 100 years now. And it is getting 
harder and harder to price the risk, because, in fact, you 
don't know what it is because the climate is changing so 
quickly.
    But I do just want to take a moment to say that I am very 
excited. This is literally the first time--and I have sat in 
hundreds of hearings--that climate change has been brought up 
and there hasn't been ridicule about it, that, in fact, we have 
all taken it seriously, and that we are all trying to do 
something about it.
    There are different approaches here, and I appreciate that, 
and I think it is terrific. Mr. Powell, I think you have had 
significant contributions here today, and Mr. Kotek and 
everybody else, trying to figure out what perspective do we 
attack this on, but not the notion that it doesn't exist. I 
think that should be something that we take note of. I think 
that is very, very important.
    That being said, I do want to talk about all-of-the-above. 
Geothermal hasn't been talked about today. And, Mr. Powell, I 
did want to ask you about geothermal, what your views are on 
that, because we have geothermal in my district. I represent 
Imperial County. We do have wind there. We also have solar and 
geothermal. What are your views on geothermal?
    Mr. Powell. There is literally enormous untapped 
opportunity in the United States, especially if you think about 
some of the new technologies in geothermal.
    We have actually been taking a look, at ClearPath, at 
enhanced geothermal. And this would be actually using a lot of 
the same technology from the shale gas revolution and applying 
that to just tapping deep, hot rocks that don't have a lot of 
water already and sort of introducing water down there.
    There may be 500 gigawatts of potential for that technology 
across the country. It is clean, it is baseload, it is 
flexible. It could be a huge part of the solution. And we think 
that more innovation in that space is absolutely vital, both in 
the private sector and in the National Labs.
    Mr. Vargas. One of the things you didn't mention that I 
think is important--because you mentioned it earlier--is the 
notion, also, of batteries and how important it is to store 
energy. In my district, they pull a lot of lithium out of there 
too, but they don't know what to do with it. They put it right 
back into the ground.
    So we also, I think, have a way to take a look at these 
rare minerals that are necessary. And you do reach them with 
geothermal.
    Mr. Powell. Absolutely. Certainly, in a more general way, 
finding new sources for rare-earth minerals like lithium and 
cobalt, in large part because the supply chains we currently 
rely on for those, from places like the Democratic Republic of 
the Congo and China, are fraught, right? So finding new places 
to find those things, new sources like bringing it up out of 
the ground sort of incidentally in geothermal is very 
important.
    Mr. Vargas. Yes. And I think I will stop when I am ahead 
and just say, Hallelujah, Amen. And I will yield back.
    Mr. Cleaver. The gentleman from Ohio, Mr. Gonzalez, is 
recognized for 5 minutes.
    Mr. Gonzalez of Ohio. First off, I want to thank everybody 
for the testimony. I really appreciate the time and energy that 
everybody put into it.
    Mr. Powell, as a once-aspiring McKinsey consultant--I did a 
summer there--I appreciate the sober, data-driven analysis and 
solutions that you are offering. I think one person that I 
talked to about this earlier in the year was a lady named Sally 
Benson, whom some of the folks at Stanford may know. And we had 
a great conversation, and she said, look, we need sober, 
rational thinking to lead the way here. And I couldn't agree 
more.
    Mr. Powell, you cited the fact that this is in fact a 
global issue. We are at 15 percent of emissions. Even if we cut 
to zero today, if global development patterns continued the way 
that they are, without the innovations that you are talking 
about, we don't really get anywhere. And that is just a fact. 
So, innovation must lead the way, if for no other reason, so 
that we can continue to be energy exporters in this country.
    And I think, with respect to this hearing, the 
macroeconomic effects of climate change, I want to talk about 
the macroeconomic effects, briefly, of bad policy, frankly. And 
so, while we agree there is an issue, I think we do need to be 
clear on what the solutions are.
    So, as I mentioned, we are energy exporters. The Green New 
Deal, which is the most comprehensive and, I would argue, 
laughable proposal I have ever seen, wants to rely exclusively 
on wind, solar, and battery. Using existing technologies today, 
is that even possible to get to zero emissions?
    Mr. Powell. Well, first, let me thank you for your 
leadership on the Science Committee. Thank you for your 
leadership on storage innovation and the BEST Act.
    I do think that there have been multiple studies of studies 
of all of the different takes on how we would get to a zero-
emission grid, and none of those studies that have taken cost 
as any kind of a factor into account find that we can do 
everything with existing technology today.
    Mr. Gonzalez of Ohio. Right.
    Mr. Powell. They all find that we need--
    Mr. Gonzalez of Ohio. And as Mr. McHenry noted, Germany has 
tried something similar; I call it ``Green New Deal Lite.'' 
They spent tens of billions of dollars, have the highest energy 
prices in the EU, and have not reduced emissions on a net 
basis, which I fear is where we were going.
    Striking on that again, we are energy exporters today. If 
we were to go down the solar and wind turbine path, would we be 
exporters or importers, net?
    Mr. Powell. We would be importers. We import virtually--
    Mr. Gonzalez of Ohio. From where?
    Mr. Powell. --all of our solar panels, in particular from 
China.
    Mr. Gonzalez of Ohio. Thank you.
    The other big proposal in there is to transition every 
single building, single family buildings, apartment buildings, 
there are roughly 100 million of these in the country today. To 
do it over 12 years--I did the math on that, and it is 4,000 
buildings an hour for 12 years--4,000 buildings an hour.
    Again, we all seem to agree, and I agree with Mr. Vargas, 
that this is happening, but we have to be realistic in what we 
are doing. That doesn't mean that we think small or we don't 
try to solve it, but it means we actually spend our dollars in 
smart ways.
    And, with that, I want to turn to the innovation side. You 
have talked a bit about carbon capture. Tell me more, if you 
could, about bioengineering and grid reliability and how we can 
innovate in those sectors?
    Mr. Powell. Bioengineering, meaning changing plants to--
    Mr. Gonzalez of Ohio. Yes.
    Mr. Powell. --maybe sequester?
    Mr. Gonzalez of Ohio. Yes.
    Mr. Powell. Well, one thing we could do with bioengineering 
is--well, we could do two things, really. One is to change 
plants to sequester more CO2 and soils to sequester more CO2. 
And there is currently activity in several parts of the 
National Labs complex and ARPA-E on that very topic that we 
should continue to support, and ideally expand over time.
    We could also do a lot with bioengineering to create better 
feedstocks for biofuels for transportation and biomass power, 
sort of the holy grail in climate modeling is a negative-
emission power plant, so something that would take biomass 
power, take CO2 out of the air to make that feedstock, run it 
in effectively a fossil power plant, a biomass power plant, and 
then sequester those emissions. So, we would actually have 
negative emissions that was also producing power.
    Right now, it is a little difficult to do that with any of 
our existing feedstocks. You could imagine using bioengineering 
to do that.
    Mr. Gonzalez of Ohio. And then you talked about the public-
private modeling from fracking, which I think is a great 
parallel to what we should be thinking about here. What set of 
technologies do you think provide the most promise today with 
respect to having a similar outcome in energy?
    Mr. Powell. We would certainly say that the suite of zero-
emission, flexible technologies--so advanced nuclear; fossils 
with carbon capture, both gas and coal; grid-scale storage 
technology; and geothermal technology--right now seem to be the 
ones that have private companies that you could actually 
feasibly partner with, that could respond to incentives and 
that could be part of those partnerships.
    Mr. Gonzalez of Ohio. Fantastic. Thanks again.
    And I yield back.
    Mr. Cleaver. The gentleman yields back.
    The gentleman from Illinois, Mr. Garcia, is recognized for 
5 minutes.
    Mr. Garcia of Illinois. Thank you, Mr. Chairman.
    And thanks to all of the great presenters here this 
afternoon.
    I would like to begin with Ms. Seiger. You served on an 
advisory panel that was tasked with identifying investment 
risks and opportunities related to climate change, which found 
that the New York State Common Retirement Fund took a loss of 
approximately $22 billion by not divesting from fossil fuels a 
decade ago.
    I am very concerned that large State pension funds, like 
the fossil-fuel and financial industry as a whole, are simply 
not doing the math on climate change. In Illinois, for example, 
the Teachers' Retirement System of the State of Illinois' 
fourth-largest holding is in Shell. Its sixth-largest holding 
is in BP. It also has significant investments in NGP Natural 
Resources, EIF, and Energy Capital Partners--natural gas firms 
that have shown serious signs of volatility in recent months.
    As more and more energy analysts begin to forecast a 
negative performance outlook for the fossil-fuel industry, how 
can State pension systems protect themselves?
    Ms. Seiger. Thank you for the question, Congressman.
    This is a challenge for pension plans. Many of them have 
the majority of their listed equities managed under passive 
indexes, where they aren't actively controlling what is in and 
what is out. And as a result, when sectors decline in value 
because they are perhaps mispriced, perhaps because risks 
haven't been fully disclosed, they just own those losses.
    So, more reporting transparency and disclosure would help 
protect pension funds by creating more efficient market pricing 
of those listed equities.
    You also mentioned some private equity firms that have 
exposure to the fossil-fuel industry. In the case of New York 
Common, they have a very rigorous screening process about the 
environmental, social, and governance components of the assets 
that they hold. So, in that case, they can actively manage that 
risk. But when it comes to listed equities, they are passive 
takers on those bad bets.
    Thank you.
    Mr. Garcia of Illinois. Staying in the financial vein of 
things, looking back at the past decade of bankruptcies in the 
coal industry, many have predicted a similar path for oil and 
gas companies in the coming years as the world transitions to 
clean-energy sources.
    However, fossil-fuel companies continue to invest in new 
production, and financial institutions continue to invest in 
this unsustainable expansion. Do you believe that this could 
lead to U.S. investors and the economy facing significant risk 
of stranded assets?
    Ms. Seiger. Congressman, I think that is a risk, and I 
think greater reporting and transparency would help us 
understand the extent of that risk and the magnitude and 
prepare for it.
    And that is why I mentioned the point about transition 
risks. We have talked a lot about physical risks, which are 
very real and more well-documented. The transition risk is a 
much more complex set of factors to understand, and it gets to 
your question. And so, better modeling and information would 
help us to better prepare for that risk.
    Mr. Garcia of Illinois. And as for retired teachers, what 
do you think the implications are?
    Ms. Seiger. It threatens their nest eggs.
    Mr. Garcia of Illinois. That is what I thought.
    Thank you.
    Mr. Cleaver. The gentleman yields back.
    The gentleman from Tennessee, Mr. Rose, is recognized for 5 
minutes.
    Mr. Rose. Thank you, Mr. Chairman.
    Economic security and national security go hand-in-hand. 
You can't have one without the other.
    The Green New Deal, as proposed in House Resolution 109, 
would upend our economy. As the American Enterprise Institute 
notes in an April 2019 report, believing that the Green New 
Deal would increase national wealth and employment follows the 
broken-window fallacy, that the destruction of resources 
increases national wealth.
    One such resource I have heard criticized recently is 
nuclear energy. For more than 60 years, the United States has 
used nuclear power to produce reliable, low-carbon energy. In 
fact, my home State of Tennessee is home to the most diverse 
nuclear research lab in terms of competencies in the country, 
the Oak Ridge National Laboratory. Tennessee is, in fact, the 
birthplace of nuclear power.
    Despite the fact that the United States invented nuclear 
power, a couple of leading 2020 Presidential candidates have 
stated that we should not build any new nuclear power plants 
and that we shouldn't even renew licenses of existing ones.
    Without continued U.S. leadership, Russia and China are 
filling the void, creating a major security vulnerability for 
the United States. The Atlantic Council reported in 2018 that 
nearly two-thirds of the new reactors under construction 
worldwide use designs from China and Russia.
    General Cheney, in June 2018 you signed on to a letter to 
Secretary Perry, urging him to recognize the importance of U.S. 
nuclear energy to our nation's security.
    Mr. Chairman, I ask unanimous consent that the letter be 
entered into the record.
    Mr. Cleaver. Without objection, it is so ordered.
    Mr. Rose. General Cheney, briefly, can you explain why 
nuclear energy is so important to our national security and to 
our military?
    General Cheney. Congressman, it is a great question.
    As you probably noticed, nuclear power started with the 
United States Department of Defense. And today, I am a big 
proponent of small modular reactors (SMRs), which are the next 
cusp on nuclear energy. We have 60 or 70 of them running today 
in the United States Navy, and they have run safely, by the 
way, with a 100-percent safety record for the last 60 or 70 
years.
    So we at the American Security Project are big proponents 
of nuclear energy. We just think it has priced itself out of 
the market, that it needs help, that we need to be advanced, 
and we need to invest in technology. And to take this one step 
further, we are investing also in fusion energy, which we 
believe is the long-term solution to this.
    But we are big proponents of nuclear energy. And, indeed, 
we must invest in the nuclear energy that our military is 
heavily dependent upon, particularly the United States Navy, 
for nuclear reactors for their ships, and they are vitally 
important to national security.
    Mr. Rose. Thank you.
    Mr. Kotek, earlier this year, DOD's Strategic Capabilities 
Office put out a request for information about small nuclear 
reactors, or microreactors, that could be useful for future 
military use. Are there future civilian applications for a 
capability like this?
    Mr. Kotek. Thank you, Congressman.
    Absolutely. If you think about some of the remote 
locations, whether Alaska, Canada, or other parts of the world 
where it is very difficult to get access to the forms of 
electricity or energy we use now, you can absolutely see where 
you could replace those forms of energy with a very small 
nuclear reactor.
    Mr. Rose. As I mentioned earlier, in my home State of 
Tennessee, 40 percent of the electricity produced is supplied 
by nuclear energy.
    I am also very proud of the fact that Tennessee is home to 
Oak Ridge. A particular project at Oak Ridge is the 
Transformational Challenge Reactor project, or TCR. One of the 
major goals of the TCR project is lowering the cost of nuclear 
energy.
    Mr. Powell, is nuclear energy clean energy?
    Mr. Powell. Of course.
    Mr. Rose. What can Congress do to help reduce the cost of 
nuclear energy specifically?
    Mr. Powell. I think that programs like the Transformational 
Challenge Reactor Demonstration Program at Oak Ridge, which is 
an amazing program at an equally amazing facility, can go a 
long way. They could do for nuclear what all our work on shale 
gas did for natural gas power.
    With the Transformational Challenge Reactor, they are 
looking at very advanced technologies--artificial intelligence, 
3-D printing, advanced sensors--to completely rethink how you 
would design and operate a nuclear reactor.
    And that is the kind of thinking that we need if small 
modular reactors and microreactors are going to be a reality 
and if they are actually going to be competitive with other 
sources of energy like natural gas.
    Mr. Rose. Thank you.
    I yield back.
    Mr. Cleaver. The gentleman yields back.
    Mr. Casten is next. The bell just signaled that votes are 
being called, so you two will be the final questioners. And if 
you wanted to cut it short, we wouldn't object.
    Mr. Casten. Thank you, Mr. Chairman, for recognizing me. I 
will try to be quick.
    I am a newly elected, freshman Member. I spent 20 years in 
the clean-energy industry before I got here. That was 2 decades 
that I spent being frustrated by how little I felt Washington 
really understood the economics of the clean-energy world. And 
I would love to tell you that I am not frustrated anymore, but 
let's move on.
    My great frustration is that we far too often talk about 
the economics of clean energy in ways that wouldn't pass muster 
in a freshman capital budgeting class. Operating expenses and 
capital expenses are two totally separate things. And when you 
deploy clean energy, you don't raise the cost of energy, you 
lower the cost of energy.
    If you operate a coal plant, every night before you go to 
bed, you look at what the power price is going to be the next 
day, and try to figure out whether you can afford to run. If 
you have a solar panel, if you have a geothermal plant, in Mr. 
Vargas' district, you stay up, you have a beer, you watch TV. 
You don't have to worry about it, because it is always going to 
be economic to run that.
    And, in fact, as we have deployed clean energy, the price 
of energy has fallen, and that has made the real challenge much 
harder--and it is the reason I asked to be on the Financial 
Services Committee--which is, how do we deploy the capital that 
is always going to out-compete the dirty-energy sources?
    Respectfully, Mr. Powell, do not build carbon capture on 
the back of coal plants. All it does is raise their operating 
costs, and make it harder for them to run. It will be great for 
the environment because it will shut the coal plants down 
faster, but it is going to be lousy for the economy.
    Now, we can learn something from the private sector, 
because if we are going to lower the cost of capital--the 
second-biggest electricity consumer in the country is Walmart, 
and Walmart made a decision to preferentially buy all their 
energy from clean sources, which gave clean-energy developers a 
very high credit offtake agreement, which lowered their cost of 
debt, lowered their cost of equity, and brought that forward.
    The biggest purchaser of electricity in the country is the 
Department of Defense. And as General Cheney points out, across 
the globe, the U.S. military has installations that are 
threatened by rising sea levels, intense weather, and other 
climate-related risks. We need a defense infrastructure that is 
resilient to those changes but that also has to be reliable and 
resistant, which means better infrastructure, higher 
efficiencies, and distributed resources that minimize their 
reliance on disruptable fuel supplies.
    And that is a heck of an opportunity. It is depressing that 
we are still having this conversation 20 years later, but it is 
an opportunity. And it is why I am working on a bill, which I 
expect to introduce later this fall, that will ask the 
Department of Defense to embrace a cleaner future, and set 
clear goals for the Department to preferentially purchase clean 
energy, while still allowing the Department the flexibility 
required to keep our nation safe and reliable. Just like 
Walmart didn't decide to be less reliable, but they also want 
cheaper, less volatile energy.
    The bill also includes goals for improving base efficiency, 
lowering water use, and reducing waste at the facilities. All 
of this is good stuff. We will be bringing it out soon.
    General Cheney, Assistant Secretary of Defense for 
Sustainment Bob McMahon has said that DOD, ``should continue to 
invest in energy-efficient technologies to improve energy 
resilience and provide for mission assurance.'' Meanwhile, he 
has also said, ``Investments in renewable energy and energy-
efficiency measures help insulate our critical infrastructure 
from the fragility of the commercial power grid.''
    Do you agree with those statements?
    General Cheney. Yes.
    Mr. Casten. Do you agree that investments in energy 
efficiency and renewable energy can help with mission 
assurance?
    General Cheney. I do.
    Mr. Casten. In your testimony, you discussed the need for 
substantial investment in zero-carbon, clean-energy systems 
alongside the need to invest in base resiliency. Can you 
explain how investments in distributed clean energy and energy 
storage at bases could help ensure our military's readiness in 
a changing climate while also combating the climate crisis?
    General Cheney. Yes. Congressman, thanks for the question. 
I will give you an example. When I was Commanding General at 
Parris Island, which totally depended on the local grid for 
electricity, any big thunderstorm shut it down, and we had an 
alternate oil-fired power plant that we would incorporate to 
use for our power. Today, they are putting up a new solar panel 
array, which will hopefully make the base maybe a net-zero.
    There is a net-zero program in the Army and the Air Force. 
There are a number of bases where the intent is to produce more 
power than they consume. If you go out to Davis-Monthan or 
Nellis Air Force Base, there are huge solar arrays.
    It does a couple of things. The Base Commander is not 
dependent on the local grid. He has a fairly dependable source 
of power. And it is fairly cost-free, so to speak, so that is a 
huge efficiency for our bases and stations.
    I will close on one other comment here. It was General 
Mattis, in Iraq, who said, ``Please get me off this tether of 
fossil fuels'', the point being that we have lost over 1,000 
soldiers, sailors, airmen, and Marines defending fossil-fuel 
convoys in both Afghanistan and Iraq. And his point being, of 
course, can we not have another source of energy so that we are 
not totally dependent on these fuel convoys?
    So there have been great efforts made in DOD to get to 
biofuels or get to alternative energies. Unfortunately, we have 
seen that grind to a halt over about the last 2 years. So, 
those programs need to be reinstated and reinvigorated.
    Mr. Casten. Thank you.
    I yield back.
    Chairman Cleaver. The gentleman from Virginia, Mr. 
Riggleman, is recognized for 5 minutes.
    Mr. Riggleman. Thank you, Mr. Chairman.
    And I find it amazing--I wish more people were here, Mr. 
Chairman, but I think this is the first time ever in a climate-
change debate that I never heard the other side of the aisle 
say anything positive about the Green New Deal either. So, I 
think this is a really good day.
    This meeting was called by the Subcommittee on National 
Security, International Development and Monetary Policy.
    I want to thank the General for his service, and all of 
your service, honestly. But I am a veteran of 9/11, and I was 
hoping today that we could actually discuss H.R. 2514, the 
Coordinating Oversight, Upgrading and Innovating Technology, 
and Examiner Reform Act of 2019 (the COUNTER Act), where we are 
talking about terrorist financing.
    I want to thank the chairman for his leadership on H.R. 
2514. And I also want to thank the chairman for his hard work 
and I look forward to continuing to work with him on that 
issue.
    I was reading an article this morning that made an 
interesting point: Many college freshmen hadn't been born 
before 9/11, and that means an entire generation of young 
Americans have no idea what it was like--the confusion, panic, 
and ultimately horrific realization that the homeland's safety 
should not be taken for granted.
    And, as a result, what we often see in today's world is 
comparisons that climate change is this generation's World War 
II or that the world could end in 12 years if Congress fails to 
act now. And this is what I find refreshing here today. We had 
a comic in our hearing yesterday, and I appreciated that, and I 
had hoped that we could be more serious than methane-capture 
devices on the backsides of cows.
    So where does that leave those of us who take climate 
change seriously, but understand that as legislators, we need a 
commonsense and realistic approach? Speaking for myself, I 
believe there is ample opportunity for free markets to work 
symbiotically to reduce man's effect on the environment.
    Before coming to Congress--and that is why I appreciate the 
General--I was in military intelligence for 20 years, and I 
understand the threat assessments. I also make whiskey. And I 
had the only geothermal distillery in the country, because we 
thought we could combine business and green technology to make 
something that everybody enjoys.
    Since coming to Congress--and thank you, Mr. Powell, for 
mentioning this--I have introduced a bill with my colleague, 
Elaine Luria, which is the Nuclear Energy Leadership Act. And 
listening to the General talking about SMRs, I got a little 
excited. I was geeking out a little bit on it. It may not be 
the holistic solution, but it is a step in the right direction.
    To me, the answer is not, as we saw yesterday in the 
student loan hearing, a socialist government takeover of 
markets or products, but free markets and entrepreneurs working 
to come up with realistic solutions that work for Americans, 
like some of my colleagues have actually mentioned on the other 
side. Congress cannot continue to give Americans cheap talking 
points to drive up Twitter likes or Instagram followers. We 
need to get to work.
    This is the question, since we are on the National Security 
Subcommittee. And it is a serious question I want to ask the 
General. I ask a simple question: If the Green New Deal were 
signed into law today as it is written, what would be the 
effects on the economy and on national security?
    General Cheney. Congressman, I am not going to sit here and 
comment on future legislation nor the Green New Deal. What we 
are in favor of at my organization is things that bring up the 
topic of climate change, and I leave it to you to figure out 
what the solution is going to be to it.
    Mr. Riggleman. That is actually the answer I was expecting. 
And thank you, sir. Because, at this point, what we are talking 
about here is a common-sense solution to this without, sort of, 
fabricated solutions or things that just don't make sense.
    I think it is fair to say today that the legislation we 
have been discussing, and some of the other Members, is far 
less drastic and something I could potentially support if we 
are talking about private-public partnerships, like NELA, 
which--I worked in the Federal Acquisition Regulation space 
virtually my entire life. It is just not that out-there to do 
these types of things.
    However, I do have a few concerns, mostly that individual 
Members of Congress, with no statutory authority to do so, will 
use economic climate change for other types of regulations, 
sort of on the Operation Choke Point model, especially on 
certain industries that are vital to the American economy. And, 
again, we heard that today from both sides of the aisle.
    That being said, I appreciate the chairman's efforts and I 
look forward to working with him on this legislation and many 
others. I do appreciate that, Mr. Chairman.
    Mr. Powell, can you tell me where Congress has failed the 
most with climate-change legislation? And if you have time, can 
you tell me where the Federal Government has failed the most in 
dealing with climate change?
    Mr. Powell. I think where Congress has failed the most, 
with all due respect, is that in the past decade, this has 
become an extremely partisan issue.
    The last great energy policy Acts passed in 2005 and 2007 
were broad, bipartisan Acts. They were big-tent solutions, and 
there was something for virtually everyone in every industry in 
those. I would argue that we need to get back to a bipartisan 
orientation in energy and climate policymaking.
    Mr. Riggleman. And looking at this, does anybody else want 
to answer this? I have 27 seconds, which would give you plenty 
of time, I am sure, in this day and age.
    But I think--and, again, talking to the General, hearing 
these things and hearing everybody's, really, assessment today, 
it sounded to me--and I am not trying to be too rosy here--like 
we can come up with a bipartisan solution to move forward using 
private-public partnerships, common-sense legislation, but also 
realizing that we actually have a problem.
    That is why I appreciate all of you here today. And I hope 
you have a great day going back. And, again, thank you for 
being here today.
    Chairman Cleaver. Thank you.
    I would like to thank our witnesses for their testimony.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    If there is nothing else to be said, this hearing is 
adjourned.
    [Whereupon, at 4:14 p.m., the hearing was adjourned.]

                            A P P E N D I X



                           September 11, 2019
                           
                           
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]