[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                   GOOD FOR BUSINESS: PRIVATE SECTOR
                     PERSPECTIVES ON CLIMATE ACTION

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

                                HEARING

                               BEFORE THE

                        SELECT COMMITTEE ON THE 
                             CLIMATE CRISIS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                            October 20, 2021

                               __________

                            Serial No. 117-9
                            
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


                            www.govinfo.gov

   Printed for the use of the Select Committee on the Climate Crisis
   
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
46-331                      WASHINGTON : 2022                     
          
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                 SELECT COMMITTEE ON THE CLIMATE CRISIS
                    One Hundred Seventeenth Congress

                      KATHY CASTOR, Florida, Chair
SUZANNE BONAMICI, Oregon             GARRET GRAVES, Louisiana,
JULIA BROWNLEY, California             Ranking Member
JARED HUFFMAN, California            GARY PALMER, Alabama
A. DONALD McEACHIN, Virginia         BUDDY CARTER, Georgia
MIKE LEVIN, California               CAROL MILLER, West Virginia
SEAN CASTEN, Illinois                KELLY ARMSTRONG, North Dakota
JOE NEGUSE, Colorado                 DAN CRENSHAW, Texas
VERONICA ESCOBAR, Texas              ANTHONY GONZALEZ, Ohio
                                 ------                                
                Ana Unruh Cohen, Majority Staff Director
                  Marty Hall, Minority Staff Director
                        climatecrisis.house.gov
                            
                            C O N T E N T S

                              ----------                              

                   STATEMENTS OF MEMBERS OF CONGRESS

                                                                   Page
Hon. Kathy Castor, a Representative in Congress from the State of 
  Florida, and Chair, Select Committee on the Climate Crisis:
    Opening Statement............................................     1
    Prepared Statement...........................................     2
Hon. Garrett Graves, a Representative in Congress from the State 
  of Louisiana, and Ranking Member, Select Committee on the 
  Climate Crisis:
    Opening Statement............................................     3

                               WITNESSES

Corley Kenna, Head of Communications and Policy, Patagonia
    Oral Statement...............................................     6
    Prepared Statement...........................................     8
Gilbert Campbell, Founder and CEO, Volt Energy Utility and Volt 
  Energy
    Oral Statement...............................................     9
    Prepared Statement...........................................    11
The Hon. Mark Menezes, Former Deputy Secretary of Energy, U.S. 
  Department of Energy; Former Chief Counsel for Energy and 
  Environment, U.S. House Energy and Commerce Committee
    Oral Statement...............................................    14
    Prepared Statement...........................................    16
David Edsey, Climate Director, Technical Underwriting, Zurich 
  North America
    Oral Statement...............................................    22
    Prepared Statement...........................................    24

                                APPENDIX

Questions for the Record from Hon. Kathy Castor to Corley Kenna..    47
Questions for the Record from Hon. Dan Crenshaw to Corley Kenna..    48
Questions for the Record from Hon. Kathy Castor to Gilbert 
  Campbell.......................................................    51
Questions for the Record from Hon. A. Donald McEachin to Gilbert 
  Campbell.......................................................    53
Questions for the Record from Hon. Kathy Castor to David Edsey...    54
Questions for the Record from Hon. A. Donald McEachin to David 
  Edsey..........................................................    54

 
                   GOOD FOR BUSINESS: PRIVATE SECTOR
                     PERSPECTIVES ON CLIMATE ACTION

                              ----------                              


                      WEDNESDAY, OCTOBER 20, 2021

                          House of Representatives,
                    Select Committee on the Climate Crisis,
                                                    Washington, DC.
    The committee met, pursuant to call, at 1:29 p.m., in Room 
210, Cannon House Office Building, Hon. Kathy Castor 
[chairwoman of the committee] presiding.
    Present: Representatives Castor, Bonamici, Brownley, 
McEachin, Casten, Graves, Palmer, Carter, Miller, and Gonzalez.
    Ms. Castor. Committee will come to order.
    Without objection, the chair is authorized to declare a 
recess of the committee at any time.
    As a reminder, members participating in a hearing remotely 
should be visible on camera throughout the hearing.
    As with in-person meetings, members are responsible for 
controlling their own microphones. Members can be muted by 
staff only to avoid inadvertent background noise.
    I would like to remind members that per guidance of the 
Attending Physician, on July 27, members, staff, and all others 
physically present in an indoor U.S. House of Representatives 
space, including a hearing room, are required to wear a mask 
unless they are seeking, or are under recognition of the chair.
    In addition, statements, documents, or motions must be 
submitted to the electronic repository, to 
[email protected].
    Finally, members or witnesses experiencing technical 
problems should inform committee staff immediately.
    Well, good afternoon, everyone. Welcome to our committee 
meeting, Good for Business: Private Sector Perspectives on 
Climate Action.
    Today, we will hear about business action to fight the 
climate crisis, and I ask unanimous consent for member----
    Speaker. This meeting is being recorded.
    Ms. Castor. That is good.
    I ask unanimous consent for member opening statements and 
question periods to be limited to 3 minutes because of votes on 
the floor.
    Without objection, so ordered.
    I now recognize myself for 3 minutes to give an opening 
statement.
    Welcome again to our outstanding panel of witnesses.
    The climate crisis has had a brutal impact on our nation 
this year. Not only did we experience the hottest month on 
record this summer, we have also had more disasters 9 months 
into this year than in any other year in our history. We have 
suffered 18 climate fueled major disasters in 2021, and that 
has left us with a price tag of over $104 billion in damages, 
and it is often working families and communities of color 
that--who shoulder the cost.
    Climate change is also harming America's businesses. 
Extreme weather events increase uncertainty and instability for 
workers and entrepreneurs, many of whom are one disaster away 
from losing their livelihoods.
    A growing number of companies are taking matters into their 
own hands, but they cannot do it alone. It is time to chart a 
better path, and build a more equitable and resilient economy.
    The right climate investments can create millions of good 
paying jobs, protect small businesses, and ensure prosperity 
across America. And, with the help of America's business 
leaders, we can make sure this progress is good for both our 
climate and our economy.
    Here is the thing: solving the climate crisis will be good 
for business. That is why car manufacturers are doubling down 
on electric vehicles, and utilities are investing in 
renewables. America's top business leaders understand that 
embracing sustainability will help them attract talent and 
deliver innovative products, which is why more companies are 
taking action to be part of the solution as we lead global 
markets towards a clean energy future.
    Hundreds of global companies have already started setting 
targets to reduce their corporate emissions, and over 100 
companies have goals to eventually run entirely on clean 
energy. Some major businesses are already at that point, 
running their facilities on 100 percent clean energy, and 
others, like those represented by our witnesses here today, are 
doing their part to put us on the right path.
    We are also seeing the world's leading investors take 
action. Just this week, the Ford Foundation announced it will 
stop investing in fossil fuels, and, instead, focus its energy 
portfolio on renewables. More than 30 other large investors 
have committed to invest only in companies with targets to 
reach net zero emissions by 2050, and a global financial 
alliance to deliver on the promises of the Paris Agreement by 
leveraging more than $70 trillion in assets, these investors 
understand that climate action is good for business.
    Moving our economy toward clean energy is an economic 
imperative. We know climate progress means millions of good 
paying jobs. It also means increased innovation, boosted cost 
savings, and improved investor confidence. So I look forward to 
today's discussion.

                Opening Statement of Chair Kathy Castor

    Hearing on ``Good For Business: Private Sector Perspectives on 
                            Climate Action''

                 Select Committee on the Climate Crisis

                            October 20, 2021

                        As prepared for delivery

    The climate crisis has had a brutal impact on our nation this year. 
Not only did we experience the hottest month on record this summer; 
we've also had more disasters nine months into this year than in any 
other year in history. Our communities have endured an unprecedented 18 
major disasters in 2021, including severe storms, historic floods, 
raging wildfires, and record-breaking heat waves. These disasters have 
been costly, leaving behind over $104 billion in damages. And it's 
often working families and communities of color who shoulder the costs.
    Climate change is also harming our nation's businesses. Extreme 
weather events increase uncertainty and instability for workers and 
entrepreneurs, many of whom are one disaster away from losing their 
livelihoods. A growing number of companies are taking matters into 
their own hands, but they cannot do it alone. It's time to chart a 
better path and build a more equitable and resilient economy. The right 
climate investments can create millions of good-paying jobs, protect 
small businesses, and ensure prosperity across America. With the help 
of America's business leaders, we can make sure this progress is good 
for both our climate and for our economy.
    Here's the thing: solving the climate crisis will be good for 
business. That's why car manufacturers are doubling down on electric 
vehicles and utilities are investing in renewables. America's top 
businesses leaders understand that embracing sustainability will help 
them attract talent and deliver innovative products. Which is why more 
companies are taking action to be part of the solution, as we lead 
global markets toward a clean energy future.
    Hundreds of global companies have already set targets to reduce 
their corporate emissions--and over 100 companies have goals to 
eventually run entirely on clean energy. Some major businesses are 
already at that point, running their facilities with 100% renewable 
energy. And others, like those represented by our witnesses here today, 
are doing their part to put us on the right path.
    We're also seeing action from the world's leading investors. Just 
this week, the Ford Foundation announced it will stop investing in 
fossil fuels and instead focus its energy portfolio on renewables. More 
than 30 other large investors have committed to invest only in 
companies with targets to reach net-zero carbon emissions by 2050. And 
a global financial alliance that includes more than 160 global firms 
has agreed to work together to deliver on the promises of the Paris 
Agreement, by leveraging more than $70 trillion in assets. These 
investors understand that climate action is good for business.
    Clean energy will also help working families, as we take steps to 
avoid the price volatility of fossil fuels while making electricity 
more affordable for the average American. Investors and shareholders 
are already demanding greater transparency on climate risks. And as 
they look to their financial futures and listen to the people they 
serve, institutions and pension funds are shifting capital away from 
fossil fuel activities and other risky investments.
    Moving our economy toward clean energy is an economic imperative. 
We know climate progress means millions of good-paying jobs; it also 
means increased innovation, boosted cost savings, and improved investor 
confidence.
    I look forward to today's discussion.

    The chair now recognizes the ranking member, Mr. Graves of 
Louisiana, for an opening statement.
    Mr. Graves. Thank you, Madam Chair, and I want to thank you 
for holding this hearing today and for the witnesses for your 
participation.
    Madam Chair, as we have discussed at many of these 
hearings, it is important that we take action, but it is 
important that we take action that is science based, that is 
evidence based. What much of the folks who pontificate on 
climate change and clean energy policy have been talking about 
in recent years--excuse me--recent months, has been this clean 
energy plan that is included in the reconciliation package.
    Yet, when you look at--excuse me--when you look at the 
actual policies that are embedded in there, even independent 
reviews by Congressional Research Service have found that this 
does not guarantee that we are going to be moving in the right 
direction, but it does guarantee higher prices for all 
consumers.
    Madam Chair, as we move forward in a direction of a clean 
energy future, we must do it--we must do it in a way that is 
based upon evidence. And you look back, for example, at the 
Clean Power Plan. The Clean Power Plan, Madam Chair, what we 
did is we lifted the restrictions. We lifted the sanctions. We 
didn't put mandates on energy companies, yet they took an 
objective that was set for 2030, and during the Trump 
administration, were able to hit that target in 2019, to hit 
that target 11 years earlier, not just hit it, but exceed it.
    And, Madam Chair, you know that that target--do you know 
how much we subsidized? Do you know how much we mandated? Do 
you know how much we required of companies to actually hit that 
target at all or hit it, much less, 11 years early? Zero. There 
were no mandates. There were no restrictions. We let innovators 
innovate.
    And so, Madam Chair, we don't need a clean energy plan in a 
reconciliation package. What we need to do is we need to build 
upon the successes. We need to learn from the failures of the 
past and realize that the best way for us to move forward in a 
clean energy direction is we must--we must let innovators 
innovate. Don't come in and restrict it to certain 
technologies. That has not resulted in the outcomes that we 
need.
    And, most importantly, Madam Chair--and I hope that this is 
something that we can all agree on as we head to the Convention 
of Parties in Scotland, is I hope that we could all agree upon 
what we need to be doing is we need to be focusing upon the 
global, the global outcomes here and stop looking myopically at 
the United States as though we can solve all the world's 
problems.
    We need to make sure that China is held accountable in an 
enforceable mechanism, and in a way that we result not in 
increasing four tons of emissions for every one ton the U.S. 
reduces, but actually results in global emissions going down. 
That needs to be the end zone. That needs to be the objective 
of the COP, and that means holding countries like China 
accountable to doing something to move in the right direction, 
not to increase their emissions by 50 percent over the next 9 
years.
    So, Madam Chair, I look forward to hearing from our 
witnesses, and yield back.
    Ms. Castor. Thank you very much.
    Now we will welcome our witnesses, and I encourage members 
to go and vote and return for their testimony and questions.
    First, we will go to Representative Casten to introduce 
David Edsey.
    Mr. Casten. Thank you, Madam Chair.
    I am pleased to introduce David Edsey, who is the Climate 
Director for Zurich North America, where he leads the 
development of insurance and service solutions to address 
climate change mitigation and adaptation.
    I should give a plug to Zurich here that one of your great 
competencies is you had the wisdom to hire my wife for many 
years, who has, of course, moved on to other things since, so 
no current conflicts.
    David has expertise in climate change risk, mitigation, and 
resilient strategies with more than 25 years of experience in 
insurance and litigation. For over a century, Zurich North 
America's corporate headquarters has been in the Greater 
Chicago area. In 2016, Zurich moved closer to my own district 
in suburban Schaumburg, where they employ over 53,000 people.
    As future climate events are projected to cause a $1.2 
trillion loss to the U.S. economy, and as more companies are 
experiencing more intensity and variability from extreme 
weather events that impact production capacity and operational 
costs, David offers a valuable perspective on how the private 
sector can play a role in determining short term climate risk 
and identify opportunities to implement mitigation and 
adaptation actions.
    Thank you, David, for being here, and I look forward to 
hearing more about Zurich's work.
    Ms. Castor. Next we will go to--the chair recognizes 
Representative Brownley to introduce Corley Kenna.
    Ms. Brownley. Thank you, Madam Chair.
    And, as I made a promise, I will be brief. But I am 
delighted to introduce Ms. Corley Kenna today from Patagonia.
    As Ms. Kenna outlined in her testimony, Patagonia has 
leaned in on the climate challenges confronting businesses as 
the planet warms and extreme weather events that threaten 
supply chains. Patagonia was founded by Yvon and Malinda 
Chouinard, who are two of the truest champions of the 
environment and the greatest stewards of our country's natural 
resources.
    I am so proud to have Patagonia in my congressional 
district. Patagonia offers paid leave, on-site childcare, 
flexible work schedules, and competitive wages and benefits. 
They have always been a forward-looking company.
    Patagonia is absolutely proof that corporations can be both 
good stewards of the environment, good to their workers, good 
for their communities, while still making a reasonable profit, 
producing high-quality products.
    So, with that, Madam Speaker, we thank Ms. Kenna for her 
testimony, and looking forward to it today.
    I yield back.
    Ms. Castor. Welcome, Ms. Kenna.
    And thank you, Rep Brownley.
    Next we will go to Representative McEachin to introduce 
Gilbert Campbell.
    Mr. McEachin. Thank you, Madam Chair.
    It is my pleasure and privilege to introduce to the 
committee Mr. Gilbert Campbell. He is the Founder and CEO of 
Volt Energy Utility, a national renewable energy firm that 
finances and develops utility-scale solar and energy storage 
projects.
    He also cofounded Volt Energy, a minority owned and 
operated distribution generation solar development company, and 
serves on the board of the Solar Energy Industry Association, 
and the American Association of Blacks in Energy.
    Lastly, but certainly not least, Mr. Campbell received the 
White House Champions of Change Award from President Obama, for 
his advocacy promoting the inclusion in the clean energy sector 
and providing STEM education opportunities for young people 
across the country. He has received numerous other awards for 
his work to make the energy sector more equitable and more 
diverse.
    Mr. Campbell, my friend, it is good to see you today. Thank 
you for appearing. I look forward to your testimony.
    Ms. Castor. Thank you, Rep McEachin.
    Next we will go to Ranking Member Graves to introduce Mark 
Menezes.
    Mr. Graves. Thank you, Madam Chair.
    Madam Chair, I am honored to introduce the Honorable Mark 
Menezes, who happens to be from the great state of Louisiana--
Hahnville, if I remember right, or at least Hahnville High. 
What is better than being a graduate of LSU? Doing it two times 
over. He is a two-times LSU grad.
    I had the honor of working with Secretary Menezes on the 
Energy and Commerce Committee as he served as Chief Energy 
Counsel for the committee, but he went on in advising many 
private sector clients on energy and electricity policy, and 
served as Deputy Secretary of the Department of Energy under 
the previous administration. And just a fantastic guy, a good 
friend, and when he takes that mask off, you are going to see 
an amazing resemblance to Henry Winkler, as he looks a lot like 
the Fonz.
    Ms. Castor. Well, thank you for that, Ranking Member 
Graves.
    Without objection, the witnesses' written statements will 
be made part of the record.
    Ms. Kenna, we are going to start with you. You are now 
recognized to give a 5-minute presentation of your testimony.

STATEMENTS OF CORLEY KENNA, HEAD OF COMMUNICATIONS AND POLICY, 
   PATAGONIA; GILBERT CAMPBELL, FOUNDER AND CEO, VOLT ENERGY 
 UTILITY AND VOLT ENERGY; HON. MARK W. MENEZES, FORMER DEPUTY 
 SECRETARY OF ENERGY, U.S. DEPARTMENT OF ENERGY; FORMER CHIEF 
    COUNSEL FOR ENERGY AND ENVIRONMENT, U.S. HOUSE ENERGY & 
    COMMERCE COMMITTEE; AND DAVID EDSEY, CLIMATE DIRECTOR, 
          TECHNICAL UNDERWRITING, ZURICH NORTH AMERICA

                   STATEMENT OF CORLEY KENNA

    Ms. Kenna. Thank you so much.
    Good afternoon, Chairwoman Castor, Ranking Member Graves, 
and members of the committee.
    And I really appreciate that kind introduction, 
Representative Brownley, and this opportunity to speak before 
the committee.
    My name is Corley Kenna, and I lead the Communications and 
Policy team at Patagonia. Patagonia is a $1 billion business, 
with brick-and-mortar stores in 19 states and 2,000 employees 
in the U.S., 3,000 globally.
    We partner with hundreds of small and large businesses in 
every single state in the country, and we are a part of an 
outdoor industry that generates nearly $800 billion in revenue 
each year and supports more than 7 million jobs, and we help 
improve mental and physical well-being.
    But, more than that, we are a community. We are hikers and 
hunters, surfers, and anglers. We are bikers and birders, 
climbers and skiers. We live in urban and rural areas, and we 
vote for liberals and conservatives. The one thing that we all 
have in common is our love for the outdoors and a desire for 
clean air, clean water, and a healthy planet.
    The climate crisis is not an abstract theory. It is an 
urgent threat to our business and our community. To paraphrase 
conservationist David Brower, there is no business to be done 
on a dead planet.
    Extreme temperatures, wildfires, polluted air, warming 
winters, eroded coastlines, and dried up rivers prevent our 
community from exploring and enjoying the outdoors. They also 
threaten our operations. Just this year, we had to close our 
distribution center in Reno because of bad air quality caused 
by wildfires exacerbated by the climate crisis. In 2017, we had 
to shut down our headquarters for a whole month because of what 
was then California's largest wildfire.
    And, just as we have an interest in acting because our 
business and community is affected by this crisis, we recognize 
we have a responsibility to act, because every part of our 
business contributes to the climate crisis. Our supply chains 
and our financial partners rely on fossil fuels, the same 
fossil fuels that are destroying the planet we all depend on.
    Patagonia is working to reduce and eliminate our scope 
three carbon emissions, and we are proud that in just 4 years, 
we won't use any virgin petroleum fiber sources in our 
materials. We have donated nearly $150 million to thousands of 
groups working on the most pressing environmental challenges, 
and we use our brand voice to advocate for solutions to the 
climate crisis.
    But Patagonia and other companies committed to aggressive 
carbon reductions can't do this alone. There are simply some 
things that only government can do.
    The Build Back Better Act offers a bold and urgent 
opportunity to address the climate crisis before it is too 
late, and to give working families the support that they 
deserve. The climate investments of this budget reconciliation 
package would accelerate the clean energy economy, create 
thousands of new jobs, and promote greater climate resilience 
by conserving our public lands. These are not wish-list items, 
but critical actions needed to stave off impending climate 
disaster.
    Patagonia is willing to pay a higher corporate tax rate to 
fund this critical legislation, but we also urge Congress to 
eliminate tax subsidies for oil and gas companies. The United 
States spends $20 billion annually subsidizing fossil fuels. It 
is time to shift those investments to a clean and just future 
for people and planet.
    This is the defining challenge of our era. The good news 
for Congress is that not only is this legislation needed, but 
it is popular among your constituents. And the climate 
investments, in particular, are supported by many in the 
American business community.
    Special interests can spend millions of dollars to lobby 
against the bill, but make no mistake; the American people want 
to see these game-changing investments in our planet and our 
future. They want to see it happen before it is too late.
    So thank you again for this opportunity to testify today, 
and I look forward to any questions you might have.
    [The statement of Ms. Kenna follows:]

               BEFORE THE HOUSE SELECT COMMITTEE ON THE 
                             CLIMATE CRISIS

                 UNITED STATES HOUSE OF REPRESENTATIVES

          ``GOOD FOR BUSINESS: PRIVATE SECTOR PERSPECTIVES ON 
                            CLIMATE ACTION''

                            October 20, 2021

                              Corley Kenna

                   Head of Communications and Policy

                               Patagonia

    Good afternoon, Chairwoman Castor, Ranking Member Graves, and 
members of the Committee. My name is Corley Kenna and I lead the 
Communications and Policy team at Patagonia. Thank you for this 
opportunity to speak before this important committee.
    Patagonia is a one-billion-dollar business with brick-and-mortar 
stores in 19 states and 2,000 employees in the US, 3,000 globally. We 
partner with hundreds of small and large businesses through our 
wholesale business in every state in the country. And we are a part of 
an industry that generates nearly $800 billion in revenue each year, 
supports more than seven million people and helps improve mental and 
physical well-being. We are proud that earlier this year, consumers 
named Patagonia as the company with the best reputation in America.
    But more than a business, we are a community. We are hikers and 
hunters, surfers and anglers, birders and bikers, skiers, and climbers. 
We live in urban and rural areas, and vote for liberals and 
conservatives. The one thing that we all have in common is our love of 
the outdoors and a desire for clean air, clean water, and a healthy 
planet.
    Along with the thousands of US businesses in our industry, 
Patagonia depends on a stable climate and healthy, protected lands and 
waters. The climate crisis is not an abstract theory, it is an urgent 
risk to our business.
    To paraphrase David Brower, there is no business on a dead planet.
    Extreme temperatures, wildfires, polluted air, warming winters, 
eroded coast lines and dried-up rivers prevent our community from 
exploring and enjoying the outdoors. They also threaten our operations. 
Let me share with you one very granular example. Just this year, we had 
to close our Reno distribution center repeatedly due to bad air quality 
caused by wildfires exacerbated by climate change.
    And just as we have a responsibility to act because our business 
and community is affected by this crisis, we also recognize we have a 
responsibility to act because every part of our business contributes to 
the climate crisis. When you grow things, make things, move things, and 
sell things, you leave behind carbon. Our supply chains and financial 
partners rely on fossil fuels--the same fossil fuels that are 
destroying the planet we all depend on.
    And we take our direct responsibility seriously. Patagonia is 
working to reduce and eliminate our scope three carbon emissions and 
are proud that in just four years we won't use any virgin petroleum 
sources in our materials. We have donated nearly $150 million to 
thousands of groups working on the most pressing environmental 
challenges and use our brand voice to advocate for solutions to the 
climate crisis.
    But Patagonia and other companies committed to aggressive carbon 
reductions--can't do this alone. There are simply some things that only 
governments can do.
    We need help scaling and incentivizing programs that won't worsen 
the climate crisis, and that will increase the pace of urgently needed 
emissions reductions and a just, clean energy transition.
    The Build Back Better Act--offers a bold and urgent opportunity to 
address the climate crisis before it's too late, and give working 
families the support they deserve. It's vital to the people and planet 
on which our company and the rest of the outdoor industry rely. It is 
an imperative investment in communities affected most on the frontlines 
of this crisis, the majority of whom are low income, Black, Indigenous 
and other people of color. Communities that are already vulnerable and 
suffering serious and lasting health issues due to poor air quality 
exacerbated by climate change.
    Bold investments to protect our planet could not only ease the 
worst effects of the climate crisis but offer an opportunity for 
innovation and job creation. And it is obvious that corporate America 
sees this opportunity. Look at prominent advertisements from the most 
well-known brands--they draw your attention to how these companies are 
working to curb their emissions and do their part to address this 
crisis.
    Patagonia is proud to be a certified B-Corporation, which requires 
us to look beyond profit and consider people, planet and the long-term 
in every business decision we make. And we have been glad to see other 
businesses and organizations make similar commitments to consider not 
just their shareholders but their full community of stakeholders in 
their business plans.
    These corporate commitments, along with bold and aggressive 
investments from our elected leaders, will create the conditions for 
the systemic change required for a healthy planet and thriving 
communities. Government support will also catalyze further business 
investment and innovation--making our economy more competitive and 
resilient while strengthening our global leadership.
    The climate investments of this budget reconciliation package would 
accelerate the clean energy economy and create thousands of new jobs. 
For example, the Civilian Climate Corps provides a great opportunity to 
train and diversify the workforce that we will need as we move to a 
renewable energy economy. In addition, the Build Back Better Act would 
also protect threatened landscapes such as the Arctic National Wildlife 
Refuge.
    In total, these investments would accelerate America's leap to 
clean, renewable wind and solar power and promote greater climate 
resilience by conserving public lands. These are not wish list items, 
but imperative actions needed to stave off impending climate disaster.
    Beyond climate, this legislation also prioritizes the needs of 
working families. For the last 50 years, Patagonia has offered paid 
sick leave, parental leave, and onsite childcare to our employees--and 
we've reaped the benefits through our ability to maintain a robust and 
engaged workforce. Yet, nationally, fewer than 21 percent of workers 
have access to paid family leave through their employers. Attracting 
and retaining top talent and a speedy economic recovery depend on 
enabling people to return to the labor force by addressing the urgent 
issues of paid leave and childcare availability.
    People say that it's easy to talk about what should happen, and a 
whole lot harder to talk about how. Patagonia is willing to pay a 
higher corporate tax rate to fund this critical legislation. Further, 
we also urge Congress to eliminate tax subsidies for oil and gas 
companies. The United States spends $20 billion annually subsidizing 
fossil fuels. It's a mistake that costs American taxpayers more than 
$649 billion each year when considering health, environmental, and 
climate externalities. It's time to shift those investments to a clean, 
just future for people and the planet.
    This is the defining challenge of our era. The good news for 
Congress: Not only is this legislation needed but it is also popular 
among your constituents and the climate investments are supported by 
many in the American business community. Special interests can spend 
millions of dollars to lobby against this bill, but make no mistake, 
the American people \1\ want to see these game changing investments in 
our planet and our future--and they want to see it happen before it's 
too late.
    Thank you again for the opportunity to testify today, and I look 
forward to any questions you may have.
    Thank you.

--------------
    \1\ Data for Progress, Vox. Build Back Better Toplines. 12 Oct. 
2021. Web: https://www.filesforprogress.org/datasets/2021/10/dfp-vox-
bbb-oct12-toplines.pdf.

    Ms. Castor. Thank you, Ms. Kenna.
    Mr. Campbell, you are now recognized for 5 minutes for a 
presentation of your testimony.

                 STATEMENT OF GILBERT CAMPBELL

    Mr. Campbell. Thank you.
    Chairwoman Castor--Ranking Member Graves had to step for 
the vote--members of the select committee, I am honored to sit 
before you today to testify on today's hearing, Good for 
Business: The Private Sector Perspectives on Climate Action.
    As Congressman McEachin mentioned, I am the cofounder of a 
company called Volt Energy. I started the company 10 years ago 
to develop rooftop solar and solar carports for companies all 
across this country, ranging from the Cheesecake Factory's 
corporate headquarters in California to projects in Colorado 
with Subaru, where we work with a lot of underrepresented 
community projects as well. We work with a lot of Historically 
Black Colleges and Universities. We also work with churches, 
synagogues, and other faith institutions across the country to 
make sure that they are able to reduce their carbon footprint 
with solar energy. I am here today to share why I strongly 
support the Build Back Better Act. While I am a small business 
owner--while I am here as a small business owner to talk about 
the financial implications that it is having--the climate 
disaster is having on businesses, I am here as a concerned 
citizen first.
    I know how divided our nation is on pretty much everything, 
and I am an eternal optimist, but I really hope the climate 
crisis--as it was mentioned earlier, it really is the 
opportunity for us to really tackle the biggest crisis our 
world is facing.
    This really shouldn't be viewed as a red or blue partisan 
issue. I truly hope that we can view this as a red, white, and 
blue opportunity to lead on a global stage for the biggest 
issue, again, facing our nation and the world.
    Ranking Member--excuse me--Congressional Member Graves 
talked about let innovators innovate. At Volt Energy Utility, 
which is a utility scale company that I founded, that is 
exactly what we are doing.
    What we are doing currently, we have created this concept 
called the Environmental Justice Power Purchase Agreement, and 
through a Power Purchase Agreement is how most corporations buy 
renewable energy. And one of the things that we wanted to do 
differently was we understand the importance of environmental 
justice and tackling environmental justice.
    What does the term--what does environmental justice mean? 
It is defined as the fair and equitable distribution of both 
environmental burden and environmental benefit. For far too 
long, communities of color and rural communities have been on 
the wrong side of that ledger only dealing with the 
environmental burden, but have not participated with the 
environmental benefit.
    Our Environmental Justice Power Purchase Agreement, we work 
with some of the largest companies in the world--we just 
recently announced a large project with Microsoft--where the 
concept is this: We cannot develop utility scale solar projects 
in places like Washington, D.C., in Baltimore, in Philadelphia, 
in New York City, and a lot of inner cities across the country. 
We don't have the space to develop large utility scale 
projects.
    What we can do is develop those projects, which has been 
done all throughout the country, in rural areas. Our focus is 
on a concept called emissionality, where we are looking to 
develop projects where the grid is the dirtiest. We want to be 
able to clean up--and why is that so important? To improve 
health outcomes for people living in those communities.
    However, we can't lose sight of the other communities, 
minority communities, that have suffered for so long with 
energy burden and environmental injustices, so we are taking a 
percentage of our revenue in partnership with the corporations 
we work with to make investments in communities of color, to 
address environmental health, to address economic justice, to 
create a pipeline of students coming out of HBCUs that will 
take on these jobs of the future.
    But we can't do this alone. We need the Federal Government 
to support the work that we are doing to tackle climate change. 
This is an effort that can be a public-private partnership and 
really get us back out--we are coming out of a time in our 
nation where we are coming out of COVID, an unprecedented 
pandemic. People are looking to get back to work.
    Climate change is that solution. It is the biggest issue, 
again, that we are facing. And my business colleagues--I had 
the opportunity to be part of a press event recently, and we 
talked about how climate change is making the supply chain very 
difficult for businesses to do what we do--to order the 
materials that we need, to develop the projects that we do.
    I will also note that over 1,000 business leaders have 
signed letters of support for Build Back Better. The American 
Sustainable Business Council, E2, and Clean Energy for America 
have organized letters from businesses calling on Congress to 
pass historic investments through reconciliation to combat 
climate change.
    And, in closing, not only does climate change pose a threat 
to our economy and our communities; this issue transcends race 
or politics. Whether one lives in the city, suburbs, rural 
communities, it already adds to disproportionate burdens on 
communities of color, and the Build Back Better Act is 
essential to mitigating these harms, to providing important 
opportunities that advance job creation here at home, U.S. 
competitiveness abroad, and environmental equity across our 
country.
    For all these reasons, I strongly support the legislation. 
Thank you for the opportunity to share my thoughts on the Build 
Back Better Act.
    [The statement of Mr. Campbell follows:]

                     Testimony of Gilbert Campbell

                  Founder and CEO, Volt Energy Utility

           The Select Committee on the Climate Crisis Hearing

  ``Good for Business: Private Sector Perspectives on Climate Action''

                            October 20, 2021

    Chairwoman Castor, Ranking Member Graves, and members of the Select 
Committee on the Climate Crisis, I am honored to be invited to testify 
on today's hearing ``Good for Business: Private Sector Perspectives on 
Climate Action.'' My name is Gilbert Campbell, and I am the Founder and 
CEO of Volt Energy Utility, a national renewable energy firm that 
finances and develops utility-scale solar and energy storage projects 
for large corporate clients, municipalities, and other institutions. 
Volt Energy Utility recently executed the first Environmental Justice 
Power Purchase Agreement (PPA) with Microsoft, to supply Microsoft with 
250 megawatts (MW) of utility-scale solar energy, that will benefit 
rural and minority communities across the country.
    In 2009, I co-founded Volt Energy, a national distributed 
generation solar development company. Volt Energy successfully 
developed solar projects for numerous public and private sector clients 
including: Accenture, Exelon/Pepco, The Cheesecake Factory, Subaru, 
District of Columbia Government, Howard University and Wake Forest 
University.
    Currently, I serve on the Board of Directors at The Solar Energy 
Industries Association (SEIA), The Renewable Energy Buyers Alliance 
(REBA), and The American Association of Blacks in Energy (AABE).
    I am here today to share why I strongly support the Build Back 
Better Act. We are facing the biggest crisis of our lifetime, and that 
is the climate crisis. If we just look at the intensification of 
extreme weather events that transpired just this year, it is clear the 
devastating impact that climate change is having on our nation. 
According to the National Oceanic and Atmospheric Association (NOAA), 
in the first nine months of this year, extreme weather and climate 
disasters in the U.S. have taken more then 538 lives and cost more than 
$100 billion. We have all witnessed the devastating wildfires in the 
west, hurricane after hurricane in the gulf region, flooding in the 
Northeast, and heatwaves all across the country. Our nation is still 
financially recovering from extreme weather events last year, like 
Hurricane Harvey. If we fail to get more resilient and control climate 
disaster spending, there could be catastrophic implications for 
communities across the country, for the economy and for the federal 
budget.
    While I am here as a small business owner to talk about the 
financial toll and implications that climate change is having on 
businesses across this country, I am a concerned citizen first. I know 
how divided our nation is on literally everything, but the climate 
crisis should not be viewed as a red or blue partisan issue, but rather 
as a red, white, and blue opportunity to ensure that our kids, 
grandkids, and future generations will be blessed with opportunities 
many of us have received.
    This is our moment to do what we have always done well and that is 
to lead on the global stage on big issues. Currently, we are lagging 
behind other countries in one of the biggest economic transitions in 
modern history. Other countries' investments in clean energy--and the 
new jobs they have created--far exceed the United States.
          2 million Chinese work in solar, compared with 
        over 230,000 Americans in solar.
          320,000 Europeans work in wind energy, compared 
        with 117,000 Americans.
          Brazil has three times as many jobs in solar 
        heating and cooling as we do in the United States.
          The global vehicle market is swiftly shifting to 
        Zero Emission Vehicles. If our auto industry is going to 
        compete in the global market, we need to invest in Clean 
        Vehicles here at home.
    The Build Back Better Act's investment in clean energy and clean 
vehicle innovation, financing, manufacturing, and deployment will 
contribute to US global competitiveness--and will ensure we create jobs 
in the process.
    Entire businesses are suffering and going under from the extreme 
weather events highlighted above, and tens of thousands of other 
businesses are broadly impacted by supply chain and labor disruptions 
stemming from these extreme climate events. From the agriculture and 
food processing industries to the hospitality and transportation 
sectors, climate change has affected productivity and financial 
resources.
    I recently joined a press event with fellow CEOs and business 
leaders, many of whom offered specific examples of the direct impacts 
of climate disasters as well as the resulting effect of supply chain 
disruptions. All of the participants called on Congress to pass the 
Build Back Better Act. As one business leader from the hotel sector 
expressed: ``We can invest now, or we can pay tenfold later to clean up 
more disasters.''
    I will also note that over 1000 business leaders have signed 
letters in support of the Build Back Better Act. The American 
Sustainable Business Council (ASBC), E2 (Environmental Entrepreneurs), 
and Clean Energy for America (CE4A) organized letters from businesses 
urging Congress to pass historic investments through reconciliation to 
combat climate change and make our country stronger and more resilient.
    I have, and will, continue to work with a wide range of key 
stakeholders from all political parties, electric utility companies, 
oil and gas companies, businesses, energy trade associations, and 
others to tackle this important issue. However, the Build Back Better 
Act is not only essential to mitigate environmental harms; it also 
presents an opportunity for our great nation to make overdue 
investments in our infrastructure that incorporates clean technology 
which reduces carbon emissions. The Act will create millions of good 
paying jobs in every corner of America, and wealth creation 
opportunities for small businesses.
    President Biden has set an ambitious goal to decarbonize our power 
sector by 2035. According to the Solar Energy Industries Association 
(SEIA), my industry, solar energy, currently accounts for only 4% of 
our electricity generation. With only 4% of the energy generated, the 
solar industry currently has over 10,000 businesses and over 230,000 
workers . In a recent study, the Department of Energy highlighted that 
in order to fully decarbonize our power grid by 2035, solar energy will 
have to account for 45% of our electricity generation. Again, at 4%, 
there are 10,000 businesses and over 230,000 solar workers in this 
nation. Imagine how many more small businesses will be created and how 
many more American workers will have good paying jobs.
    If we are going to tackle climate change and decarbonize our power 
sector, we also will have to make significant investments in our aging 
grid infrastructure to account for the new renewable energy generation 
coming online, including transmission, distribution, and 
interconnection. Currently, there are hundreds of Gigawatts (GWs) of 
renewable energy projects waiting to be connected to the grid, but due 
to backlogs and costs, they are sitting in the queue. Build Back Better 
Act investments in our grid infrastructure will provide greater grid 
reliability, which is vitally important as extreme weather events shut 
down power for days and weeks, resulting in significant financial loss 
for businesses and is a major burden for American citizens.
    We must also prioritize investments in communities of color that 
have long suffered from environmental injustices. Environmental justice 
is defined as the ``fair'' distribution of environmental benefits and 
burdens. For far too long, underserved minority communities have been 
on the wrong side of the ledger and have incurred extreme environmental 
burdens and minimal environmental benefits. According to the American 
Lung Association, an estimated 141 million American live in counties 
with unhealthy levels of air pollution. In lower income communities of 
color, there are greater exposures to higher levels of air pollution. 
This chronic exposure is believed to worsen underlying diseases, 
including many that represent risk factors for severe cases of COVID-
19. African American communities have suffered the burdens from 
discriminatory environmental policy and regulations but have not 
benefited from the job growth and wealth creation stemming from clean 
energy. According to a recent analysis titled Help Wanted: Diversity in 
Clean Energy Jobs, African Americans only represent 8% of the clean 
energy workforce, and during COVID-19, workers of color have lost jobs 
at a faster rate and have been slower to be rehired compared to their 
white counterparts. Over the last two weeks, I have had the privilege 
of talking with students at both Howard University and Clark Atlanta 
University, two prominent Historically Black College and Universities 
(HBCUs). We discussed the intersection of environmental justice and the 
clean energy investments needed in their communities. The students are 
strong proponents of Build Back Better, especially because of several 
provisions that are geared towards providing greater climate equity. 
Here are some of the investments in the climate bill that will bridge 
the climate equity gap:
        1.  National Clean Energy and Sustainability Accelerator 
        (called the Greenhouse Gas Reduction fund in the Build Back 
        Better Act)--is based on the state green bank model. This is 
        critical to addressing the financing issue.
                  a.  Not only does the investment require 40% of 
                investments from the accelerator go to communities most 
                impacted by climate--including communities of color, it 
                also
                         i.  provides technical support to business 
                        leaders to help them package their projects for 
                        financing and
                         ii.  provides for flexible financing--which 
                        can help homeowners, farmers and small 
                        businesses who may have resources but not have 
                        high FICO credit rating. They can look at other 
                        factors like consistency of paid utilities to 
                        assess credit worthiness.
    2.  In efforts to ensure that investments in clean energy are more 
affordable and accessible so that there is less need for financing, the 
Build Back Better Act also includes:
                        iii.  Tax credits--with bonus credits for 
                        underserved communities and communities with 
                        high energy burdens
                         iv.  Investments in clean vehicle 
                        infrastructure to ensure it reaches communities 
                        of color;
                         v.  Energy efficiency loan and grant programs.
                        vi.  Consumer incentives for energy efficient 
                        appliances
    In short, climate change poses a threat to our economy and our 
communities. This issue transcends race or politics or whether one 
lives in cities, suburbs or rural communities. Climate change adds to 
the already disproportionate burdens on communities of color. The Build 
Back Better Act is essential to mitigating these harms by providing 
important opportunities that advance job creation here at home, 
increasing US competitiveness abroad and expanding environmental equity 
across our country. For all these reasons, I strongly support the 
legislation.
    Thank you for this opportunity to share my thoughts on the Build 
Back Better Act.

    Ms. Castor. Well, thank you, Mr. Campbell.
    Next, we will go to Mr. Menezes. You are now recognized for 
5 minutes. Welcome.

               STATEMENT OF HON. MARK W. MENEZES

    Mr. Menezes. Thank you, Chair Castor, Ranking Member 
Graves, and members of the select committee. I thank you for 
the invitation to testify before you this afternoon.
    I appear before you as a private citizen, not in any 
official capacity, and my testimony is my own.
    My testimony will be on the Clean Electricity Performance 
Program, commonly referred to as the CEPP, that is part of the 
budget reconciliation package pending before Congress. As has 
been reported, the CEPP was created for two reasons: one, as a 
mechanism to comply with the Senate's Byrd rule's restrictions 
against policy changes in the budget reconciliation process; 
and, two, to compel electric utilities to add clean electricity 
within its tight scoring window.
    I submit the CEPP is a solution to a Senate process 
problem, and not an emissions problem. It is unnecessary for 
two reasons. One, the electric sector leads all other sectors 
in actual quantifiable emission reductions since 2000. These 
reductions are the reason the U.S. leads all other countries in 
actual reductions since 2000.
    Two, the electric sector is viewed as the solution, not the 
problem to reducing our nation's emissions. All comprehensive 
plans to obtain emission reductions or net zero goals call for 
greater electrification of the economy.
    As Congress incents, or mandates, the electrification of 
sectors of the economy, utilities will have to increase 
generation to meet the increased demand. Is the CEPP, which 
penalizes utilities unable to meet clean electricity 
requirements, a rational reaction? The CEPP requires all 
electric utilities--co-ops, munis, and the investor-owned 
utilities--to increase their clean electricity by 4 percent 
each year from 2023 to 2030, or pay the government $40 for 
every megawatt hour below its mandated target.
    To say this is a very aggressive timetable is an 
understatement. The average rate nationwide of bringing new 
renewable generation online is 1 percent per year over the past 
10 years. As I have said, reconciliation rules do not allow for 
a longer timeline of compliance.
    And it is quite possible the CEPP, if enacted as drafted, 
would make electricity less reliable, potentially increase 
costs to consumers, and not do much to improve the environment.
    Now, why do I say that? With the CEPP's relatively short 
timeline for compliance, the only clean electricity source is 
likely to be solar, which as an intermittent resource, does not 
assure reliability.
    I have been unable to find any review of the CEPP by either 
NERC or FERC, those entities mandated by Congress to develop, 
implement, and enforce the electric reliability standards of 
our nation's bulk power system. Considering the great concern 
expressed by Congress just this year about electric reliability 
in California, Texas, and elsewhere, one would wonder why 
Congress hasn't insisted on getting views from those with the 
statutory obligations to keep our grid reliable.
    The CRS points out that the CEPP will put compliance costs 
on Federal taxpayers as well as electricity consumers. It 
estimates it will cost Federal taxpayers $150 billion over 10 
years.
    Now, truly, the grants in the CEPP are intended to reduce 
costs to ratepayers so they do not bear the direct costs of 
this transition to clean electricity. However, as the CRS 
points out, no one really knows for certain who will bear the 
expected cost and how much. In the long run, consumers might 
pay more. Imagine explaining to grandma living on fixed income 
why she has to pay more to meet the CEPP requirements.
    Nor is it apparent that the CEPP will do much for the 
environment. Indeed, as the CRS points out, the CEPP does not 
guarantee reductions. The CRS alerts Members of Congress that 
under the CEPP, electric utilities may face costs or other 
constraints, such as siting challenges, state and local 
regulatory requirements, reliability risks on achieving CEPP 
targets. Plus, utilities might decide to pay the penalty rather 
than expend the high capital costs to reduce emissions.
    And were the CEPP to be enacted as drafted, it is likely 
there will be unintended consequences. As the sector adds more 
and more intermittent renewables to comply with the CEPP, more 
reliable backup power--power will be needed because battery 
storage capacity can't be built quickly enough. A project 
underway in California today to add state-of-the-art, 4-hour 
battery storage to a 350-megawatt solar project for 2022 
started in 2015, 7 years from start to coming online.
    Finally, the CEPP may very well stop the development of 
zero emitting nuclear development and CCS deployment. Both 
nuclear and carbon capture technologies simply cannot be 
permitted and built in time. What happens to the $4.5 billion 
Louisiana Clean Energy Complex announced last week by Air 
Products and the Governor of Louisiana to use CCS to capture 
and permanently sequester 5 million tons of carbon a year? What 
happens to the small modular nuclear reactors being pursued out 
west that the taxpayers and private industry have spent 
enormous amounts of resources to develop and deploy?
    And, by the way, the photovoltaics that will cover our 
landscapes to meet the CEPP, very likely horse and buggy 
technology. Today, our labs have developed disruptive liquid 
crystalline technologies that could replace today's solar 
panels with coatings as cheap as paint. You can read about it 
all in this book. Even John Kerry called this potential that 
may very well save the Earth.
    Finally, all this is not to say there couldn't be 
improvements to the CEPP as drafted. I have offered some 
suggestions in my written testimony.
    I thank you and look forward to your questions.
    [The statement of Mr. Menezes follows:]

               Testimony of the Honorable Mark W. Menezes

                        Former Deputy Secretary

                       U.S. Department of Energy

              Former Chief Counsel, Energy and Environment

     U.S. House of Representatives Committee on Energy and Commerce

  Before the U.S. House Select Committee on Climate Crisis Hearing on

  ``Good for Business: Private Sector Perspectives on Climate Action''

                      Wednesday, October 20, 2021

    Chair Castor, Ranking Member Graves, and members of the Select 
Committee:
    Thank you for the invitation and opportunity to testify before you 
today on the important question of whether Congressional efforts to 
take meaningful climate action will be good for business. Today, I 
appear before you as a private citizen, not in any official capacity, 
and my testimony is my own opinion informed by over 30 years of 
experience in the public and private energy policy sectors.
    To be sure, Congressional climate action can be good for business. 
While at DOE, we carried out Congressional direction promoting 
technology that would be good for business, good for consumers, and 
good for the environment. We know advancing affordable technologies is 
both necessary in reducing domestic emissions and is vital to reducing 
emissions globally--particularly in developing nations where 
affordability is paramount. If we miss the opportunity to leverage 
domestic action to reduce global emissions, then we will have 
accomplished little.
    Not all climate legislation is good for business, or consumers, or 
even the environment. Some provisions could be harmful to all three.
    In that regard, I would like to focus today on the Clean 
Electricity Performance Program, commonly referred to as ``the CEPP'' 
that is part of the budget reconciliation package before Congress. As 
the members of this Select Committee are well aware, it's not unusual 
for Congress to take several Congressional sessions to consider 
transformative, controversial measures, proceed through regular order, 
to ensure a complete record in order to survive judicial scrutiny. But 
that's not the case here. Other than the House Energy and Commerce 
markup without a legislative hearing, there is a dearth of evidence in 
the Congressional record or even the public record as to why this CEPP 
is necessary. This lack of transparency and objective analysis is not 
inconsequential as the CEPP would transform a sector of the economy 
that every business and every family in America pays for and relies on 
daily. It is deserving of significant vetting. I would note that this 
Select Committee spent over a year hearing from stakeholders before the 
majority released a staff report that contained over 700 
recommendations. While that report was embraced by the Speaker, it is 
the CEPP, which was neither considered nor included in the 700 
recommendations, that is pending before Congress.
    The interesting thing about the CEPP, from my point of view, is 
that, except for those who were involved with its creation, no one else 
was aware of it until it was released a few months ago from Evergreen 
Action. A recent article confirmed that as of a year ago, the concept 
itself didn't even exist calling its invention ``an acrobatic feat and 
calculated to get past arcane Senate rules'' on reconciliation.\1\ 
Congress, think tanks, academicians--all serious minded people who want 
to contribute to solving climate challenges in the policy arenas in 
meaningful ways--have not had much time to independently analyze or 
model this approach, described as both an incentive and a penalty,\2\ 
because no one saw the proposal, outside of ``The Third Way, a center-
left think tank, Evergreen Action, an environmental policy outfit, and 
the Natural Resources Defense Council, the nonprofit advocacy group,'' 
\3\ until about a month ago. And apart from a committee markup, there 
have been no hearings or testimony on it.
---------------------------------------------------------------------------
    \1\ Meet the CEPP, the biggest federal climate policy you've never 
heard of | Grist.
    \2\ House Proposes Strong Clean Electricity Performance Program | 
NRDC.
    \3\ See FN 1.
---------------------------------------------------------------------------
    As I will explain, the CEPP is a solution to a process problem, not 
an emissions problem. Since the CEPP was designed to bypass a process 
problem it was limited in utilizing tools and policies that could have 
led to an efficient and cost effective solution. This process 
intentionally ties the hands of Congress and the potential negative 
impacts of the CEPP are a result of these process restrictions.
    The CEPP, I believe, is unnecessary for two reasons. One, the 
electric sector leads all sectors in actual, quantifiable greenhouse 
gas emissions reductions since 2000. In fact, these reductions have 
been of such magnitude that the U.S. leads all other countries in 
actual GHG emissions reductions since 2000.\4\ These are actual 
emission reductions, not pledges or public statements that the U.S. 
will get to ``net zero'' or achieve some clean energy standard by a 
certain date. Other countries and sectors do not come close to matching 
the actual reductions of the U.S. electric sector. The electric and 
power sector continues to reduce emissions at a faster pace than other 
sectors.\5\ Emission reductions in this sector have been so significant 
and lasting that today it is the transportation sector that leads U.S. 
emissions.\6\ One would wonder why the CEPP targets the sector that has 
demonstrated a commitment and has achieved success reducing emissions 
without federal government mandates. Indeed, one Senate critic of the 
CEPP has wondered why there is even a need for incentive payments to 
companies already doing everything they can to reduce emissions while 
ensuring safe, reliable and affordable power.\7\
---------------------------------------------------------------------------
    \4\ Global CO2 emissions in 2019--Analysis--IEA.
    \5\ U.S. energy-related CO2 emissions declined by 11% in 
2020--Today in Energy--U.S. Energy Information Administration (EIA).
    \6\ Microsoft Word--MER S11 (eia.gov) at 198.
    \7\ What a clean electricity payment plan means for gas, CCS--E&E 
News (eenews.net).
---------------------------------------------------------------------------
    The second reason that the CEPP is unnecessary is that the electric 
sector is viewed as the solution, not the problem, to reducing our 
nation's emissions. All comprehensive plans to obtain emission 
reductions or ``net zero'' goals call for greater electrification of 
the economy. Where electrification makes sense and where it does not is 
a worthy policy debate, but increased electrification is going to be 
part of the solution. Recognizing this better efficiency, it is not 
surprising that other provisions contained in the budget reconciliation 
legislation increase the use of electricity.\8\ Indeed today, almost 
all new electric generation being built today is renewable and natural 
gas,\9\ with the exception of the emission-free Vogtle nuclear facility 
in Georgia. Natural gas complements the addition of renewable power on 
the grid for several reasons: 1) it can be added in incremental amounts 
to meet generation capacity requirements as intermittent sources stop 
producing, 2) it can respond quickly to demand changes, and 3) has 
lower environmental compliance, fuel, and operating costs.\10\ As 
Congress encourages the electrification of sectors of the economy, 
utilities will have to increase generation sources to meet the 
increased demand. Is the CEPP, which penalizes utilities unable to meet 
clean electricity requirements, a rational reaction?
---------------------------------------------------------------------------
    \8\ R46934.pdf (fas.org) at 4.
    \9\ Electricity generation, capacity, and sales in the United 
States--U.S. Energy Information Administration (EIA).
    \10\ Ibid.
---------------------------------------------------------------------------
    The CEPP was created, as has been reported, as a mechanism to 
comply with the Byrd Rule restrictions against policy changes in the 
budget reconciliation process.\11\ Any policy change would be subject 
to a ``point of order'' which would then require 60 votes in the Senate 
for consideration for final passage. As of last week, it was not known 
if the Senate Parliamentarian would rule that it in fact satisfies the 
Byrd Rule.\12\ It also was created to compel electric utilities to add 
clean electricity sources to their generation mixes in a scoring window 
to comply with the Byrd Rule. The reconciliation process does not allow 
for long-term policies to be considered. Thus, the CEPP had to require 
taxpayer action (on paper) within an unreasonably short time frame to 
achieve emission reductions targets announced by the Biden 
Administration in preparation for the upcoming COP26 meeting in 
Glasgow.\13\
---------------------------------------------------------------------------
    \11\ FN 1.
    \12\ FN 8 at 7 (FN 29).
    \13\ Joe Biden to reveal US emissions pledge in key climate crisis 
moment | Climate crisis | The Guardian.
---------------------------------------------------------------------------
    Let's take a minute to look at each of these reasons for its 
creation. The CEPP requires all electric utilities (co-ops, munis, and 
IOUs) (referred to as ``eligible electricity suppliers'' in the CEPP) 
to increase their ``certified clean electricity'' by 4% each year from 
2023 to 2030 or pay the government $40 for every MWh below its mandated 
target. To say this is a very aggressive timetable is an 
understatement. The average rate nationwide of bringing new renewable 
generation online is one percent per year over the past 10 years.\14\ 
Reconciliation rules do not allow for a longer timeline of compliance.
---------------------------------------------------------------------------
    \14\ FN 8 at 2.
---------------------------------------------------------------------------
    The other factor at work here is that the Biden administration has 
increased dramatically its emission reduction goals. On ``day one'', 
the President announced the ambitious goals to reach net zero emission 
economy-wide by 2050 and a carbon-free power sector by 2035. Only three 
months later, at a ``Leaders (sic) Summit on Climate'' on April 22nd, 
he announced a new goal of ambitious reductions by 2030.\15\ These are 
not insignificant changes over a very short period of time. These new 
numbers reverberate throughout all sectors of the economy. All sectors 
had to immediately revise project capital expenditures, ensure supply 
chains, implement meaningful management and sustainable policy changes 
to meet these new goals. Teams of engineers had to recalibrate 
operational facilities and design, financial managers reassessed access 
to capital markets and debt issuance, Wall Street and rating agencies 
had to again reassess risk and value. The cost of doing business in the 
U.S. likely increased dramatically all in a matter of three months 
because the President simply decided to increase reduction goals. This 
announcement alone is driving U.S. companies to change. The CEPP is 
piling on.
---------------------------------------------------------------------------
    \15\ FACT SHEET: President Biden Sets 2030 Greenhouse Gas Pollution 
Reduction Target Aimed at Creating Good-Paying Union Jobs and Securing 
U.S. Leadership on Clean Energy Technologies | The White House.
---------------------------------------------------------------------------
    Indeed, it's possible the CEPP, if enacted as drafted, would make 
electricity unreliable, increase costs to consumers, and not do much to 
improve the environment. With the CEPP's relatively short time line for 
compliance, the ``clean electricity'' sources needed to be added will 
be mainly solar which, as an intermittent resource of electricity, does 
not assure reliability. The grants in the CEPP are intended to reduce 
costs to ratepayers so they do not bear the direct cost of this 
transition to ``clean electricity.'' However, for reasons explained 
later, no one really knows for certain who will bear the expected costs 
and how much. In the long run, customers might pay more.
    Of all the statutory changes under consideration today by Congress 
to address climate, the CEPP is likely not good for business or for 
American families.
    Let's now discuss those three aspects: reliability, costs to 
consumers and the utility companies, and environmental consequences.

Reliability
    Mandating a rapid increase throughout the entire power sector of 
``clean electricity'' in the time frame to meet an arbitrary budget 
scoring window will result in only a very few energy sources 
qualifying. Of the energy sources allowed under the CEPP--renewable 
energy (wind, solar, hydro, geothermal), maybe fossil with CCS, maybe 
biomass--only solar, possibly some wind, will be able to be brought 
online in time to meet the CEPP's aggressive timelines.\16\ These power 
sources are variable and intermittent and need transmission upgrades to 
accommodate integration into the power grid. There is insufficient time 
under the stringent CEPP timelines to build the necessary transmission 
to meet the CEPP mandates while keeping rates affordable and ensuring 
reliability.\17\
---------------------------------------------------------------------------
    \16\ FN 8.
    \17\ Ditto Says House Clean Energy Plan Creates Unachievable 
Transition Timeframe For Public Power | American Public Power 
Association.
---------------------------------------------------------------------------
    Some claim that batteries will take the place of traditional power 
generation. Our current state of effective battery technology is 4 
hours and it takes years to site, permit and build. Long Duration 
Energy Storage (LDES), possibly the ``holy grail'' of grid storage is 
still years away from development and deployment.\18\ In California, a 
4-hour, 350-megawatt battery storage project scheduled to come online 
in 2022 has been under development since 2015 (a seven-year period for 
one project).\19\ There simply isn't enough storage available in time 
to maintain reliability, and even if there were, it would be enormously 
expensive. A study by the National Renewable Energy Laboratory in 2019 
predicted the cost of 4-hour battery storage ranging between $124 and 
$328 per kilowatt hour in 2030.\20\ As comparison, the average cost of 
electricity here in the District of Columbia is about 12 or 13 cents 
per kilowatt hour (kWh).\21\
---------------------------------------------------------------------------
    \18\ Energy Storage Grand Challenge Energy Storage Market Report.
    \19\ California Scrambles to Find Electricity to Offset Plant 
Closures--WSJ.
    \20\ Cost Projections for Utility-Scale Battery Storage: 2020 
Update (nrel.gov).
    \21\ Electricity Rates by State >> (October 2021) << ElectricRate.
---------------------------------------------------------------------------
    I have been unable to find any review of the CEPP by either the 
North American Energy Reliability Corporation (NERC) or the Federal 
Energy Regulatory Commission (FERC), those entities mandated by 
Congress to develop, implement and enforce the electric reliability 
provisions of our nation's bulk power system. Considering the great 
concern expressed by Congress just this year about electric reliability 
in Texas, California and elsewhere, one would wonder why Congress 
hasn't insisted on getting views from those with the statutory 
obligations to keep our grid reliable.
    Our current state of the electricity sector finds that the ramping 
ability of efficient natural gas combined cycle units has complemented 
the rapid buildout of wind and solar. When DOE issued emergency orders 
to California in 2020 and again in 2021,\22\ it ordered natural gas 
units to run. California has such an abundance of solar that over 1.5 
million MWh was curtailed in 2020, and that number continues to 
increase unless and until additional storage technologies can be 
developed and deployed and transmission upgrades are made.\23\ As 
reported by the Congressional Research Service (CRS), and mentioned 
above, the CEPP does not provide for necessary upgrades to the 
transmission and distribution systems (wires) of our electric 
system.\24\
---------------------------------------------------------------------------
    \22\ DOE's Use of Federal Power Act Emergency Authority | 
Department of Energy.
    \23\ California's curtailments of solar electricity generation 
continue to increase--Today in Energy--U.S. Energy Information 
Administration (EIA).
    \24\ FN 8 at 6.

Costs
    The CRS points out that the CEPP will go beyond a Clean Energy 
Standard (CES) in that it will put compliance costs on federal 
taxpayers as well as electricity customers.\25\ The CRS estimates it 
will cost federal taxpayers $150 billion over 10 years.\26\ For 
families, it is not a question of ``if their utility bills will go up, 
but instead just a question of ``how much.'' Renewables with energy 
storage to maintain reliability are very expensive, as highlighted 
above in the NREL study, and take years in siting and deployment. It is 
very likely that transmission cannot be built in the time frame of the 
CEPP, so the construction costs would be incurred later, after the 
incentive payments have ended. Finally, we do not know how competitive 
electricity markets will react to a situation where qualified ``clean 
electricity'' will be scarce and there's a $40 penalty for every MWh 
below the mandate. It is logical to predict that companies capable of 
producing new qualified ``clean electricity'' will increase their price 
because it is obvious buyers will pay up to $40 more for that 
electricity than pay a penalty. But utilities won't know whether their 
State utility commissions will allow them to pass on that cost to 
customers. The CRS is correct in concluding ``[e]lectricity consumers 
ultimately bear most costs of any electricity policy.'' \27\
---------------------------------------------------------------------------
    \25\ FN 8 at 1.
    \26\ Ibid at 2.
    \27\ Ibid at 5.

Environmental Performance
    It is not apparent that the CEPP will do much for the environment. 
Indeed, the CEPP does not guarantee reductions.\28\ The CRS has alerted 
Congress that under the CEPP electric utilities ``may face cost or 
other constraints (e.g., siting challenges, state and local regulatory 
requirements, reliability risks) on achieving CEPP targets. ...'' \29\
---------------------------------------------------------------------------
    \28\ Ibid at 2.
    \29\ Ibid.
---------------------------------------------------------------------------
    As I mentioned, the utility sector has reduced emissions 
dramatically in recent years, and that has happened in large part 
because of market forces. Through the economic miracles that have come 
with hydraulic fracturing for natural gas, gas has become very cheap 
and has replaced coal as the dominant power source. That largely 
accounts for the U.S. GHG emissions dropping over the past 20 years as 
mentioned above. And due to the abundance and affordability of 
domestically produced natural gas, generation fueled by it complements 
the development and operation of renewables since it ramps up when the 
sun goes down or the wind stops blowing.
    Were the CEPP to be enacted, it's likely there will be unintended 
consequences.
    First, the environment might not improve very much because 
companies are unable to build renewables fast enough to meet the 
targets, due to supply chain issues, permitting, and other issues 
mentioned previously. Many utilities and developers have already built 
solar farms near to existing transmission lines capable of 
interconnection to existing reliable power grids. The next wave of 
solar onto our bulk power system, as experts predict, will require 
substantial and extensive new transmission facilities and significant 
(and expensive) upgrades to our existing, and currently reliable, 
transmission system.
    Second, for the portion of renewables they are able to build, they 
will need reliable backup power in place because they won't be able to 
build storage quickly enough, due in part to the same supply chain 
issues, delays in permitting and other time-consuming processes. Today, 
we have 1.5 gigawatts of battery storage deployed and another 14.5 
gigawatts expected to come online by 2024. Of this amount, only 4% will 
be standalone. Of the rest, 9.4 gigawatts will be co-located with solar 
and 1.3 gigawatts with wind. That means utilities will be unlikely to 
install batteries without planning, siting, permitting, and 
constructing solar or wind farms.\30\ Notwithstanding the collective 
effort of Congress, DOE, the national labs, the private sector, the 
SPAC investors, private equity, and the many universities and think 
tanks to achieve the breakthrough, grid-scale battery storage needed to 
accommodate the variable sources of energy we desire, we have yet to 
make the technological breakthroughs necessary for grid-scale battery 
storage to be available today as a reliable, cost-effective solution. 
It's likely, if the CEPP is enacted this year, the backup power will be 
fossil energy. As mentioned, today at best, we have battery technology 
capable of operating 4 hours in duration. Long-duration energy storage 
is still in its early development.\31\
---------------------------------------------------------------------------
    \30\ Most planned U.S. battery storage additions in next three 
years to be paired with solar--Today in Energy--U.S. Energy Information 
Administration (EIA).
    \31\ FN 18, 19.
---------------------------------------------------------------------------
    Third, the CEPP may very well kill the development of zero emitting 
nuclear development and deployment and any chance of deploying carbon 
capture technologies. Take nuclear: Congress has spent billions to fund 
nuclear technology development and deployment ranging from fuel 
technologies for existing units to small modular reactors to fusion 
energy. None of the new reactor technologies being funded by Congress 
can possibly be built in the time frame of the CEPP. To be sure, 
nuclear qualifies under the CEPP but where is the investment incentive 
to develop new technology? If we abandon our commitment to maintain 
technological leadership in nuclear generation, we will cede new plant 
construction around the world to our competitors at best or Russia or 
China. These are countries without the obligation to enter into other 
nonproliferation or enrichment agreements with those they are providing 
nuclear technology. Congress should carefully at programs that might 
appear to accomplish one goal but lose another of greater security 
importance.
    As for CCS, like nuclear, it is likely eligible under the CEPP. 
However, like nuclear, these facilities involve a longer planning and 
construction time than the CEPP allows. And, like nuclear, Congress has 
supported both technological development through research and 
development through appropriations to DOE and its deployment by the 
enactment of 45Q tax credits for both CCS and CCUS. By making CCUS less 
of an opportunity for the power sector, we lose out on the opportunity 
to produce low-carbon oil, because we won't be capturing the CO2 
necessary to produce it. That means higher-carbon oil produced by 
foreign competitors will take its place in the oil market.
    Both nuclear and carbon capturing technologies simply cannot be 
permitted and built in time. And that means the world, not just the 
U.S., but the entire world is going to lose out on technology that we 
would otherwise build, test and export. It will be the U.S.--the 
world's technological leader--building new technologies that can be 
exported around the world to supply reliable power with low emissions 
and low cost. All credible experts agree that global deployment of 
carbon capture technologies is essential to reducing global emissions. 
It is foreseeable that global emissions would miss out on reductions 
that could have been made across the world because this proposal will 
set back our technological leadership, about which I know quite a bit 
from my time at DOE, implementing the clean energy programs Congress 
assigned to us.
    Congress should conduct hearings specifically on the CEPP to 
determine if it is in fact, ``good for business.''
    Finally, and perhaps most importantly, another interesting aspect 
of the CEPP is that it is part of a ``roadmap'' proposed by Evergreen 
Action comprised of several mechanisms that Congress should enact to 
achieve emission reductions in the electricity sector. Most of the 
reductions would be obtained through the extension and enhancement of 
tax credits, not the CEPP. It is my understanding DOE has reviewed some 
of these provisions and has indicated that full implementation of the 
tax package provisions under consideration would result in a 73% clean 
electricity sector mix by 2030. Thus, the CEPP's role is to obtain the 
remaining 7%. It seems an overreach to enact a program that will 
increase the federal deficit by $150 billion over the next 10 years 
\32\ to achieve an additional 7% clean electricity sources when the 
U.S. is building renewables at an already historically high pace. It 
has been reported some utilities will expend more capital by several 
factors to comply with CEPP than expended in the past 15 years. One 
major utility, which has already announced plans to add 16,000 MW of 
renewables-over half of its current load-has raised questions about the 
impact of the program on market prices and failing to take into 
accounts the costs to build and upgrade transmission systems.\33\ 
Layering on an administratively burdensome and costly CEPP regime to 
get to the administration's goal of 80% in 2030 appears to be 
excessive.
---------------------------------------------------------------------------
    \32\ FN 8.
    \33\ Major utility questions Biden's signature climate plan--E&E 
News (eenews.net).
---------------------------------------------------------------------------
    Moreover, the CEPP does not specify how revenue collected would be 
used and directs the Department of Energy to administer the 
program.\34\ For a Department whose missions are to conduct basic 
science research, maintain our nuclear security systems, cleanup 
environmental wastes at the Manhattan Project sites, and develop 
breakthrough technologies in the energy sector, this would be an 
entirely new challenge for it. From my experience in employing 
qualified people into the service ranks at the Department, under 
current hiring processes, DOE would not be able to get the number of 
people in place in time to carry out the aggressive timetable set forth 
under the CEPP. Congress would have to change the hiring process. The 
Executive Branch cannot hire qualified candidates as efficiently as the 
Legislative Branch.
---------------------------------------------------------------------------
    \34\ Ibid.
---------------------------------------------------------------------------
    Speaking of roadmaps to meeting emission reduction targets, I 
typically encourage policy makers to read the Lawrence Livermore Lab 
Foundation's ``Getting to Neutral.'' \35\ It was prepared at the 
request of the state of California to determine if the state could meet 
what it considered to be a very aggressive ``net zero'' goal by 2045. 
The scientists that performed the analysis and published the study 
determined the state could achieve its goal with existing technologies 
at a cost of between $5 billion to $15 billion annually to the citizens 
of California. Importantly for policy makers, the report assumed no 
statutory changes by the state or federal government. It does not call 
for the ban or elimination of fossil fuels. It recognizes fossil fuel's 
continued role in our economy and its role in achieving net zero goals. 
The report concludes that California would need to put CCS on existing 
point sources, develop pipelines to transport carbon and its geologic 
storage capacity to ensure permanent sequestration with monitoring, 
better land management of forests and wetlands to increase biomass and 
biofuels production and increase natural carbon sinks, and to employ 
existing direct air capture technologies. The report goes on to suggest 
other technologies capable of deployment today including carbon 
weatherization with rocks and use of cellulosic ethanol. All 
technologies are currently available for use. Congress could consider 
creating a fund for continued development of these technologies and 
incent deployment nationwide. There is no need for Congress to pass 
legislation penalizing anyone for not reaching arbitrary reduction 
goals.
---------------------------------------------------------------------------
    \35\ Getting_to_Neutral.pdf (llnl.gov).

Suggested improvements to the CEPP
    All this is not to say there couldn't be improvements to the CEPP 
as drafted. While it would take significant improvement to overcome the 
flaws of the current construct, I haven't met one industry, 
corporation, NGO, not-for-profit, trade association or person who does 
not want to be part of the solution to achieving emission reduction 
goals. All are willing to work on new proposals as they are made aware 
of them. You have probably heard from the munis and co-ops as well as 
the investor-owned utilities that some ``tweaks'' to the CEPP should be 
considered. Supportive suggestions include language being considered by 
the tax committees: eliminating penalty exposure for failure to meet 
annual percentage targets if the load serving entity meets even higher 
clean electricity standards, and similarly, eliminating the penalty for 
failure to reach the 80% target by 2030 if annual progress targets are 
met; increase the annual averaging mechanism to lessen the severity of 
penalties to avoid either increased cost of electricity to consumers or 
increasing capital costs that result in increased rates to consumers.
    In addition to those improvements, other suggestions include 
allowing state public utility commissions to determine whether 
compliance payments should be recovered in retail rates removing the 
express or design a mechanism to have benefits flow to customers and 
remove the compliance payment paid by the utilities; spreading out the 
acquisition amounts more than the 4% target in a given year be allowed 
for use in meeting compliance requirements across the full ten-year 
timeframe in recognition of the fact that capital is expended in 
varying amounts depending on the specific projects, not uniformly over 
a certain time period; and giving credit for early action and removing 
the compliance payment should there be any ``backsliding'' due to the 
vagaries of renewable power caused by low hydro, low wind, solar 
generation from year to year for utilities already achieving 85% clean 
electricity. These are just a few of the many suggestions that have 
been reported in the press.
    But in the end, as a former Chief Counsel to an authorizing 
committee, I believe the best approach is to use regular order to 
develop policies and programs outside of the reconciliation process. A 
fair, open and transparent process always results in opportunities to 
participate in bipartisan debates. In the end, one might not prefer the 
outcome but none can complain about the process.
    Members of the Select Committee, this concludes my prepared 
statement. Thank you again for the opportunity to testify today and I 
look forward to answering your questions.

    Mr. Casten [presiding]. I apologize. Thank you for your 
testimony.
    The chair now recognizes Mr. Edsey for your prepared 
remarks.

                    STATEMENT OF DAVID EDSEY

    Mr. Edsey. Thank you.
    I would like to thank Chair Castor, Ranking Member Graves, 
and Congressman Casten for the introduction, and the other 
members of the committee for inviting me to address you today 
on this issue of such extreme importance to our entire country 
and the world.
    My name is David Edsey, and I am employed by Zurich North 
America, one of the largest commercial insurance companies in 
the U.S., as its Climate Director, a role which my employer 
created as part of its broader response to climate change.
    In addition to our casualty and specialty lines of 
insurance, Zurich insures the commercial properties of 
thousands of U.S. companies against physical damage caused by 
flood, windstorm, hail, wildfire, and other extreme weather 
events. Our property policies also pay for our customers' lost 
business income resulting from damage to their property, power 
outage, or damage to their supply chain due to extreme weather 
events.
    In short, Zurich, like all other property insurers, is 
dramatically exposed to extreme weather events, now made more 
frequent and severe due to anthropogenic climate change. The 
science of climate change and, in particular, the recent IPCC 
Sixth Assessment Report, are extremely alarming to Zurich, not 
only with respect to its own exposure, but also due to the 
potentially devastating impacts to our customers, communities, 
the economy, our ecosystems, and the humanitarian toll likely 
to fall upon the most vulnerable on this planet.
    In response to this threat, Zurich has prioritized helping 
our policyholders and communities adapt to the effects of 
climate change in reducing greenhouse gas emissions. For 
example, in alignment with the Paris Agreement, we have 
committed to achieving net zero emissions by 2050 in our own 
operations, in our investment portfolios, and in our 
underwriting portfolios, and have already made significant 
progress towards these targets.
    We are also sponsoring the not-for-profit Instituto Terra, 
which is restoring nearly 2,000 acres in Brazil's Atlantic 
Forest by planting 1 million trees, and restoring biodiversity.
    We are also collaborating with the Resilient Cities Network 
to create a multiyear program to strengthen climate resilience 
and address social inequities in vulnerable communities, 
beginning initially with Houston and Boston.
    Zurich has made and embarked on many other climate-related 
commitments and initiatives, including maintaining a prominent 
presence at the upcoming COP 26 Conference in Glasgow.
    Now, of course, Zurich is not alone amongst companies 
making net-zero emission commitments or financial companies 
committing to climate impact investment. But the commitments 
from industry and commerce, though impressive and growing, 
would not be enough to eliminate greenhouse gas emissions by 
2050 in order to keep global warming in check. Decisive 
governmental action is needed.
    As Zurich recently stated in our Closing the Gap on Climate 
white paper, certainty around political commitment to net zero 
and the policy actions that will implement those commitments 
are fundamental to making progress. Without this clarity, it 
will be difficult to make the investment case for new low-
carbon technologies, or to create the pipeline of investable 
green projects required to really scale green financial 
markets.
    Zurich, therefore, applauds the important work of all of 
the members of this committee and its staff in developing 
recommendations on the policies needed to solve the climate 
crisis. Transforming our society on the scale required to meet 
this challenge will be monumental. To align with science to 
limit global warming to 1.5 degrees Celsius, broad and bold 
public policies need to be enacted that will enable a reduction 
of our greenhouse gas emissions by 50 percent by 2030 and 100 
percent by 2050. And so, it is urgent that we put those 
policies in place now.
    As Congress considers climate legislation, Zurich supports 
a clean electricity program, as the foundation of a net-zero 
economy is a clean grid to meet the growing demands of 
electrified vehicles, buildings, and industries. We further 
support the extension of tax credits supporting the use of 
renewable electricity and the purchase of electric vehicles.
    We also support public investments in EV charging 
infrastructure, green hydrogen, and carbon capture and storage.
    Zurich has also long held that a meaningful global price on 
carbon is the most efficient way to achieve net zero outcomes. 
Done correctly, a price on carbon would allow economic 
incentives to reduce emissions.
    The response to this crisis cannot be overdone and will 
require the combined efforts of all citizens, communities, 
businesses, and levels of government. It will also require an 
unprecedented level of international cooperation, especially to 
advance emerging economies onto carbon-free platforms, to 
protect the world's natural carbon sinks, and to share carbon 
reporting and pricing mechanisms.
    Thank you again for allowing me to address you this 
afternoon, and I am happy to answer any questions.
    [The statement of Mr. Edsey follows:]

                        Testimony of David Edsey

                          Director of Climate

                          Zurich North America

  ``Good For Business: Private Sector Perspectives on Climate Action''

  U.S. House of Representatives Select Committee on the Climate Crisis

                            October 20, 2021

    Good afternoon. I would like to thank Chairwoman Castor, Ranking 
Member Graves and other members of the committee for the opportunity to 
testify before the Select Committee. My name is David Edsey, and I am 
the Climate Director for Zurich North America.
    I am here today to provide an overview of how Zurich views climate 
risk, how Zurich is addressing the issue of climate change within our 
own operations, how we incorporate climate change thinking into our 
market activities, and how we engage with society more broadly to help 
advance climate awareness and action. Following the release of the 
Intergovernmental Panel on Climate Change (IPCC) report this summer, as 
COP 26 quickly approaches, and as Congress continues to evaluate public 
policy responses to climate change, today's hearing is particularly 
timely.
    Zurich North America is part of Zurich Insurance Group, a leading 
multi-line insurer that has been serving its customers in global and 
local markets for 150 years. With approximately 55,000 employees, 
Zurich provides a wide range of property and casualty, specialty and 
life insurance products and services in more than 215 countries and 
territories. Zurich's customers include individuals, small businesses, 
and midsize to large companies, as well as multinational corporations. 
With nearly 8,700 employees in the United States, Zurich has called the 
greater Chicago area home for over a century.
    In addition to our casualty and specialty lines of insurance, 
Zurich also insures the commercial properties of many of the largest 
corporations in the US in addition to thousands of midsize companies. 
Our property policies will pay for physical damage caused by flood, 
wind and storm surge from hurricanes, hail, wildfires, and other 
extreme weather events, in addition to loss of business income 
resulting from those damages. Our property policies may also pay for 
our customers' lost business income resulting from a power outage or 
from damage to their supply chains from an extreme weather event.
    In short, Zurich, like many other property insurers, is 
dramatically exposed to the increased frequency and severity of extreme 
weather events brought about by anthropogenic global warming. The 
scientific research of climate change, and in particular the summary of 
findings in the recent IPCC 6th Assessment report, are therefore 
extremely alarming to Zurich not only with respect to its own exposure, 
but the potentially devastating impacts to our customers, the economy, 
our ecosystems, and the humanitarian toll likely to fall upon the most 
vulnerable on this planet.
    This, year, the U.S. has once again seen climate records broken. 
Through September, 2021 has brought 18 weather and climate disaster 
events with losses exceeding $1 billion each across the U.S., and this 
year is four events shy of the 2020 record for the most disasters on 
record in a calendar year.\1\
---------------------------------------------------------------------------
    \1\ https://www.ncdc.noaa.gov/sotc/national/202109.
---------------------------------------------------------------------------
    Over the last 18 months, it has become clear that no person or 
place is immune from disasters or disaster-related losses. As an 
insurer tasked with helping communities, individuals and businesses 
recover from a catastrophe, we are at the forefront of realizing and 
quantifying the large-scale consequences of inaction. Furthermore, we 
have direct insight into the difficulties and challenges in quickly 
returning to ``normal'' after catastrophe strikes.
    While we cannot eliminate risk or prevent all losses from 
occurring, we can expedite the return to ``normal,'' by reducing 
impacts and accelerating recovery. As an insurer, we are continually 
looking for solutions to limit exposure and minimize risk before 
disaster strikes. Our analysis and risk assessments have identified 
climate change as perhaps the most consequential and complex risk 
facing society today. It is intergenerational, international, and 
interdependent.
    Climate change poses an array of challenges potentially impacting 
every aspect of our society and economies across the globe. From an 
insurance coverage perspective, many assets may simply become 
uninsurable if action is not taken to eliminate greenhouse gas 
emissions and strengthen and adapt our infrastructure. Zurich is 
committed to helping its policyholders, individuals and communities 
adapt to the effects of climate change, while at the same time taking 
action to help bring about the transition to net-zero.
Addressing Climate Change Within Our Own Operations
    Zurich was the first insurer to sign the UN Business Ambition 
Pledge for a 1.5+ Future, committing to reach net-zero operational GHG 
emissions by 2050. Zurich was also a founding member of the UN Net-Zero 
Owner Alliance, committing to hold a net-zero carbon investment 
portfolio by 2050. Zurich was also a founding member of the Net-Zero 
Insurance Alliance, committed to reducing their underwriting portfolios 
to net-zero emissions.
    In 2016, ZNA moved its U.S. corporate campus in Schaumburg, 
Illinois, to an award-winning headquarters that has earned LEED 
Platinum' certification, the highest rating from the U.S. 
Green Building Council. The distinctive design underscores our 
commitment to resilience, collaboration, and innovation.
    More recently, Zurich completed a major redevelopment of our global 
headquarters, Quai Zurich Campus. With our own climate pledges in mind, 
we are aiming to achieve LEED Platinum certification for the overall 
campus. Highlights of that redevelopment include:
          power supply in all the buildings comes from 100% 
        renewable sources,
          photovoltaic systems on roof surfaces,
          lake water used for heating and cooling,
          no use of fossil fuel in the building,
          rainwater captured, stored, and used for sanitary 
        systems, and
          electric vehicle charging stations.
    Zurich became carbon neutral as of 2014 through its ambitious 
internal carbon emissions reduction efforts and by offsetting remaining 
emissions. We have decreased our own CO2 emissions by 50% 
percent, eliminating over 150,000 tons of CO2 from our 
operations since 2007. While we are proud of our record, we continually 
assess our own impact and actions. In fact, just last month Zurich 
announced additional commitments to achieve our goal of being a net-
zero emissions business by 2050. Those new commitments include:
          reducing remaining greenhouse gas emissions by 50% by 
        2025 and by 70% by 2029,
          reducing air travel-related emissions as of 2022 by 
        70% compared with their pre-pandemic level,
          new company vehicles will be electric or hybrid, with 
        the goal to eliminate internal combustion engine-only vehicles 
        from the fleet by 2025,
          implementing a sustainable buildings program in an 
        additional 50 offices by the end of 2022, and
          setting a new energy efficiency ambition for real 
        estate once the target to switch to 100% renewable power across 
        the Group is reached next year.
    While proud of our record, we recognize that as an insurance 
company we are relatively small emitters of carbon and the true impact 
comes from our marketplace role as an institutional investor and an 
insurer of risks.
How are we engaging on Climate Change?
    Zurich continues to be a leading voice on the urgent need for 
action to address climate change. Beyond our own operational actions, 
Zurich is leveraging our expertise to educate and shape a more global 
response to the climate crisis. We are investing in and helping 
communities become more resilient. We are helping our customers 
navigate the transition to a net-zero emissions economy by providing 
products and services that lower their emissions and strengthen their 
resilience to climate change. And, we are sharing broadly our knowledge 
and engaging stakeholders and policy makers at every level.
Building Resilience in Our Communities
    Insurers play a critical role in assisting communities, 
individuals, and businesses recover when catastrophe strikes. 
Importantly, the industry also plays a vital role in improving 
community preparedness and risk management before the disaster hits. In 
furtherance of this mission, Zurich has undertaken a series of 
initiatives to apply the analytics of insurance to a much broader set 
of stakeholders. Our goal is to demonstrate the effectiveness of 
investing in pre-event resilience.
    In 2013, Zurich launched its Global Flood Resilience Alliance, a 
multi-sector partnership focusing on finding practical ways to help 
communities strengthen their resilience to floods. In 2020, we further 
extended the program through 2024 with the goal to increase third-party 
investments dedicated to pre-event resilience by $1 billion. We seek to 
do this by rolling out best-practice community programs that 
demonstrate the value of resilience-building and advocating for more 
investment in resilience.
    Last week, Zurich announced a collaboration, through Zurich's 
charitable foundation, with Resilient Cities Network to create a multi-
year program designed to strengthen climate resilience and help address 
social inequities in vulnerable communities in Houston and Boston. 
Zurich has committed $3 million to the program. Resilient Cities 
Network will identify neighborhoods and bring together community and 
government partners for the program. The program is expected to attract 
additional funding and generate policy support, which together will 
amplify successful, resilience-building projects. While the initial 
focus is on Houston and Boston, the program will expand to scale best 
practices in other cities, building urban resilience throughout the 
United States.
    Another approach we take is to share our knowledge about resilience 
through the publication of our Post-Event Review Capabilities, or 
PERCs. To date, we have completed 18 PERCS globally. In the United 
States, we have conducted four (4) such reports covering flooding 
events in North Carolina, South Carolina, and Houston, and wildfires in 
California. The PERCs systematically and holistically analyze disaster 
events, what led to the disaster, and identify actionable 
recommendations to enhance resiliency.
    In March of this year, ZNA provided testimony to the House 
Transportation and Infrastructure Committee, Subcommittee on Economic 
Development, Public Buildings, and Emergency Management. In summary, 
our testimony stressed the need for infrastructure investments to focus 
on pre-disaster mitigation and sustainability.
    From our perspective, prevention and resilience-building are not 
just about humanitarianism, they are about the more effective use of 
scarce funds, preventing loss, and speeding economic recovery. Our own 
post-event studies conducted after significant flood, drought and 
wildfire events show that every $1 spent on resiliency resulted in $5 
of savings post-disaster. Other research, such as the frequently cited 
National Institute of Building Science's (NIBS) Mitigation Saves 
Report,\2\ has confirmed our assessment and, in some cases shows an 
even stronger cost benefit ratio. The evidence shows that investing in 
pre-disaster mitigation can limit losses, accelerate recovery, and is 
overall responsible budgeting.
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    \2\ http://2021.nibs.org/files/pdfs/
NIBS_MMC_MitigationSaves_2019.pdf; page 2.
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    Importantly, Zurich is directly engaging with our customers. 
Through Zurich Resilience Solutions, our customers (and other 
businesses) can tap into our expertise to help them quantify climate 
change risk, by providing insights on current and potential future 
risks, and by identifying more specific mitigation and adaption actions 
that they can implement. We are able to provide a holistic, detailed, 
and catered approach that goes beyond the physical risks associated 
with extreme weather, and address some transition risks, which could 
include liability, regulatory and compliance, environmental, social and 
governance (ESG) integration.
    Investing in resiliency and mitigation helps to make individuals, 
communities, and businesses better prepared for disaster and recover 
more quickly when disaster does strike. As outlined previously, we are 
making investments to enhance resiliency in communities around the 
world. Governments, at all levels, play a vital role in strengthening 
community resiliency by investing in sustainable infrastructure that is 
designed to withstand the impacts of extreme weather and climate 
change. We were pleased to see that the Infrastructure Investment and 
Jobs Act includes significant funding for pre-disaster mitigation and 
urge Congress to pass this important legislation.
    In addition to direct investment in resiliency, Congress should 
require that federal agencies consider future conditions and the impact 
of climate change in the development, planning, and design stages of 
federally funded projects. Beyond the planning and design stages, 
Congress should incentivize the development and enforcement of modern, 
consensus-based codes; encourage sound land use planning; and ensure 
transportation networks are interconnected and appropriately sized to 
reduce vulnerability.
    Congress should also incentivize the use of industry best practices 
and standards that go beyond consensus-based codes, particularly high-
risk areas or to meet a specific need. Examples of this include the 
Institute for Business and Home Safety (IBHS) Fortified standard and 
the Institute for Sustainable Infrastructure (ISI) ENVISION standard. 
With regard to sustainability standards, the House Appropriations 
Committee has recognized their value and importance by including report 
language in the FY22 Financial Services and General Government 
appropriations bill directing the General Services Administration (GSA) 
\3\ and encouraging the Office of Management and Budget (OMB) to 
develop sustainability standards for federal buildings and federal 
capital projects.\4\
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    \3\ https://www.congress.gov/117/crpt/hrpt79/CRPT-117hrpt79.pdf; 
pg. 73.
    \4\ https://www.congress.gov/117/crpt/hrpt79/CRPT-117hrpt79.pdf; 
pg. 40.
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Transition to a Low Carbon Economy 
    As set forth above, Zurich has imbedded mitigating climate change 
into its corporate DNA and is working to reduce its own operational 
greenhouse gas emissions and those within its investment and 
underwriting portfolios. Zurich, of course, is not alone amongst 
companies that have made net-zero emission commitments to align with 
the Paris Climate Agreement. Nor is Zurich alone amongst financial 
companies that have committed to invest in the technologies and 
industries needed to reach 2050 net-zero targets.
    But the commitments from industry and commerce, though impressive 
and growing, will not be enough to halve the emission of GHGs within 
the next 9 years and stop them altogether within the next 29 years in 
order to keep global warming to below 1.5+C. Decisive governmental 
action is needed.
    Last month, Zurich released a white paper--Closing the gap on 
climate action.\5\ The paper outlines some of the key public policies 
needed and actions that corporations can take to address the climate 
crisis. While recognizing that progress has been made, the paper 
concludes that much more needs to be quickly done. Our hope is that the 
paper serves as a call to action and provides a framework for 
companies, policymakers, Congress, the Administration, and world 
leaders as they develop policies and strategies to mitigate and adapt 
to climate change.
---------------------------------------------------------------------------
    \5\ https://www.zurich.com/knowledge/topics/climate-change/closing-
the-gap-on-climate-action.
---------------------------------------------------------------------------
    To further assist our customer and business with the transition to 
a net-zero economy, we are expanding our offering for the renewable 
energy sector and further strengthening our clean energy underwriting 
capabilities to offer a more complete suite of products and services, 
tailored to support our customers' transition.
    When it comes to public policy initiatives, Zurich has long-held 
that a meaningful price for carbon at a global level is the most 
efficient way to achieve net-zero outcomes. We recognize the 
significant challenges associated with establishing a price on carbon. 
But, done correctly, a price on carbon would align economic incentives 
to reduce emissions, provide signals to investors that low-carbon 
investments are valuable, and could help identify exposure to potential 
stranded assets. A carbon-price would also help to stimulate investment 
into clean technology and innovation required for a transition to a 
net-zero.
    Climate change is a global risk and in order to achieve the 
transparency that investors need, standardization of data is required. 
The Task Force on Climate-related Financial Disclosures (TCFD) has 
created a useful framework for companies to start to address the 
corporate governance, risk management, scenario-playing, and 
measurement aspects of either adapting to or mitigating the impact of 
climate change. This approach should form the basis of information that 
investors and other stakeholders can use to target investment and 
policies enabling a transition to the low-carbon economy.
    The investments required to transition to a low carbon economy are 
too large for the public sector to meet alone and financing the 
transition remains a significant challenge. However, governments can 
play a key role in incentivizing private investment. As Zurich recently 
stated in our Closing the Gap on Climate white paper,

        Certainty around political commitment to net-zero and the 
        policy actions that will implement those commitments are 
        fundamental to making progress. Without this clarity it will be 
        difficult to make the investment case for new low-carbon 
        technologies or to create the pipeline of investible green 
        projects required to really scale green financial markets.

    Zurich therefore applauds the important work of all the members of 
this committee and its staff in developing recommendations on the 
policies needed to solve the climate crisis. Transforming our society 
on the scale required to meet this challenge, and doing much of this 
before 2030 as is necessary, will be monumental. The Majority Staff 
Report of this Committee on Solving The Climate Crisis published last 
June appropriately sets forth a broad and bold array of policy 
recommendations which would certainly put us on the right trajectory if 
adopted into our public policy.
    Looking at the Infrastructure Investment and Jobs Act, we applaud 
the inclusion of investments in the development and research on carbon 
capture technology and hydrogen power; electric vehicles and EV 
infrastructure; energy efficiency and renewable energy; and modernizing 
the electric grid.
    We also urge Congress to consider additional financial incentives, 
such as tax credits or rebates, to encourage business and individuals 
to invest in low-carbon and carbon sequestering technologies, 
electricity generation, buildings, materials, products, and vehicles. 
As noted previously, the investment needed to address the climate 
crisis is too big for governments alone. Congress should expand bond 
initiatives, including green bonds, that could leverage private 
investment and risk sharing. As the foundation of a net-zero economy 
will be a clean electric grid powering the increasingly electrified 
transportation and building sectors, Congress should prioritize public 
policies supporting the growth of the renewable energy industry and 
improvements to our electric grid efficiencies.
    The response to this crisis cannot be overdone and will require the 
combined efforts of all citizens, communities, corporations, small 
businesses, and all levels of government. It will also require an 
unprecedented level of international cooperation, especially with 
respect to supporting emerging economies' growth onto carbon-free 
platforms, protecting the world's natural carbon sinks, and sharing 
necessary technologies and carbon-pricing mechanisms.
    Again, thank you for the opportunity to present our views on 
addressing climate change.

    Mr. Casten. Thank you.
    Thank you to all the witnesses. The chair will now 
recognize Ms. Bonamici for 3 minutes of questions.
    Ms. Bonamici. Thank you, Acting Chair Casten and Chair 
Castor and Ranking Member Graves, but thank you, especially to 
the witnesses. I have read all of your testimony, and I 
appreciate that you are here today.
    A study released in September by the Department of Energy's 
Solar Energy Technologies Office and National Renewable Energy 
Laboratory found that, with the proper policies in place, solar 
energy could make up 40 percent of the U.S. power sector by 
2035, which is a thirteen-fold increase over the current 
proportion of solar power electricity. The study also projected 
an increase in total solar energy jobs from 230,000 in 2021 to 
up to 1.5 million by 2035.
    To phase out fossil fuels and spur the job growth needed to 
achieve such an increase, we must rapidly increase investment 
in workforce development. Over the past few decades, investment 
in the public workforce development system has declined 
significantly, and currently the system is not prepared to 
train the thousands, if not millions, of new industry 
professionals in the renewable energy industries who will be an 
important part of reaching our decarbonization goals.
    So, last week, I wrote a letter with 35 of my colleagues in 
support of preserving as much workforce development funding as 
possible in the Build Back Better Act, robust funding, which is 
important, that will increase career counseling; career and 
technical education; on-the-job training programs, including 
registered apprenticeships. So making this investment is a 
priority in the Build Back Better Act, and it is necessary to 
facilitate this transition to a green economy, help meet our 
nation's decarbonization goals and, importantly, create good 
paying jobs.
    So my question is, Mr. Campbell, what are your current 
workforce challenges at Volt Energy? And, on the broader solar 
sector, how do you expect these challenges to compound as the 
transition to renewable energy accelerates, and what can 
Congress do to build a diverse, clean energy workforce?
    Mr. Campbell. Thank you, Congresswoman. All great 
questions.
    And I just want to first add on a little bit to what you 
said about the 40 percent. There is a recent DOE study that 
said if we get to 100 percent decarbonization by 2035, it will 
require solar to get to between 40 and 45 percent, but let's 
talk about where solar is now.
    Solar only accounts for 4 percent of our nation's 
electricity generation, but it accounts for 100,000 businesses 
in the solar industry, including mine. It also accounts for 
230,000-plus Americans with good-paying jobs working in the 
solar industry.
    So we are at 4 percent now, 100,000 businesses, 230-plus 
thousand employees. We get to 40 percent, what is the growth as 
far as wealth creation? What is the growth as far as jobs? We 
cannot afford not to make these investments.
    And, specifically, the question as far as some of the 
workforce challenges that we are facing, we are scaling our 
business. We are putting our money where our mouth is. We are 
hiring a lot of people to help us address environmental 
justice, even though, you know, our core business is developing 
solar projects.
    But one of the challenges that we are facing is we are 
looking to hire people that look like America. And for far too 
long, our communities of color have not been engaged in this 
space, and it is really hard to find diverse talent in this 
space.
    So part of what----
    Ms. Bonamici. I appreciate that, Mr. Campbell. 
Unfortunately my short time has expired, but I appreciate that, 
and I yield back. Thank you, Mr. Chair.
    Mr. Casten. Thank you. And apologies to all for our short 
timing, but I appreciate your flexibility.
    The chair will now recognize Mr. Graves for a far-too-brief 
3 minutes.
    Mr. Graves. Thank you, Mr. Chair.
    Mr. Menezes, Secretary Menezes, I want to thank you, again, 
for coming.
    In my opening statement and your testimony, you talked 
about this CEPP effort in the reconciliation package. You led 
the agency under this extraordinary reduction, again, beating 
targets that were set by the Obama administration.
    Can you talk a little bit about the strategy that you all 
used to do that and how--if you were given a magic wand, how 
you would sort of chart a course moving forward in a clean 
energy direction?
    Mr. Menezes. Thank you, Ranking Member Graves, for the 
question.
    Yeah. At the DOE, we had a policy--you remember, we are in 
the executive branch--and it was innovation over regulation. We 
certainly had options to issue regulations--EPA does, 
Department of the Interior--but generally, we took the view to 
get out of the way and to focus on really developing the 
technologies. We were all of the above. We were very excited 
about all the technologies.
    We saw industry, consumers--people were moving in the 
direction of green energy. There were many opportunities. Look 
at all that we have accomplished. We have accomplished so much 
in the electricity sector without a carbon tax, without a 
mandate, that it is almost hard for the government to catch up 
with what is going on.
    So research and development dollars, basic research. We 
talk about this technology in solar. Solar is a great thing. We 
have a lot of sun.
    The problem that we have, and we have got to really focus 
on is, as much of intermittent renewable as we have, whether it 
is solar, which is fantastic, wind, still you need ramping 
technology. Now, everybody is saying we have got battery 
technology, and that is why I have referred to what is going on 
in California. We are building it, it's a 4-hour battery. That 
is the state of the technology there.
    So our national labs, indeed universities, everybody is 
trying to figure out how to get at least 10 hours of battery, 
and that is the challenge. But, when we get there, it may be 
breakthrough technology. It may not be the lithium ions. It may 
be new technologies, but it is really an exciting opportunity. 
But we are simply not there yet to be able to, I think, 
withstand the CEPP, which really confines things to a very 
small window.
    Mr. Graves. Yes or no. Do you think, if the CEPP were 
enacted, it would result in higher energy prices--electricity 
prices for those making less than $400,000 a year?
    Mr. Menezes. Well, that is what the CRS seems to be 
alerting Congress to, because we really don't know who is 
ultimately going to bear the cost. We do know that it is both 
the taxpayers and ratepayers.
    Mr. Graves. Thank you.
    I just have a little bit of time left, but, Ms. Kenna, I am 
curious. Would Patagonia support a Federal certification for no 
slave labor as a condition of Federal subsidies as it comes to 
a clean energy future?
    Ms. Kenna. Excuse me. Sorry. Thank you. Hi. Are you able to 
hear me?
    Mr. Graves. Yes, ma'am.
    Ms. Kenna. Okay. Sorry about that. Thank you for your 
question.
    My sense is, is you are asking a question about the 
situation in China with the Uyghurs in Xinjiang, and Patagonia 
actually made the decision early last year to stop sourcing 
altogether--stop sourcing cotton altogether from that region.
    And just want to get back to why we are here today, which 
is that the business community supports investments in climate, 
and we need it both so that we can--as I understand from your 
staff, that you like to get outdoors and have fun, our 
community does, too. We need these investments so that we can 
recreate, have fun outside, and because they are critical to 
our bottom line.
    Mr. Graves. Yeah. And, Ms. Kenna, I know I am out of time, 
but I just wanted to clarify. I wasn't speaking about 
Patagonia's own materials or products. I am talking about for 
energy products, but we can clarify that on the record. Thank 
you for your answer.
    Ms. Castor [presiding]. Thank you.
    And Representative Casten, you are recognized for 5 
minutes.
    Mr. Casten. Representative Casten was suppressed. Thank 
you, Madam Chair.
    Mr. Menezes, I want to thank you for your testimony, and I 
want to start with two points you raised that I totally agree 
with. Number one, we have to push to electrify everything as 
quick as we can, or as much as we can to decarbonize. And, 
number two, that will require a rate of decarbonization and 
deployment of renewables beyond anything we have ever achieved. 
I agree.
    The reason that we have done that is because our job today 
is not to justify delay or make excuses for inaction. I think 
our predecessors have set that bar too high. We have run out of 
time, and we have to act. And so, I would urge us all to be 
inspired by both the fact that we electrified rural America in 
a decade.
    As Condoleezza Rice says, our job is to make the impossible 
seem inevitable in retrospect. So let's not be constrained by 
our ambition. Let's get it done.
    Two points of yours I disagree with are the reliability and 
the price. France; Ontario, Canada; a couple Scandinavian 
countries all achieved over 80 percent clean energy without any 
detriment in reliability. Would you agree with that?
    Mr. Menezes. Two Scandinavian countries?
    Mr. Casten. Two Scandinavian countries. I mean, Ontario did 
this in basically a decade. They decided to get rid of their 
coal, and I haven't seen any hiccups in the Ontario grid.
    Mr. Menezes. I mean, I am not aware of any studies on that, 
but I am happy to look at them.
    Mr. Casten. You haven't seen a lot of newspaper reports 
about outages in Ontario. Let's at least be more ambitious than 
Ontario.
    On the question of pricing, you know, you have got 
experience in the coal industry. How many must run hours does a 
typical coal plant have where they would shut off if they could 
because of the economics, but they can't afford to dial it back 
and are losing money for their shareholders every hour, for a 
typical coal plant?
    Mr. Menezes. Yeah. Well, I don't know the exact number, 
but, yeah, with the low-cost natural gas, I mean, coal plants 
basically were taken offline, and they were reserved in must-
run capacity, but they weren't running in the energy markets.
    Mr. Casten. Yeah, and the gas, it factors down. You said 
low-cost natural gas. Is the capacity factor of the gas fleet 
lower or higher than the nuke fleet?
    Mr. Menezes. In the combined cycle units? The combined 
cycle units----
    Mr. Casten. Yes.
    Mr. Menezes [continuing]. Are more efficient than the 
coal----
    Mr. Casten. I know, than the nuclear fleet. Which has a 
higher capacity factor, the nuclear fleet, or the combined 
cycle fleet?
    Mr. Menezes. I think the nuclear fleet.
    Mr. Casten. Yeah, because it is cheaper, right?
    Mr. Menezes. Well, when it runs 96 percent----
    Mr. Casten. Are you aware of anybody who owns a solar panel 
or a wind turbine or a geothermal plant or a hydro plant who 
wakes up in the morning and says, I better check to see if it 
makes sense for me to run today?
    Mr. Menezes. Only when consumers need the electricity is 
when they really absolutely have to have it, and so what we 
find is that, when the system is stressed is when they need it, 
not when they want it. And it is--we need to divine our--design 
our system to be able to produce electricity when it is needed 
the most----
    Mr. Casten. Well, and I guess what I am suggesting----
    Mr. Menezes [continuing]. and that prices don't go through 
the roof, right? I mean, that is--like we said, that is----
    Mr. Casten. Well, let's be very clear. As you mentioned, we 
have NERC, we have FERC to cover the reliability. They do an 
excellent job, and I trust them.
    Every time we build a zero-carbon energy asset, we build a 
plant that does not require fossil fuel to run, and it has 
driven down the cost of energy. I know that, because that was 
my entire career. And we are on the cusp of the greatest wealth 
transfer in our history from the energy producing sector to 
energy consumers. Let's get out of the way and run forward.
    Thank you, and I yield back.
    Mr. Menezes. Thank you.
    Ms. Castor. Rep. Casten yields back.
    I don't know if Rep. Gonzalez is on or not.
    Otherwise, we will go to Rep. Miller. You are recognized 
for 3 minutes.
    Mrs. Miller. Thank you, Chair Castor and Ranking Member 
Graves, and thank you to all of you all for being here today.
    I want to echo the thoughts of several of my colleagues and 
note the Clean Energy Performance Program is a performative 
agenda pushed by liberal activists. I applaud my colleague, 
Senator Manchin, from my home state of West Virginia, for 
seeing through what the CEPP pretends to offer, and 
understanding that wind and solar energy generation cannot and 
will not ever have the ability to power our country on its own.
    CEPP, as currently written, would rob investment in these 
future technologies, as only a small sliver of so-called 
renewables would be eligible for these government handouts, 
incentivizing some technologies and companies over others.
    I have long been a proponent of an all-of-the-above energy 
policy that takes into account the necessity to use fossil 
fuels to ensure Americans have affordable baseload power while 
continuing to innovate in technologies that bring them closer 
and closer to carbon neutral.
    While I appreciate the lofty goals set by many of my 
colleagues, I often find myself pondering this practicality of 
implementing their grand visions, and have found myself living 
around communities that have been destroyed by the good 
intentioned ambitions of government leaders.
    McDowell County, located in my district of southern West 
Virginia, is one of those communities. Once a thriving area 
with a population well over 100,000 people, it was obliterated 
by former President Obama's war on coal. Now there are in the 
teens, less than 20,000 people that remain in McDowell County, 
where the cost of their daily lives only continue to rise as 
out-of-control inflation continues to take hold, and rising gas 
prices cuts into their paychecks for every mile they now have 
to drive to jobs in neighboring counties and states.
    While some of my colleagues on this committee today may say 
that West Virginia is irrelevant--bless your heart--I would 
like you to note that our small but mighty state is the fifth 
largest energy producer, and you are welcome for keeping your 
lights on this winter.
    Mr. Menezes, could you briefly explain how enhanced oil 
recovery works, and how this process can create carbon-negative 
oil and gas?
    Mr. Menezes. Thank you, Congresswoman, for the question.
    I made reference to the carbon capture technologies that 
may be at risk if CEPP goes into play right now. Congress has 
enacted the 45Q tax credits, and what carbon capture, 
utilization, and storage allows to happen is, you can take 
captured carbon, and you can push it down into oil fields or 
formations that have been essentially depleted, or at least 
what was able to get out of them, you know, when you first took 
the oil out, so there is plenty underground in those 
formations.
    You take the captured carbon, and you pump it down 
essentially into those wells, and it brings additional oil up. 
And, while it does, some of it stays in. When it comes up, that 
carbon that is with the oil is separated and put back down in, 
and it is constantly recycled so that over time, there is more 
captured carbon that stays down and is permanently sequestered 
in that oil field than it is in producing the barrel of oil.
    And the emissions are offset over time then--basically it 
is a negative-emissions outcome.
    Mrs. Miller. Is my time up? Thank you.
    Ms. Castor. Thank you, Rep. Miller.
    Mrs. Miller. I yield back.
    Ms. Castor. Next, we will go to Congresswoman Brownley. You 
are recognized for 3 minutes.
    Ms. Brownley. Thank you, Madam Chair.
    Ms. Kenna, I wanted to ask you a couple of questions. First 
is: Why should the business community really care about passing 
climate legislation?
    Ms. Kenna. Sorry about that. Thank you. Thanks so much for 
that question.
    The business community should--does care about climate 
investments, and, in particular, these climate investments, 
because, frankly, the cost of inaction is not an option.
    The costs are only going to go up, and already we are 
seeing the effects of this climate crisis. It is affecting our 
ability to enjoy and recreate outside. And it is affecting our 
bottom line. And, as a business that is part of an $800 billion 
industry, we need a healthy planet both so we can get outside 
and do our business.
    Ms. Brownley. Well, thank you for that.
    And you mentioned your bottom line, and could you elaborate 
a little bit more on why climate investment is important to 
your bottom line and to others and their bottom line?
    Ms. Kenna. Absolutely. So, you know, our company is made up 
of people who like to get outside, and we were founded for that 
reason, and we are still in business today, because we fight 
for those same places to get outside.
    As a business that has been also engaged on protecting 
these places, we know that public lands contribute immensely to 
the health and economic vitality of local communities, from the 
ecosystem services of clean water and air to healthy 
communities for kids and families, to the recreation and 
outdoor industry that we are a part of.
    National parks, national wildlife refuge, monuments, and 
other lands and waters, they account for $45 billion in 
economic output, and nearly 400,000 jobs nationwide, many of 
which are in communities in rural areas and with close 
proximity to public lands.
    This Build Back Better Act offers a bold and urgent 
opportunity to address this crisis and support our bottom line.
    Ms. Brownley. Thank you for that. And I certainly thank 
Patagonia for their investments in our nation's outdoors, our 
nation's public lands. You have certainly played your part.
    Last question, quickly, is: If you could talk just a little 
bit about, you know, embracing renewable energy in your 
facilities. Are you? If you are, where are you? If you could 
talk a little bit about that for a minute, or for 9 seconds.
    Ms. Kenna. Yeah. Yeah. Great question.
    So we are. In our owned and operated facilities, 
absolutely. We are very near to having 100 percent reliance on 
renewable energy. In your district, you have seen probably our 
campus. We have solar panels here. But the bulk of our 
emissions comes from our supply chain, and we are committed to 
reducing our emissions all the way through.
    We are also using the whole-of-business approach to push on 
our community and our policymakers to advance community-driven 
solutions to support a transition to renewable energy and 
nature-based climate solutions.
    Ms. Brownley. Terrific.
    Well, thank you, Madam Chair. And I invite the committee to 
go visit a forward thinking company in my district, and visit 
Patagonia.
    Ms. Castor. Love Ventura County.
    Ms. Kenna. Thank you.
    Ms. Brownley. I yield back.
    Ms. Castor. Next, Representative Gonzalez, you are 
recognized for 3 minutes.
    Mr. Gonzalez. Thank you, Madam Chair. I am going to start 
with Ms. Kenna and Mr. Campbell, just some quick yes or noes. I 
think you have said already today you believe we need bold, 
urgent action to stop climate change today, correct?
    Ms. Kenna. Yes.
    Mr. Campbell. Yes.
    Mr. Gonzalez. Yes. Yes or no. Do you support a $27 billion 
investment for grid infrastructure?
    Mr. Campbell. Yes.
    Ms. Kenna. Yes.
    Mr. Gonzalez. What about $21.5 billion investment for clean 
energy demonstrations to research carbon capture?
    Mr. Campbell. Not as well-versed on carbon capture, so I 
can't opine on that.
    Mr. Gonzalez. Okay. Clean energy demonstration projects, 
though, generally.
    Mr. Campbell. Generally, I would say yes.
    Mr. Gonzalez. Okay. Yes or no. $6 billion investment to 
support the existing civil nuclear fleet?
    Mr. Campbell. No.
    Mr. Gonzalez. No? Not fans of nuclear?
    Mr. Campbell. No.
    Mr. Gonzalez. Okay. I guess that would make sense 
considering the business model.
    I respectfully disagree on that.
    Having said that, I wanted to go through that primarily 
to--well, and then one final thing for Ms. Kenna. You said the 
cost of inaction on climate goes up with each passing day, 
correct?
    Ms. Kenna. Yes.
    Mr. Gonzalez. So mostly yes answers to those questions, so 
I guess my thought is: What justification could there possibly 
be for my Democratic colleagues and for those who believe we 
need bold, urgent climate action, and the cost of inaction goes 
up with each passing day, not to put up a bipartisan 
infrastructure package today which has the exact investments 
that I just outlined?
    I see no possible logic. If you are going to sit here and 
argue that every day we waste is a day that climate gets worse 
when we have a bipartisan package that we could put up, it 
would pass--I think, I hope, I would vote for it--and we need 
to do that.
    Mr. Campbell, I am going to stay with you and talk about 
inflation for a second. Solar sector has not been immune to the 
supply chain disruptions and rising commodity prices. Price of 
silicone, for example, has increased 300 percent in just the 
past few months. One of the pillars of the CEPP would 
incentivize utilities to go green by rewarding them for 
shifting to wind and solar energy. If the bill only stimulates 
demand for solar panels but doesn't solve the underlying supply 
chain issues, wouldn't that further drive up inflation?
    Mr. Campbell. Possibly, but I--Congressman Gonzalez, I 
would also like to highlight, when I started my company in 
2009, we are--take a step back. We are developing a 139-
megawatt project in Missouri, which would cost us about $160 
million to build. Eleven years ago, that would have cost us 
over $900 million to build. So, due to smart climate 
legislation, the cost of solar has drastically come down. But, 
like any other industry, we are not immune to inflation.
    Mr. Gonzalez. Right. And the raw material, silicone, 
though, that has gone up by 300 percent, the raw material of 
silicone?
    Mr. Campbell. I am not aware of that fact, Congressman.
    Mr. Gonzalez. Okay. I cite the statistics on that.
    My bottom line is, we have urgent climate action. We need 
to make the investment. We should put up the bipartisan 
infrastructure package, which a lot of people agree on.
    And, secondly, we can't be immune to inflation. We can't be 
spending $3.5 trillion when the economy is already overheating. 
It is horribly irresponsible.
    And, with that, I yield back.
    Ms. Castor. Thank you, Rep. Gonzalez.
    I will recognize myself for 3 minutes for questions.
    Mr. Edsey, you've testified that insurers are increasingly 
thinking about their exposures because we are--these extreme 
climate-fueled weather events are just coming more frequently. 
They are more costly. And it is not just insurers. It is my 
neighbors back home in Florida. Our property insurance rates, 
flood insurance, and people now are connecting it to the 
climate crisis.
    So tell us how Federal action would really help us address 
the increasing cost of climate when it comes to insurance 
rates?
    Mr. Edsey. Sure. Thank you, Chairwoman Castor. Thank you.
    You know, we have done studies that every dollar spent on 
building up resiliency saves $5 in post-event repair work. So 
certainly, any investment from the public sector or from the 
private sector into fortifying properties against climate 
change and increased flood and increased hurricanes are going 
to, you know, save money down the line.
    You know, being an insurance company, we are in the 
business of assessing risk and managing risk, helping our 
customers manage that risk, helping our customers mitigate the 
risk, so we take the science of climate change very seriously.
    And, so, when you look at mitigation, the efforts that we 
could take as a society and the world in investing in lowering 
greenhouse gas emissions is going to be the most valuable 
investment we can make at this time in order to lessen the 
severe weather effects of climate change in the future.
    Ms. Castor. And those costs on businesses and consumers 
alike. So reducing greenhouse gases. We also think that local 
communities need additional tools to help build resiliency. I 
remember I was a young lawyer working for the State of Florida 
after Hurricane Andrew, and, at that time, the State of Florida 
stepped up, and they improved their building codes. And it was 
kind of held up over time as a very important move. It probably 
has saved businesses and consumers' costs over time. But now 
those codes and standards haven't kept up.
    What is important for the Federal Government to do to 
partner with local communities to make sure we have the 
appropriate building codes and standards in place?
    Mr. Edsey. Definitely. Whatever the Federal Government can 
do to encourage local, consensus based, you know, up-to-date 
standards on building codes is going to help those local 
communities respond. And, in more vulnerable areas, what should 
be supported is for high hazard risk standards. There is the 
FORTIFIED Standards, and IBHS has FORTIFIED Standards to 
fortify against wildfires and flood.
    Ms. Castor. Well, thank you very much.
    Thank you for putting up with us today on the in and outs, 
and I want to thank all the members for being very efficient.
    Are there any members who have not had an opportunity to 
ask a question today? Terrific.
    Well, I want to thank all of our witnesses--if we can
    Ms. Bonamici. Can I ask a quick question?
    Ms. Castor. Yeah. Why don't we--since Rep. Escobar is 
coming back from the vote and Mr. Carter is going to come on in 
just a second, Rep. Bonamici, I will recognize you for 3 
minutes for an additional question.
    Ms. Bonamici. Thank you, Madam Chair.
    And I really, again, want to thank you all for being here 
today. And I want to ask Ms. Kenna a question.
    I represent a district in the Pacific Northwest, and the 
outdoor recreation industries are very, very important to our 
quality of life and to our economy, so I wanted to ask you, Ms. 
Kenna, in sort of general terms, how has the climate crisis 
affected your business?
    But, also, once we get on this path to a clean energy 
economy and address the climate crisis, how will that 
positively affect your business?
    Thank you.
    Ms. Kenna. Yeah. Thank you so much for that question.
    I had the pleasure this past weekend of spending some time 
with some of the ambassadors, the athletes in our communities. 
These are world-class bikers and skiers and climbers, anglers, 
and they report, with each year, they are seeing these effects 
of the climate crisis more and more. And so, that is part of 
our community. And then, of course, there is our bottom line, 
and how we operate our business, our supply chain, our 
distribution center, and our headquarters.
    As I mentioned in my testimony, we have had to shut down 
our Reno distribution center several times this year already 
because of smokey skies from these really severe wildfires.
    In 2017, our headquarters here in Ventura had to shut down 
for a month. And that was a fire that was here on our campus. 
At the time, it was the largest one since. And I believe, each 
year since then, we have seen bigger and bigger fires.
    So, without a doubt, this is having an effect on our 
business and on our community.
    Ms. Bonamici. Thank you.
    And I just want to note that last year we had the horrific 
wildfires and smoke. This year we had the heat dome, where more 
than a hundred people lost their lives in Oregon because of the 
extreme heat.
    And I was recently hiking at Mount Hood, and I have never 
seen it more brown. Usually there is snow there and skiing year 
round. That is not happening now because the temperatures are 
so high and the heat.
    So thank you so much for your testimony.And I yield back. 
Thank you, Madam Chair.
    Ms. Castor. Thank you, Rep. Bonamici.
    Next we will go to Rep. Gonzalez for his second round of 
questions.
    Mr. Gonzalez. Thank you.
    I want to start with Ms. Kenna again and just talk about 
the nuclear point a little bit more.
    Patagonia thrives and is built around the notion that we 
should all be able to enjoy the outdoors, we should all be able 
to enjoy the natural habitat. I am a customer of yours, I love 
your products, and appreciate that mission, and I share it.
    That being said, the opposition to nuclear strikes me as 
somewhat misguided. I guess I would like to hear your thoughts 
on it more, given that we know for sure that if we put solar 
and wind all over the country, that there is a natural habitat 
destruction and a biodiversity problem that you just can't get 
away from, as far as I know.
    But I am curious for your thoughts on that. Because my view 
is that nuclear actually allows you to solve for that.
    Now, the cost of nuclear is too high. There is a lot we 
need to do to improve our nuclear infrastructure. I am working 
on a lot of those things in a bipartisan way with many of my 
colleagues.
    But I would love to hear from you why Patagonia would be 
against nuclear, given what we know about the biodiversity 
challenges associated with solar and wind.
    Ms. Kenna. Thank you, Congressman. It is a great question. 
And also thanks for being a customer. We appreciate that.
    So you are right, we do have a lot of concerns about 
nuclear. And I am not a nuclear expert, but what I do know is 
that the waste associated with nuclear is incredibly 
problematic. We don't have a solution for it. So that is why we 
are pushing for investments in wind and solar.
    And you are right, we need to be mindful about where we are 
putting windmills and solar fields. And it is our point of 
view, our perspective, that we should take advantage of 
underutilized areas. Brownfields and landfills, for instance, 
would make for great locations for wind and solar.
    Thank you again for the question.
    Mr. Gonzalez. Yeah, thanks for clarifying. Respectfully, I 
am personally more concerned about the biodiversity challenges 
associated with wind and solar than I am the waste issues 
associated with nuclear.
    I think the nuclear waste issues are much more solvable 
and, frankly, have moved a lot further. I just don't know how 
you throw up solar panels all over the country without 
destroying the natural habitat.
    And that concerns me greatly as somebody who loves the 
outdoors, who is passionate about climate, and wants to see my 
kids, my grandkids, have the opportunities to enjoy the 
outdoors in the same way that you and I have for much of our 
lives.
    Ms. Kenna. Yeah. Mr. Gonzalez. So with that, I thank you 
for clarifying. And I yield back.
    Mr. Casten [presiding]. I commend the gentleman for 
finishing under time. I think that is a first here on this 3 
minute panel.
    The chair will now recognize Ms. Escobar on the TV screen.
    Ms. Escobar. Thank you so much, Mr. Chairman.
    Really appreciate all of our witnesses who are here today 
sharing their expertise. And I will be as brief as I can in my 
question, but first some quick context.
    We know that the Federal Government alone, nor the private 
sector alone, can do this. We have to achieve a place where we 
are saving our planet together. That includes consumers, 
individuals, local governments, you name it.
    And in my community, we have formed--my office has formed a 
Climate Crisis Advisory Committee, and our focus right now is 
bringing all parties together, sitting around the same table, 
so that we can ensure that each sector and each stakeholder 
creates a climate action plan.
    Mr. Campbell, thank you so much for your work as a leader. 
As I mentioned, we are developing our climate action plan. And 
as more communities develop these plans, we really have a 
tremendous opportunity to ensure that there is equity for 
minority communities who are frequently left out.
    My own community is economically disadvantaged and about 85 
percent Latino, and it is frequently left out of Federal 
packages, and local governments don't have a whole lot of money 
to fund plans like this.
    But given your leadership in developing the first 
Environmental Justice Power Purchase Agreement, how can 
communities of color plan ahead in order to realize the 
benefits of a clean energy transition? What are the things you 
think we need to be looking out for, planning for?
    Mr. Campbell. Great question, Congresswoman Escobar, and 
thank you for sharing your comments.
    So a couple things. I think first, in communities, 
particularly of color, there needs to be a little bit more 
education around the impacts of climate change, both to prepare 
from a resiliency standpoint but also to understand the 
opportunities.
    As I mentioned before, communities of color shouldn't only 
suffer environmental burdens--they shouldn't suffer at all--
they should also participate from environmental opportunities.
    I recently had the opportunity, piggybacking on your point, 
to speak to over 50 students at Howard University two Fridays 
ago, at 4 p.m., about climate change and solar.
    I can speak for myself as a graduate of Howard University. 
When I was in college, I don't think I would have been at 4 
o'clock on a Friday talking about climate change and 
sustainability.
    However, these students have a direct ask for the members 
before this committee and before Congress in general: They want 
you to invest in their future. They come from communities, like 
yours, Congresswoman Escobar, where for far too long they have 
seen family members suffer from respiratory diseases. It has 
played out in COVID.
    They want these investments from Build Back Better to 
invest in their future to make sure that, A, they are breathing 
clean air, which should be a fundamental necessity, but they 
have opportunities to get good career jobs in renewable energy, 
in sustainability, and to be able to start their own 
businesses.
    So I just ask everyone to be thoughtful of making a down 
payment for future generations. Thank you.
    Ms. Escobar. Thank you so much.
    Mr. Chairman, I yield back.
    Mr. Casten. Thank you.
    The chair now recognizes the gentleman from Georgia, Mr. 
Carter.
    Mr. Carter. Thank you, Mr. Chairman, I appreciate it.
    Mr. Menezes, I want to start with you, because your 
testimony pretty much focused on the Clean Electricity 
Performance Program, CEPP.
    And I have to say that I read your testimony, and I heard 
most of it earlier, and I have to agree with you. I think you 
are absolutely spot on here. And I think it is going to 
negatively affect reliability, I think it is going to increase 
cost to consumers, and that it is going to have environmental 
consequences.
    And one of the things that you have highlighted in this is 
that it is likely to kill the development of nuclear power 
because of its limited 10-year timeframe.
    As you pointed out, CEPP will have the most significant 
climate action in our country's history. There is no question 
about that. Yet it passed out of the E&C in the markup, during 
the markup, and really never had a single hearing by itself as 
it should have.
    And this is important to me because Plant Vogtle, where we 
have two of the only nuclear reactors under construction 
currently in the country, it sits right outside my district in 
Georgia. And Plant Vogtle, once it goes online, it will provide 
Georgia with reliable clean energy for up to 60 to 80 years--60 
to 80 years--clean reliable energy.
    It will power over 500,000 homes, and that would be the 
equivalent of being carbon free and would be the equivalent of 
removing over one million cars from the roads each year, and to 
me, that is an incredible investment.
    I just want to ask you, how would CEPP affect the 
development, in your opinion, how would CEPP affect the 
development of nuclear energy in our country since it is the 
only reliable, emission-free source of energy in our country?
    Mr. Menezes. Well, thank you for the question.
    The difficulty with CEPP is that, again, it is a solution 
to a Senate process problem. And so as a consequence, would 
there be an opportunity to actually have input from all 
stakeholders? You would try to build in more time.
    Think about, by having to comply with this within that 
budget-scoring window, you are basically picking winners and 
losers. And the winners will be solar--nothing wrong with 
solar--and maybe some wind, just to be able to meet the CEPP 
requirement so you don't have to pay a penalty.
    Now, two technologies that we really worry about.
    What is going to happen over the next 10 years of the 
nuclear breakthroughs that we have?
    We may never, unless economic conditions change, we really 
might not build another Vogtle Plant in the United States as we 
are headed now. But we may very build small modular reactors.
    Now, we have some planned out West. At DOE we have been 
trying to get the NuScale project built in Idaho.
    And recently, we shouldn't forget fusion. The Office of 
Science within the Department of Energy has made some recent 
breakthroughs in fusion. We have almost kind of forgotten about 
fusion. But ultimately, if we can harness fusion, imagine, no 
more water pressure reactors Right? No more fission.
    So what happens during the CEPP period? Right? Are we 
forcing all our technological dollars to go in and try to 
figure out how it is that we can get more solar and more wind 
by improving the transmission and get the upgrades?
    And just one other thing on nuclear, because the Patagonia 
witness said some interesting things.
    When I was over at the Department, and not many people 
really know about this, but in the United States, we are pro or 
against nuclear.
    But when you step back and look at what is going on in the 
world, right now the U.S. is the world's leader in nuclear 
technology. And we have a statutory obligation that if we share 
any of this great technology, we have to have 123 Agreements, 
nonproliferation and non-enrichment for weapons.
    Well, what we see--and countries are coming to us and say, 
``Please, we would like to build more nuclear,'' because the 
IEA has said, if you really want to meet your climate 
restrictions, you ought to look at nuclear, invest now, and 
over the 40 to 80 years you will have emission clean energy.
    Mr. Carter. Right. Thank you.
    Mr. Menezes. But Russia and China do not have 123 
Agreements, and they will get this technology somewhere else. 
And that is if you are anti-nuclear, you ought to be concerned 
about that.
    Mr. Casten. Sorry. We are going to have to move on. It is a 
fascinating conversation, and we may have some chance for 
secondary follow-up.
    Mr. Graves, I think you are now up for a secondary round of 
questions should you have any.
    Mr. Graves. Great. Thank you.
    Ms. Kenna, I want to clarify my question earlier, because I 
think we crossed wires a little bit.
    I was specifically asking about, do you believe that if we 
provide Federal energy subsidies to companies, such as solar 
energy, wind energy, that they should have to abide by a 
certification of no slave labor as a condition for being 
eligible for those funds?
    I apologize if that didn't come across the right way.
    Ms. Kenna. No, that is okay, and thank you for clarifying.
    I think I will stick to what I know here, which is our own 
supply chain, though, and I am glad to get back to you on 
that.But certainly with our own supply chain, we have taken a 
very strong stance against slave labor and work very hard to 
ensure that we keep up to that commitment.
    Mr. Graves. Thank you. And, look, I think I have easily got 
thousands of dollars' worth of y'all's products, having spent a 
lot of time leading wilderness trips for many years.
    But I also want to be clear that I have been very 
disappointed in seeing the companies stepping out into areas, 
just like you said, you said staying in your lane, and watching 
Patagonia step out of their areas where I think they have no 
expertise. For example, the comment about nuclear. When 
California recently shut down the nuclear power plant, they had 
to send a letter requesting that they be allowed to violate 
their emissions standards because they are going to have to 
produce electricity from energy.
    The United States has one of the cleanest natural gas 
sources in the world. We have reduced emissions better than any 
other country in the world--and better than the next 12 
emissions-reducing countries--because of our transition to 
natural gas under a tight regulatory regime.
    And so I do think that we need to be very thoughtful about 
how to proceed in a global direction that results in downward 
emissions.
    Mr. Menezes, I want to ask, with all of your experience in 
energy policy, are you aware of any recommendations that 
existed prior to a couple of months ago that mirror the CEPP?
    Mr. Menezes. No. As I put in my testimony, there have been 
recommendations of the task force looking at this to Congress, 
some 700 recommendations, the CEPP was not involved in that.
    I happen to have--this is a great bible, certainly for 
lawyers interested in trying to decarbonize, develop policies--
``Legal Pathways to Deep Decarbonization in the United 
States.''
    Mr. Graves. Is there a Cliffs Notes version?
    Mr. Menezes. There is no nutshell version of this, as I 
remind my students. But nowhere in here--nowhere in here--is 
any CEPP. And these are serious-minded people that have been 
looking at this to try to come up with things like the CEPP, 
but CEPP is nowhere.
    It is not that they are trying to avoid controversial 
topics. Right? I mean, they propose carbon taxes. So they 
thought of--they tried to think of everything they possibly 
could. And I have looked at this thing, and I have shaken it up 
and down, and I just can't find the CEPP anywhere in there.
    So, again, as I have said, now as a former staffer, if we 
were in a room and the Members said, ``You have got budget 
reconciliation that you have to deal with,'' well, we know we 
have a limited window to divine something that has to raise 
income. It has got to be fees because we don't have 
jurisdiction over taxes. We are not Ways and Means.
    So tight time window, typically something that will cause 
money to come into the Treasury, so that you basically can meet 
the payfor requirement so that you don't get 60 votes in the 
Senate. This is what this is all about.
    Mr. Graves. Thank you. All right, sit tight.
    I would like to ask the rest of you, while we are waiting 
on additional members to come, I know we have covered a lot of 
ground over the past hour or so, are there other questions that 
you would like to be able to cover, or topics maybe that you 
weren't asked about that you would like to be able to address? 
Just give you a couple minutes each.
    Mr. Edsey.
    Mr. Edsey. Thank you, Ranking Member Graves.
    Yeah, I guess I would just like to say that what Zurich, 
and from our angle of the business community, what we need is 
an orderly transition to net zero.
    In managing risk, we take the science and engineering of 
risk very seriously. So the message from the IPCC and climate 
scientists is we need to reduce greenhouse gas emissions by 
about 50 percent by 2030 and 100 percent by 2050.
    So how the public policies are enacted to get us there is 
something that Washington and the states need to decide, in 
conjunction with the world.
    But it is crucial. If we don't get there, then our economy 
faces extreme risk. From the insurance industry, we recognize 
that risk very acutely.
    And so, again, we support the work of this committee. And 
we can't help but stress the urgency of it to Zurich and to the 
insurance industry and to our economy.
    So thank you.
    Mr. Graves. Mr. Campbell, do you want to [inaudible]?
    Mr. Campbell. Sure. And I would like to answer one of the 
questions you mentioned earlier as well.
    So our company has signed a pledge, as part of the Solar 
Energy Industries Association, not to work with forced labor.
    And I will just say this again. Chairwoman Castor mentioned 
this earlier. In the 9 months this year, we have spent over a 
hundred billion dollars after disaster after disaster--the 
wildfires in the West, hurricane after hurricane in the Gulf, 
flooding in the Mid-Atlantic, here in the Northeast.
    But let's just take a step back. We are at an interesting 
time in our nation's history. The business community supports 
clean energy.
    I was on a conference call today. I am a board member of 
the Renewable Energy Buyers Alliance. We have set forth a new 
goal of 90 percent, focusing on some of the largest companies 
in the world from all industries, getting to 90 percent 
decarbonization by 2030 of the power sector.
    We also have a great opportunity--and this bill allows for 
that as well too--to decarbonize our transportation sector.
    We go back and look at--we have talked a lot about 
underserved minority communities. Well, guess what the biggest 
form of carbon emission is in those communities--the 
transportation sector. And we have the opportunity to look at 
putting EV charging stations all across this country.
    And America has really smart businesses, and these smart 
businesses, particularly automobile manufacturers, are making 
significant investments in electric vehicles. Almost every car 
I could think about is going to have some form of an electric 
vehicle in the future. And obviously, lastly, we also have the 
opportunity to electrify our buildings--Federal buildings, 
commercial buildings, residential buildings--across this 
country.
    So I just hope that we all recognize that we can no longer 
afford to pay inaction for all the events that have happened, 
but we have an opportunity to really grow our economy and 
really prepare ourselves for the infrastructure that is needed 
of the future.
    Thank you.
    Mr. Graves. Ms. Kenna.
    Ms. Kenna. Yeah, thanks for the opportunity.
    I will just want to highlight what my panelists have 
already said and just reinforce this idea that the cost of 
inaction now is far greater than any of the investments on the 
table.
    Additionally, we haven't talked about it a lot today, but 
one of the things that is on the table here that we feel really 
strongly about is the Civilian Climate Corps, which we think 
would really create new job opportunities in rapidly growing 
clean energy, ecosystem restoration, and recreation industries 
for both urban centers and rural communities.
    And while at the same time, it will inspire a new 
generation of conservationists and healthy outdoor recreation 
enthusiasts.
    Mr. Graves. Thank you.
    Mr. Menezes.
    Mr. Menezes. Yeah, sure, I have something I would like to 
talk about.
    The Lawrence Livermore Lab Foundation did a report at the 
request of California. When California came out with their 
``let's get to net zero by 2045,'' they asked the Lawrence 
Livermore Lab Foundation to actually see: Can we do it?
    And the lab assumed no policy changes, okay, no carbon tax, 
no Federal mandates, just current policy. And so the question 
was: Can we get there? Right?
    They said we can. You can get there. You don't need 
Congress to do anything. And you don't have to be anti fossil. 
You can accept the fact that we are going to have emissions for 
as far as we can see. But what can you do and how can you get 
there?
    One, put carbon capture technology on all existing 
facilities that emit. We have the technology. Let's do it. Can 
Congress incent that? Sure, they can do that. You capture it. 
Now you got to build pipelines. California has a lot of 
permanent places to sequester, so we are able to do that.
    Two, land management. Manage your forests, manage your 
biomass, and guess what, you can make renewable biofuels, and 
you can help reduce the emissions in the transportation sector. 
Okay?
    And then finally they looked at everything and they said, 
with all these reductions, we still need one more thing, we 
can't quite get there.
    But you know what we have? We have direct air capture 
technologies. We have direct air capture technologies that can 
actually pull CO2 right out of the air. We have the 
technology today. And Congress has been incenting direct air 
capture.
    So together we have the means to be able to get to the 
goals that we want. We don't have to have things like the CEPP. 
We just don't have to come up with these things.
    So that is really what I wanted to say.
    Mr. Graves. Mr. Menezes, I see you have got a minute left. 
If you could maybe talk about, I have watched as you end up 
having companies that end up spending a gazillion dollars to 
reduce that last ton of carbon to get to zero.
    Could you talk about, with the last 45 seconds or so, 
should we be doing that and try and focus sector by sector, or 
should we be looking at ways to identify less expensive offsets 
that are easier to do?
    Mr. Menezes. Well, that is right. And Environmental Action 
actually proposed a roadmap. It was a combination of a variety 
of things. It wasn't just the CEPP.
    And so when you look at the roadmap, there were all the 
things that we have been talking about. I mean, tax benefits, 
moving to EVs, for example.
    It is a very comprehensive piece, in that if you have all 
the other parts in place, you can get to at least 73 percent of 
the 80 percent of the emission target that is set forth in the 
Environmental Action Programme.
    So essentially what we are doing is we are going to be 
spending $150 billion, according to the CRS, on chasing that 7 
percent just to get us to that 80 percent reduction by 2030.
    So that is what I have to say about that.
    Mr. Palmer [presiding]. I thank the gentleman for his 
questions. I will now recognize myself for questions.
    Ms. Kenna, a recent study found that the Clean Electricity 
Performance Program that is being proposed as part of the 
Democrat reconciliation bill would result in a 45 percent 
increase in electricity prices by 2031 in Arizona, and a nearly 
90 percent increase from 2019 rates if the Palo Verde nuclear 
plant were to cease operation.
    This level of rate hike would have low-income and fixed-
income seniors struggling to pay their bills to keep their 
houses warm in the winter.
    Is it your company's hope by supporting this bill low-
income families and fixed-income seniors will buy Patagonia 
jackets to stay warm when they cannot afford to heat their 
home?
    Ms. Kenna. Thank you, Congressman.
    Look, at the end of the day, we are concerned about the 
economy, and we are concerned about the planet.
    And the oil and gas markets are volatile by nature, as are 
their prices. And we think one way to avoid this volatility is 
to expedite the transition to clean energy, which we think is 
wind and solar, and to protect our public lands, and to 
cultivate these natural climate solutions.
    Mr. Palmer. Would you like to see the transition to 
renewable energy similar to what they have done in the U.K.? Or 
Europe, I mean.
    Ms. Kenna. Our interest here is in clean water and clean 
air and a healthy planet.
    Mr. Palmer. No, I am asking, if you are really interested 
in it, then you have kept up with what is going on around the 
world. Do you recommend that we transition to renewable energy 
like they have in Europe, and particularly in the United 
Kingdom? It is a simple yes or no. Or either you don't know.
    Ms. Kenna. Look, I think the United States has an 
opportunity to be a leader. I do. I really do.
    Mr. Palmer. Now, let me tell you, you have been coached to 
filibuster the answer. And I will just tell you, if we 
transition to renewables the way the U.K. has, last winter they 
had 3,000 people die because they couldn't afford to keep their 
homes warm enough.
    And that is where we would head with this. We are already 
talking about a 40 percent increase in household utility costs 
just in the United States.
    And that is going to be particularly problematic, Mr. 
Menezes, in certain parts of the country. I would like for you 
to comment on it. Do you think we should transition like the 
U.K. and Europe have?
    Mr. Menezes. Well, just from the energy point of view, I 
mean, just what happened last month. So the U.K. has embraced 
wind. They get 25 percent of their energy from wind. It is a 
great thing. When it runs, it tends to be cheaper. They have 
saved a lot of money. Sometimes it produces too much that they 
can use.
    But when they--again, and I mentioned this earlier in a 
question--when you need the electricity is when you want it. So 
you have to have it. Right?
    So when the wind stopped blowing last month, you saw 
natural gas prices spike. They had to import natural gas from 
Russia and the United States, so that was a good thing.
    But they had to run a coal plant that had been closed due 
to anti-fossil policies that are there in Europe and in the 
U.K.
    So again, as I have mentioned earlier, we have to develop 
the battery technology or the storage technology to be able to 
be there when the wind stops blowing and when the sun stops 
shining. We haven't gotten there from a technological point of 
view.
    Mr. Palmer. We are not against renewables, but renewables 
from an engineering perspective--and I worked for two 
international engineering companies in a previous career--we 
are not there for being able to convert to renewables because 
our grid is a patchwork grid. It depends on a consistent 
baseload. That is not going to happen.
    I also want to point out that if we can't go to next-
generation nuclear, if we can't go to maybe more dependence on 
natural gas, then it is going to have an enormously negative 
impact on low-income people around the world.
    There are projections that approximately, because of the 
energy crisis right now, that there are about 4 billion people 
who don't have access to cleaner energy. They are cooking their 
food using wood or animal dung, cow dung, other combustible 
materials, which they use inside their homes.
    There are about 4 billion people whose life expectancy is 
much shorter because of that. We are talking about places like 
the Congo and places like that, that need energy to develop for 
the benefit of their people.
    And I just would like for you to comment on how we can 
justify some of these policies that the Democrats are proposing 
when it will create enormous harm for people. And not just in 
the more impoverished regions of the world, but here in the 
United States, when you are looking at a 40 percent increase in 
household utility costs. And they are projecting now that 
natural gas is going to go to about $10 per million cubic feet.
    That is going to force some people, particularly elderly 
people, to make a decision on how much they can spend on their 
utility bill versus their food and their medicine.
    Does that sound like a reasonable policy?
    Mr. Menezes. Even the CRS has identified that ultimately it 
is the electric consumer that bears the cost of policy changes 
in Congress. And with regard to the CEPP, they say, we really 
don't know what the outcome is going to be.
    With respect to the rest of the world, pulling people out 
of poverty, electricity pulls people out of poverty. In India 
and in Africa the leaders are trying to bring electricity to 
their people. And it is the United States' technology typically 
which we export to them. And with our policies, we help to put 
that technology in place.
    Technology is not limited to the solar or wind. Certainly 
it includes all that. But we are trying to also figure out ways 
to where we can bring small modular reactors, for example, give 
them an opportunity to do that, and use the U.S. technology.
    So with the CEPP and other policies, it seems like Congress 
is picking winners and losers.
    And we haven't even talked about the clean coal 
technologies that are in existence here. We still have an 
abundance of coal. We can develop and put clean coal 
technologies on this, and we can export that technology to the 
countries that rely mostly on coal.
    When you look at the International Energy Agency's 
projections in those developing countries, coal is going to 
increase. We have to give them options, because they will not 
want to turn away from coal because they want to bring 
electricity to their people.
    Mr. Palmer. When you talk about picking winners and losers, 
I think most of us understand that in the context of favoring 
certain industries over others.
    But I will tell you right now, the legislation that is 
before us, the losers are going to be low-income Americans, 
elderly Americans, people who, like I said, are going to be 
making some really tough decisions this winter about how much 
they can afford to pay for utility bills versus food and 
medicine.
    With that, the time is expired.
    Without objection, all members will have 10 business days 
within which to submit additional written questions for the 
witnesses. I ask our witnesses to please respond as promptly as 
you are able.
    This hearing is adjourned.
    [Whereupon, at 3:04 p.m., the committee was adjourned.]

                 United States House of Representatives

                 Select Committee on the Climate Crisis

                      Hearing on October 20, 2021

  ``Good for Business: Private Sector Perspectives on Climate Action''

                        Questions for the Record

                              Corley Kenna

                   Head of Communications and Policy

                               Patagonia

                       the honorable kathy castor
    1. Thank you for your leadership on climate action. Just to make it 
crystal clear, why should the business community care about passing 
climate legislation? 
    First, thank you for your incredible work on this issue, especially 
the emphasis you put on storytelling and bridging divides. At 
Patagonia, we know that climate change is everyone's issue and our 
business, and our community agrees, whether they're climbers from West 
Virginia, anglers from Florida or skiers from California. If you run a 
business and care about your employees, customers, and community, it is 
a no-brainer to support this legislation. The right thing to do is also 
the smart thing to do.
    The Build Back Better Act offers a bold and urgent opportunity to 
address the climate crisis before it's too late, gives working families 
the support they deserve, and will help strengthen the economy. It is 
an imperative investment in communities affected most on the frontlines 
of the climate crisis, communities that are already vulnerable and 
suffering serious and lasting health issues due to poor air quality 
exacerbated by climate change.

    2. Could you please explain why climate investment is important for 
your bottom line as well as for the planet?
    These two issues are inextricably bound. To paraphrase David 
Brower, there is no business on a dead planet.
    Along with the thousands of US businesses in our industry, 
Patagonia depends on a stable climate and healthy, protected lands and 
waters. The climate crisis is not an abstract theory, it is an urgent 
risk to our business. As such, we need help scaling and incentivizing 
programs that won't worsen the climate crisis, and that will increase 
the pace of urgently needed emissions reductions and a just, clean 
energy transition.
    Beyond climate, this legislation also prioritizes the needs of 
working families. For the last 50 years, Patagonia has offered paid 
sick leave, parental leave, and onsite childcare to our employees--and 
we've reaped the benefits through our ability to maintain a robust and 
engaged workforce. Yet, nationally, fewer than 21 percent of workers 
have access to paid family leave through their employers. Attracting 
and retaining top talent and a?speedy economic recovery?depend on 
enabling people to return to the labor force by addressing the urgent 
issues of paid leave and childcare availability.

    3. How is Patagonia building a culture of corporate accountability 
by connecting your climate priorities to other policy positions?
    Patagonia is proud to be a certified B-Corporation, which requires 
us to look beyond profit and consider people, planet and the long-term 
in every business decision we make. And we have been glad to see other 
businesses and organizations make similar commitments to consider not 
just their shareholders but their full community of stakeholders in 
their business plans.
    These corporate commitments, along with bold and aggressive 
investments from our elected leaders, will create the conditions for 
the systemic change required for a healthy planet and thriving 
communities. Government support will also catalyze further business 
investment and innovation--making our economy more competitive and 
resilient while strengthening our global leadership.
    Patagonia is willing to pay a higher corporate tax rate to fund 
this critical legislation. Further, we also urge Congress to eliminate 
tax subsidies for oil and gas companies. The United States spends $20 
billion annually subsidizing fossil fuels. It's a mistake that costs 
American taxpayers more than $649 billion each year when considering 
health, environmental, and climate externalities. It's time to shift 
those investments to a clean, just future for people and the planet.

    4. Under Secretary Haaland's leadership, the Department of the 
Interior is exploring how to reduce barriers to equity in outdoor 
recreation. Could you please discuss how Patagonia views diversity, 
equity, and inclusion when it comes to outdoor recreation and climate 
solutions?
    We can, and should, be doing a lot more to actively engage with 
individuals and communities who are historically underrepresented in 
the outdoor community, the environmental movement and our own company. 
We are working deliberately to create meaningful change by conversing 
with and listening to the communities we do not represent adequately. 
We supported the Great Americans Outdoors Act and encourage Congress to 
pass the Simplifying Outdoor Access for Recreation Act.

    5. The Climate Crisis Action Plan recommends smart-from-the-start 
siting to expand clean energy deployment while also protecting 
wildlife, wildlands, and cultural resources. Do you agree that, with 
appropriate policy safeguards, it is possible to advance both 
conservation and clean energy deployment?
    Yes. We must also double down on our work to help communities get 
off fossil fuels and protect nature, the original climate solution. And 
we must demand nothing short of systemic change from government and 
industry.
    Science confirms that nature can reduce a third of the CO2 
we need captured by 2030 to slow catastrophic warming. Given the 
science and urgency, we now focus more than ever on the high-carbon 
landscapes that can save us, too. Through partnerships with local and 
Indigenous communities and our 1% for the Planet program, Patagonia has 
supported the protection of Alaska's Tongass National Forest since 
2008, with its 17 million acres of old-growth spruce, hemlock, and 
cedar that hold hundreds of millions of tons of carbon.
    At the same time, communities know what they need to make a just 
transition from fossil fuels to renewable energy. We support local 
knowledge and activation of climate solutions, particularly with Black, 
Indigenous, and other communities of color that have been hit the 
hardest, lost the most and had the least say in their climate 
realities. Patagonia will expand our support of groups such as the ones 
we featured in our recent films DISTRICT 15 (on fighting Big Oil and 
Gas in California) and We the Power (on the energy-democracy movement 
in Europe). At the same time, we're committed to a new energy system 
that gives communities real power.
                       the honorable dan crenshaw
    1. In your testimony, you write that ``Patagonia is working to 
reduce and eliminate our scope three carbon emissions and are proud 
that in just four years we won't use any virgin petroleum sources in 
our materials.''
    Is Patagonia willing to totally cease the use of all fossil fuels 
and its derivatives--virgin and recycled--in your business's entire 
chain of operations from the design and manufacture of fabrics for 
clothing to the transport of those products on trucks, rail, and ships 
to stores by December 31, 2021?
    We believe that the production of all fossil fuels and their 
derivatives should be discontinued, and the sooner we move in this 
direction the sooner everyone from workers to companies can seize the 
economic opportunities that come from clean energy. While the world 
cannot stop using fossil fuels overnight, we do need to move beyond 
them as quickly as possible if we are to leave a habitable planet for 
future generations, and that is what we are committed to doing at 
Patagonia. But we need a national plan for the just and speedy 
transition from fossil fuels to renewable energy. We need to end tax 
breaks for polluters and we need to offer incentives that promote 
renewable energy and support conservation. And importantly, we need 
jobs programs to support those who transition out of the extractive 
industries.
    The fossil-fuel industry needs to participate in its own transition 
if it is to survive economically the late 21\st\ and 22\nd\ centuries. 
Their marketing campaigns imply that they understand this, but it is 
our hope that you and your colleagues hold them accountable to their 
promises to the planet and communities.
    For more information about how we intend to reduce and eliminate 
our emissions, please visit www.Patagonia.com/climate-goals

    2. In your testimony, you stated, ``The Build Back Better Act--
offers a bold and urgent opportunity to address the climate crisis 
before it's too late, and give working families the support they 
deserve.''
    Is it Patagonia's official position that those men and women 
working on our nation's pipeline infrastructure should be laid off from 
those jobs despite the fact that pipelines have been shown to provide 
the safest and most reliable method to transport crude oil to 
refineries?
    Patagonia's believes that our country is missing the opportunity to 
lead the world on industries of the future. Our government leaders 
should make decisions on science and the overwhelming threat of climate 
change, not politics.
    We honor the men and women who do the work to build, maintain and 
repair energy infrastructure. We favor efforts big and small, private 
and public, to provide the workers of today the means to hold the jobs 
of tomorrow in an electric-powered economy fueled by cleaner forms of 
energy such as wind and solar.

    3. In your testimony, you stated ``Beyond climate, this legislation 
also prioritizes the needs of working families.'' How do you define 
`working families' and what metrics should be used in determining how 
their `needs' should be prioritized? Should the needs of the building 
trades workers be considered in President Biden's Build Back Better 
legislation?
    A working family, as it was meant, is any family or household in 
which a person earns a paycheck from an employer and also supports 
loved ones with that paycheck. Some of the needs of working families 
that we see in our communities are:

        --Access to affordable, high quality child care
        --Support to afford and find qualified caregivers for older and 
        disabled adults
        --The ability to take a family or medical leave to care for 
        themselves or a child or an ill or injured loved one without 
        falling into financial hardship or forgoing a needed leave

    At Patagonia we have found that supporting our colleagues and 
providing solutions to the needs listed above benefits our entire 
community and our business. We even wrote a book about it called Family 
Business and we would be glad to send you a copy.
    In terms of the building trades, we are very happy to see that the 
Build Back Better Act does take their needs into account, especially 
with respect to paid family and medical leave because eligibility 
criteria for access to paid leave depends on an earnings history 
overall ($2,000 over a recent 8-quarter period) without regard to 
whether those earnings came from one employer or multiple employers or 
jobs. This reflects the realities of workers who may have multiple jobs 
and are hired through hiring halls for their work.

    4. In your testimony, you stated, ``Patagonia is proud to be a 
certified B-Corporation, which requires us to look beyond profit and 
consider people, planet and the long-term in every business decision we 
make.''
    When Patagonia chooses to fund anti-Line 5 advocacy groups and 
documentaries do you consider those workers in the building trades 
working to build our nation's energy infrastructure like Line 3, for 
example, or are `some people' and their jobs expendable as your actions 
seem to imply?
    We should stop importing the world's dirtiest oil--Canadian tar 
sands. We don't think relying on it is necessary to keep the U.S. 
economy running, nor is it necessary to keep U.S. workers employed. 
There are great jobs building the energy of tomorrow, today.
    Does Patagonia believe that fossil fuels play any role in our 
country's energy economy?
    In the short run, unfortunately that is the case, but the 
transition must begin without delay. For too long, the fossil fuel 
industry has not only hidden but misled the American people about the 
effects of their pollution. We believe they should be held accountable 
for their actions.

    5. If the Line 5 pipeline were to be shutdown, how does Patagonia 
suggest crude oil be transported to refineries in the Midwest?
    We must accelerate our transition to renewable energy, specifically 
wind and solar.

    7. Are trucks carrying crude oil to refineries a safe way to 
transport unrefined crude?
    They are safer than a pipeline running under the Straits of 
Mackinac.

    8. Will an additional 2000 truckloads carrying crude oil to 
refineries result in greater GHG emissions?
    Yes. It's a balancing act. It's a better short-term risk than a 
pipeline leak or spill under waters that are irreplaceable. And this is 
precisely why we need accelerate a transition to renewable energy.

    9. Will an additional 2000 trucks degrade road infrastructure 
resulting in more roads needing to be repaved with asphalt--a fossil 
fuel product?
    Green infrastructure and the circular economy are making those 
projects less environmentally destructive, and electric trucks are 
clearly the direction many major shippers are choosing for their 
fleets, but we don't disagree that we will be using some byproducts 
from fossil fuels for the foreseeable future. The question is how 
quickly can we stop taking from the planet and start being motivated by 
the benefits of conservation and clean energy?

    10. Why is Patagonia clothing so expensive? For a company that has 
seemingly placed such an emphasis on helping `working families,' how 
does Patagonia justify the cost of a Men's Frozen Range Parka which 
retails for $699, for example? Hard to believe many `working families' 
are buying $700 winter coats.
    We believe one coat that outlasts three coats made for the same 
purpose is a good value for the customer able to spend more up front to 
save money in the long run. For those who want a lower price point and 
for those looking for the most responsible way to shop for jackets, we 
invite you to check-out WornWear.com. Buying used extends a garment's 
life by about two years which cuts its carbon, waste, and water 
footprint by about 82%. And, when you are done with your Patagonia 
jacket, we are glad to give you credit towards your next new or used 
one.

    I can buy an insulated Patagonia jacket for $200 (actually under), 
which means instead of giving $140M in grants to environmental issues, 
you could have donated 700,000 insulated jackets to the homeless and 
those who died from cold-related weather. If 1% of those jackets 
prevented deaths, Patagonia could have saved 7,000 people in the past 
20 years from dying. Why did Patagonia choose not to do this?
    That's a false choice between working to save the planet and 
helping human beings. We do both, and we're proud of it. We donate 
significant amounts of cold-weather clothing to communities in need and 
protective clothing to first responders fighting California and Nevada 
fires made worse by climate change. We prioritize support for 
grassroots environmental organizations working to protect or restore 
ecologically important land and water in their communities.
    Please provide us with a list of every product Patagonia designs, 
manufactures, and sells that contain any kind of fossil fuel or 
chemical feedstock--virgin or recycled.
    We believe in transparency. That's why we make this information 
freely available and accessible on our website and we encourage you to 
check it out: www.Patagonia.com

    11. China's dismal record on human rights record is well documented 
and, as the Northwest Ohio Building Trades Council letter notes, your 
company's mission statement mandates that it, ``cause no unnecessary 
harm.'' Given this corporate dictate, how can you justify operating in 
a country that openly uses slave labor?
    Patagonia takes responsibility for our products, the workers who 
make them, and the environmental footprint left behind. We invite you 
to learn more about the range of due diligence activities to promote 
and sustain fair labor practices, safe working conditions and 
environmental responsibility in factories that make our projects. You 
can find that information here: https://www.patagonia.com/our-
footprint/working-with-factories.html.
    In July 2020, we were public in our decision to exit Xinjiang after 
it was clear we were not able to rely on auditors to ensure that our 
products were free of forced labor. We no longer source cotton from 
China.

    12. Why does Patagonia manufacture any of its products in China?
    Due to misguided trade policies, much of the US apparel 
manufacturing landscape no longer exists. As a result, we search the 
globe for the best partners.
    Patagonia fought NAFTA and paid for ads in opposition to it because 
we feared it would degrade environmental standards and displace 
American workers. We also were vocal in our opposition to TPP.
    We would welcome a chance to work with you to support policies that 
would allow apparel companies like ours to grow organic cotton in Texas 
and manufacture in facilities powered by wind and solar with workers 
who make a thriving wage the US.

    13. Since China is the world's leading GHG emitter and continues to 
build out coal fired power plants extensively, in addition to having a 
dismal environmental record generally, and given your significant 
presence in the country, have you lobbied the Chinese government to 
institute mandatory and binding GHG emissions reductions across its 
industrial sector? If so, please provide documentation detailing what 
you have requested of the Chinese government. If not, why not?
    To date our efforts have been focused on appealing to world leaders 
to stop hiding behind the excuse of China being a GHG emitter and 
working to elect leaders who will prioritize people and planet. That 
said, we do support economic penalties for all countries that are 
failing to meet their commitments under the Paris Climate Agreement and 
we're watching to see which countries are keeping their word after 
Glasgow.

    14. What percentage of your clothing is manufactured in China?
    Less than three percent of our current and spring line is 
manufactured in China.

    15. Does Patagonia's manufacturing in China contribute to global 
warming?
    All manufacturing everywhere does. We are honest about our carbon 
footprint and encourage companies to do the same. We welcome you to 
visit our website our website to learn about why climate is our 
business: Patagonia.com/climate-goals.

    16. How many shipping containers with Patagonia products are sent 
to the U.S. each year?
    That information is not readily available.

    17. What type of fuel is used to power the engines of the container 
ships from Patagonia products?
    4% of our total carbon footprint comes from the transportation of 
our products. We are a part of the Aspen Shipping Decarbonization 
Initiative to address the challenge of maritime shipping 
decarbonization, Read more about it here: https://
www.aspeninstitute.org/blog-posts/companies-aim-to-use-only-zero-
carbon-ocean-shipping-by-2040/.

                        Questions for the Record

                            Gilbert Campbell

                            Founder and CEO

                  Volt Energy Utility and Volt Energy

                       the honorable kathy castor
    1. Climate change is both a crisis and an opportunity. How would 
federal investment in the transition to a clean energy economy help 
businesses like yours make clean energy more affordable, reliable, and 
accessible for all Americans?
    Thank you for the question Chairwoman Castor. Federal investments 
in the transition to clean energy will accelerate the decarbonization 
of our electricity system and help firms like Volt Energy Utility 
deliver clean energy that is more affordable, reliable, and accessible 
to a variety of stakeholders. An extension of the Investment Tax Credit 
(ITC), and incorporating direct pay as an option, provides certainty to 
investors and lenders that allows project financing for the solar 
projects that we develop in both rural and minority communities. 
Additionally, investments in our aging grid infrastructure will allow 
for more Americans to have access to affordable, reliable, and 
accessible clean energy.

    2. There are many cost-effective policy solutions that could be put 
in place today to help reduce electricity bills for families while also 
reducing carbon pollution. Could you please describe some of the cost-
effective policies you would recommend Congress adopt to expand clean 
energy deployment and promote environmental justice?
    The climate crisis produces many environmental injustices. 
Promoting environmental justice while addressing the climate crisis 
requires a multifaceted approach, which we have begun to develop at 
Volt Energy Utility.\1\ To address the climate crisis equitably, we 
need to make sure that underserved communities have access to the 
assets and health benefits of clean energy. The following are examples 
of cost-effective policy solutions that would help American families 
and especially underserved minority and rural communities:
---------------------------------------------------------------------------
    \1\ https://www.voltenergyutility.com/services#environmental-
justice.
---------------------------------------------------------------------------
          National Clean Energy and Sustainability Accelerator: 
        Referred to as the Greenhouse Gas Reduction fund in Build Back 
        Better, this strategy is based on the state green bank model 
        and is critical in addressing the financing issue that plagues 
        underserved communities.
    Not only does the legislation require that 40% of investments from 
the accelerator supports communities most effected by climate; 
including communities of color, it also:
    i. Provides technical support to business leaders to help them 
package their projects for financing.
    ii. Provides for flexible financing which can help homeowners, 
farmers and small businesses who may have resources, but do not have a 
high FICO credit rating. They can look at other factors like 
consistency of paid utilities to assess credit worthiness.
          Improving Affordability and Accessibility of Assets: 
        The other piece of the asset pie is to make assets more 
        affordable and accessible, so that there is less need for 
        financing. Some of these policies include:
    i. Tax credits with bonus credits for underserved communities and 
communities with high energy burdens
    ii. Investments in clean vehicle infrastructure to ensure that 
funding reaches communities of color
    iii. Energy efficiency loan and grant programs
    iv. Consumer incentives for energy efficient appliances

    3. How would distributed renewable energy increase the reliability 
of electricity for everyday Americans?
    Distributed renewable energy is an extremely effective way to 
increase the reliability of electricity for everyday Americans. The 
extreme weather events amplified by the climate crisis are causing 
power outages that have serious health and financial implications to 
American families. Distributed renewable energy has demonstrated the 
potential to be more resilient, reliable, and in many cases more 
affordable, all while decreasing carbon emissions. For example, 
distributed solar energy has been found to enhance grid reliability, 
redundancy, and resilience. Community benefits include increasing 
utility cost savings, reducing peak loads, improving the accuracy and 
response times to outages with smart inverter technology, as well as 
increasing community's adaptability and independence following a 
disturbance.

    4. How could inaction on climate change lead to increased 
electricity bills for Americans?
    Between 2000--2009 the annual average cost of U.S. climate 
disasters was around $54 billion (according to NOAA). Between 2010--
2019 the average was about $85 billion. Last year alone, we had $99 
billion in climate-related disasters and this year we are on track to 
break that record. While our nation is working our way out of a 
pandemic that has wreaked havoc on our economy, we cannot afford for 
our economy to continue to take the additional hits from disasters 
stemming from climate change. This trend is not sustainable and we have 
the ability to make the investments to curb these costs. A weakened 
economy from climate inaction will absolutely lead to increased 
electricity bills for Americans. In Texas, the deadly power outages in 
February caused by the deep freeze, left 4.5 million Americans without 
power for several days. Many Texas residents incurred astronomical 
electricity bills along with the loss of food, productivity, and other 
costs associated with a prolonged power outage. Additionally, while the 
burdens of costs will be felt across American communities, there will 
be a disproportionate impact on communities that reside in substandard 
homes with limited energy efficiency. As we experience more high heat 
and high cold days, those community members will be forced to spend 
more to maintain safe temperatures in homes.

    5. How has the solar industry worked to ensure that its supply 
chain is free of forced labor and other human rights concerns?
    Ensuring that there is an ethical supply chain is of the utmost 
importance to the U.S. solar industry. Our country's transition to 
renewable energies also provides an opportunity to create energy 
systems that primarily consider environmental health and equity. For 
example, selecting mining sites for metals needed to produce renewable 
technology can be assessed with biodiversity and habitat conservation 
in mind to protect the lands and waters revered by indigenous 
communities, and shared by other Americans.
    I am proud to be a Board Member of the Solar Energy Industries 
Association (SEIA), who has been a leader in working to stamp out the 
force labor and other human rights issues in the solar supply chain. 
Volt Energy Utility was one of over 300 firms that signed SEIA's Forced 
Labor Prevention Pledge.\2\ SEIA also led the development of an 
industry-led solar supply chain traceability protocol used as a tool 
for identifying the source of primary raw materials and inputs and 
tracking their incorporation into finished products, including solar 
modules.

--------------
    \2\ https://www.seia.org/sites/default/files/
Solar%20Industry%20Forced%20Labor%20Prevention%20Pledge%20Signatories.pd
f.

                    the honorable a. donald mceachin
    Mr. Campbell, thank you again for appearing today and for your 
continued work to ensure equity and diversity as we continue to move 
towards a zero-carbon future.
    As you know, I also share a passion for environmental justice.
    Low-income and minority communities, those that have been 
disproportionally impacted by pollution and have already seen the 
effects of climate change, must be a part of the coming energy 
transition. And importantly, these communities must be brought to the 
table as partners as we move towards a net-zero carbon economy.

    1. Mr. Campbell, can you speak to the work you're doing and how 
industry can employ innovative solutions, like Volt Energy Utility's 
Environmental Justice Power Purchasing Agreement, to ensure these 
communities are partners in the transition?
    Communities relegated into marginalized positions due to systems of 
inequity should be centered in our country's energy transition to 
renewables. This ensures equity is built in at the onset of a robust 
renewable energy system. Centering marginalized communities, such as 
communities of color and low-income communities, also allows for a 
diverse array of perspectives and solutions to be advanced across 
communities, which can promote efficacious programs. Volt Energy 
Utility has designed the EJPPA to serve the dual purpose of assisting 
corporate clients to meet and exceed their clean energy milestones and 
fulfill their commitment to support programs that increase 
opportunities for underserved communities to benefit from the expanding 
clean energy economy. The primary funding mechanism established to 
identify, evaluate and determine which clean energy-focused causes to 
support is the Environmental Justice Community Impact Fund.
    For more information about Volt Energy Utility's Environmental 
Justice PPA, please visit here: https://www.voltenergyutility.com/
services.

    2. What role do you believe Historically Black Colleges and 
Universities and other Minority Serving Institutions can play?
    At Volt Energy Utility, we value supporting the next generation of 
sustainability practitioners. We also value diversifying the 
sustainability sector, to enrich perspectives and spur innovation. The 
opportunity to include HBCU's in this work is ample, because these 
students already bring interdisciplinary thinking to environmental 
issues--as they naturally combining social, economic, and other 
frameworks in environmental conversations. Cultivating HBCU students' 
interests and natural abilities to consider how different systems 
intersect, would create new sustainability leaders that are ready to 
tackle the complex environmental challenges of our times. These 
institutions are critical in advancing a clean energy system and 
promoting healthy and sustainable communities.

                        Questions for the Record

                              David Edsey

                Climate Director, Technical Underwriting

                          Zurich North America

                       the honorable kathy castor
    1. Why do insurers and reinsurers support federal climate 
investment in both emissions reduction and resilience?
    As noted in my written testimony, climate change poses an array of 
challenges potentially impacting every aspect of our society and 
economies across the globe. From an insurance coverage perspective, 
many geographical areas and assets may simply become uninsurable if 
action is not taken to eliminate greenhouse gas emissions and 
strengthen and adapt our infrastructure.
    Secondly, the evidence shows that investing in pre-disaster 
mitigation can limit losses, accelerate recovery, and is overall 
responsible budgeting. Zurich's own post-event studies, conducted after 
significant flood, drought and wildfire events, shows that every $1 
spent on resiliency up front resulted in $5 savings post-disaster. In 
addition to our own analysis, National Institute of Building Science's 
(NIBS) Mitigation Saves Report , confirms our assessment and, in some 
cases shows an even stronger cost benefit ratio.
    Zurich's has identified climate change as perhaps the most 
consequential and complex risk facing society today. It is 
intergenerational, international, and interdependent. We know that 
accumulated greenhouse gas emissions in our atmosphere have already 
caused average surface temperatures to increase 1.1+C since the second 
half of the 19\th\ Century, resulting in sea level rise, drought, 
glacier loss, wildfires, and more frequent and severe weather-related 
catastrophes. These adverse impacts pose a heightened risk not only to 
the insurance industry but to our entire economy. Without comprehensive 
federal action to address both emissions reductions and resilience, the 
risk of continued warming and a disorderly transition to face a more 
severe climate are only amplified.

    2. What steps should the federal government take to support 
sustainable, resilient, insurable communities?
    Zurich believes that creating sustainable and resilient communities 
will take the combined efforts of individuals, businesses, and 
government at all levels. That noted, we urge Congress to continue 
investing in pre-disaster mitigation. Beyond the investment itself, 
Congress should require that federal agencies consider climatological 
projections and the impact of climate change in the development, 
planning, and design stages of federally funded projects.
    Congress should incentivize the development and enforcement of 
modern, consensus-based building codes; encourage sound land use 
planning; and ensure transportation networks are interconnected and 
appropriately sized to reduce vulnerability. Congress should also 
incentivize the use of industry best practices and standards that go 
beyond consensus-based codes, particularly in high-risk areas or to 
meet a specific need or peril. Congress could provide tax incentives to 
individuals and business to take steps to harden or fortify their homes 
and businesses. Further, Congress should provide support to local 
governments and utilities to strengthen and fortify critical 
infrastructure against the increased risks of climate change.
                    the honorable a. donald mceachin
    1. The price of natural disasters is increasing, particularly flood 
related events, which have cost the nation over $900 billion since 
2000. The federal government is working to get a handle on the rising 
costs through new mitigation programs, increased investments in 
resilient infrastructure and transportation programs and through the 
National Flood Insurance Program. What are some innovative ways Zurich 
is working with communities to drive costs down to prevent economic 
devastation and avoid future losses?
    Zurich recently announced a collaboration, through Zurich's 
charitable foundation, with Resilient Cities Network to create a multi-
year program designed to strengthen climate resilience and help address 
social inequities in vulnerable communities in Houston and Boston. 
Zurich has committed $3 million to the program. Resilient Cities 
Network will identify neighborhoods and bring together community and 
government partners for the program. The program is expected to attract 
additional funding and generate policy support, which together will 
amplify successful, resilience-building projects. While the initial 
focus is on Houston and Boston, the program will expand to scale best 
practices in other cities, building urban resilience throughout the 
United States.
    The Resilient Cities announcement is an extension or our Flood 
Resilience Alliance , which was launched in 2013. The Flood Resilience 
Alliance is a multi-sector partnership focusing on finding practical 
ways to help communities strengthen their resilience to floods. In 
2020, we further extended the program through 2024 with the goal to 
increase third-party investments dedicated to pre-event resilience by 
$1 billion.

                            References Page

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\i\ http://2021.nibs.org/files/pdfs/NIBS_MMC_MitigationSaves_2019.pdf.
\ii\ https://floodresilience.net/zurich-flood-resilience-alliance/.

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