Summary of Hearings on Climate Change(6-30-2008)
Witnesses Committee Members Present
This hearing weighed the positions of various groups on five different climate change mitigation proposals. The five bills are: the Safe Climate Act (H.R. 1590); the Investing in Climate Action and Protection Act, or iCAP (H.R. 6186); the Climate Security Act, or the Lieberman-Warner bill (S. 2191); the Boxer-Lieberman-Warner substitute to the Climate Security Act (S. 3036); and the Low Carbon Economy Act, or the Bingaman-Specter bill (S. 1766). “Each of these bills,” said Subcommittee Chairman Rick Boucher (D-VA) in his opening statement, “makes a valuable contribution in the effort to address the climate change challenge.” All of the bills, Boucher noted, utilize the same market based mechanism for reducing carbon dioxide emissions: cap and trade. However, he said, they vary greatly in their methods, timetables and allowments, and points of regulation. Ranking Member Fred Upton (R-MI) was less supportive of the bills. In his opening remarks, he said “the nature of the bills is disappointing. Global warming needs to be addressed, but I don’t believe cap and trade is the way to do it.” Slowed economic growth, the export of American jobs, and the increased cost of energy for the consumer were among Upton’s concerns with cap and trade policies. Cap and trade, Upton claimed, will cost Michigan families $7,000 a year by 2050. While critical of cap and trade, Upton said he was excited about carbon capture and storage, renewable energy technologies, and the “renaissance in nuclear power.” Upton concluded by saying “it will be a daunting task to reduce our greenhouse gas (GHG) emissions to 1910 levels in 2050. There were 92 people in America in 1910; there will be 420 million people in 2050.” Representative Joe Barton (R-TX) echoed several of Upton’s points. He also cited comparative demographic data for America in the twentieth and twenty-first centuries, adding “in 1910, most people lived on the farm.” The bills would cost families about $8,000 per year, according to an analysis Barton cited. With “food prices soaring and airlines canceling their flights” the price of carbon is already too high, Barton claimed. “Let’s don’t take the U.S. economy off a cliff” he urged. Furthermore, Barton was disapproving of the bills because of their projected lack of effectiveness. “According to an EPA [Environmental Protection Agency] analysis,” Barton said, “the Lieberman-Warner bill would reduce emissions by 25 ppm [parts per million] by 2050. That wouldn’t change temperature by one degree.” Like Barton, Representative Michael Burgess (R-TX) touched on the price of carbon to consumers. Consumers in his home district, Burgess said, have already changed their lifestyles with rising fuel costs and don’t need the behavioral controls of cap and trade. Burgess continued that the pertinent question for Americans is—are you willing to pay more for your energy? “In my district, the answer is no,” he said. “They [his constituents] want this Congress to bring the costs down.” Representative Ralph Hall (R-TX) urged the subcommittee to approach the bills cautiously. “We need to be careful,” he said. The issue of “the cash register” was paramount in Hall’s statement, and he claimed that “these bills would mean that we have to raise taxes three or four times…and we wouldn’t know whether it worked for 50-60 years.” Representative John Barrow (D-GA) mentioned agriculture in his opening statement. He said lawmakers have the “responsibility of incorporating agriculture in this process.” Specifically, he highlighted the statistics that 1% of GHG emissions are currently sequestered by agricultural processes and up to 20% of emissions could potentially be sequestered in the agricultural sphere. Furthermore, Barrow said he believes any cap and trade legislation must have a safety valve, an upper limit on the cost of the carbon emission control program, so that “legislation doesn’t get ahead of the technology.” In their opening statements, Ex Officio John Dingell (D-MI) and Representative Jane Harman (D-CA) agreed that the House has lessons to learn from the Senate’s recent attempt to pass cap and trade legislation. On the matter of cap and trade, “the other body is far from consensus,” said Dingell. “We must pass good climate change legislation, but it needs to be passed in broad coalition.” Representative Marsha Blackburn (R-TN) said she was wary of passing cap and trade legislation “if it were only the U.S. and Europe participating.” Furthermore, Blackburn said she feared that the cap and trade program would have a “negligible effect on environmental improvement.” As for global warming, Blackburn posited that “there are more pressing problems such as disease and malnutrition.” Blackburn admitted that she is skeptical of the anthropogenic contribution to global warming, and said that it’s “a little bit of a head-scratcher that global temperatures have cooled 0.7 degrees Celsius over the past 16 months.” The lack of involvement on the parts of China and India in climate change legislation discussions was also of concern to Representatives Greg Walden (R-OR) and John Shimkus (R-IL). “To ensure that countries like China and India” follow suit with climate change mitigation legislation, Representative Edward Markey (D-MA) responded in his opening remarks, the cap and trade bills will instate “a system of carrots and sticks.” Representative Tammy Baldwin (D-WI) said “we have a responsibility to our planet and future generations to address climate change.” The costs of inaction, Baldwin declared, are too great. Representative Jay Inslee (D-OR) concurred. He said “inaction will affect the U.S. economy. Action will help the economy.” Inslee asserted that the U.S. needs to “radically increase the pace of innovation in clean energy.” The research and development budget for clean energy technologies, said Inslee, is “pathetic.” He suggested that the revenues from the auction of permits in the cap and trade program go toward supporting research and development (R&D) in the renewable energy sector. As for the clean energy technology that is developed, “we can sell it to India, sell it to China,” Inslee said. Mr. Naasz said “coal is our prime source of energy and is likely to remain so.” In the U.S., he said, half of our electricity generation is from coal. Furthermore, the Energy Information Administration (EIA) has estimated that demand for electricity will grow. The EIA projects that coal will provide 54% of our electricity by 2030. Naasz noted that clean coal and carbon capture and sequestration (CCS) technology will “help reduce GHG emissions.” Long term carbon storage is a emission-reduction method that the National Mining Association (NMA) believes should be implemented. Because the NMA supports full utilization of America’s “abundant coal resources,” said Naasz, NMA opposed the Boxer bill. The Bingaman-Specter bill, however, is acceptable on its face, but the NMA “would want to amend it.” Mr. Goo’s first point harkened back to the opening statements of Baldwin and Inslee. He said “the thing to remember about cost is the cost of inaction.” Goo cited the Stern Review report’s estimation that 5-11% of global gross domestic product (GDP) will be lost in conjunction with the costs of environmental damage related to global warming. Another study, said Goo, estimated that inaction will cost $3.8 trillion annually by 2100. Mr. Reuther applauded the bills for establishing taxes on imported goods from countries without carbon dioxide caps. He also applauded the upstream nature of the bills—which applies the cap and trade system to energy producers versus the downstream approach which applies cap and trade to energy users—saying their “upstream basis is good.” What Reuther opposed was a bill’s provision to make the Environmental Protection Agency (EPA) the regulator of emissions from vehicles. “This,” Reuther said, “would relax standards.” Ms. Jacobson expressed support for the immediate deployment of clean energy technology. She said “starting early leads to clear dividends” and cited a study claiming that, by 2030, clean energy technology could reduce GHG by 3-4.5 gigatons. Furthermore, just 1.5% of investments from the U.S. economy over this period would be required to enable the growth of clean energy technology. She addressed the job market and the energy sector, saying “clean energy jobs are higher paying and are not easily outsourced.” Finally, Jacobson offered a slew of suggestions for the bills, suggestions for the facilitation of the deployment of clean energy technology. Mr. Kuhn cited EIA estimates that, by 2030, demand for electricity will grow by 30%. As “electricity is the lifeblood of the economy,” Kuhn said “we will need a full suite of technologies” to meet the challenge posed by the increasing demand for electricity. Kuhn said that energy efficiency should be the first priority. Increasing the contribution from renewable energy sources comes next, he said, but to allow their contribution to increase, the U.S. needs the transmission capacity. Nuclear, too, will assume a greater role. Currently, nuclear generates 118 gigawatts of electricity but could generate an additional 64 gigawatts Kuhn claimed. Removing the carbon dioxide emissions from coal plants and plug-in electric hybrid vehicles should also be priorities, said Kuhn. A report from the National Academy of Sciences states that nuclear will be part of the solution to the energy and carbon crises, Admiral Bowman affirmed in his testimony. He said it is “beyond question” that nuclear will assume a greater role in America’s future energy portfolio. “The nuclear industry is moving as fast as it can to license and build new plants,” Bowman noted. Unfortunately each new nuclear plant costs between $6-7 billion to build, so financial incentives from the federal government are imperative. According to Ms. Minette, “protection of God’s planet and God’s people” is the basis for the National Council of Churches’ position on global warming. Accordingly, said Minette, the Council has three main policy priorities for climate change legislation: appropriate emissions reduction targets so that global temperature increase does not exceed 2 degrees Celsius, provisions diminishing the economic effect of the legislation on the American poor, and provisions for international adaptation assistance such as disaster relief. Minette praised bills with these items and criticized those bills without them. Mr. West began his testimony by explaining how 90% of the production of ammonia for nitrogen fertilizer is tied to natural gas: “natural gas is a raw material for the production of fertilizer,” he said. With the increasing cost of natural gas, though, 26 nitrogen fertilizer production facilities have had to close. Now, there are “only 30 nitrogen plants in the U.S., and over half of nitrogen fertilizer is imported.” West concluded that any climate change policy “must take fertilizer into account. It is a matter of national security” because importing all of the fertilizer we need is not ideal. During the first question and answer period, Chairman Boucher asked Admiral Bowman how many new nuclear plants will come online by 2030. Bowman replied that, by 2016, 4-8 new plants are expected to come online and by 2030, 20-30 plants could come online. It is possible for nuclear plants to supply 64 gigawatts by 2030, Bowman said, but “we’re going slowly and cautiously this time. We want to do it right.” As for Minority Whip Roy Blunt’s (R-MO) question on the handling of spent nuclear fuel disposal, Bowman said “disposal has never been a safety issue but a political issue.” Bowman also affirmed that more “robust research and development” is needed to determine the best way to re-process spent fuel. “We need to do it [reprocess] better than the world is doing it today,” he said. Mr. Felmy discussed the “shortcomings” of the Lieberman-Warner bill that the American Petroleum Institute (API) identified. Felmy said the bill “would have imposed disproportionate costs on the supply of natural gas…and other petroleum products.” API, said Felmy, also commissioned ICF International to determine the bill’s effects on natural gas supplies and fuel production. ICF International found that the bill “would have reduced natural gas supplies by 12 percent and driven overseas some three million barrels [of oil] per day or 17% of our refinery capacity,” Felmy said. Ms. Figdor testified to Environment America’s three principles for “strong, effective, and fair” global warming legislation. The legislation, said Figdor, must set emissions caps consistent with the carbon dioxide levels scientists say will prevent global warming’s worst impacts, accelerate America’s transition to a clean energy economy, and minimize societal cost. The Safe Climate Act and iCAP satisfy Environment America’s requirements; the Climate Security Act, the Boxer-Lieberman-Warner substitute to the Climate Security Act, and the Low Carbon Economy Act do not. On behalf of the AFL-CIO, Mr. Baugh called for a “transparent [and] economy-wide” cap and trade system. He also said that government incentives should promote green collar jobs while discouraging the offshoring of manufacturing jobs. “The AFL-CIO,” said Baugh, “supports a new industrial policy, and an environmental economic development policy, which places manufacturing and trade at the center of a green economy program.” With his testimony, Mr. Grumet imparted the National Commission on Energy Policy’s recommendations for global warming legislation. Grumet recommended the inclusion of a cap on the price of carbon dioxide emission allowances, returning revenues raised by the auction of allowances to consumers, a system of carrots and sticks to “engage major trading partners,” and the reconciliation of federal GHG reduction policy with state policy. Mr. Cicio raised the concerns of the industrial sector, which contributes about 20% of total U.S. carbon dioxide emissions, with the climate change legislation. Among the industry’s anxieties are that emissions reduction timetables are inconsistent with timetables for the availability of carbon reduction technology such as carbon capture and storage. As the emissions reduction timetables are smaller, there will be a “massive coal to natural gas fuel switching,” which will increase the price of natural gas around the nation, Cicio said. Mr. Scott said “states will have to play a major partnership role with the federal government, and that role needs to be carefully and robustly delineated” in any global warming legislation. Some states have been researching reduction strategies and their economic impacts for years, he noted. The potential for global warming legislation to cause an increase in the price of fuel is worrisome for the trucking industry, said Mr. Mullett. “In 2006 alone trucking consumed over 39 billion gallons of diesel fuel. This means that a one-cent increase in the average price of diesel costs the trucking industry an additional $391 million in fuel expenses,” Mullett said. The trucking industry opposes the placement of carbon emissions caps on it and believes that policy to reduce carbon dioxide emissions from trucks should, instead, mandate a 65 mpg speed limit, decrease idling, reduce highway congestion, and increase fuel economy standards.For thefull text of the bills, click on their links below: -LMB Witnesses Panel I Panel II Committee Members Present Chairman John F. Kerry (D-MA) Chairman John F. Kerry (D-MA) stated that he is "dismayed" that after seven years of hearings on the U.S. climate science and assessment program, the same issues are subjects of concern. Kerry believes that "policy needs to be driven by the best possible science." This hearing concerns the U.S. Global Change Research Act of 1990 (USGCRA), which requires a national assessment report every four years. During the current Bush Administration, no reports have been completed as outlined by the legislation. In August, three non-profit environmental organizations won a lawsuit against the Office of Science Technology Policy (OSTP), the U.S. Climate Change Science Program (CCSP), and the program directors for non-compliance with USGCRA. This hearing will focus on the actions of these government offices and improvements to USGCRA. Senators voiced their concerns about the Administration's censorship of science. Senator Frank R. Lautenberg (D-NJ) said it is "distressing" that not all Americans believe climate change is occurring, and that he believes the Administration "censors and suppresses" science. Senator Barbara Boxer (D-CA) stated that in October Julie Gerberding, Director for the Center of Disease Control (CDC), had six pages of her testimony on the health impacts of climate change removed by the Administration during editing. Boxer showed the deleted text compared to data from the Intergovernmental Panel on Climate Change's (IPCC) third assessment report, stating that the two were almost identical and blaming the administration for wrongly censoring valid science. Dr. John Marburger III, the Director of the Office of Science and Technology Policy (OSTP) and the President's top science advisor, replied that the "IPCC tends to describe impacts around the world", whereas in the U.S. many impacts are "significantly modified" from what will occur in other areas. His recommended edits included only slight modifications to ensure the testimony addressed U.S. impacts only, and he stated that he does not know why six pages were removed. Dr. Marburger testified on the state of the OSTP and USGCRA. He acknowledged that climate change is occurring and is a "serious issue" about which "something has to be done." He added that the IPCC reports have been supported by U.S.-funded research, and that this Administration and others have led the world in funding of climate science. Senator Ted Stevens (R-AK) agreed, stating that the U.S. has spent more money on climate change research than any other country. When Chairman Kerry asked if the Administration has engaged in a proactive process to remove greenhouse gases, Dr. Marburger replied that the answer is "somewhat subjective" and that the Administration supports technology to reduce greenhouse gases and create energy independence. Chairman Kerry asked multiple times what level of urgency Dr. Marburger conveys to the President during his consultations, to which Dr. Marburger replied "I am resisting using the word urgency", but said there is a "sense of urgency" to reduce greenhouse gas emissions. Chairman Kerry replied "I think you ought to resign" for not conveying the gravity of the situation. Dr. Marburger stated one of the major roadblocks for implementing climate change policy is changing the behavior of a large group of people, and said he is not confident that the U.S. will meet emissions reduction goals without mandatory policy. Senator Boxer asked Dr. Marburger to use the science of the IPCC that "95 percent of scientists believe" because the Earth's future is at stake. Chairman Kerry asked why the assessment report is overdue. Dr. Marburger replied that 21 individual reports are in progress under OSTP oversight, and have taken longer than planned. Kerry argued that these reports did not convey the overall national assessment that is necessary to understand how climate is changing in the U.S. Dr. Marburger replied that one national assessment would take much longer to complete, and that his office will obey the court order to publish an assessment by May 2008. Senator Olympia J. Snowe (R-ME) stated that it is "frustrating" that the Administration "has not lived up to its commitment" and that it is "vital" to update the USGCRA so the best science is available for policy decisions. Dr. Donald F. Boesch, professor and President of the University of Maryland Center for Environmental Science, testified that USGCRA needs additional funding, accountability, budgeting, and focus on providing information to users. Additionally, more climate change research should be focused on regional scales. Dr. Boesch also recommended that more climate change information needs to be given to policymakers. Dr. Braxton Davis of the Coastal States Organization's Climate Change Working Group agreed that research needs to focus on regional scales so cities can understand the potential hazards and costs of inaction. Communities need to plan adaptation of resources to changing conditions, which is easier with information tailored to their area. Dr. Davis stated "we cannot wait for 'perfect' information" to create a strategy for federal programs. He also echoed Dr. Boesch's statement that policymakers need to receive more climate research information. Dr. Peter C. Frumhoff, of the Union of Concerned Scientists (UCS), testified that policymakers need the best possible scientific information to make good decisions, and that currently there is a large gap between what is needed and the information provided by USGCRA. He cited sea level rise research as an example. While UCS supports USGCRA, Dr. Frumhoff requested strengthening the Act to improve adaptation strategies and mitigation, and adding public review. Dr. Lynne M. Carter of the Adaptation Network supports the USGCRA, and suggests improving regional scale research, communication, and the level of information shared with policymakers. She suggested including public review to find "relevant local research needs" and making information available to the public for free. She stressed that data is only useful if it is on a relevant regional scale and that data on the wrong scale can give "false information." Dr. John R. Christy of the National Space Science and Technology Center testified that "continuous and accurate" data is necessary for better climate observations and testing of current models. He addressed the urgent need to keep climate satellites working properly to avoid a lapse in critical information. The National Polar-orbiting Operational Environmental Satellite System (NPOESS) is experiencing problems with one of the onboard sensors, which Dr. Christy said needs to be fixed as soon as possible. He also said that he questions climate models because they are unreliable local climate indicators, and supports examining past data to predict the future. Dr. Richard Moss from the Climate Change World Wildlife Fund testified that USGCRA incorporates important technology that should not be discontinued. He suggested creating a council of users of all levels to provide direction for research. Dr. Moss is concerned about political issues getting in the way of research. He also believes that more funding should be given to research, and that communication and public education need to be added to the program. Senator Stevens asked the panel why the U.S. should give climate research more funding when researchers have received additional funding for eight years and not yet obtained the information they need. He wanted to know why climatologists cannot "predict the future" with the money that has been put towards research. Dr. Moss replied that research money was not being wasted, and "tremendous progress" has been made in climate change research, but this research needs to be continued over long time-scales. He said "you cannot solve this problem in eight years." Dr. Bausch added that the USGCRA 2000 national assessment report used predictions from two climate models from different countries. Now there are many climate models available internationally, and the increased capacity to perform research is due to investments in climate change research. The U.S. Global Change Research Act of 1990 (USGCRA) has been inadequately
implemented. Senators demand increased accountability and the completion
of a national assessment report as defined in the legislation. The
witnesses suggested improving the program with additional regional-scale
climate research, funding, and accountability. They also requested
better information be provided to the public and policymakers. Most
senators are in favor of implementing these improvements to the USGCRA.
A link to witness testimony can be found here. Edited
and unedited
versions of Julie Gerberding's testimony can be found here. -EAL
Witnesses David Hawkins, Director, Climate Center, Natural Resources Defense
Council Committee Members Present Chair Barbara Boxer (D-CA) The biggest debate over S.2191, America's Climate Security Act (ACSA), is its potential impact on the U.S. economy. Senator Joseph I. Lieberman (I-CT) stated that the costs of ACSA will be "manageable" and relatively minor, but without legislative action the costs of climate change will be "grievous" by next century. Chair Barbara Boxer (D-CA) noted that other countries have reduced greenhouse gas emissions while increasing jobs and stimulating their economy. Senator George V. Voinovich (R-OH) disagreed, saying that the "costly" bill will "do little" to help climate change while increasing energy prices by an average of 40 percent by 2030. Senator Christopher S. Bond (R-MO) stated that ACSA will make the U.S. less competitive and cause companies and jobs to move to other countries. To address these concerns, Senator John W. Warner (R-VA) has requested a full economic impact assessment of ACSA from the Energy Information Administration (EIA) and the U.S. Environmental Protection Agency (EPA). David Hawkins of the Natural Resources Defense Council testified that global warming is a "front-loaded problem" because damage has already been done, but we will not see its effects until later. He stated that climate change, if not slowed, will harm the U.S. economy. Mr. Hawkins applauded many provisions of the cap and trade system outlined in ACSA, including the carbon market efficiency board that will ensure lawful trading. He stressed that there is "no time left for delay" in implementation of climate change legislation. Dr. David Greene of Oak Ridge National Laboratory addressed the transportation sector, which emits 28 percent of U.S. greenhouse gas emissions. He stated that only 39 percent of U.S. consumers considered fuel price before buying gasoline. Because consumers are not demanding lower prices, there is currently little incentive to decrease prices in the fuel market or increase vehicle gasoline mileage. Other countries have fuel economy standards that work to increase average miles per gallon, which Dr. Greene argues should be implemented in the U.S. to help reduce greenhouse gas emissions and encourage new technologies. Robert Baugh from AFL-CIO stated his concerns that carbon caps set in ACSA are too stringent for the pace of technological advancements, and there are too many allowances for carbon offsets. He also asked for more explicit information regarding the jobs that ACSA will create, and better cost-control mechanisms in the carbon market. Andrew Sharkey of the American Iron and Steel Institute testified that the U.S. steel industry is very energy efficient and working on long-term research projects that may eliminate carbon dioxide emissions from the steel manufacturing process. Mr. Sharkey believes that ACSA could have "devastating" consequences on U.S. competitiveness if other countries have lower environmental standards, and thus lower costs. He stressed that ACSA must have mandatory, simultaneously-imposed performance standards, and include provisions so it does not limit U.S. competitiveness. Donald R. Rowlett from OGE Energy Corporation testified that all utilities will have different challenges presented by ACSA, but outlined a few important aspects for all utilities. He stated that giving utilities free emission allowances at the start of the cap and trade program is "critical" to cover the costs of new technologies. He also warned that many utilities will have incentive to switch from coal to natural gas, which will increase consumer energy prices by 40 percent. Senator Amy Klobuchar (D-MN) asked about the economic impacts of Europe's carbon cap and trade program. Mr. Hawkins replied that their initial, trial run has had price fluctuations, but provisions in ACSA will prevent this in the U.S. He said no harm has come to the European economy because of the cap and trade program, and he estimates that ACSA will provide economic opportunity and more jobs. Mr. Baugh disagreed, interjecting that the European cap and trade system is impacting their economy, and ACSA may cause job losses in the U.S. Senator John Barrasso (R-WY) asked the panel if they believe Earth will be cooler if Congress passes ACSA and India and China, industrial countries that are growing rapidly, do nothing. Mr. Hawkins replied that if the U.S. passes ACSA, countries such as China and India will engage in greenhouse gas emission reduction efforts faster than if the U.S. does nothing. He asserted "this is not speculation," China has followed the U.S. lead in many other policy initiatives. He stated "I am confident that the planet will be cooler" if Congress passes ACSA. Many senators are concerned that energy prices will increase due to the costs of complying with reduced greenhouse gas emission standards. Most senators agree that low-income households should be given credits or other financial aid to help pay for the cost increases. Barrasso said we must "take care" of those negatively impacted by the bill and give states the flexibility to help people as they see fit. Boxer supported the cap and trade program, saying that a carbon tax would hurt low-income families more. Neither witnesses nor senators agree on what impacts ACSA will have on the environment or the U.S. economy. Some believe that the carbon cap legislation will have little impact on the global environment, but will likely hurt the domestic economy. Others argue that the legislation is necessary and will stimulate the U.S. economy. Chairman Boxer has stated she will hold more hearings on ACSA to gain additional support for the bill. A link to witness testimony can be found here. -EAL
Witnesses Peter A. Darbee, Chairman of the Board, CEO, and President, Pacific
Gas and Electric (PG&E) Corporation Committee Members Present Chairwoman Barbara Boxer (D-CA) Increasing partisan tensions over S.2191, America's Climate Security Act of 2007 (ACSA), showed in the opening statements of the November 8 hearing. Senator George V. Voinovich (R-OH) asked Chairwoman Barbara Boxer (D-CA) to slow down the bill process, noting the motivation for trying to pass the bill by the end of the year may be to attend the December 2007 United Nations Climate Change Conference in Bali, Indonesia with a "scalp in hand". Chairwoman Boxer noted 20 past hearings on global warming as evidence that the process has not been rushed, and has "nothing to do with Bali". Senator Amy Klobuchar (D-MN) said Congress has "waited too long" to enact legislation on global warming. Thirty-one states have developed their own climate change laws in the absence of federal legislation. She stated that ACSA is a "strong" bill, and while imperfect, it serves as an excellent start for long-overdue federal action. Senator Christopher S. Bond (R-MO) noted that ACSA is "very problematic" for farmers. He stated that ACSA will cause an increase in natural gas prices, which will increase fertilizer prices for farmers. Bond believes that "farm costs far outweigh the benefits" of ACSA, noting that the agricultural carbon offsets program within ACSA is not sufficient to cover higher costs elsewhere. Senator Thomas R. Carper (D-DE) stated his concerns that pollutants such as sulfur dioxide, nitrous oxides, and mercury are not sufficiently addressed in ACSA. He also stressed the need for the legislation to incentivize the most efficient energy production methods. Additionally, Carper wants to see more focus on the transportation sector, such as cleaner fuels, cars, and other options for travel. Senator David Vitter (R-LA) said the "stakes are very, very high" with global warming and Congress needs to get the legislation right. He stressed the need for the committee to hold more hearings on bill S.2191. Climate change and resulting sea level changes are problems for Louisiana, and he wants to ensure politics do not get in the way of good policy. Senator Frank R. Lautenberg (D-NJ) stated that there is no more critical issue in the world than climate change. He approves of the revisions to S.2191 so far, but concedes more work needs to be done. He cited the Union of Concerned Scientists as saying carbon emissions should be reduced by 80 percent by 2050 to avoid the most catastrophic results of climate change, but S.2191 only reduces emissions by 60 percent by 2050. Lautenberg said Congress needs to "reach further" to encourage cleaner energy production. Senator John Barrasso (R-WY) stated that the U.S. cannot simply "shut off" traditional energy sources and that Congress must "put our money where our best hopes are" by investing in new clean energy production technology that can be used domestically and spread around the world. Senator Benjamin L. Cardin (D-MD) believes ACSA is the "best hope" for Congress to pass "meaningful" climate change legislation. He would prefer greenhouse gas emissions to be reduced by 80 percent by 2050 though, in line with Senator Lautenberg. Senator Larry E. Craig (R-ID) disagrees, stating that cap and trade is "obsolete" and will only transfer wealth. Craig believes the Energy Policy Act (EPAct) of 2005 lets the government incentivize companies to use clean energy, which will be much more effective without raising energy prices. Craig also echoed Senator Voinovich's request for a slow deliberate review process. Senator Bernard Sanders (I-VT) has "serious problems with this legislation" because it does not go far enough to meet scientists' recommendations to slow climate change. He stressed that humans today "know how to reverse global warming" through increased energy efficiency, and that some money from emissions auctions should go to help advance efficient energy programs and technologies. He cited National Renewable Energy Lab estimates that solar power costs in 2050 will be half what they are today. Peter A. Darbee of PG&E testified that ACSA is an "appropriate starting point" to take while working on further policy and regulation of climate change. He stressed the importance of "decoupling" cost from kilowatt hours used, so that a power company does not get money based on how much power is sold, thus encouraging utilities to promote energy conservation without losing profits. Darbee also said that 87 percent of the costs of reducing emissions will be passed on to energy consumers, so they should be given financial reimbursement or tax breaks to compensate for increased energy costs. Additionally, he suggested that a regulating board place a ceiling and a floor on the costs of carbon emission allocations and allow both to increase over time so prices do not jump unexpectedly. Additionally, the rising costs of carbon emissions will help stimulate the development of cleaner technologies because the technologies will become cheaper fixes than paying the rising emission charges. Jonathan C. Pershing, from the non-profit environmental think-tank Climate and Energy World Resources Institute, testified that damages from climate change will be "enormously costly", citing examples such as California wildfires, Southeast droughts, and hurricanes, all of which are projected to worsen due to global warming. Duke University's Nicholas Institute analyzed ACSA and found that with no policy enacted, U.S. Gross Domestic Product (GDP) is predicted to increase 112% by 2030, and with ACSA enacted GDP would increase 111% over the same time period, showing only a very slight economic impact. Anne E. Smith of CRA International, an economic consulting firm, testified that near-term ambitions of ACSA will not work because climate change is too rapid and the needed technological advances are not ready. She suggested that the carbon caps cannot be met with current technology. A model created by CRA International shows annual U.S. GDP losses at millions of dollars, a decrease in real annual spending per household of over $1,500, and total net losses of over one million jobs through 2050. Because of the detrimental affects on the U.S. economy, Smith does not support ACSA in its current form. Dr. Margo Thorning of the American Council for Capital Formation testified that, in contrast to other witnesses, she had estimated an increase in U.S. GDP if ACSA is implemented. She stated that cap and trade may not be the best system to limit carbon emissions, suggesting that a carbon tax is more "straightforward" and may incur less abuse. Dr. Thorning agreed with Ms. Smith that current solutions are based on developing technologies that are not yet commercially usable. Wiley Barbour, an environmental engineer with the non-profit group Environmental Resources Trust, testified that his organization works with U.S. companies to reduce their net carbon emissions. He noted that cap and trade programs work effectively and have benefits. Some U.S. companies are currently in voluntary cap and trade programs, however, without a law such as ASCA, that includes a carbon cap, the U.S. has "failed" to change its carbon emissions. Senator Boxer began her questioning by noting that ARCO, BP p.l.c.,
and other oil companies were listed as clients on the CRA International
website. Ms. Smith replied that if they were listed, her company had
done business with them at some point. Mr. Pershing noted that the different values the witnesses obtained for future U.S. GDP were from separate models looking at different sectors and options. He thought that Ms. Smith's model probably did not look at all of the possible scenarios. Smith stated that ACSA appears to be "extremely costly". Senator Lautenberg asked what Ms. Smith thought of the costs of unmitigated global warming. Smith replied that it is a "risk management" situation. While global warming catastrophes are a risk, she doesn't believe reductions to this degree will make a real difference, except to harm the economy. The witnesses agreed that allowing carbon offsets is one way that a cap and trade program is superior to a carbon tax, although the program needs careful monitoring to ensure offsets are correctly used. Most witnesses support some type of oversight committee. Senator Whitehouse noted that "safeguards" need to be "built in" to the process. The panel debated about how much energy conservation will impact consumers. Senator Sanders said that energy conservation is working well and stimulating the economy in states such as Vermont and California. Mr. Pershing noted that energy conservation has "enormous" potential to reduce total costs while benefiting the public. However Dr. Thorning expressed concern that reducing energy use will "impinge on consumer's lifestyles" and be costly to replace existing technology. Senators and witnesses are divided on most aspects of ACSA. Some of the major concerns of ACSA opponents include the pace with which the legislation is moving, the cap and trade system and its potential to harm the U.S. economy. Proponents generally want a tighter carbon emissions cap, but say that action needs to be taken immediately, and ACSA has the best chance to become a comprehensive greenhouse gas emissions law in the near future. A link to witness testimony can be found here. A link to Duke University's Nicholas Institute Assessment of ACSA can be found here. A link to all results of the CRA International economic model can
be found here. -EAL
Witnesses Dr. Howard Herzog, Principal Research Engineer, MIT Laboratory for
Energy and the Environment Committee Members Present Chairman John F. Kerry (D-MA) Chairman John F. Kerry (D-MA) opened the hearing stating that the past 20 years of climate hearings in Congress have passed "without a whole lot of progress" and with no "real" governmental commitment to the issue. He stated that the last Intergovernmental Panel on Climate Change (IPCC) report data came from 2005, and even in the two years since then "things are changing and they are changing fast". He cited the IPCC report that carbon dioxide concentration must be below 450 parts per million (ppm) to keep global warming low enough to avoid the most "catastrophic" global warming consequences, which will necessitate reduced greenhouse gas emissions. Kerry stressed that coal is and will be a "critical" part of our energy portfolio because we have over 100 years of coal reserves in the U.S., versus 40 years of oil reserves. To use this coal cleanly, however, the carbon dioxide created from burning the coal must be captured and stored in the Earth so it does not enter the atmosphere. The carbon capture and sequestration (CCS) technology is already occurring in some places. This hearing is to address what methods should be used for carbon capture and storage and how much carbon dioxide needs to be captured to achieve the climate change goal. Chairman Kerry announced his bill on carbon capture and sequestration November 7 to create three to five commercial-scale CCS operations across the U.S., three to five coal-fired power plants with CCS, begin capacity assessment by the U.S. Geological Survey (USGS), start an "aggressive" research and development program by the Department of Energy (DOE), and establish a technology-sharing agreement with China and India. Senator Byron L. Dorgan (D-ND) said the U.S. must use coal in the future, but must also capture and store carbon dioxide. He stressed the need to try many different CCS technologies, and criticized the Administration for not sufficiently funding this research and development. He said it is time to make "real investments" in CCS technology. Dr. Howard Herzog, an environmental researcher for MIT and co-author of the IPCC reports, testified that "CCS is not a silver bullet" that will solve global warming. But with coal a "critical fuel" for the world to obtain cheap electricity, and 40% of world carbon dioxide emissions coming from coal burning, it is a necessary part of the plan to slow climate change. Based on research, he believes geologic sequestration, the storage of carbon dioxide in geologic formations, is "feasible". But there are still technical issues which he suggests addressing through large-scale CCS facilities. Dr. Herzog believes the DOE needs to accelerate its CCS research process and create regulations. Although he believes CCS is "not technologically or institutionally ready" to commercial-scale use, it may be within ten years if the programs are properly supported. The biggest problem is a lack of funding for research and development, for which he recommends a one billion dollar per year budget. Dr. Herzog stressed that it is "prudent" and "inexpensive" to search out options such as CCS to slow climate change. Mr. Charles E. Fox testified for the Kinder Morgan CO2 Company, which deals with the transport of carbon dioxide through pipelines. This transport system has been used for 35 years without major incident and is deemed safe. If CCS is used commercially the current pipelines will need to be retrofitted and new pipelines will need to be built. The capture of carbon dioxide is the most expensive part of the process. Mr. Fox believes that pre-combustion capture, although a much newer process, is better than post-combustion capture because it is less expensive and more efficient. He stressed the need for additional research on the capture and storage issues of CCS. He recommended that Congress increase research and development, and enact legislation to remove some liability from the storage companies. If carbon dioxide storage companies are liable for any future gas leakage they will be unlikely to invest in and contribute to CCS . Dr. Sally Benson, a climate and energy researcher and professor at Stanford University, testified that "safe and effective" sequestration can be achieved. She explained that carbon dioxide is stored in the same types of geologic formations that may store oil, porous rocks underneath impermeable cap rock. Another less-researched storage option is saline aquifers, which have a large capacity but more research is needed on their seal quality. Dr. Benson said Congress needs to address who will monitor CCS and who will pay for remediation if leaks occur. These issues will determine if companies invest in CCS. She also recommended more money be appropriated to research and development. Dr. Robert C. Burruss of the USGS testified on the potential storage capacity for carbon dioxide. Lots of changes in the U.S. energy regime are needed to achieve climate change goals. The global storage capacity for carbon dioxide may hold a "large portion" of the carbon dioxide that needs to be sequestered, but further analysis of saline reservoirs and geologic formations is necessary. The USGS would like to do large-scale storage assessments but has not been funded to do so. Another "critical knowledge gap" that needs research is the storage of carbon dioxide in the biosphere (vegetation, soils). He recommended Congress support many more large-scale CCS projects. Dr. Bryan Hannegan testified on behalf of the Environment Electric Power Research Institute, a research and development organization. He believes that an advanced coal power plant with CCS capabilities will be the key to reducing carbon dioxide levels in the atmosphere. He also asserted that this technology will increase energy costs less than many alternatives. He recommended full-scale CCS operations and increased funding, specifically $8 to $17 billion invested in research and development between now and 2020. He said the main problems were technological advancement of carbon capture and the non-technological barriers of storage, such as permitting, public acceptance of the technology, liability, and potential new uses for captured carbon dioxide. Mr. Ron Wolfe of Sealaska Corporation testified that incentives should be used to encourage companies to capture and sequester carbon dioxide. He asserted that changing carbon dioxide levels in the atmosphere is not enough to cause companies to store carbon long-term. He believes a single-focus strategy is not the best way to implement policy, and that preserving Earth's ecological functions should be the main objective of any legislation Congress supports. Senator Ted Stevens (R-AK) asked the panel if carbon sequestration could take place in coal mines. Dr. Benson replied that it is possible to sequester carbon dioxide in deep coal beds. Stevens then asked about the possibility of sequestering methane and if it could be captured and burned as fuel. Dr. Benson responded that she was unsure about the possibility of sequestering methane, but burning methane is cleaner than burning coal. Dr. Hannegan added that burning methane or natural gas is also more efficient than burning coal. Ranking Member John Ensign (R-NV) asked the witnesses what volume of storage was needed for effective carbon sequestration, and if the U.S. has that volume available for storage. Dr. Hannegan responded that a rate of about 300 million tons of carbon dioxide injected into the Earth each year would necessitate the geologic space of a one to two billion barrel oil field over the course of a 20-30 year project. Dr. Benson replied that worldwide about 2-10 trillion tons of storage space is available, which is equivalent to about 100 years of world sequestration. In the U.S., about three billion tons is available. Senator Stevens asked if it will be economical for carbon dioxide to be sequestered at the power plants where it is captured. Dr. Burruss replied that the decision must be made to build power plants where carbon dioxide can be sequestered or to transport the carbon dioxide from existing power plants to sequestration sites, which are usually hundreds to thousands of miles away. Chairman Kerry said that the world is "operating with a very small cushion" for mistakes, and that rapid movement on CCS is necessary. He asked the witnesses to list major goals that Congress should achieve. Responses included funding large-scale demonstration projects using a variety of CCS technologies, create regulations regarding liability and ownership issues, and provide environmental monitoring. The committee has shown bipartisan support for advancing CCS technology. Some of the major issues that witnesses want addressed are better knowledge of storage capacity and longevity for carbon dioxide, funding for commercial-scale long-term tests of various CCS technologies, and legislation with incentives and flexible liability laws to encourage companies to invest in CCS. A link to witness testimony can be found here. -EAL
Witnesses Dr. Peter Orszag, Director, Congressional Budget Office Members Present Chairman John M. Spratt, Jr. (D-SC) The purpose of this hearing is to receive expert testimony on how the U.S. can create and maintain an environmentally and fiscally responsible carbon emissions cap and trade system. The House Budget Committee sees the timing of this hearing as relevant because of the concurrent markup of bill S.2191, America's Climate Security Act (ACSA), which would create a cap and trade system if enacted. Chairman John M. Spratt, Jr. (D-SC) explained that this hearing was not meant to "impede" any legislation that may be passed, but to serve as guidance for future policy. A cap and trade (or emissions trading) system was the focus of this hearing. This system would set a limit on the total amount of greenhouse gas emissions that can be produced by U.S. businesses. It would also allow individuals to purchase, sell, or trade emissions allowances as needed to meet lower emissions standards and possibly make a profit. Ranking Member Paul Ryan (R-WI) stated that "Congress and the public have got to realize there are going to be tradeoffs" with any greenhouse gas emission cuts. These include higher energy prices, which will hurt low- to moderate-income households the most. He also stressed there are "international dimensions of this issue" that need global participation. The U.S. produces about 20% of the world's carbon emissions, so a worldwide effort is needed to truly reduce greenhouse gases. Dr. Peter Orszag of the Congressional Budget Office stressed that some of the most significant long term "economic and social costs" would be those created by global warming, such as sea level rise and increased severe weather. He believes that a "well-designed policy to reduce emissions will produce greater benefits than costs." Any policy will have lower costs if it is incentive-based, such as a carbon tax or a cap and trade system. The drawback of an incentive-based system is that a price increase is essential to make it work. The extent of price increases will depend on the height of the emissions cap as well as the availability and cost of technology to reduce greenhouse gas emissions. An increase in energy prices will affect low- and middle-income households the most because they spend the largest percent of their income on energy. But Dr. Orszag attests that the way profits from emissions allocations are spent could offset these negative affects. He estimates that profits of additional allowances at auction could be about $300 billion by 2020. These revenues can be allocated to pay off the federal deficit and lower the increased energy costs of low-income Americans. Mr. David D. Doniger testified that the world is "already suffering dangerous impacts of global warming" but that it is "in our power to control" what happens in the future. He asserted that average temperatures have increased one degree Fahrenheit over the past 100 years, and that the world needs to keep future temperatures from increasing another two degrees Fahrenheit in the future to avoid the most catastrophic affects of global warming. The Intergovernmental Panel on Climate Change (IPCC) report states that limits such as those set by the ACSA, with 15% emissions reductions by 2020 and 80% emissions reductions by 2050, will keep additional temperature increases below two degrees Fahrenheit. Mr. Doniger suggested that greenhouse gas emission cuts should begin in industrialized nations like the U.S., adding that "we can afford this, but it gets much harder as we delay" emissions cuts. Mr. Doniger agreed with Dr. Orszag that revenues from emissions allowances should be used to help offset energy costs for low-income households. He also suggested revenues could fund new clean energy technologies. Mr. Doniger added that an auction system was not the only way to obtain revenue for the public good, and that the same benefit could come from using a calculated formula with a production allowance credit given to businesses that are creating technologies to increase energy efficiency. Regardless of which method is used to cap emissions and obtain revenue, the manner in which allowances are allocated must be clear and consistent over a long time period. Doniger gave the example of the wind industry, which has suffered because tax credits have been given on and off over the past ten years, leaving investors and the industry unable to plan for future expenditures. Robert Greenstein presented findings from the Center on Budget and Policy Priorities' (CBPP) report on effects of climate change legislation on the federal budget and the public, especially low-income groups. They found that with moderate climate-change legislation the average increase in energy costs for the lowest-earning fifth of the U.S. would be $750-950 per year. Through auction of emissions allowances, the same legislation could generate revenues of $50-300 billion which could be used to offset increased energy costs for low-income households and fund new energy technologies. The number varies based on which cap and trade or carbon tax plan is used. According to the CBPP, only about 14% of that revenue would be needed to fully offset the increased energy costs for low-income households. Additionally, 15% of those revenues will compensate energy companies and other emitters for increased costs of compliance with the climate change legislation. This would leave about 70% of the revenue for helping moderate-income households, fund new energy technologies, and helping the federal government pay for its increased energy costs. Mr. Greenstein stressed that all emissions allowances must be auctioned off to make this funding available. He also denied the veracity of the opinion that if allowances are given away rather than auctioned off, energy costs will not increase. A cost increase will occur either way, so it is necessary to auction off allowances to offset that increase for those that need it most. Dr. Anne E. Smith, an economist with a background in managing economics of environmental legislation, testified that auctioning allowances cannot offset the costs of climate change legislation. She believes while there will always be a net cost, the best ways to help reduce the cost to society are to use auction revenues to reduce marginal tax rates and support new low-carbon technologies without using subsidies, neither of which is being considered by Congress now. Auctioning could also cause additional problems. Because of the auction system, prices for emissions allowances would change each year, adding unknown costs to businesses. The volatility of compliance costs could hurt businesses and thus the U.S. economy. Contrary to the testimony of Mr. Greenstein, Dr. Smith believes that businesses would need over 15% of allowance revenues to cover costs. Another major concern is that U.S. businesses will move overseas to reduce costs increased by climate change legislation. Dr. Smith asserts that global cooperation and an allowance price ceiling would help reduce these occurrences. Chairman Spratt asked the witnesses who should oversee the implementation and management of climate change legislation. Dr. Orszag replied that the cap and trade system could be imposed "upstream" by an energy firm, or "downstream" in goods and services bought. He also said he "cannot see how a cap and trade system can be used" if the federal government does not help monitor and enforce it. Mr. Doniger said that a cap and trade system is relatively easy to administer. He explained that the U.S. Environmental Protection Agency (EPA) uses a cap and trade system under the Clean Air Act to limit the amount of acid rain. A few dozen employees oversee the regulation, which involves monitoring emissions and imposing fines for non-compliance. The system has "almost perfect" compliance. Dr. Smith attested that a carbon tax would be easier to manage than a cap and trade system, and that greenhouse gas regulation would be much harder to monitor than acid rain regulation. Spratt then asked Dr. Smith why she called 15% of total auction revenue necessary to compensate energy companies for compliance costs a "misleading" figure. She replied that it was based on a model with a permanent amount of allocations through time, whereas legislation would likely decrease the amount of allocations over time. The estimate is also based on large groupings of market sectors, and did not show how some markets would lose while others would not. Dr. Orszag disagreed that there had been misleading information given. He stated that the deeper issue was that averages were used to create these numbers. It is impossible to ensure that each household or firm gets an exact refund for the particular amount they paid due to increased energy costs. Mr. Doniger added that the idea that shareholders for firms that emit large amounts of greenhouse gases need to be compensated is based on the idea that global warming is a surprise to them. He believes it should not be "taken as a given that they are owed this" because "they have been on notice that global warming is a problem" and have not taken action. Mr. Greenstein agreed that their estimates were not exact figures. He conceded that if allocations are phased out over a number of years, the initial amount needed to compensate energy companies will be greater than 15%. The value simply depends on which method you use. Ranking Member Ryan asked the panel why a cap and trade system was the most widely proposed if it meant price volatility and companies leaving for other countries. Mr. Doniger stated that the question assumes a long period when the U.S. is the only country working on the global warming problem, while in fact most of the industrial world is already instituting climate change policies to reduce emissions. He said that volatility does not necessarily mean increased long-term costs. While prices will change each year, a method of "banking and borrowing" could be used to "smooth out" price differences over the long-term. If prices are low one year, firms can save up allowances, but if costs are high, they can borrow from the future and repay it when prices go down again. Doniger believes that this system will not need a safety valve. He added that a tax is not less complicated to write or maintain, and that the tax amount would need to be adjusted annually as well. Dr. Smith disagreed that banking and borrowing would work to lessen volatility. She believes that once implemented, a carbon tax would be simpler to maintain. Mr. Greenstein added that the options for legislation are cap and trade, carbon tax, or doing nothing. He said the differences in economic impacts between cap and trade and a carbon tax are far less than between either one or doing nothing. While a carbon tax would be better, it would be harder for government to enact because of the stigma often associated with taxes. He said we "do not want to let the perfect be the enemy of the good" and halt climate change legislation altogether. Congressman Adrian Smith (R-NE) asked the panel about the effects that increased energy and corn costs would have on agriculture. Dr. Orszag stated that the agricultural sector would be affected by either cap and trade legislation or by climate change, so it was necessary to weigh the costs and benefits of enacting legislation versus doing nothing and possibly facing catastrophic agricultural problems. Mr. Doniger replied that most cap and trade systems do not plan on controlling carbon emissions from agriculture, but do include opportunities for funding by helping reduce energy use. Dr. Smith said the increased cost of energy will raise the cost of farming, and while there may be some opportunities for additional income through energy reduction technologies, there is lots of uncertainty. She did agree with Dr. Orszag that there is always a net cost and any legislation must be weighed against costs of climate change, which have not been calculated. Chairman Spratt asked to what extent these analyses had taken into account the economic benefits of climate control. Dr. Smith said these need to be taken into consideration, but the "risk of catastrophes already in the works will not be changed with cap and trade" legislation. Mr. Greenstein replied that we "cannot quantify the economic damage of doing nothing" because the economic costs of climate change are unknown. These values are often left out of the equation because there is no definite number to use. Congressman Smith queried if it was possible to reverse global warming by implementing a cap and trade policy. Mr. Doniger cited the IPCC reports and other studies as stating that the emission reductions given in ACSA, if matched by other developed countries, will be enough to meet the goal of increasing average global temperatures by no more than two additional degrees Fahrenheit. Dr. Smith stated that even if emissions were capped now, it would take about another century to reverse the effects occurring now. She said that other countries are not reigning in emissions, giving them a competitive advantage for business. The U.S. needs a cost-effective climate policy that will work with other countries. Dr. Orszag replied that too much focus has been put on expected outcome and too little on the risk of catastrophic climate events. Most witnesses believe that a cap and trade system can be economically
sound if designed correctly. Auctioning emissions allowances and using
revenue to help offset increased energy costs for low-income households
and energy corporations and to fund new low-emissions energy technologies
have been recommended. Some witnesses support a carbon tax over a
cap and trade program because it is slightly less complicated to enforce.
But witnesses disagree on the validity of the current cost data. All
insist that costs and benefits of any system must be weighed carefully,
which is made difficult because the economic costs of continued climate
change cannot be calculated. The sooner climate change legislation
is enacted, the less strict it will have to be to meet legislative
goals. A link to witness testimony can be found here. A link to the full text of S.2191 can be found here.
A link to the IPCC reports can be found here. A link to the CBPP report can be found here. -EAL Witnesses Kevin Anton, President, Alcoa Materials Management Committee Members Present Chairman Max Baucus (D-MT) Senator Joseph I. Lieberman (I-CT) and ranking member John W. Warner (R-VA) created America's Climate Security Act (ACSA) to reduce U.S. greenhouse gas emissions up to 63% below the 2005 level by 2050. ACSA would create a carbon exchange program (also called cap and trade) and help fund other environmental protections and energy-cost reduction technologies. These reductions are based on Intergovernmental Panel on Climate Change (IPCC) reports that world carbon dioxide levels of less then 500 parts per million (ppm) would spare the planet of some of the worst effects of global warming. According to the Environmental Protection Agency (EPA), the emissions reductions in the ACSA, assuming conservative emissions from other countries, would keep world carbon dioxide levels below 500 ppm. Senator Lieberman believes the "U.S. government has a responsibility to be a part of the solution to this problem" of global warming. He cited two studies, one by Duke University and another by the Clean Air Task Force, on the economic impact of ACSA. Neither review anticipated any disruption of robust economic growth, sharp increases in energy prices, or jeopardy to the role of coal in the U.S. energy portfolio. Lieberman stated that while he believes ACSA is the "best cap and trade program on earth", it is "unfinished" and will change before it is presented on the Senate floor. Senator Christopher S. Bond (R-MO) asserted that his concerns about ACSA "remain unaddressed". He believes that a carbon exchange program will increase energy costs, hurting low- and middle-income Americans. Bond said the act needs a "safety valve" at a preset level to keep energy prices reasonable. Senator Lamar Alexander (R-TN) questioned the benefits and costs of a carbon exchange program versus a carbon tax. He believes the committee must understand the effects of any plan they approve, especially energy costs. The senator supports "aggressive conservation and aggressive nuclear" to help the climate while keeping energy costs low. Senator Barnard Sanders (I-VT) asserted that "we now have the tools to reduce global warming" and must use them. He supports ACSA, but wants to ensure that the "latest science is periodically considered" and allow revisions to standards to reflect new scientific findings. Sanders also encouraged increased use of solar and wind power on large and small scales, which could create millions of good-paying jobs. He also stressed a need for increased energy efficiency. Senator John Barrasso (R-WY) believes that when consumers demand decreased carbon dioxide emissions and clean energy sources, the market will respond. He stated that any policy action cannot impede current, traditional energy sources or it will harm the U.S. economy. Barrasso also noted he does not want the committee to make "rash" decisions based on "bad science", saying they must ensure scientists can accurately predict changes before developing policy. Senator Larry E. Craig (R-ID) believes that the U.S. is "one of the cleanest nations in the world" because of technology. He asserted that other countries such as China need to have similar technologies so they can decrease their greenhouse gas emissions as well. If the U.S. decreases its emissions while other countries increase theirs, the effort will not slow global warming. Craig also said that carbon emissions trading, such as that proposed in ACSA, will not work. The U.S. needs a policy that will "grow us, not slow us." Chairman Max Baucus (D-MT) stated the ACSA is "getting us on track to find a solution" to global warming. He said the act has "some problems" but believes they can be fixed. He agreed with Craig that "stopping coal-fired power plants here won't stop China's." Baucus also emphasized the need for carbon sequestration technology. Senator James M. Inhofe (R-OK) agreed with Craig and Baucus that other countries such as China also need to decrease emissions to make a difference in global warming. He stated that the U.S. has not built a new coal-fired power plant in 15 years but many have been built in China during that time. Inhofe has many questions regarding ACSA and said the committee needs to spend more time on the legislation. He also said that the U.S. is headed for an energy crisis in the next few years, citing a predicted 18% increase in demand. Inhofe supports additional nuclear energy resources, but is concerned that ACSA will cause a "massive" switch toward natural gas, which will be imported, causing energy dependency and possibly price increases. Inhofe stated he supports a carbon tax rather than the ACSA carbon emissions trade because the cost will be set. Witness testimony began with Kevin Anton of Alcoa Materials Management, an aluminum production company that supports ACSA. Anton stated that the U.S. needs one mandatory, flexible policy to decrease greenhouse gas emissions, and that other countries must reduce emissions as well. Anton believes a carbon trade will stimulate investment and innovation in the U.S. as industry decides how to achieve the goals set by the government. He also asserted that businesses need to pay for their emissions, not "pass the bill" on to customers. Anton concluded by saying the amount of greenhouse gases released in one year is not as important as those released over many years, and now is the time to take the first step towards decreasing carbon dioxide emissions. Frances Beinecke of the Natural Resources Defense Council agreed that "the time for action on global warming is now." She supports ACSA because it "caps and cuts emissions of three sectors - electricity, transportation, and industry - that together account for about 75 percent of U.S. greenhouse gas emissions." Beinecke believes that investments must be made in innovative clean energy technologies now so the U.S. does not continue to fund old technologies that will "lock in high carbon emissions for many decades to come." However she does not support a "safety valve" that would allow emissions credits to be given away as Senator Bond suggested. Beinecke listed some important areas that ACSA must address before it is complete. One is continuing scientific review of emissions targets using the latest scientific advancements so adjustments can be made. Efficiency standards must also be placed on energy producers, not just buildings and appliances. Beinecke believes there are too many free emissions allowances, which may undermine ACSA's goal. Beinecke also said one of the most grievous effects of global warming is its threat to national security. Global warming is a "destabilizing force" that will affect vulnerable communities in developing countries the most, with worldwide repercussions. The U.S. has a "crucial opportunity to alleviate suffering" in these countries, while helping its own national security. Dr. William R. Moomaw, an author of the Intergovernmental Panel on Climate Change (IPCC) reports and Director of the Tufts University Institute for the Environment, testified in support of ACSA. He asserted that carbon dioxide levels must remain below 500 ppm to keep temperature increases from reaching a catastrophic level. Moomaw said the U.S. must look "upstream" as much as possible to increase energy efficiency and reduce emissions. He used an example of using waste heat from production to heat buildings rather than expelling it as exhaust. Moomaw hopes that in 50-100 years, the U.S. energy system can be totally transformed to "create a new low-carbon economy." Will Roehm of the Montana Grain Growers Association testified on the role agriculture plays in the reduction of greenhouse gases, especially with carbon emissions trading. He indicated that agricultural soils already serve to sequester 20 million metric tons of carbon per year, and could potentially sequester 3-10 times that amount. Roehm stated that farmers support an emissions trading program, but do not want any limits on the price of carbon or the amount of possible offsets. Currently ACSA includes limits on these values. Paul Cicio represented the Industrial Energy Consumers of America, a trade association with members from the manufacturing industry. He testified that ACSA was "complex legislation" with "serious consequences." Cicio asserted that an increased supply of energy is essential before the U.S. can have a successful carbon emissions trading system or consumer energy costs will most likely increase. He also stated that ACSA needs to discourage fuel-switching (for example, a coal-fired power plant switching to natural gas) or energy prices will increase, as happened in the European Union emissions trading program. Cicio concluded by asking the committee not to cap and trade greenhouse gas emissions until an abundant supply of low-cost energy is available. Senator Thomas E. Carper (D-DE) attested that carbon emissions could not be the only type of pollution addressed by ACSA, and that health organizations showed the importance of limiting all harmful pollutants, not only greenhouse gases. Ranking member Warner asked the panel what would happen if the U.S. did not move forward with a policy such as ACSA and other countries such as China and India do. Mr. Cicio replied that if energy costs become cheaper in other countries, U.S. companies will move there, hurting America's economy. Ms. Beinecke replied that the U.S. is the largest greenhouse gas emitter and it needs to provide leadership and "show the way" for other countries by reducing emissions. Warner then asked if research has been done on the "cost of inaction" of not reducing greenhouse gases. Dr. Moomaw replied that multiple studies, including one by the University of Maryland, report that financial costs will be higher if the U.S. does not approve an emissions reduction plan. Four of the five witnesses support ACSA, although all would make changes to the current legislation. Witnesses and senators agree that the U.S. must do something to decrease greenhouse gas emissions and that technology is the key to having clean energy sources. But strong disagreements persist on the issue of a carbon trading system versus a carbon tax, and the details of either system. The markup of ACSA will show whether or not it will be a driving force for climate change. A link to witness testimony can be found here. A link to the full text of S.2191, the ACSA, can be found here.
A link to the Duke University preliminary assessment of potential
economic impacts of the Lieberman-Warner Climate Security Act can
be found here.
A link to the University of Maryland U.S. economic impacts of climate
change and the costs of inaction report can be found here.
-EAL
Witnesses Panel 1 Committee members present Majority: Wildfire activity has increased markedly in the United States over the past few decades, especially in the West. Changing climate has decreased water supplies and increased temperatures and the occurrence of droughts. More fuel is present in forests each year as humans continue to extinguish most small, natural fires. This combination of fuel, heat, and lack of water continues to increase the number of large wildfires and acres burned in the U.S. during fire season. The purpose of this hearing is to assess the current effectiveness of federal funding on wildfire prevention, to understand how climate change is altering wildfire activity in the U.S., and to decide what legislative action will provide the best prevention for these changing conditions. Chairman Jeff Bingaman (D-NM) stated that "climate change is driving the dramatic growth" of wildfires in recent history, and will continue to do so, quoting an estimate of a 25-75% increase in wildfires by the year 2050. Senator Pete Domenici (R-NM) reviewed some of the major U.S. fires from the past 150 years, the period argued to show climate change due to anthropogenic carbon output, which resulted in over 1,000 fatalities. He noted that the committee has held many hearings on wildfires over the past 15 years, showing its enduring dedication to this important topic. The first witness, Dr. Ann Bartuska stated that climate change research must be used to create sound forest management policies for the future. Adaptation, litigation, and policy support are all necessary to implement researchers' findings. Dr. Bartuska also remarked that we must get science "into the hands of practitioners" to ensure our forests are well-managed. She suggested the committee should plan a solid investment in this research for about 100 years. Dr. Susan Conrad mentioned the danger of positive feedbacks that in turn encourage more global warming and wildfires: darker land left after a fire absorbing more heat energy; increased carbon dioxide output from fires; and less oxygen output in areas where fires have killed vegetation. She also noted that planning and decision-making must be "site-specific", based on the needs of each region. All witnesses agreed that the needs of each forest should be assessed independently, based on the local ecosystem. Dr. John Helms concurred, noting that forests in different areas have been and will continue to be affected differently by climate change. While forests have adapted to warming and cooling trends through time, the concern now is the increased rate of climate change and thus adaptation. Additionally, humans are increasingly responsible for starting forest fires. Dr. Helms cited that in one recent year, 83% of all wildfires were started by humans. The research headed by Dr. Thomas Swetnam has shown that some environmental changes are also human-caused. Major settlement has led to a large decrease in the number of fires starting about 100 years ago, as evidenced by the decrease in burn scars on tree rings from that period. Yet temperatures have been increasing through the same time period. Before 1900, temperature and number of fires were positively-correlated. This change indicates human development of land and forest management has altered the natural burn patterns in the U.S. In response to a question of where to focus policy and funding for forest management, Dr. Swetnam said frequent-burning forests need the most attention. Senator Larry Craig (R-ID) brought up the need to thin forests to remove fuel and lessen fire hazards, while Dr. Swetnam told the committee "we cannot thin our way out of this problem", and that more funding and collaboration between legislators and land management is needed. He recommended prescribed fires as a more cost-efficient means of reducing hazards. Dr. Bartuska said that the complex stresses within forests make solving the problem difficult and that thinning is only one piece of the solution. Dr. Conrad explained that, for example, in a closed-canopy, slow-growth forest, thinning will destroy the ecosystem. Dr. Swetnam agreed with all the other witnesses and again mentioned that "balanced design" is necessary in preventive efforts, and that we must first understand the forest area before deciding what action to take. All witnesses acknowledged that humans have altered forest ecosystems, and thus the occurrences of wildfires, and that prevention must be chosen based on the individual ecosystem of each forest. Committee members were divided on which course of action would most effectively decrease wildfires. Senator Craig argued that increased thinning and grazing to remove fuel was the best solution, while Senator Tester felt that thinning would not solve the problem. Yet, even with these differences of opinion, all senators and witnesses repeatedly mentioned the need for compromise and bipartisan work on this issue. A better understanding of the effect of climate change on U.S. forests may provide a basis for more compromise between parties. A link to witness testimony and archive webcast can be found here.
Witnesses: On July 24, 2007, a Senate Environment and Public Works subcommittee convened to discuss the economic impacts of global warming policy that would include regulating carbon emissions. Chair Joe Lieberman (I-CT) began the hearing by running through the many recent proposals in the Senate concerning carbon cap-and-trade. He first described his joint proposal with Senator John Warner (R-VA), also Ranking Member on the subcommittee. Lieberman expressed his belief in the need for "emergency off ramps" so that any cap-and-trade legislation could provide safeguards should the program prove to be too economically taxing. Lieberman also ran through several other cap-and-trade initiatives, one introduced by Sens. Jeff Bingaman (D-NM) and Arlen Specter (R-PA) and another by Sens. Warner, Mary Landrieu (D-LA), Blanch Lincoln (D-AR), and Lindsey Graham (R-SC). Lieberman expressed cautious support for the quartet's plan unveiled that very same day. The chairman finished his opening remarks by citing various statistics from an Environmental Protection Agency (EPA) study through 2030 that said his and Sen. John McCain's (R-AZ) climate change legislation had positive environmental goals along with economically viability. Ranking Member Warner expressed his support for Lieberman's comments. He continued by referencing a war metaphor and said that "as an old marine, we're going to lay a beachhead." In his short remarks, Warner mentioned the necessity for the "strongest partnership" between government, private sector, and citizen motivation. "This is a start," he said. Full committee chair, Sen. Barbara Boxer (D-CA), invoked Warner's metaphor by saying to the senators "you're on a great mission." Boxer stressed the need for action, and cited a statistic that $1 in preventative measures today will save $5 in future corrective measures for combating the effects of climate change. Sen. James Inhofe (R-OK) next put forth his opposition to carbon cap-and-trade, saying that it "doesn't work." Although hesitant to increase taxes, he said that they offer a more certain price for carbon. He said that all propositions currently drifting in the Senate "range from costly to ruinous." Inhofe finished by questioning the validity of global climate change. He suggested that current proposals "will enrich China at our expense." As skeptical as Inhofe was, Sen. Bernie Sanders (I-VT) was vocal for action; he similarly invoked the war metaphor. Sanders cited a California proposal to create 1 million active photovoltaic units in the next ten years. He then postulated the benefits of pushing for a similar national mandate of 10 million photovoltaic units. "Think about the jobs that are created in production as well as installation," he said. Sanders continued by stating his support for better public rail transport and increased corporate average fuel economy standards (CAFE). He wrapped up his comments by stating strong opposition to the "safety valve" by calling it a "white flag of surrender." Before the testimony, Warner and Lieberman reiterated their plans for carbon regulation. Before the August recess, the senators plan to issue a study document that will then be reworked into a bill in September, based on suggestions made in the mean time. All witnesses were given a longer ten-minute period for comments. First to testify was former Lieberman staffer and current director of the Nicholas Institute for Environmental Policy Solutions at Duke University, Timothy Profeta. Profeta described the Nicolas Institute's proposal after having met with legislative officials, corporate CEOs, scholars, and non-profit organizations. The proposal advocates the creation of a Carbon Market Efficiency Board, a federal oversight body able to adjust market price for greenhouse gases and short-term emission goals. Profeta likened the Board's role to that of the Federal Reserve. The proposal also supported a provision included in the Bingaman-Specter bill that would require U.S. importers to meet the same carbon emission standards as comparable American industries through certificates called "international reserve allowances." These allowances could |
