[Congressional Record Volume 140, Number 100 (Wednesday, July 27, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 27, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                         ADDITIONAL STATEMENTS

                                 ______


                       STARS OF ENERGY EFFICIENCY

 Mr. BINGAMAN. Mr. President, on June 15, 1994, the Alliance to 
Save Energy, a bipartisan coalition of Government, environmental, and 
business leaders that I chair and that Senator Jeffords and Congressman 
Sharp co-chair, presented its annual awards to three ``Stars of Energy 
Efficiency,'' Pacific Gas and Electric Co. received the 1994 Energy 
Efficiency Award for two decades of leadership in energy efficiency 
programs. Our colleague Representative Philip Sharp of Indiana, 
chairman of the House Energy and Power Subcommittee, received the award 
for his career-long commitment to energy efficiency, which culminated 
in his successful effort to make energy efficiency the cornerstone of 
the Energy Policy Act of 1992.
  The Alliance presented its final award to Maurice Strong, chairman 
and CEO of Ontario Hydro, for his many years of pioneering effort to 
ensure that energy efficiency would be a key part of global energy and 
environmental activities. Among his many other accomplishments, Mr. 
Strong served as Secretary-General of the U.N. Conference on 
Environment and Development--the Earth summit--in Rio de Janeiro in 
1992, which placed energy efficiency at the forefront of a global 
effort to reverse environmental degradation and promote sustainable 
development.
  In accepting this prestigious and important award, Mr. Strong clearly 
profiled the challenges facing the global economy and environment. I 
would like to share Mr. Strong's enlightening remarks with my 
colleagues.
  The remarks follow:

                       Energy and the Environment

                         (By Maurice F. Strong)

       Thank you very much, Katie. And profound thanks also to the 
     Alliance to Save Energy. I am deeply moved by, and grateful 
     for, your high compliment in awarding me one of this year's 
     Energy Efficiency Awards--all the more so because I share 
     this year's honors with such distinguished company as Rep. 
     Sharp of Indiana and the Pacific Gas and Electric Company.
       May I also pay tribute to Senators Charles Percy, Tim Wirth 
     and Jeff Bingaman, who were among the earliest to recognize 
     the vital need for energy efficiency, and who have done so 
     much to make this Alliance such a powerful influence in the 
     business sector of this country. Finally, I would like to 
     recognize Bill Nitze, a great champion of sustainable 
     development and mainstay of this organization.
       Indeed, I see many familiar faces here tonight, and I would 
     like to single them all out. Instead, let me just say that I 
     accept this distinguished award as a tribute to them, and all 
     the others with whom I have had a privilege of working on 
     behalf of the Earth's environment over the years.
       I am sure that most of these old friends will vouch for me 
     when I say that I am not one of those somewhat dubious 
     prophets who hang around street corners with a sign reading 
     ``The End Is Nigh.'' If I truly believed that, I wouldn't 
     waste your time and my breath here tonight. I'd probably be 
     out near a lake somewhere, enjoying what was left of nature.
       But I DO believe that humankind is at one of the most 
     critical cross-roads in its history. And I DO believe that 
     time is running out for us all to make some very fundamental 
     changes in the way in which we conduct outselves--in 
     particular, the ways in which we use the Earth's resources--
     and most notably, its energy resources.
       I am not alone in this belief. Nor have the threats I speak 
     of only recently come to light. Let me quote a famous 
     stateman on the subject:
       ``To waste and destroy our natural resources--to skin and 
     exhaust the land instead of using it so as to increase its 
     usefulness--will result in undermining for our children the 
     very prosperity which we ought by right to hand down to them 
     amplified and developed.''
       Now, that statesman was Theodore Roosevelt. And his 
     warning--just as timely today--was given a century ago. He 
     was talking about the need--and indeed the duty--of the 
     industrialized world to embrace policies of sustainable 
     economic development--many, many decades before the term 
     itself was invented.
       The world's population in his day was about one and a half 
     billion. It is now more than 5 billion, and in the two 
     decades alone the number of people on this planet has 
     increased by an amount equal to the total in Teddy's 
     Roosevelt's time. Last year the net increase in our numbers 
     was 90 million. We are adding the equivalent of one New York 
     City to the Earth every month.
       There is now overwhelming evidence that the industrialized 
     world cannot continue in its historical patterns of 
     production and consumption--that it cannot forge ahead 
     indefinitely on the path of profligacy in its use of the 
     Earth's resources--either for its own sake or for the sake of 
     the myriad others who have not yet experienced the luxury of 
     waste.
       This realization prompted the United Nations General 
     Assembly to convene the Conference on Environment and 
     Development, the Earth Summit of Rio de Janeiro, in June of 
     1992. Studies undertake for UNCED made clear not only that 
     the ecological consequences of our economic behavior were 
     worsening, but also that rich/poor disparities within and 
     between nations were deepening.
       Last fall, the report of the World Energy Council's 
     Commission on Engery for Tomorrow's World supplied more 
     evidence. Among the important points it made was that energy 
     issues will shift from the industrialized to the developing 
     world within the next three decades, and that the latter's 
     proportion of world-wide energy consumption will rise to 55 
     percent from 33 percent in the same period. Among the many 
     severe challenges identified was the requirement for 
     investment of about $30 trillion (US) in the expansion of 
     existing energy systems and technologies by the year 2020--50 
     percent more than the current total world GDP! What's more, 
     ``Energy for Tomorrow's World'' not only maintained that the 
     target of stabilizing global anthropogenic CO2 emissions at 
     the 1990 level by the year 2020 is virtually unattainable, 
     but says there is a strong possibility that atmospheric CO2 
     concentrations will continue to rise ``for many decades to 
     come.''
       But there is also evidence that circumstances are beginning 
     to bring about changes in energy consumption patterns, even 
     without a grand strategy or concerted conservation policies.
       In a book called ``Vital Signs 1993,'' Lester Brown 
     describes the 1990s as the ``decade of discontinuity.'' It is 
     an era, he says, in which long-standing upward growth curves 
     for production of such key economic commodities as grain, 
     steel and coal have suddenly reversed.
       World coal production, which had risen annually and almost 
     without interruption since the beginning of the Industrial 
     Revolution, declined in 1990--then again in 1991 and 1992. 
     World oil output peaked even earlier--in 1979. Only the 
     relatively clean-burning natural gas is expanding in 
     production.
       These reversals in historical trends may well be temporary 
     and result from environmental constraints in industrialized 
     countries. Intolerable air pollution in such cities as Los 
     Angeles, Mexico City and some European centers has put a 
     brake on the unrestrained growth of automobile use. Acid 
     rain, health concerns, and the more recently acknowledged 
     threat to the ozone layer, have curtailed the world's use of 
     coal. But the fossil fuel era is far from over. Coal may not 
     be the fuel of choice, but it is still the fuel most likely 
     to be used in countries like China and India, which have 
     rapidly growing energy needs and extensive coal reserves.
       It is true that a growing environmental consciousness in 
     recent years has produced discernible improvements throughout 
     the industrialized world in what I call the ``close-in'' 
     problems. Toxic emissions to air, land and water have in many 
     cases been reduced, and important changes in manufacturing 
     processes have reduced raw materials and energy use per unit 
     of production.
       With the coming into force of the Climate Change 
     Convention, and the Biodiversity Convention approved at Rio, 
     we have taken some important first steps to come to grips 
     with two of the most threatening and intractable global 
     risks. But they are only first steps. Indeed, there is a 
     danger that the process of negotiating the protocols required 
     to give real substance and ``bite'' to these framework 
     conventions will now lag. It must not be allowed to do so.
       Moreover, too little attention has been given to the area 
     of environment-development relationships in the policies and 
     practices of governments and industries. The growing 
     awareness and concern over the past two decades has been 
     accompanied by the establishment of environmental ministries 
     and agencies by virtually all governments, and this has of 
     course produced a proliferation of regulations. But these 
     activities have not typically been linked to, and have had 
     little effect on, national economic policies or the 
     fundamental policies and practices of the major sectoral 
     industries that are the principal sources of environmental 
     impacts. Regulation is necessary, but experience has shown 
     that its effects can be limited, and even sometimes counter-
     productive, if it is not accompanied by changes in fiscal 
     policies and provide positive incentives for environmentally 
     sound and sustainable development.
       We are still approaching the problem, to too great an 
     extent, from the wrong end. Last year, a paper from Arthur D. 
     Little's Centre for Environmental Assurance said that 
     industry in North America and Europe is spending more than 
     $150 billion per year on pollution abatement and control--the 
     so-called ``end-of-the-pipe'' remedies--and that this figure 
     will likely double by the end of the century. Despite these 
     enormous outlays, companies are still not meeting society's 
     demands. In other words, we have been busy applied very 
     expensive Band-aids to our industrial infrastructure while 
     the environment, the natural resources, and the health and 
     welfare of human beings in much of the developing countries 
     have been hemorrhaging.
       The prospect of a massive increase in Third World energy 
     consumption over the next 30 years boldly underlines a point 
     I have been making since before Rio. That is that the 
     industrialized world must reduce its environmental impacts in 
     order to leave ``space'' for developing countries to begin to 
     fulfill their own development needs and aspirations. The 
     Earth simply cannot sustain another traumatic round of 
     undisciplined growth, a repeat of the unthinking exploitation 
     that marked the first industrial revolution--and which, to an 
     alarming extent, continues.
       A crucially important priority--which makes as much sense 
     economically as it does environmentally--is energy 
     efficiency. PG&E, the Sacramento Municipal Utility District 
     under David Freeman, and the New England Electric System 
     under John Rowe, have been pioneers in recognizing that those 
     of us in the energy industries--and in particular the 
     electrical utility sector--have an enormous potential in 
     helping our customers cut their energy use--and thereby cut 
     their costs and increase their competitiveness. The Electric 
     Power Research Institute in the United States has estimated 
     that electricity use in that country could be reduced by as 
     much as 55 percent through cost-effective measures. Others 
     think that is a conservative estimate. While most electric 
     utilities today have some sort of demand management program 
     in place, I believe we are still just on the threshold of 
     potential savings.
       There is a similar potential in the transportation field--
     particularly in the United States and Canada, which account 
     for more than a third of the world's private cars. A study 
     for the National Academy of Sciences in the U.S. judged that 
     straightforward technological improvements--using existing 
     light-weight materials, for example--could make vehicles 50 
     percent more efficient, and save about two million barrels of 
     oil per day. That saving is more than the U.S. imports from 
     the Persian Gulf. On this front, it was very encouraging to 
     learn of President Clinton's recent initiative on light-
     weight cars, but this too can only be viewed as a modest step 
     in the right direction.
       What is needed, as the Business Council on Sustainable 
     Development advocated to the Earth Summit, is a decisive 
     change of course. As Ed Woolard, the CEO of DuPont and 60 
     other Chief Executive Officers of some of the world's leading 
     corporations said in their contribution to our Earth Summit 
     preparations, ``The present industrial civilization is simply 
     not viable.'' It's simply not viable.
       Now those aren't wild-eyed environmentalists or placard-
     wavers, any more than I am. Those are some of the most astute 
     and experienced business leaders of our times.
       As I have said, fossil fuels will be with us for a long 
     time yet. We are admittedly undergoing changes in our fuel 
     mix, but it is still a very traditional mix. The World Energy 
     Council predicts that by the year 2020, our two countries 
     will be using 21 percent less coal, but only two percent less 
     oil. And these reductions will be all but offset by a 
     forecast 21 percent increase in our use of natural gas. 
     Viewed in isolation, this would seem to augur for somewhat 
     cleaner air. But in the same period, developing countries on 
     the Pacific Rim, South Asia, Africa, the Middle East and 
     Latin America will increase their coal consumption by factors 
     of up to two-and-one-half times--resulting in a net global 
     increase in coalburning of 31 percent. Blue skies and reduced 
     greenhouse gas emissions are not yet in prospect, at least 
     world-wide.
       The period ahead will continue to be characterized by 
     pressures to reduce the role of coal and oil, but in fact it 
     will take quite some time to do this. And while natural gas 
     is emerging as the fuel of choice within the fossil fuel 
     complex, this can only be regarded as a transitional 
     adjustment rather than a permanent solution. Even with the 
     adjustments I have mentioned, we have still not got 
     anything like a viable, environmentally sound, 
     economically feasible energy mix on which we can rely for 
     our energy future.
       An essential second step is to reflect in our energy prices 
     the full external costs of producing it. As long as our 
     energy prices remain at current low levels--particularly in 
     North America, and even more particularly in the United 
     States--there is little incentive to develop alternatives to 
     our dependence on either fossil fuels or on nuclear energy. 
     Energy prices still tend to be pegged to oil prices, and low 
     prices--coupled, in the United States, with low taxes on 
     gasoline--provide no short-term encouragement to conserve. 
     Ultimately, we will need higher prices, and this would occur 
     if they reflected their true total cost--not only the costs 
     of capital, exploration, development, production and 
     delivery--but also the environmental costs incurred in each 
     of these stages.
       I am pleased to say that my own company, Ontario Hydro, is 
     in the process of adopting full cost accounting as a guide to 
     its decision making. While we will not be able unilaterally 
     to incorporate full environmental costs into our rate 
     structure, we hope that our example will help to accelerate 
     the process of full cost accounting by society as a whole.
       The third step--and I do not mean to imply that these steps 
     are sequential, or that one need be completed before another 
     is undertaken--the third step is a fundamental revision in 
     the system of incentives and penalties by which governments 
     motivate the conduct of citizens and corporations. In general 
     terms, this means providing positive incentives for 
     environmentally sound and sustainable practices, products and 
     services, together with penalties as a deterrent to unsound 
     behavior. This also needs to be accompanied by full cost 
     accounting at the national accounting level as well as 
     business levels. It is, after all, fully consistent with the 
     principles of market economics that the price of all products 
     and transactions should incorporate their full real cost.
       And, speaking of consistency, one of the more intractable 
     myths surrounding this whole matter of sustainable 
     development is that energy efficiency costs more than it's 
     worth, and that conservation is somehow a recipe for slow 
     growth or no growth. The experience of industrialized 
     countries, notably Japan, has demonstrated that environmental 
     improvement and efficiency in the use of energy and resources 
     is fully compatible with, and indeed contributes to, good 
     economic performance.
       As Katie McGinty said, a healthy economy and a healthy 
     environment go hand-in-hand. I am encouraged to note that the 
     Alliance has joined with the U.S. Agency for International 
     Development to promote energy efficiency in Europe and Mexico 
     as part of the Sustainable Cities Project. I see great 
     promise, too, in the Alliance's collaboration with other 
     energy NGOs to help the Department of Energy promote exports 
     of energy-efficient products and services.
       Energy is the fulcrum of the relationship between the 
     environment and the economy. Virtually every environmental 
     issue--from a local dump site to the deterioration of the 
     global climate--has an energy component. This gives those 
     of us in the energy industry a special responsibility to 
     lead the process of transition to sustainable economy. And 
     I might add that for me and my fellow Canadians, that 
     responsibility is heightened by the fact that we are the 
     most energy self-indulgent nation in the world, even 
     allowing for the vastness of our geography and our cold 
     climate.
       Every sector of the North American economy is faced with 
     the need to effect a massive restructuring to ensure that we 
     can continue to compete in an increasingly competitive and 
     interdependent, global economy. Our own company had undergone 
     a massive restructuring, cost-reduction program as the first 
     step in reshaping the organization to live up to the new 
     corporate goal which Katie McGinty mentioned. It's an 
     ambitious goal--yes. Some might even say pretentious. But we 
     deliberately wanted to set a high standard for our own 
     performance--and perhaps even to throw down a gauntlet to 
     other utilities and other energy players in other 
     jurisdictions.
       I might just say here that we at Ontario Hydro recognized 
     the leadership role of PG&E a year before the Alliance. We 
     did this just over a year ago by hiring its former Manager of 
     Energy Efficiency Services, John Fox. He is Managing Director 
     of our Energy Services and Environment Group, the Hydro 
     branch that will play the key role in helping us to achieve 
     our efficiency objectives. I am happy to note also that John 
     is a director of this Alliance.
       We have recently received the report of an internal Task 
     Force on Sustainable Energy Development, with a series of 
     recommendations responding to the global Agenda 21 adopted by 
     governments at last year's Earth Summit in Rio de Janeiro. We 
     are determined to make Ontario Hydro, as the largest company 
     in Ontario and a major factor in the Ontario economy, a much 
     more active and positive force for revitalizing the economy, 
     helping to make it more competitive and setting the primary 
     example of sustainable energy development. Energy efficiency 
     is our highest priority. And our first challenge is to set an 
     example ourselves.
       It's amazing what you discover when you change your 
     perspective. Our Sustainable Energy Development Task Force 
     pointed out that Ontario Hydro is its own best and worst 
     customer. Best because we use in our system 50 per cent more 
     electricity than the entire City of Toronto. Worst because we 
     didn't pay for it. It was treated as a free good in our own 
     internal economy. That might have made good sense at one time 
     but no more! We are changing that--charging our own business 
     units on the same basis that we charge our customers. This 
     way we expect to get more energy efficiency and better 
     business decisions.
       And the stakes are high. We estimate that we can save at 
     least 800 megawatts just by using energy more efficiently 
     within the corporation. It is like finding another Niagara 
     Falls we didn't know we had. And not only do we NOT have to 
     build a generating station to get the power--we hope to 
     produce additional savings, or revenue, of some half-a-
     billion dollars per year.
       I am sure that all of the organizations that many of you 
     represent could find, to varying degrees, similar savings, 
     and that some of you are already doing this. We have been 
     working with our own customers to help them to use our 
     product more efficiently, and many of them have offset rate 
     increases to a significant degree by becoming more efficient 
     in their use of energy. And what better example could the 
     energy sector set for the nations in which they operate, and 
     for the world as a whole, than for each company to commit 
     itself to a process of self-examination and development of 
     its own Agenda 21 while at the same time encouraging and 
     working with its customers to improve their energy 
     efficiency.
       While this may seem counter-productive to companies, like 
     our own, which have substantial surpluses of capacity and 
     declining revenue, I maintain that it still makes sound 
     economic sense. If our economy is to be competitive, our 
     customers must be competitive and energy efficiency will make 
     an important, and in some cases decisive contribution to 
     their competitiveness. Helping them to become more 
     competitive through energy efficiency may reduce their 
     purchases from us in the short term, but will make them 
     sounder, more secure customers in the longer term, provide an 
     incentive for them to expand and, at the same time, help to 
     put our own economies on a more sound, more sustainable 
     basis.
       This will not be easy; nor does it seem timely when the 
     pressure of recession and competition are most acute. But I 
     believe that these changes are imperative in both economic 
     and environmental terms and that this period of change is 
     precisely the right time to effect these changes. Waiting 
     until what may seem a more propitious moment would, in my 
     view, exact heavy costs, both in terms of our own 
     organizations and our economies as a whole.
       The dilemma facing the energy industry illustrates 
     graphically the main theme of the Earth Summit and the 
     principal challenge we all confront in giving effect to its 
     conclusions--the need for fundamental changes in our economic 
     life through a full integration of the environmental 
     dimension in economic policies, decision making and 
     behaviour.
       In the final analysis, the role of industry in effecting 
     this transition will be pivotal. The Business Council on 
     Sustainable Development made it clear in its report to the 
     Earth Summit that eco-efficiency is the key to the new 
     generation of industrial opportunity--efficiency in the use 
     of energy and resources, and in the prevention, disposal and 
     re-cycling of waste.
       The economic growth of developing countries, if it proceeds 
     in the traditional mode, will soon overtake industrialized 
     countries as the principal source of global environmental 
     impacts. An already discernible shift in the focus of energy 
     production and energy markets to the developing world 
     underlines this perilous potential. These developments would 
     increase risks to dangerous levels the word community cannot 
     afford to accept. Yet the right of developing countries to 
     grow cannot be denied; nor can it be constrained by 
     conditions unilaterally imposed by the industrialized 
     countries.
       We must lighten our demands on the Earth's resources, and 
     reduce our impacts on Earth's environment. This will require 
     basic changes in current patterns of production and 
     consumption and a transition to an efficiency-driven, eco-
     industrial economy, based on much greater efficiency in the 
     use of energy and materials as well as in the prevention, 
     disposal and recycling of waste. It must be accompanied by 
     expanded support for developing countries in effecting their 
     transition to sustainable modes of development and to 
     increased access to financial resources, technology, and the 
     international trading system that this will entail.
       This new eco-industrial economy really implies a new 
     industrial revolution--not some comprehensive patching-up of 
     our old political and economic systems. Today's world cannot 
     be re-tooled with yesterday's blue-prints. Today's problems 
     cannot be solved with yesterday's conventional wisdom.
       Is there, then, any basis for confidence that we can rise 
     to the challenge? Despite the persuasive case for pessimism, 
     I remain convinced that we can do it. The reason is that we 
     must do it or civilization will degenerate into chaos, 
     conflict and continued degradation of the environment. 
     Pessimism would be self-fulfilling. As long as there is the 
     slightest chance that we can make the transition to a more 
     secure and sustainable way of life on our planet, we must 
     continue to strive for it.
       Throughout history, nations have demonstrated their 
     willingness to devote the resources, establish the alliances 
     and make the sacrifices required to confront risks to their 
     security. Today the people and nations of the world are 
     joined as never before in facing the greatest ever threat to 
     their common security--the threat to the capacity of our 
     planet to sustain life as we know it and the accompanying 
     risks of economic, political and social breakdown. Only by 
     forging a new global alliance, embracing north, south, east, 
     west, rich and poor, can this challenge be met effectively. 
     The agreements reached at the Earth Summit--the Declaration 
     of Rio and Agenda 21--provide the foundations for the 
     launching of this new alliance.
       But in the final analysis, it is only through our practical 
     actions and the examples we set in our lives as businessmen, 
     community leaders and citizens that our hopes for a more 
     secure, sustainable future will be realized.

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