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21
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11
3
FINANCIAL ENERGY
MANAGEMENT, INC.
Turning Savings Into Assets
Testimony of:
James C. Crossman
Financial Energy Management, Inc.
Denver, Colorado
Presented to:
U.S. Congress House of Representatives
Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs
April 23, 1998
1625 Downing Street
Denver, Colorado 80218
(303) 832-1920
Fax (303) 831-8221
Printed on Recycled Paper
Good morning Chairman McIntosh, and Subcommittee members. My name is Jim Crossman
and I am the founder, and president of Financial Energy Management, Inc. (Financial Energy), a
Denver, Colorado based energy services company (ESCO). My company provides energy and
water audits of existing businesses to identify ways to cost effectively reduce the consumption of
gas, electricity and water. In addition to consulting in energy efficiency, Financial Energy is a
contracting firm which designs, builds, and manages energy conservation retrofit projects.
Financial Energy measures and guarantees that the utility cost reductions will meet the estimated
amount determined in the audit. Using performance contracts or "shared savings" financing,
Financial Energy pays for the design and construction of the retrofit work, and is paid back out
of the future energy cost savings.
We are a relatively small company with sales averaging $2.25 million per year for the last two
years. As we have established ourselves in the market, our sales have increase dramatically, as
we have grown 280% over the last four years. We employ about 15 people who have many
diverse skills including: 1) licensed mechanical engineers for design work; 2) journeyman
electricians for motor and lighting installations; 3) licensed architects; and 4) window film
applicators for solar heat control.
The Company was formed in 1984, and in the past 14 years we have retrofitted hundreds of
buildings including apartments, industrial facilities, schools, hospitals, and offices. In just a little
over four years, we have retrofitted 77 buildings totaling approximately 6 million sq. feet. These
energy efficiency upgrade projects have saved owners $1.1 million in utility expenses at an
installed cost of $3.4 million.
What we stress to our clients is that energy efficiency is a tremendous investment opportunity
which improves comfort and increases productivity. A building owner who invests in energy
conservation in his/her own building can expect a return on investments (ROI) in the range of
20-60%. Since 1984 Financial Energy has identified $35.2 million in energy investments with
an average ROI of 35% per year in buildings that were considered by their owners to be
relatively energy efficient.
More recently we have begun to emphasize the environmental benefits of energy efficiency. The
electricity saved is directly related to the reduction in coal or natural gas burned at the power
plant. For example, in the 77 buildings I mentioned earlier, the projects are saving
approximately 970,000 therms of energy (1 therm = 100,000 Btu's) or about 28 million kilowatt
hours (kWh) of electricity per year. These project's electric savings, if produced with coal as is
the case in Colorado, eliminate the burning of 17,000 tons of coal (34 million lbs.) each year
which would in turn emit about 28,000 tons of carbon dioxide and 144 tons of sulfur dioxide at
the power plant.
A residential energy rating program in Colorado has identified an average energy efficiency
retrofit of a home costing $2,000 and saving about $200 per year in natural gas. The natural gas
saved reduces emissions by about 2 tons of CO₂ per house per year. In an all electric home the
savings are about $400 for the same $2,000 retrofit cost and on average and the CO₂ emissions
savings are about 7 tons of CO₂ per year per house.
Last year our Company completed an energy efficient lighting retrofit of a 1.3 million square
foot office building in Denver. The 56 story building is now saving 3,680,000 kWh of electricity
and over $280,000 a year in utility costs. By not burning coal to produce this electricity, the
project is reducing CO₂ emissions by 7,544,000 lbs and SO₂ emissions by 37,760 lbs. Using T-
8 lamps and electronic ballasts, the project has improved lighting levels and visual acuity for
tenants. The T-8 lamps, which are 1" in diameter verses the standard 1 1/2" diameter lamps,
contain about one half of the mercury which of course will reduce mercury levels in land-fills.
Additionally, the efficiency gains in the lamps and ballasts have reduced the heat given off by
the lighting fixtures, which reduces the air conditioning load in the building. In fact, the building
engineer stated that for the first time since the building was built they have not had to operate
the building's second chiller. This is particularly good news for buildings which need to convert
to ozone friendly HCFC refrigerants for their chillers. Often the HCFC refrigerant conversion
produces a small loss of cooling capacity for the chiller. This loss of cooling capacity can be
easily offset by a reduction in cooling load due to more efficient lighting.
In summary, energy efficiency is good business. Energy efficiency upgrades for businesses and
homeowners offer improvements in comfort and productivity gains, as well as a good investment
return. Energy efficiency creates jobs and helps to reduce our consumption of non-renewable
resources such as coal, nuclear and natural gas. Finally, energy efficiency offers a negative cost
way to reduce air and land pollution. "Negative cost" since energy efficiency retrofits are paid
for many times over from utility cost savings. The cost savings to businesses and the
environmental savings to society continue year in and year out for the life of the measures.
The White House Initiative on Global Climate Change has goals for CO₂ emissions which
maybe met, in part, through cost effective investments in energy efficiency in our homes, our
schools, our offices, and in our factories.
THE DENVER POST®
September 9, 1997
BUSINESS
SECTION C
E
The Denver Post / John Prieto
Dennis Brachfeld of Financial Energy Management measures
Denver. Brachfeld's Denver company helps clients use energy
the temperature at an exhaust fan motor at Keyline Graphics in
more efficiently.
Ch
save
e
WO
Firm finds clients' energy waste
By Mark Eddy
Downtown Denver with energy-
Denver Post Environment Writer
saving lights, showers and a va-
Jim Crossman and Dennis
riety of other devices designed
Brachfeld are out to change the
to save water and cut energy.
world by changing light bulbs.
In Republic Plaza alone, the
Making office buildings,
pair cut the building's energy
homes and apartment houses
use 3.6 million kilowatt hours a
more energy efficient not only
year by installing efficient fluo-
saves money for their custom-
rescent lights, reflectors and
ers and makes money for them-
connections and LED (light-
selves, but helps the environ-
emitting diode) exit lights. That
ment, both reasoned.
saved the management compa-
"I'm interested in promoting
ny $280,000 a year in energy
energy efficiency for the sake of
and maintenance costs.
reducing our consumption of a
"It's cut operating costs, it's
non-renewable resource, such as
improved lighting quality and
coal or natural gas," Crossman
it's improved temperature com-
said. "It has environmental ben-
fort. It's a win-win for us," said
efits, plus it's a good invest-
Patrick Hilleary, regional man-
ment."
ager of engineering for Repub-
The Denver Post / John Prieto
The two entrepreneurs have
lie Plaza owner Brookfield
retrofitted everything from sin-
Management Services.
Edward Wernsman, left, and Dennis Brachfeld take the tempera-
gle-family homes to the behe-
ture of air-blanket pumps at Keyline Graphics. Financial Energy
moth Republic Plaza building in
Please see ENERGY on 12C
Management takes on jobs big and small, with varied solutions.
Firm targets clients' wasteful energy ways
bulbs and replacing shower heads
ment. Crossman ended up consult-
shower and bath water, gas con-
ENERGY from Page 1C
to the biggest lighting retrofit job
ing for Brachfeld's company,
sumption dropped SO much that the
There's a hidden benefit to the
in Colorado," Brachfeld said of the
About Saving Heat, which he still
utility company thought something
retrofit, Crossman said: The envi-
Republic Plaza project.
owns and operates. Then they
was wrong and went to the building
ronment won because of what
While Republic Plaza was huge,
hooked up with Vories and formed
to check its equipment.
didn't happen.
the company's biggest job SO far is
Financial Energy Management -
"They assumed the meter was
To produce the amount of elec-
a contract with Southern Califor-
and they were off.
broken,' Crossman said.
tricity that was saved, a Denver
nia Edison Co. to help its custom-
Jobs have been big and small.
Another time, they figured out
power plant would have had to
ers cut energy use by 20 gigawatt
The solutions to energy problems
that heating costs in an apartment
burn 3.9 million pounds of coal.
hours -- roughly 10 times the sav-
have varied.
building had ballooned because the
Crossman said. That would have
ings they achieved with the Repub-
Among the simplest fixes, Cross-
garage door kept jamming open
released 12.7 million pounds of
lic Plaza building.
man said, was one job where they
and cold air was rushing in under
carbon dioxide into the air. A ma-
They're SO confident in their en-
discovered a valve hadn't been
the building, which refrigerated
ture tree absorbs about 13 pounds
ergy assessments that they guaran-
turned off and the cooler was being
the floors in the apartments direct-
of CO2 a year, SO, retrofitting the
tee the dollar amount a customer
fed hot water. They shut the valve
ly above. They put in a couple of
Republic Plaza building and reduc-
will save each month
and instantly the cooling costs
metal guards to keep the door op-
ing the emission of CO2, had the
"If they don't save money then
dropped by several thousand dol-
erational; the heating bills plum-
same impact as planting 983,000
we don't get paid," Brachfeld said.
lars a month.
meted immediately.
trees.
And to help cash strapped com-
"The payback was instant,"
Besides helping the environment,
"Energy efficiency reduces our
panies pay for the work, they offer
Crossman said. "All you had to do
saving energy makes good business
consumption of non-renewable re-
a financing program in which the
was shut the valve and save thou-
sense, Crossman said.
sources - coal, nuclear and gas --
customer pays them each month
sands of dollars for zero cost."
"Energy is the largest controlla-
and it reduces air and land pollu-
out of money saved by lowering en-
Another time they installed a
ble expense a building owner has."
tion," Crossman said.
ergy costs.
small boiler in an apartment build-
And with deregulation of the
Crossman, Brachfeld and Rebec-
"We're a partner in energy sav-
ing in Minneapolis that was using
utility industry just over the hori-
ca Vories started Financial Energy
ings, that's a definite theme,"
its large winter-heating boiler to
zon, conserving energy will be-
Management 14 years ago. By
Brachfeld said.
warm water for showers during
come even more important, Brach-
showing businesses how they can
The two met when Crossman
the summer. Using such a large
feld said.
save money by saving energy, the
was doing consulting work just af-
boiler to heat a small amount of
So he and Crossman will be
company has steadily grown. and
ter he'd graduated from the Uni-
water was extremely wasteful,
ready with their calculators and
now does work all over the coun-
versity of Denver's business school
Crossman said. "It was like digging
notepads, figuring out ways to save
try.
with an master's degree in business
tulips with a backhoe."
money, energy and the environ-
"We went from screwing in light
administration in energy manage-
By using the small boiler to heat
ment.
APR-21-98 TUE 8:22 AM
P. 2
Statement of Robert H. Johnson
Before the House Sub-Committee On National Economic Growth,
Natural Resources and Regulatory Affairs
11:00AM April 23rd, 1998
2154 Rayburn Office Building
My name is Robert H. Johnson. As a private citizen I want to thank the
members and staff of the Subcommittee for this opportunity to speak in
opposition to the ill-conceived Kyoto Treaty. MAY IT NEVER be signed by
any member of the Senate. Nor may it ever be foisted on the American
people through regulation, budget fiat or executive order. The Treaty must
first be brought before the United States Senate and given very careful and
thorough consideration. The proposal must be accompanied with hard
analytical data produced by politically neutral and impeccable scientific
sources. We can't afford to sacrifice reason and common sense to fear-based
1
APR-21-98 TUE 8:22 AM
P. 3
decisions and actions.
I want you to know that I have been cautious about the environment long
before it was fashionable. I built my 3500 sq. foot house in 1964 with
greater than code required insulation. Today my heating bill is almost 50%
less than the much smaller houses around me. I once drove a car that I
entered in a gas milage competition and won because it got 68.63 miles to the
gallon. I did it because it made logical and economical sense. That's what
we need here, common sense.
Let me tell you the economic impact this Treaty could have on me. As you
can see on the chart, in 1997 my family's expenditures for electricity, natural
gas and gasoline were $2845. Those costs could go up by $1100 if the Kyoto
Treaty is implemented. That is an unacceptable 38.6% decrease in our after
tax income. It could put a pinch on our finances, but let me tell you about a
2
APR-21-98 TUE 8:23 AM
P. 4
60+ year old resident of the District of Columbia that I know. She spends
83% of her $704/month pension on her house payment. At the moment she
still owes $2,000 for gas consumed in 1997. This Treaty could decimate her
meager spendable income. These could be real impacts on real people.
Though the personal effects could be adverse, I am even more concerned
about the national effects of implementing this mis-guided Treaty. I have
read a lot of articles about global warming and the Kyoto Treaty. It is
appalling to me how complacent Americans have become about their own
safety and sovereignty. Raul Estrada-Qyruela, Argentine's Ambassador to
China and the person considered to be the architect of the Kyoto Protocol
said, "Congress (he is referring to America's Congress) is out of touch with
the rest of the world." Does Mr. Estrada know what's best for the United
States? I do not believe that he does. Nor does the United Nations. Our
military preparedness will suffer because of cuts in fuel usage for all
3
APR-21-98 TUE 8:24 AM
P. 5
vehicles: land, sea and air. The current problems in our once proud military
would be greatly exacerbated. And this would come at a time when non-
participating countries such as China, North Korea, Iraq, Iran and others are
building their military forces.
As jobs would be moved over seas to countries where environmental
restrictions from the Kyoto Treaty would not apply, America will become
weaker economically, to say nothing of the people here who will lose their
jobs. What about those who are still working? The price of electricity and
gas goes up AND they lose their jobs. That just isn't right.
Mr. Clinton, as President elect, came to Washington proclaiming that his
administration would be the most ethical ever. I do not believe that he has
come anywhere close to realizing that goal. I just don't trust him. You may
or may not share my opinion but I'm telling you truthfully how I feel, and
4
APR-21-98 TUE 8:24 AM
P. 6
you know what? I think there are some in this Congress who don't trust him
either. On March 3rd, Trent Lott, Jesse Helms and Chuck Hagel sent a letter
to the President. In that letter they requested that the President assure them
that Secretary Eizenstat was correct in stating that the Administration would
not seek to impose any binding restrictions on any elements of the U.S.
economy that would have the effect of implementing terms of the Kyoto
Protocol without first being consented to by the United States Senate. Does
this sound as though they trust the President?
I hope you sense and understand my frustration and deep felt concerns. I
hope you really do "feel my pain" and the pain of millions of seniors just like
me. This Treaty goes far beyond hurting Americans financially. If signed, it
would trample on America's soul. The American citizen has not been given
enough information either pro or con to be in a position to make a completely
informed and valid decision. So my plea is that each member of this
5
P. 7
APR-21-98 TUE 8:25 AM
Committee makes sure the Congress gets all the facts related to the issue of
global warming and uses, to the MAXIMUM, its full authority to control a
President whose vision has been clouded by his need to build a legacy and by
a Vice-President who is willing to use American's money and America's
sovereignty as a stepping stone to the Presidency.
Much more than global warming is at stake. What's really at stake here is
the possible loss of our sovereignty to the United Nations - May God forbid.
You have my prayers and blessings to use all of your God given talents in
pursuit of TRUTH and a return to the America that I fought for. Thank
you all very much.
6
APR-21-98 TUE 8:25 AM
P. 8
IMPACT OF KYOTO ON SENIORS
Mr. Robert Johnson (single home in suburban Maryland
Impact on 1997 Expenses
Electricity $
793
25% increase
$ 198
Natural Gas
1,074 40% " "
430
Gasoline
978
50 cents per gal
489
Total
$ 2,845 39+% Increase To $3,952 (+$1,117)
A widow acquaintance living in D.C.
Natural Gas 40% increase plus $2,000+ accumulated deficit
Income
$704 a month
House Cost: 590 a month
Net Income $114 a month
for Living
"Proceed Cautiously When Considering Global Climate Policy Changes"
Testimony of Judy Kent
House Subcommittee on National Economic Growth, Natural Resources,
and Regulatory Affairs
Good afternoon. I'm a "behind the scenes" sort of person, and while
I've never done anything as daunting as speaking before a Congressional
subcommittee, I feel compelled to come before you today to express my
concerns. I'm concerned about the impact of the global climate policies,
and how they will affect my family---and all consumers.
To be sure, I'm not an expert on climatic change or an expert on
international treaties or economics. What I do know, however, is how
important energy use is in my everyday life, and how global climatic policies
will impact almost every aspect of my life. One thing is very clear, if the
global warming policies are enacted, my world, and that of every American
citizen will change.
Let me tell you a little about myself. I'm a married woman with two
children and live in a single-family home in the Northern Virginia suburbs.
My husband Frank is the full-time bread-winner for the family now. When he
was in graduate school a few years ago, I had that role.
-2-
Right now I work as a homemaker, although I do do some outside
freelance work, including helping my sister Beth with her housecleaning
business. I have a daughter Megan who is 9, and a son Nicholas who is 5.
My parents had ten children and we were raised on Long Island before
moving to California. About half of my siblings stayed out west, as did my
now widowed, mother.
Today my life principally revolves around my children and their
activities. Taking Nicholas to his pre-school 20-miles each way, transporting
him and Megan to friends' homes, doing the daily errands, after school-
sponsored classes, and weekly religious education classes means lots of time
on the road and more trips to the gas station. And while my parents may have
driven only 12,000 miles-per-year, 20,000 miles-per-year is my reality today.
Now, here, I'm afraid, is another reality. Passing the global warming
policies now under consideration will mean higher energy costs, which will
have a direct impact on the costs I'm paying for gasoline, housing, heating
and air conditioning, lighting, food, and virtually every consumer product.
Electricity costs could increase by almost 50 percent, as outlined by the
WEFA economic study; household fuel prices could jump by 50 percent and
the price of gasoline could rise by 36 percent.
-3-
Actually, these numbers I'm citing may be even larger, since the
Clinton Gore Administration agreed in Kyoto to lower U.S. greenhouse gas
emissions 7 percent below 1990 levels, which is greater than what the
Administration had originally promised to do back in October.
To be sure, all consumers will bear the brunt of hasty action. Energy
taxes and restrictions will affect people in every aspect of their lives. We're
not hearing a whole lot about the true impact of these policies and the
ramifications for all Americans if they are enacted. Here's how my family
would be affected:
Our home is all-electric. Even when keeping my thermostat at moderated
levels, our annual electric bill still totals $2,800.00. Global climate
policies could raise those prices by about 50 percent in Virginia, which
will force me to keep the indoor temperature much colder in the winter
and warmer in the summer. If the global warming proposals are signed
into law, my family's annual electricity cost will total $4200.00, an
additional $1,400.00 per-year for electricity.
-4-
As stated earlier, I'm driving 20,000miles per-year. Like most families,
we have two cars. Gasoline costs alone for both cars are about $2,300.00
annually. If prices rise by 36 percent, that cost will jump $840.00 for a
total of $3,140.00. If this becomes a reality, It's not hard to imagine
cutting back on some of the children's extracurricular activities.
In order to save on fuel costs, my husband and I would probably be
driving smaller cars. Most importantly, I feel those much smaller cars
would be less safe. Rationing of gas and waiting in long lines like those of
the 1970's would probably become a reality.
Air travel could also be impacted by imposing special energy taxes, which
ultimately would be passed on to the consumer through higher prices for
airline tickets. That too, is going to affect everyone, including people like
my 76-year-old mother who lives in California. While she is by no means
a "world traveler" on her fixed income, her main pleasure in life is
visiting her 13 grandchildren. Our family, however, is spread out
throughout the country- from California, to Montana, Washington,
Pennsylvania, Virginia, and Montreal. Certainly on her modest income,
grandma's trips would be less frequent.
-5-
On the dinner table, we'll find the cost of both fresh and prepared food
rising. I'm already paying over $600.00 a month for the four of us to eat.
Let's not kid ourselves, the increase in transportation costs would simply
be passed down to the consumer.
Other services for family members- nursing homes, day care centers,
hospitals, will be more expensive as their own energy costs skyrocket. In
addition, schools, fire and police departments and other municipal services
will also experience their operating costs rise, which could lead to tax
increases for every one of us. Services or personnel will need to be cut
back, directly affecting my family's safety. I'm sure you'll agree that
wouldn't be beneficial for any of us.
I'm also bothered by the fact that climate change policies will be unfair;
individuals and families will be affected differently. People, for instance, who
live in large states, like California, and drive their cars greater distances,
would be harder hit by high gasoline taxes. Another group that doesn't
always get the attention it deserves are the poor. No one is saying anything
about the impact these policies will have on them. Because they pay a larger
share of their income for utilities, household fuels, gas and food, they will
have to cut back on the essentials in order to pay for the increased costs.
-6-
This should be a major concern to us all. Other groups who could be
significantly impacted include senior citizens on fixed incomes who very
often live in older, drafty homes. They will also have to compensate for
higher energy costs by cutting back on heating and air conditioning, or
spending less on food.
I haven't even talked about what lies ahead for my children if these
proposals are enacted. By the year 2010, Megan will be 22 years old. If all
goes well, she'll also be a new college graduate, ready to make her mark on
the world.
The WEFA study estimates that during this same year, Virginia citizens
could lose tens of thousands of jobs, and the U.S. as a whole could lose 1.8
million jobs, all due to the global warming policies now under consideration.
It's not hard to understand how this could happen. Why would a U.S.
manufacturer choose to stay here when they could go overseas where
developing countries would not have the same limitations and strict emissions
standards imposed on them as they do here in the United States. This could
be the reality of Megan's world as she searches for that all-important first job.
-7-
Americans should be concerned about these policies. And they should be
concerned about why Administration officials and policy makers are not
openly discussing the impact this treaty could have on consumers, on every
single American.
What they are feeding us are scare stories about how global warming has
had a significant impact on our weather and what terrible things are going to
happen to our health and well-being because of this alleged phenomenon
called "global warming."
What we are not hearing from this Administration is that most scientists
and researchers, those that have thoroughly examined global warming and its
impact, do not share their gloom and doom global warming outlook.
Consumers and taxpayers cannot easily be swayed, and we are not buying
that "gloom and doom" forecast. I opened my presentation talking about my
concern for all of us if these global warming policies are enacted. I'm
concerned because of all the reasons I've just outlined. I urge you to please
proceed cautiously, ensure that the Administration provides us with better
research and a clearer analysis of what the future holds for us all under their
proposed policies. Enacting the global warming policies should not be fear-
based, it should be fact-based.
-8-
I'm also thoroughly convinced that if the majority of Americans out
there knew about the global warming policies now under consideration they
would vigorously let their elected officials know of their concerns. Our
policy makers and negotiators should understand this, and they should be
required to provide a clearer analysis, discussion, and public debate on the
impact of global warming policies, not legislate and negotiate on the basis of
bad science.
Americans want an accurate and complete explanation on the true risks
of global warming policies, and deserve to know what its real-world impact
will be for families like mine and yours.
Thank you.
April 24, 1998
"I have not received any Federal grants or contracts during fiscal year-
1998."
Judy Kent
STATEMENT OF MIAMI-DADE CLERK HARVEY RUVIN
Presented to the U.S. House of Representatives
Committee on Government Reform and Oversight Subcommittee
on National Economic Growth, Natural Resources, and Regulatory Affairs
Room #2203 Rayburn House Office Building
Thursday, April 23, 1998 at 11:30 A.M.
Mr. Chairman, Committee Members -
Good Morning and thank you for your
gracious invitation to appear here today to offer testimony on behalf of local
government.
My name is Harvey Ruvin, currently serving as the elected Clerk of Miami-Dade
County, Florida where I served first as a local Mayor and then for 20 years as a County
Commissioner. I'm a past president of the National Association of Counties (NACo)
and am now serving as President of USA-ICLEI and as Vice-Chair of the overall
governing body of the International Council for Local Environmental Initiatives
(ICLEI).
ICLEI is a democratic organization committed to build and support a world-wide
movement of local governments to achieve and monitor tangible improvements in
global environmental conditions through cumulative local actions.
Our global membership is comprised of over 350 cities, counties, towns and their
associations. Each are focused on thinking globally and acting locally in seeking a
sustainable future for their constituents. Climate change, or more aptly climate
disruption, and sustainability issues are central to their efforts.
In the USA, we have a strong membership base. Our "Cities for Climate Protection
Campaign" has over 50 American cities and counties containing 25 million people
representing about 7% of overall U.S. greenhouse gas emissions. We partner with
prestigious Public Technology (PTI), the non-profit technology transfer and
commercialization arm of local governments in America.
Our efforts in the U.S. are closely monitored and we have already documented nearly
5 million tons of emissions avoided as a direct result of our joint efforts in the U.S.
Localities in America have clearly demonstrated that reducing CO2 emissions can not
only create jobs but save taxpayers money, while giving them a more livable
environment.
1
I'm pleased to include for the record our report issued just prior to the Conference of
the Parties III in Kyoto last December. ICLEI was given the honor of presenting
formally to the COP III Plenary Session. I am also proud to enclose a copy of a
recently issued Status Report on the progress that Miami-Dade County is making in
implementing its CO₂ Reduction Plan. In the Clerk's Office we've undertaken re-
inventions and implemented systems that allow our people to do more and more of their
business electronically rather than always having to take that CO2 emitting trip
downtown.
Today's inquiry, I understand, is primarily with regard to the impact of climate change
issues on employment. This committee's focus on jobs is obviously well-founded as a
path to understanding both the impacts of not taking strong enough actions to curb
climate disruption, as well as, those impacts on sustainable employment brought about
by taking bold, coordinated actions in harmony with the international community.
The key in both instances, Ladies and Gentlemen, are the words:
"SUSTAINABLE EMPLOYMENT"
Isn't it clear that employment within industries that are in the business of producing
energy from finite sources are not sustainable jobs. And even worse, those are jobs that
are, however unwittingly, contributing to the long-term non-sustainability of other jobs
as well - indeed to the non-sustainability of all our futures.
Nevertheless, those jobs are held by people with real needs today. We need to address
those needs compassionately as we transition those individuals and their families to the
coming energy paradigms.
If appropriate actions towards renewable energy and efficiency technologies, emission
avoidance strategies, etc., are not taken, then the impacts on jobs and the economy in
general will surely be draconian due to the devastating inevitabilities of an ever-
disrupting climate system with its damaging extreme events. Flooding, droughts,
tropical storms and diseases and air pollution all have negative impacts on jobs.
I can attest to the devastation caused by tropical storms. In 1992, Hurricane Andrew,
hitting the least dense part of my County, still left 100,000 people homeless and
obliterated countless jobs in both tourism and agriculture. The final property damage
total exceeded 20 billion dollars.
As more and more areas of the world's oceans reach temperatures capable of spawning
"Andrew" type storms - more of these storms will surely occur - and in unprepared
2
places never before hit.
The impact on jobs of all types as a result of projected flooding of coastal areas could
be among the most horrible of all projected impacts of climate change.
Inland areas of the country, involved in agriculture, fishing, tourism and beyond will
all be impacted as our economy, as well as the global economy, suffers unabated climate
disruption. In fact, if the worst scenarios become reality - jobs will become secondary
to survival.
The Good news for jobs, as well as our survival, is to be found in taking coordinated
bold action to combat projected climate disruption by encouraging and phasing in the
commercialization of renewable forms of energy and by implementing a whole range
of energy efficiency and sustainability strategies.
The following is a partial listing of various projections of employment impacts resulting
from taking positive actions regarding climate change.
According to Energy Innovations, a study recently completed by NRDC and
four other independent energy policy organizations, U.S. emissions of carbon
dioxide, the chief global warming pollutant, could be cut to 10% below 1990
levels by 2010 while national energy costs are reduced by $530 per household
annually and nearly 800,000 additional jobs are created. -- from an NRDC
press release, 9/9/97.
From Energy Efficiency and Renewable Energy Network (EREN):
For every $100 million invested in the Million Solar Roofs Initiative, 3,850 jobs
will be created, resulting in more than 70,000 new high-tech jobs by 2010.
The wind energy industry presently supports more than 50 businesses in
California; 1200 people are employed directly in these businesses and another
4,300 jobs have been created indirectly. Nearly all jobs are related to operating,
maintaining, and servicing wind turbines.
From biomass alone, 66,000 jobs are supported in the United States, with a great
many in rural areas. By 2010, biomass power could support more than 283,000
U.S. jobs.
The Sacramento Municipal Utility District's Conservation Power Program has
saved $45 million, increased regional income by $124 million, created about 880
3
direct jobs, and added $22 million to households in the area.
The Massachusetts State Energy Office reports that the state realized a 257%
growth in energy-efficiency firms between 1988 and 1992. This trend is happily
occurring all over.
1992 study co-sponsored by the Solar Energy Industries Association, the
American Gas Association, and the Alliance to Save Energy estimates 175,000
new jobs by 2010, through efficiency improvements, renewables, and strategic
use of natural gas.
The value of renewable energy equipment exports reached $245 million in 1992,
including $210 million for photovoltaic equipment. Near-term export market
expansion of $800 million in sales of renewable energy and energy efficiency
equipment would create approximately 29,000 new jobs.
The Wisconsin Energy Bureau recently found that with a 75% increase the
state's renewable energy use, the state would realize more than 62,000 new jobs,
$1.2 billion in new wages, and $4.6 billion in new sales for Wisconsin businesses.
About 293,000 new jobs could be created by 1995, 471,000 new jobs by 2000, and
nearly 1.1 million new jobs by 2010 with a major national commitment to energy
efficiency improvements.
In closing, our economy, indeed the global economy, cannot be sustainable unless
our environment is made sustainable.
The era of a fossil based economy must come to a graceful end. A renewable energy
based economy must be in our future, if we are to have a future in which we not only
have jobs but a healthy world to live in as well:
The opportunity for our nation to lead the world, especially the developing world, to a
sustainable future should not be either squandered - or sacrificed on the altar of non-
sustainable carbon-based jobs.
We owe no less to the future of our planet and to all living things.
Thank you.
4
American Corn Growers Association
P.O. Box 18157
Washington, DC 20036
202-835-0330
Fax: 202-429-3741
Testimony of
Sam Darwin
Member, Board of Directors
American Corn Growers Association
Before the
House Government Reform and
Oversight Committee
Subcommittee on National Economic Growth, Natural
Resources and Regulatory Affairs
April 23, 1998
Chairman David McIntosh
Mr. Chairman and members of the Subcommittee, I'm Sam Darwin, a corn, popcorn,
wheat and soybean farmer from Huntsville, Alabama and a member of the Board of
Directors of the American Corn Growers Association. I am here today as a farmer to
express my deep reservations over the proposed United Nations Global Climate Change
Treaty and its effect on production agriculture.
I'm a fifth generation farmer, with my farm dating back to 1814. It's a family operation
with my wife, son, daughter, son-in-law and daughter-in-law all sharing in the
responsibilities of the farm. I farm approximately 3000 acres with 350 going into cotton,
around 1000 going into corn and popcorn, and 1400 going into wheat to be double
cropped with soybeans after wheat harvest. The remainder is planted to soybeans. In my
area this farm is a little larger than average, but it needs to be to feed multiple families like
it does.
I'm concerned about the Global Climate Change Treaty because the United Nation's own
scientific panel states that agriculture is to blame for 20 percent of human-induced
greenhouse gas emissions. In response to this, they have suggested that there should be
considerations given to mandating limits on certain farming practices. These include limits
on diesel fuel use, restrictions on tillage, limits on methane emissions from animal waste
and restrictions on fertilizer, transportation and agricultural processing.
According to a study commissioned by the nationally respected Sparks Company, net farm
income would drop by 46 percent if this treaty is implemented. This study also shows a
8.5 percent increase in cost of production, a 6 percent decrease in exports, a 33 percent
increase in gasoline costs, a 130 percent increase in natural gas costs, a 500 percent
increase in coal costs and a $17.4 billion increase in consumers cost of food. All these
increased costs are totally unacceptable to production agriculture and would result in
economic hardships on my fellow farmers and ranchers and our surrounding rural
communities. By adding close to $.50 per gallon to the cost of diesel fuel and substantially
higher prices on our electric rates, I would have to pay thousands more in production
costs, eventually driving me out of business. In fact, diesel fuel alone would cost me over
$20,000 per year more under this treaty, and that could be the difference between profit
and loss for my farm.
We live in a global economy. Much of what my farm produces is exported. With this in
mind, agriculture has worked towards fair trade policies that level the playing field
between the highly subsidized agricultural sector in other parts of the world and U.S. farm
policy. Under the Global Climate Change Treaty, 132 so-called "developing" countries are
exempt from the same tough, mandatory emissions standards facing the U.S. Many of
these countries, including South Korea, China, India, Brazil, Argentina, and Mexico are
direct competitors of ours. How can I compete when my production and financial hands
are tied while other countries are free to plant and harvest all they can without any
impediments and emission restrictions? The bottom line is that I can't compete when my
own government stacks the deck against me and gives my business to other countries.
This treaty is flawed and unworkable unless every country plays by the same rules and
regulations.
Agriculture is hard pressed. Prices for corn, soybeans, wheat, cattle and hog are falling
while production costs continue to rise. The Global Climate Change Treaty will only make
the situation worse. Someone will have to pay the higher prices for our diesel fuel,
fertilizers, herbicides and electricity. And I'm afraid that someone will be me, and I simply
can't afford it.
I'm proud to be a part of an Association that has shown so much leadership on this issue. I
am also proud that we have been joined by many of the major farm organizations in our
efforts to point out the numerous problems that production agriculture has with this
treaty. We respectfully request that Congress think long and hard before endorsing this
treaty as drafted. I'm afraid to think about what could happen to me and my family if the
Global Climate Change Treaty were to be ratified as it's been proposed. This policy will
make it increasing difficult for me to afford to grow the crops and hope to show some
profit by the end of the year.
We have tough decisions to make concerning our environment. Agriculture doesn't ignore
the possible problems associated with global warming. However, much more scientific
study needs to be completed and the treaty effects on industry needs to be examined
before we give our trading competitors the key to our markets and bring about higher
food prices for American consumers. I ask that you analyze this treaty and take as much
time as possible to view it's effects upon agriculture. After all, driving me out of business
is not the answer to cleaning up our environment.
Thank you for allowing me to testify and I would be happy to answer any questions at this
time.
STATEMENT
of
THE HONORABLE BEULAH COUGHENOUR
Member, Indianapolis/Marion County City-Council
before the
UNITED STATES HOUSE OF REPRESENTATIVES
COMMITTEE
on
Government Reform and Oversight
SUBCOMMITTEE
on
National Economic Growth, Natural Resources, and Regulatory Affairs
with regard to the
WHITE HOUSE INITIATIVE ON GLOBAL CLIMATE CHANGE
2203 Rayburn House Office Building
April 23, 1998
1
Mr. Chairman, it is a pleasure to appear before your Subcommittee today to share my
perspectives on the effects the White House's Initiative on Global Climate Change will
have on American jobs and the American economy, including the economy in my home
town of Indianapolis/Marion County, Indiana.
I am a member of the Indianapolis/Marion City-County Council. I chair the Council's
Public Works Committee and have done so for 20 years. I have also chaired both the
Committee on Energy, Environment and Natural Resources for the National League of
Cities and the Committee on Environment, Energy and Land Use for the National
Association of Counties. District 24, which I represent, has 34,000 people on the south
side of Indianapolis/Marion County, including the St. Francis Hospital and Southport
High School. I have a personal interest in a sound, healthful environment and have
worked and continue to work to assure that my constituents have a healthy economy in
which to work, educate their children, and lead productive lives.
Last June, I introduced a resolution on this subject before our City-County Council by
which these issues were explored and considered carefully. Our Council supports a
healthy environment and most everyone I know does. But I cannot support efforts that
will produce no environmental benefits, possibly environmental detriments, all at great
expense to the standard of living for my constituents. Not surprising to me, my
resolution passed by an overwhelming vote of 26 to 1. On July 2, 1997, I submitted a
similar resolution to the National Association of Counties. Both are attached to this
statement, and I hope, will be made a part of your hearing record.
2
As someone who has worked throughout my more than 20 years of public service for
protection of the environment, it grieves me to see the one-sided and damaging
approach set forth in the White House Initiative. The Kyoto Protocol, a substantial
underpinning to the White House Initiative, is at best unfair. While it would legally bind
its signatories to future reduction in greenhouse gases to 7% less than their 1990
emissions levels, it would not require any reductions in 134 of the World's 168
countries, including exclusions for China, India, Mexico, and the former Soviet Union
countries. But it is in these developing nations where greenhouse gas emission
increases have been the most dramatic. There is no credible, scientific or other
factual basis on which to conclude or even infer that this Protocol will reduce emissions
in the World as a whole--our real goal!
From my years of experience in implementing other air pollution requirements for our
citizens, I know that the costs for reducing greenhouse gases in my home town as
elsewhere in the United States are going to be multiples of the costs for reducing
greenhouse gases in developing countries such as China or Mexico where pollution
controls are relatively nonexistent. A pound of greenhouse gas is a pound of
greenhouse gas whether it's in China or Mexico. A well thought out initiative would be
moving toward developing and funding pollution controls in the developing nations until
those controls have obtained a parity with the controls already in place in the more
developed countries. QUITE FRANKLY, I THINK IT IS IN THE ECONOMIC
INTEREST OF THE UNITED STATES TO BE EXPORTING POLLUTION CONTROL
3
TECHNOLOGY TO DEVELOPING COUNTRIES SUCH AS CHINA RATHER THAN
EXCUSING THEM FROM CLEANING UP THEIR AIR QUALITY.
It is virtually indisputable that the White House Initiative will result in higher energy
prices, hitting hard the local economies that rely on energy intensive industries. For
example, residential consumers would face a substantially higher energy bill under the
proposed measure. Residential prices for energy would rise significantly above
baseline levels in 2010: natural gas (73.5%), electricity (64.2%), and home heating oil
(77.3%). The price of motor gasoline would also increase 49.9% relative to the
baseline. These figures are according to WEFA, Inc., an international economic
consulting firm.
Sharp increases in fuel and electricity prices would be felt across the nation. Industrial
firms in Indiana would be burdened in the global competition for markets with price
increases of over 90% for delivered natural gas and over 100% for electricity by 2010
versus baseline levels.
The steel, automobile manufacturing, agriculture, and coal mining industries in Indiana
would experience severe impacts. These industries form the core of my State's
economy. Implementation of this agreement could threaten thousands of good paying
jobs--the very jobs that enable our local governments to thrive. Higher energy prices
also threaten future economic development as businesses are forced by competition to
move operations overseas in order to remain competitive. This uneven playing field
4
will put my community, and for that matter all of our Country's home towns, at a
significant, possibly devastating disadvantage in the ever increasing global market
place. And for what? Certainly not for a cleaner or better global environment!
In summary, we do know the White House Initiative on Global Climate Change
(including the Kyoto Protocol) is unfair, will significantly, adversely affect the economy
of the United States, including lost jobs and higher energy prices, and will do all the
above with negligible global environmental benefit. As I said above, I think a better
approach would be to reach out to the developing nations and work with them to assure
that they have access to the pollution technology available today. They need that
technology. Let's help them ir. a positive way, not by lowering the passing grade so
that they can be pushed on into further environmental failure!
Again, I appreciate the opportunity to be able to provide this statement and would be
pleased to respond to any questions or requests for further information that you might
have.
5
CITY-COUNTY SPECIAL RESOLUTION NO. 51, 1997
Proposal No. 438, 1997
A SPECIAL RESOLUTION urging the U.S. President to reject the job-threatening U.N. treaty that would
restrict energy usage by developed nations.
WHEREAS, the U.S. Government is involved in United Nations negotiations aimed at reducing
greenhouse emissions in the post-2000 time period; and
WHEREAS, these negotiations are expected to culminate in an agreement by the end of 1997 which
would legally bind the United States to reduce energy usage; and
WHEREAS, the "Berlin Mandate Decision" already specifically exempts all developing countries from
emission reduction requirements, which will preclude meaningful progress worldwide to stabilize carbon
dioxide concentrations; and
WHEREAS, the U.N. negotiating parties made a fundamental error when they agreed to negotiate
legally-binding restrictions on the United States and other industrialized countries but to exempt high-growth
developing countries like China, Mexico, Brazil and Korea from any new carbon reduction commitments; and
WHEREAS, as much as 60 percent of global carbon emissions are expected to come from developing
countries in the next few decades; and
WHEREAS, the exclusion of new commitments by developing nations will create a powerful incentive to
export jobs and capital from the U.S., shifting greenhouse gas emissions to other countries and do little or
nothing to stabilize atmospheric concentrations of carbon; and
WHEREAS, such an uneven playing field will cause the loss of high-paying U.S. jobs in the mining,
manufacturing, energy, transport and other sectors; and
WHEREAS, carbon taxes, or equivalent programs, will raise electricity, gasoline and other energy prices
significantly to consumers and are highly regressive and most harmful to citizens who live on fixed incomes
or work at poverty-level wages; and
WHEREAS, the U.S. Government has not completed a thorough economic analysis of the effects of a
treaty on the U.S. economy, even though U.S. negotiators have been at the bargaining table for over 18
months and have agreed to a December, 1997, deadline for finalizing this far-reaching treaty or protocol;
now, therefore:
BE IT RESOLVED BY THE CITY-COUNTY COUNCIL OF THE
CITY OF INDIANAPOLIS AND OF MARION COUNTY, INDIANA:
SECTION 1. The Indianapolis City-County Council urges the President to neither sign nor agree to sign in
Kyoto in December, 1997, or thereafter, any agreement that applies mandatory commitments to reduce or
limit greenhouse gas emissions only to the developed nations, thereby exempting developing nations; or that
adversely affects the prosperity or employment stability of the people of the United States or any region or
sector thereof.
SECTION 2. The Mayor is invited to join in this resolution by affixing his signature hereto.
SECTION 3. This resolution shall be in full force and effect upon adoption and compliance with IC 36-3-4-14.
The foregoing was passed by the City-County Council this 23rd day of June, 1997 at 9:05 p.m.
SPECIAL RESOLUTION RECORD 1997 PAGE 109
S.R. No. 51, 1997
Page 2
ATTEST:
Benst Sust
Sulllen Hait
Dr. Beurt SerVaas
President, City-County Council
Suellen Hart, Clerk, City-County Council
Presented by me to the Mayor this 26th day of June, 1997 at 10:00 a.m.
Sullen Wait
Suellen Hart, Clerk, City-County Council
Approved and signed by me this 27th day of June, 1997.
Stephe Gobbamt
Stephen Goldsmith, Mayor
STATE OF INDIANA, MARION COUNTY)
) SS:
CITY OF INDIANAPOLIS
)
I, Suellen Hart, Clerk of the City-County Council, Indianapolis, Marion County, Indiana, do hereby certify the
above and foregoing is a full, true, and complete copy of Proposal No. 438, 1997, a Proposal for SPECIAL
RESOLUTION, passed by the City-County Council on the 23rd day of June, 1997, by a vote of 26 YEAS and
1 NAY, and was retitled Special Resolution No. 51, 1997, which was signed by the Mayor on the 27th day of
June, 1997, and now remains on file and on record in my office.
WITNESS my hand and the official seal of the City of Indianapolis, Indiana, this 27th day of June, 1997.
Sullla Hast
Suellen Hart, Clerk City-County Council
(SEAL)
SPECIAL RESOLUTION RECORD 1997 PAGE 110
NATIONAL ASSOCIATION OF COUNTIES
ENVIRONMENT, ENERGY AND LAND USE STEERING COMMITTEE
RESOLUTION ON GLOBAL WARMING
WHEREAS, NACo supports the U.S. government's involvement in the United
Nations negotiations aimed at reducing greenhouse gas emissions in the post-2000
period; and
WHEREAS, these negotiations are expected to culminate in an agreement by the
end of 1997 which will legally bind the United States to reduce energy usage; and
WHEREAS, the "Berlin Mandate Decision" already specifically exempts all
developing countries from emission reduction requirements, which will preclude
meaningful progress worldwide to stabilize carbon dioxide concentrations; and
WHEREAS, the U.N. negotiating parties made a fundamental error when they
agreed to negotiate legally-binding carbon restrictions on the United States and other
industrialized counties but to exempt high-growth developing countries like China,
Mexico, Brazil and Korea from any new carbon reduction commitments; and
WHEREAS, as much as 60 percent of global carbon emissions are expected to
come from developing countries in the next few decades; and
WHEREAS, the exclusion of new commitments by developing nations will
create a powerful incentive to export jobs and capital from the U.S., shift greenhouse gas
emissions to other countries and do little or nothing to stabilize atmospheric
concentrations of carbon; and
WHEREAS, such an uneven playing field will cause the loss of high-paying U.S.
jobs in the mining, manufacturing, energy, transport and other sectors; and
WHEREAS, carbon taxes, or equivalent programs, will raise electricity, gasoline
and other energy prices significantly to consumers and are highly regressive and most
harmful to citizens who live on fixed incomes or work at poverty-level wages; and
WHEREAS, the U.S. Government has not completed a thorough economic
analysis of the effects of a treaty on the U.S. economy, even though U.S. negotiators have
been at the bargaining table for over 18 months and have agreed to a December, 1997
deadline for finalizing the far-reaching treaty or protocol:
THEREFORE, BE IT RESOLVED that the National Association of Counties
urges the President to neither sign nor agree to sign in Kyoto in December 1997, or
thereafter, any agreement that applies mandatory commitments to reduce or limit
greenhouse gas emissions only to the developed nations, thereby exempting developing
nations; or that adversely affects the people, prosperity or employment stability of the
United States or any region or sector thereof.
Adopted by NACo
July 15, 1997
State of Rhode Island and Providence Plantations
SENATOR
Secretary,
WILLIAM A. WALASKA
LEIPH
Joint Committee on Small Business
>STATE
C,
TELAND
140 Aldrich Avenue
farwick, Rhode Island 02889
Committee on Corporations
District 17
Committee on
Room 310, State House
HOPE
Health, Education and Welfare
Providence, Rhode Island 02903
Res.: 401-737-1065
Senate Chamber
Joint Committee on
Environment and Energy
Bus.: 401-751-5866
Fax: 401-421-4603
Remarks of State Senator Bill Walaska
Before the Government Reform and Oversight Committee,
Subcommittee on National Economic Growth, Natural Resources and Regulatory Affairs
Thursday, April 23, 1998
Good afternoon. I am State Senator Bill Walaska of Rhode Island, where I sit on the Joint
Environment and Energy committee. I am also a member of the American Legislative Exchange
Council, the largest bipartisan membership organization of state legislators. Within ALEC, I am
an executive committee member of the Energy, Environment, Natural Resources and Agriculture
Task Force. I am here today to discuss the consequences of the Administrations' Global Climate
Change policy.
Many aspects of the global climate change discussion are troublesome. Scientists have
not reached a conclusion as to the existence of any long term warming trend, let alone the impact
from human activity. Additionally, a treaty that is binding on some, but leaves others out of the
mix would create sharp competitive disadvantages to the participant nations. The economic costs,
which the Kyoto protocols acknowledge in exempting developing nations, would be extremely
burdensome to nations like the US dependent on exports, energy production, and energy
consumption.
As a state legislator, I am concerned about the attempt at "backdoor" implementation
without ratification. The Environmental Protection Agency and other agencies have begun a
concerted effort to exert pressure on state environment agencies to implement programs designed
to meet Kyoto emission reduction goals. Such efforts circumvents the US Senate ratification
process, violating separation of powers unconstitutionally. Our founding fathers never intended
such a pervasive treaty affecting the entire nation's security and economy to become the law of
the land through the actions of unelected bureaucrats. In this regard, ALEC has passed a model
bill reaffirming the Senate ratification process and state sovereignty. In my comments, I will
touch on the concerns I have in the other areas, but I will focus on the one area about which there
is little debate: the extreme economic burden the treaty would cause.
It is an entirely natural phenomenon for the climate of the world to change. Throughout
history, the planet has experienced ice ages, and resultant periods of warming. In fact the world is
still recovering from the Little Ice Age that occurred around the year 1400. The average global
temperature fluctuates year to year, related in part to sunspot activity. Conditions such as El
Nino, which has been occurring for thousands of years, also offer evidence of naturally occurring
climate change.
Much of the public debate has been shaped by the media portrayals of impending doom.
However, according to Accu-weather, the world's leading weather forecasting company, there
has been only a .45 degrees C change in this century, and satellite data shows that a slight
cooling has ocurred in the last 18 years. Additionally, the media seems to go through its own hot
and cold periods. Twenty years ago there were reports of catastrophic global cooling.
Conversely, during a period of warming, the media will portray the impending disaster of
catastrophic temperature increases. While periods of warming and cooling are normal, the
question becomes; is there a human impact on these changes?
The basis for the Administration's Kyoto Climate Change Protocols is the proposition
that human caused emissions of so-called greenhouse gases, or CO2, are responsible for any
warming. In fact, CO2 is emitted by every living thing on the planet. Human activity accounts
for only 2% of the emissions. The computer models available for forecasting today offer
contradictory results. They have limited ability to predict with certainty the weather next week,
let alone next century. They can not accurately predict how the climate will respond, how much
if any warming will occur, how soon it will happen, and what the impacts will be.
While I am not a scientist, I do know that a Gallup survey of the American
Meteorological Society and the American Geophysical Society found that only 17% of their
members believe that any warming is the result of human activity. Additionally, over 15,000
scientists recently signed a petition that urged the rejection of the Kyoto protocols. These
scientists find no convincing evidence that human activity is causing heating of the atmosphere,
or disruption of the climate. The signatories include over 2,000 geophysicists, climatologists,
meteorologists. Many of the rest are trained in fields able to critically evaluate climate research.
This seems to me a clear message from the scientific community that there is still much debate
about global climate change.
Leaving aside the scientific debate, there also exists the issue of fairness. Any effort
designed to cut emissions of greenhouse gases must include universal participation. If human
activity causes only 2% of greenhouse gas emissions, the nations whose industries emit the
greatest concentrations of greenhouse gases must participate in any reduction plan. While
developing nations were exempted precisely because of the economic burden of reducing
emissions, this leaves the US and other developed nations at a competitive disadvantage. As
Mike Buckner of the United Mine Workers said, "regardless of the science, it if a flawed
agreement." Developed nations already spend far more on cleaning up the environment than do
developing nations. This treaty would cause the US to bear an even greater proportion of
economic hardship.
As I stated before, I am not a scientist. I am a state Senator. I am most concerned about
the effects that this treaty would have on my family, my constituents, and my state.
Economically, this treaty would be a disaster. Rhode Island currently ranks 26th in the country in
economic growth, and 33rd in employment gain. Our employment level has not yet reached the
1990 peak. While much of the country has been experiencing flush economic times, Rhode
Island is still in the midst of a fragile recovery. The emissions reductions called for in the
administrations planning would jeopardize that recovery, and cause severe economic dislocation.
A recent GAO study determined as much, concluding in part that "actions to reduce greenhouse
gas emissions and global warming will have significant economic consequences." Far from the
painless proposition the administration touts, the treaty would be a nightmare for the states.
The states hit hardest would be those with export intensive economies, or those that are
either energy producing or high energy consumption states. According to the Wharton
Econometric Forecasting Associates (WEFA) study, under the proposed carbon stabilization
case, the New England region would suffer a 1.9% decline in Gross State Product from the
baseline by 2010. Employment would decline by .8%, and real personal income would decline
by 1.6%. Under the current plan, these jobs would most likely be exported overseas, to non-
participating countries. Manufacturing, agriculture, real personal income- all of these areas
would suffer under the emission reduction plans.
Mandated reductions in energy consumption would result in price increases for all energy
commodities. According to the Competitive Enterprise Institute, gasoline is likely to increase in
cost by over 50 cents a gallon. In Rhode Island, home heating oil would increase in cost by 55%
over the baseline. According to WEFA economists, commercial establishments, including
hospitals, schools and industrial facilities would see electricity price increases of 35% by 2010.
In fact, this amounts to an extremely regressive tax. For individuals and families on limited or
fixed incomes, heating your home in the winter is hardly a luxury. For these people, expenditures
on energy represent a relatively large percentage of their income, leaving them with less money
to purchase other necessities. The increased cost of energy would have lasting, drastic economic
effects on the citizens of Rhode Island and the nation.
And now for the silver cloud with the lead lining. New England is projected to be among
the least heavily affected regions in the country! As Rhode Island is at the end of energy
pipelines, energy costs are already very high. These high costs have driven away much of the
manufacturing base, and there is little mining in the region. Still, in less than twelve years, my
constituents would face direct and indirect costs per year of over $3,000 per household. Other
speakers will go over the expected national economic impact, so I will only say that in all areas
of the country, families will see real increases in unemployment, energy costs, and loss of wages.
As for the specifics of how the emissions reduction programs would be implemented,
Rhode Island would again be hit hard. Rhode Island is still working hard and undergoing
sacrifices to meet the goals of the Ozone Transport Assessment Group, (OTAG) and the National
Ambient Air Quality Standards for Particulate Matter (NAAQS/PM). Rhode Island passed
Senate Resolution 884, opposing new NAAQS and PM standards, and requesting identification
of the full costs involved with this unfunded mandate. We are still working on meeting the
current standards, and have not yet seen the results of a fully implemented the IM 240 program.
Further unfunded mandates in the form of emissions reductions programs promoted by the EPA
would be of grave concern to the states.
As a state legislator, I am concerned about the pressure the EPA is putting on state
agencies. At recent conferences of the Environmental Council of States, cosponsored by the
EPA, the tone was established at the outset. A conference brochure proclaims that the US "must
now begin designing policies and programs to meet this (emissions) reduction goal." This is
certainly premature, given the fact that the U.S. Senate has not ratified or even debated the merits
of the treaty to this point.
In response to this pressure, ALEC has recently passed the State Responses to Kyoto
Climate Change Protocols Act. This model bill, for use by state legislators around the country,
prevents state agencies from promulgating rules and regulations designed to meet Kyoto
emissions reductions targets until three things have occurred. First, the United States Senate must
ratify the treaty. Second, congress must pass implementing legislation. Third, the state legislature
must also act. In this way, the constitutional separation of powers is protected, state sovereignty
is respected, and if the treaty is ultimately adopted, states will be free to experiment and innovate
in reaching the overall emissions goals.
It is clear that the debate over global climate change has yet to run its course.
Implementation efforts by the EPA and state agencies should cease until important questions
about the science have been answered, full participation in any agreement has been ensured, and
the extreme economic costs have been taken into account. The United States should not
implement the Kyoto protocol.
STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 1997
SENATE RESOLUTION
MEMORIALIZING THE UNITED STATES ENVIRONMENTAL PROTECTION
AGENCY AS IT UNDERTAKES A REVIEW OF THE NATIONAL AMBIENT AIR
QUALITY STANDARDS FOR OZONE AND PARTICULATE MATTER
97-S 884
Introduced By: Senators Badeau, Kelly, Irons,
McBurney, O'Leary, Connors, et. al.
Date Introduced: March 4, 1997
Referred To:
Read and Passed
WHEREAS, The United States Environmental Protection Agency (EPA) has the
responsibility to periodically review the National Ambient Air Quality Standards (NAAQS)
to ascertain if such standards are sufficiently protective of human health; and
WHEREAS, The EPA has proposed changes in the NAAQS relative to ozone and
particulate matter which will make attainment of these new standards extremely difficult;
and
WHEREAS, The State of Rhode Island, through its citizens, businesses, local
governments, the Genereal Assembly and its regulatory agencies, has worked with
commitment and dedication to reduce air pollution and to meet the 1999 deadline for
attainment of clean air standards; and
WHEREAS, The EPA is proposing to scrap the standards set by them for states,
counties and local communities to achieve attainment of clean air and to substitute new,
more restrictive standards which will make attainment more difficult if not impossible; and
WHEREAS, If the new standards for ozone and particulates are imposed, the entire
state of Rhode Island, which is making great strides in meeting EPA's current standards,
would have to impose even more stringent and costly controls on residents, local businesses
and all levels of government; and
WHEREAS, EPA's own Advisory Committee of scientists recently concluded the
new standards are not anymore likely to improve public health than existing standards; and
WHEREAS, Lowering the NAAQS for ozone and particulates may well preclude
Rhode Island from ever achieving attainment, thus Imposing significant and long lasting
economic, administrative and regulatory burdens on the citizens of Rhode Island, their
business and their governments; and
WHEREAS, Rhode Island regulatory agencies would be forced to devote
substantial resources in developing a new State Implementation Plan (SIP) if the NAAQS
standards are significantly revised by the EPA; now, therefore, be it
RESOLVED, That this Senate of the State of Rhode Island and Providence
Plantations does hereby respectfully request and urge the United States Environmental
Protection Agency (EPA), in support of its proposed NAAQS changes for ozone and
particulates, to reveal the potential incremental health impacts and economic consequences
of such changes, if any; and be it further
RESOLVED, That the Environmental Protection Agency is respectfully requested
and urged, on behalf of all the people of the State of Rhode Island and Providence
Plantations, to detail the unfunded mandates and/or other administrative burdens which a
reduction in the NAAQS for ozone and particulates would impact on State and local
governments, the economy and the citizens of the State of Rhode Island and Providence
Plantations; and be it further
RESOLVED, That the Secretary of State be and he hereby is authorized and
directed to transmit duly certified copies of this resolution to Ms. Carol Browner,
Administrator, USEPA, 401 M Street, SW, Washington, DC 20460 and the members of the
Rhode Island delegation to the United States Congress.
PD00573
H.
SENATE RESOLUTION
MEMORIALIZING THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY AS IT
UNDERTAKES A REVIEW OF THE NATIONAL AMBIENT AIR QUALITY STANDARDS FOR
OZONE AND PARTICULATE MATTER
Presented
by Roger William 2 R Badeau 32 Could 30
Com the Been 3(38) (JR.OL(40)
Come
33
Man acots (31)
Leore Repts (20)
writing D.Waksh by
Mulinl /12)
MI Carin 43
EBD 44
Jhicey (36)
Domine DJ Ruggerio
Dillam so (4))
in L (g(26)
1997
(29)
IN THE SENATE MAR o 4
Read and PASSED
Robert V. Landi, Jr.
Reading Clerk
Josune MPolisa (28)
June minta (37)
Alephan am(19)
IN
MERICAN
LEGISLATIVE
EXCHANGE
1973 25 Years of Service to America's State Legislators 1998
COUNCIL
sonian Principles in Action!
910 17th Street N.W.
Fifth Floor
Washington, D.C. 20006
(202) 466-3800
FAX (202) 466-3801
Website: http//:www.ALEC.org
State Responses to Kyoto Climate Change Protocol
A Bill
IN THE [HOUSE/SENATE] OF [STATE]
An Act prohibiting the proposal or promulgation of state regulations intended to reduce.
emissions of greenhouse gases, prior to ratification of the Kyoto climate change protocol by the
United States Senate and enactment of implementing legislation by the United States Congress.
An Act Concerning the Kyoto Climate Change Protocol
Short Title: This act may be referred to as the Kyoto Protocol Act of 1998.
Section 1. Findings and Purposes
The [House/Senate] of [State] hereby finds that:
(a) The United States is a signatory to the 1992 United Nations Framework Convention
on Global Climate Change ("FCCC");
(b) A protocol to expand the scope of the FCCC was negotiated in December 1997 in
Kyoto, Japan ("Kyoto Protocol"), requiring the United States to reduce emissions of greenhouse
gases such as carbon dioxide and methane by seven percent from 1990 emission levels during the
period 2008 to 2012, with similar reduction obligations for other major industrial nations;
(c) Developing nations, including China, India, Mexico, Indonesia, and Brazil, are
exempt from greenhouse gas emission limitation requirements in the FCCC;
(d) Developing nations refused in the Kyoto negotiations to accept any new commitments
for greenhouse gas emission limitations through the Kyoto Protocol or other agreements;
(e) With respect to new commitments under the FCCC, President William Clinton
pledged on October 22, 1997, that "The United States will not assume binding obligations unless
key developing nations meaningfully participate in this effort";
(f) On July 25, 1997, the United States Senate Resolution No. 98 by a vote of 95-0,
expressing the Sense of the Senate that, inter alia, "the United States should not be a signatory to
any protocol to or other agreement regarding, the Framework Convention on Climate
Change which would require the advice and consent of the Senate to ratification, and which
would mandate new commitments to mitigate greenhouse gas emissions for the Developed
Country Parties, unless the protocol or other agreement also mandates specific scheduled
commitments within the same compliance period to mitigate greenhouse gas emissions for
Developing country Parties;"
(g) The Kyoto Protocol fails to meet the tests established for acceptance of new climate
change commitments by President Clinton and by U.S. Senate Resolution No. 98;
(h) Achieving the emission reductions proposed by the Kyoto Protocol would require
more than a 35 percent reduction in projected United States carbon dioxide and other greenhouse
gas emissions during the period 2008 to 2012;
(i) Developing countries exempt from emission limitations under the Kyoto Protocol are
expected to increase their rates of fossil fuels use over the next two decades, and to surpass the
United States and other industrialized countries in total emissions of greenhouse gases;
(j) Increased emissions of greenhouse gases by developing countries would offset any
potential environmental benefits associated with emissions reductions achieved by the United
States and by other industrial nations;
(k) Economic impact studies by the U.S. Government estimate that legally binding
requirements for the reduction of U.S. greenhouse gases to 1990 emission levels would result in
the loss of more than 900,000 jobs in the United States, sharply increased energy prices, reduced
family incomes and wages, and severe losses of output in energy -intensive industries such as
aluminum, steel, rubber, chemicals, and utilities;
(1) The failure to provide for commitments by developing countries in the Kyoto Protocol
creates an unfair competitive imbalance between industrial and developing nations, potentially
leading to the transfer of jobs and industrial development from the United States to developing
countries;
(m) Federal implementation of the Kyoto Protocol, if ratified by the United States Senate,
would entail new Congressional legislation whose form and requirements cannot be predicted at
this time, but could include national energy taxes or emission control allocation and trading
schemes that would preempt state-special programs intended to reduce emissions of greenhouse
gases;
(n) Piecemeal or other uncoordinated state regulatory initiatives intended to reduce
emissions of greenhouse gases may be inconsistent with subsequent Congressional
determinations concerning the Kyoto Protocol, and with related Federal legislation implementing
the Kyoto Protocol;
(o) Individual state responses to the Kyoto Protocol, including the development of new
regulatory programs intended to reduce greenhouse emissions, are premature prior to Senate
ratification of that Protocol, in its current or amended form, and Congressional enactment of
related implementing legislation;
(p) There is neither Federal nor [State] statutory authority for new regulatory programs or
other efforts intended to reduce greenhouse gas emissions for purposes of complying with or
facilitating compliance with the provisions of the Kyoto Protocol.
Section 2. Restrictions on State Regulations Related to Greenhouse Gas Emissions
(a) Effective immediately, the [Secretary/Administrator/Director] of the [State]
[Department/ Agency of Environmental Protection or any appropriate agency] shall not propose
or promulgate any new regulations intended in whole or in part to reduce emissions of
greenhouse gases, as such gases and emissions are defined by the Kyoto Protocol, from the
residential, commercial, industrial, electric utility, transportation, agriculture, energy, or mining
sectors;
(b) In the absence of a resolution or other act of the [House/Senate of
]
approving
same, the [Secretary/Administrator/Director] of the [State], [Department/Agency of
Environmental Protection or other appropriate agency] shall not submit to the U.S.
Environmental Protection Agency or to any other agency of the Federal Government any legally
enforceable commitments related to the reduction of greenhouse gases, as such gases are defined
by the Kyoto Protocol;
(c) Nothing in this section shall be construed to limit or to impede state or private
participation in any on-going voluntary initiatives to reduce emissions of greenhouse gases,
including, but not limited to, the U.S. Environmental Protection Agency's Green Lights program,
the U.S. Department of Energy's Climate Challenge program, and similar State and Federal
initiatives relying on voluntary participation;
(d) This Act shall remain in effect until repealed by an Act of the Legislature of the
[State/Commonwealth] of [State], or until ratification of the Kyoto Protocol by the United States
Senate and enactment of Federal legislation implementing the Kyoto Protocol.
TULBOR
House of Representatibes
TOM ALLEY
Lansing, Michigan
CHAIR: CONSERVATION ENVIRONMENT
AND RECREATION
STATE REPRESENTATIVE
COMMERCE
STATE CAPITOL
FORESTRY AND MINERAL RIGHTS
LANSING, MICHIGAN 48913
PUBLIC UTILITIES
PHONE: (517) 373-3817
LEGISLATIVE COUNCIL
FAX: (517) 373-5495
Remarks of Michigan State Representative Tom Alley
Before the Government Reform and Oversight Committee,
Subcommittee on National Economic Growth, Natural Resources and Regulatory Affairs
Thursday, April 23, 1998
I am State Representative Tom Alley of Michigan, chair of the Conservation, Environment
and Recreation Committee within the Michigan House. I am also a member of the American
Legislative Exchange Council (ALEC), the nation's largest bipartisan membership organization
of state legislators with over 3,000 state legislative members nationwide. Within ALEC, I am
chair of the Environmental Subcommittee on the Energy, Environment, Natural Resources and
Agriculture Task Force. I sit before you today to discuss the grave misgivings I and many other
state legislators have over the proposed Kyoto protocols.
In 1992, as a result of negotiations held in Rio de Jeneiro with over 160 nations, the
United States entered into an agreement, the Framework Convention on Climate Change, calling
for developed nations to reduce emissions of greenhouse gases which may impact the world's
climate, causing global warming. The goal of this agreement was for the participating nations to
voluntarily reduce greenhouse gas emissions back to 1990 levels.
That approach was abandoned in 1995 with the adoption of the Berlin Mandate, and with
Recycled
Paper
6
the US administration's agreement to accept binding reductions in July of 1996. Subsequently in
December of 1997, during climate negotiations in Kyoto, Japan, the administration agreed to
reduce greenhouse gas emissions in the United States to a level 7 percent below 1990 levels by
the time period 2008 to 2010. Developing nations refused to accept any role in this agreement.
Global warming is a natural phenomenon. Greenhouse gases - water vapor, carbon
dioxide and methane are the most common - trap some of the sun's warmth and keep it near the
surface of the earth. This is important because if the greenhouse effect did not exist, our planet
would be about 60 degrees colder and much of the earth's surface would be uninhabitable.
We know scientists have noticed that certain human activities, such as the burning of coal,
oil and natural gas, have increased greenhouse gas concentrations and some are concerned about
a human "enhanced" greenhouse effect. However, between 90 and 95 percent of all greenhouse
gases come from natural sources. For example, cows raised in Argentina produce methane, as
does rice grown in Thailand. Human activities produce less than 10 percent of global greenhouse
gases. Furthermore, a variety of human activities produce greenhouse gases. Coal or natural gas-
generated electricity releases carbon dioxide and methane, whether it's done in New Dehli, Hong
Kong or Boise. Most of the developed world's factories and homes are heated with fossil fuels,
which release greenhouse gases. Cars running on gasoline do too - as do fireplaces, whether
they're lighted to cook food in Santiago, Chile or to warm the hands and feet on a cold winter's
night in Reykjavik, Iceland.
Some scientists say human activity is changing the earth's climate, pointing to the 1°F rise
in earth's temperature during the past 100 years. But other scientists see flaws in the theories of
human contributions to global warming. According to Dr. Sally Baliunas of the Center for
2
Astrophysics at Harvard, while most man-made greenhouse gases entered the atmosphere after
1940, most of the observed temperature increase occurred before 1940. Moreover, the scientists
who drafted and approved the United Nations Second Assessment Report on climate change stated
that "no study to date has positively attributed all or part" of the 1°F rise in the earth's
temperature during the past 100 years to human causes.
Further, to what is the 1°F rise in the earth's temperature compared? The best
observational temperature records start around 1850, about the time the world emerged from the
grip of a Little Ice Age that began around 1400 A.D. Many scientists therefore are not surprised
that temperatures began rising "naturally" once this long cold spell ended. The difficulty comes
when scientists try to separate "natural variability" from mankind's impact on climate. As the
U.N. document, Climate Change 1995. Draft contribution of Working Group I to the IPCC
Second Assessment Report stated, "When will the detection and unambiguous attribution of
human-induced climate change occur? We do not know."
While the effects of global warming certainly raise serious concerns, they may not be
immediate dangers. Experts who study this issue typically think in terms of 100 to 200 years.
Many scientists believe we need to know more about how the climate system works before
dramatic action is taken to change the way we use energy. Present computer capabilities are
insufficient to provide a full analysis of the available data, and there remain uncertainties and
variations in the mathematical models used to predict global climate change. Similar difficulties
exist in predicting global climate change as exist in predicting the local weather as they both rely
on the same science. Slight changes in the mathematical assumptions or the data used can create
vast differences in climate forecasts stretching thirty, fifty, or one-hundred years into the future.
3
Climate models are a forecasting tool. However, these tools must be used with extreme
caution. Our understanding of the underlying science continues to grow, and we are still limited
by computers not powerful enough to portray local or regional impacts decades in the future. In
the face of this still maturing science, policy makers are considering, or being asked to consider
measures that would have far-reaching social and economic impacts.
As stated earlier, the administration has agreed to commit the United States to a 7 percent
reduction in the production of greenhouse gases from 1990 levels by the year 2010. Such a
reduction will have a dramatic effect on our economy and our society as a whole.
In the absence of the significant technological advances necessary to achieve the
reductions, which may or may not be possible, the likely alternative would be significant increases
in the price of energy. Such increases would adversely effect the price of practically all goods
and services in the United States. According to WEFA, Inc., the estimated $200 per metric ton
carbon fee or tax necessary to reduce emissions to 1990 levels would have a wide range of
impacts. Gasoline prices would rise significantly -- an estimated 50 cents per gallon -- creating
a drain on household finances and raising the price of all transported goods. Household energy
bills would likely increase $900 to $1,100 annually. Total output in the US would decline $228
billion below the baseline and total output in Michigan would fall $7.8 million below the baseline.
The US would lose an estimated 1.8 million jobs and Michigan would lose an estimated 94,000
jobs. According to the American Farm Bureau Federation, total US farm production expenses
would rise over $10-20 billion under the current energy price increase models. This would
represent a 24% to 48% decrease in the net farm income under the respective low/high energy
price scenarios.
4
States heavily dependent upon exports of manufactured products would be negatively
impacted. Higher input costs reduce the competitiveness of US manufacturing, especially against
developing countries not required to limit carbon emissions, causing exports to fall below the
baseline. Additionally, the demand for US exports in developing OECD countries falls as
economic growth slows. States with exports representing a large share of output include
California, Washington, Illinois, Texas, New Jersey, and Michigan. For Michigan, exports
represent 15.3% of gross state product, second only to Washington.
The largest percentage of declines in Michigan employment would occur in durable
manufacturing including transportation equipment, electrical machinery, and fabricated metals.
In the non-durable category, the plastics industry would lose the most jobs. The largest absolute
decline in non-manufacturing jobs would be in the trade sector, where 40,400 jobs are predicted
to be lost by 2010.
In Michigan, with its large industrial manufacturing base, real gross state product would
fall between 2.6 and 3.0% below the baseline in 2010. The hardest hit industry would be the auto
sector. Production of auto components such as electrical machinery, plastics, and fabricated
metals would be doubly impacted - first by higher overhead costs, then by reduced demand. Real
output in the manufacturing sector would drop by 4.0% in 2010. Manufacturing losses would
cause producers to reduce their purchases of labor and other services.
Wages and salaries would fall under the imposition of a carbon tax. Again according to
WEFA, Inc., in Michigan a 3.4% decline in manufacturing wages is projected in 2010 relative
to the baseline. Private non-manufacturing wages would fall 2.0%. Real income growth would
be slowed by job losses. Currently, wages in Michigan's manufacturing sector tend to be higher
5
than in most nonmanufacturing industries. As economic activity and jobs shift away from the
manufacturing sector, real income per capita would fall by $371, or 1.7 percent versus the
baseline in 2010. High economic costs are borne by all states, but energy producing states and
export dependent states suffer a disproportionate burden. Michigan, falling under both categories,
will suffer a double hit.
Each of the above losses would have a significant adverse impact on Michigan's economy
if occurring alone. Occurring together, the impact is potentially devastating.
Given all the uncertainties inherent in the science of global warming, it is bad public policy
to impose such radical changes to every aspect of our society. These sacrifices by the United
States would be even more egregious in light of the fact that the agreements reached in Kyoto are
not binding on the so-called developing countries including China, Brazil, and India.
Prior to the Kyoto accords, developing nations were expected to account for 60 percent
of global carbon emissions over the next few decades. By the year 2025, it is expected that
developing countries would likely be responsible for as much as 68 percent of all energy-related
carbon dioxide emissions. By the year 2050, that number is 76 percent. The impact of the Kyoto
agreements can only compound these numbers.
The likely impact of mandatory reductions of energy related carbon dioxide emissions in
the United States and other developed countries will be to shift those emissions and their sources
from the developed to developing countries. The exclusion of new commitments by developing
nations will create a powerful incentive to export jobs and capital from the United States, shifting
greenhouse gas emissions to other countries, and will do little or nothing to stabilize atmospheric
concentrations of carbon dioxide. As developing countries are on the one hand exempt from
6
reaching any reductions from current levels, and on the other have more relaxed emissions
standards, the net effect of mandatory reductions in developed countries will most likely be an
increase in global energy production-related carbon dioxide emissions.
In October of 1997, based upon all the aforementioned factors, I introduced in the
Michigan Legislature House Concurrent Resolution 70. Similar to S.R. 90 adopted by the United
States Senate and H.R. 211 introduced by Congressman Joe Knollenberg (R-MI), H.C.R. 70 urges
the President of the United States to reject any agreement on limiting greenhouse gas emissions
that apply restrictions only to developed nations while exempting the developing nations. H.C.R.
70 received strong bipartisan support in both the Michigan House and Senate, and was adopted
by both chambers by November 13, 1997. A copy of H.C.R. 70 is attached.
Long before the meetings in Japan, the Michigan Legislature felt it important to go on
record as not supporting what was expected then to be an unfair agreement -- costing American
jobs and economic productivity for little or no benefit. Given the agreements reached by the end
of the Kyoto meetings, the concerns of those of us in the Michigan legislature supporting HCR
70 were certainly valid. They remain valid today.
Now, there is growing concern that the U.S. EPA is attempting to implement the treaty
without ratification. By pressuring state environmental agencies to design and activate programs
to reduce emissions, the administration may be attempting to gain "back door" approval of the
Kyoto accords. Because of these actions by the EPA, and to preserve the separation of powers
and the concept of states rights, the American Legislative Exchange Council recently adopted
model legislation entitled State Responses to Kyoto Climate Change Protocol Act. Three states,
Alabama, Illinois, and West Virginia, have already introduced this legislation, and many more
7
are expected to in the near future.
In the last two years alone, EPA has issued new national ambient air quality (NAAQS) and
particulate matter (PM) standards, as well as ozone transport standards. In response, I have
sponsored H.R. 13 and H.C.R. 11, and H.R. 214 and H.C.R. 87 respectively. H.R. 13, H.R.
214, and H.C.R. 87 have been adopted by the Michigan House, H.C.R. 11 was adopted by both
the House and Senate. Copies of the four resolutions are attached to this written testimony.
Whatever the cause, global warming is a global problem. One in which all countries must
take part if any real reductions are to be achieved. The Global Climate Treaty reached at Kyoto
in December of 1997 is not the global solution necessary to make these necessary reductions. The
net effect will be little to no impact on global emissions, at the cost of the destruction of our own
economic and social well-being. In its current form, it is not good public policy.
I respectfully ask the United States House of Representatives to not support this treaty, and
I would ask the United States Senate not ratify any treaty that does not bind all countries to
achieving their fair share of reductions.
8
No. 11
JOURNAL OF THE HOUSE
House Chamber, Lansing, Tuesday. February 18, 1997.
2:00 p.m.
The House was called to order by the Speaker Pro Tempore.
The roll was called by the Clerk of the House of Representatives, who announced that a quorum was present.
Reps. Alley, Middaugh, Agee, Owen, Palamara, DeHart. Kelly, Scott. Mans, Sikkema, Goschka, Bodem and Callahan
offered the following concurrent resolution:
House Concurrent Resolution No. 11.
A concurrent resolution to urge the United States Environmental Protection Agency to reaffirm certain standards of
ozone and particulate levels.
Whereas, The United States Environmental Protection Agency (EPA) has a responsibility to review periodically the
National Ambient Air Quality Standards (NAAQS) for ozone and particulate matter (PM): and
Whereas. The EPA is considering establishing a more stringent ozone standard and a new, more stringent standard
for particulate matter at or below 2.5 microns (PM2.5): and
Whereas, Michigan, through its local jurisdictions, businesses, and citizens, has supported health-based National
Ambient Air Quality Standards (NAAQS) that are premised on sound science: and
Whereas. Michigan has made significant progress in meeting current NAAQS for both ozone and particulate matter
(PM) under the Clean Air Act amendments of 1990. although there are some areas that have not yet come into
compliance with the current standard(s): and
Whereas, Michigan, through its local jurisdictions, businesses. consumers, and taxpayers, has borne considerable
cost to come into compliance with the current NAAQS for ozone and particulate matter: and
Whereas, The proposed new standards will significantly expand the number of nonattainment areas for both ozone
and particulate matter. This may result in additional emission controls in all areas, thus imposing significant economic,
administrative, and regulatory burdens on Michigan, its citizens, businesses, and local governments; and
Whereas, EPA's own Clean Air Science Advisory Committee (CASAC) was unable to find any "bright line" that
would distinguish any public health benefit among any of the proposed new standards for ozone, including the curreht
standard; and
Whereas, There is very little existing PM2.5 monitoring data; and
Whereas. There are many unanswered questions and scientific uncertainties regarding the health effects of particulate
matter, in particular PM2.5, including:
-Divergent opinions among scientists who have investigated the issue:
-Exposure misclassification;
-Measurement errors;
-Lack of supporting toxicological data;
-Lack of a plausible toxicological mechanism:
-Lack of correlation between recorded PM levels and public health effects;
-Influence of other variables; and
-The existence of possible alternative explanations
; and
Whereas, No scientific proof exists that establishing a more stringent ozone standard or a new, more stringent PM2
standard would avoid alleged adverse health, but it would assuredly impose significantly higher costs; now, therefore,
be it
Resolved by the House of Representatives (the Senate concurring). That we advise and strongly urge the EPA to
reaffirm the existing NAAQS for ozone; and be it further
Resolved. That we advise and strongly urge the EPA to reaffirm the existing NAAQS for PM10; and be It further
Resolved, That we advise and strongly urge the EPA to refrain from establishing a new NAAQS for PM2.5 at this
time and to gather the necessary PM2.5 monitoring data and conduct all necessary research needed to address the issue
of causality and other critical and important unanswered scientific questions concerning PM2.5; and be it further
Resolved. That we advise and strongly urge the EPA to identify any unfunded mandates or other administrative and
economic burdens for state or local governments or agencies that would result from the proposed changes to the
NAAQS for ozone and particulate matter; and be it further
Resolved, That copies of this resolution be transmitted to the President of the United States. the President of the
United States Senate, the Speaker of the United States House of Representatives, the members of the Michigan
congressional delegation, the administrator of the United States Environmental Protection Agency. and other appropriate
administration officials.
The concurrent resolution was referred to the Committee on Conservation. Environment and Recreation.
REP. TOM ALLEY
3735495
P.04
No. 14
STATE OF MICHIGAN
JOURNAL
OF THE
House of Representatives
89th Legislature
REGULAR SESSION OF 1998
House Chamber, Lansing, Tuesday. February 17, 1998.
2:00 p.in
The House was called to order by the Speaker.
The roll was called by the Clerk of the House of Representatives. who announced that a quorum was present.
Reps. Alley, Middaugh. Callahan, Schermesser, Birkholz, Wetters, Kilpatrick, Bodem, Walberg. DeVuyst. By
McNutt, Sikkema, Dalman, Mans and Perricone offered the following concurrent resolution:
House Concurrent Resolution No. 87.
A concurrent resolution to urge the Environmental Protection Agency to revise its timetable for proposed rule
making on ozone transport to provide opportunities for refined modeling to identify both beneficial and adverse
impacts on air quality in upwind areas from emissions controls intended to benefit downwind areas.
Whereas, On November 7. 1997, the Environmental Protection Agency (EPA) released a proposed rule calling on
twenty-two states to revise their State Implementation Plans to address ozone transport and meet specific limits on
emissions. The limits will require equal levels of control in the twenty-two states. ignoring studies showing that these
twenty-two states have different impacts on downwind sites: and
Whereas, Michigan recognizes the challenges presented by transported pollutants. This is a problem that has been
especially vexing to the western portions of our Lower Peninsula. Michigan also believes that, due to variables in
climate, topography. and atmospheric chemistry. the extent to which transport causes any given area's ozone problems
can be quite different from one locale to another: and
Whereas. All upwind areas do not contribute equally to poor air quality in downwind areas: and
Whereas. EPA relied on different emissions inventories and modeling assumptions than those used by the Ozone
Transport Assessment Group (OTAG) in reaching their recommendations after two years of study. The EPA
disregarded OTAG recommendations calling for the states to conduct additional local and subregional modeling over
a twelve-month period. This modeling is essential to better understanding "disbenefits" on upwind areas of some
emissions controls compared to the minimal benefits to downwind areas of those same controls; and
Whereas. Other differences between the OTAG recommendations and the EPA's proposed call for State
Implementation Plan revisions Include OTAG's recommendations for a wider range of controls. variability for
geographic areas, using a one-hour rather than an eight-hour standard, and using an emissions base of 1990 instead of
1995; and
Whereas. Given the disagreement over the timetable and means of addressing the transport of ozone, it is prudent to
reconsider our response and the expectations and requirements placed upon the states; now. therefore, be 11
Resolved by the House of Representatives (the Senate concurring), That we urge the Environmental Protection
Agency to reconsider its timetable for proposed revisions to State Implementation Plans and to work with other states
and groups of states to determine more appropriate modeling to Identify the impact of emissions controls at upwind
sources on local air quality in downwind locales; and be it further
Resolved. That we urge that the EPA's final action be based on consideration of all of the following:
1. Michigon's proportional contribution to a specifically identified problem in another state.
2. The ozone benefits and disbenefits that would result from reducing emissions in Michigan, and
3. The comparative cost of achieving those ozone reductions from controlling emissions in Michigan versus
controlling emissions in the downwind states and nearby states
: and be it further
Resolved. That copies of this resolution be transmitted to the United States Environmental Protection Agency. to the
members of the Michigan congressional delegation, and to the office of the President of the United States.
The concurrent resolution was referred to the Committee on Conservation. Environment and Recreation.
REP. TOM ALLEY
3735495
P.05
STATE OF MICHILGANS
MICHIGAN LEGISLATURE
:
House Concurrent Resolution No. 70
Offered by Representatives Alley. Micklaugh, LeTarte, Sikkema, Griffin, Rhead, London, Richner, Birkholz, Kelly, Schermesser, Kilpatrick,
Palamara, Walberg. Thomas, Callahan, McManus, Varga, Wetters, Mans, Geigar, Wojno and Bodem and Senator Schwarz
A CONCURRENT RESOLUTION TO URGE THE PRESIDENT OF THE UNITED STATES TO REJECT
ANY AGREEMENT ON LIMITING GREENHOUSE GAS EMISSIONS THAT APPLY RESTRICTIONS
ONLY TO DEVELOPED NATIONS AND EXEMPT OTHER NATIONS
WHEREAS, The United States government is Involved In United Nations negotiations aimed at reducing greenhouse gas amissions in the post-
2000 period; and
WHEREAS, These negotiations are expected to culminate in an agreement by the end of 1997, which will legally bind the United States to reduce
energy usage: and
WHEREAS. The "Bertin Mandate Decision" already specifically exempls all developing countries from emission reduction requirements, which will
preclude meaningful progress worldwide to stabilize carbon dioxide concentrations; and
WHEREAS. The United Nations negotiating parties made a fundamental error when they agreed to negotiate legally binding carbon restrictions on
the United States and other Industrialized countries but agreed to exempt high-growth developing countries like China, Mexico, Brazil, and Korea from
any new carbon reduction commitments; and
WHEREAS, As much as 60 percent of global carbon emissions are expected to come from developing countries in the next few decades; and
WHEREAS, The exclusion of new commitments by developing nations will create a powerful Incentive to export jobs and capital from the United
States, shift greenhouse gas emissions to other countries, and do little or nothing to alabiliza atmospheric concentrations of carbon; and
WHEREAS, Such an uneven playing field will cause the loss of high-paying United States jobs in mining, manufacturing, energy, transport, and
other sectors; and
WHEREAS, Programs to limit greenhouse gases may have the effect of raising energy costs; and
WHEREAS, The United States government has not completed a thorough economic analysis of the effects of a treaty on the United States
economy, even though United States negotiators have been at the bargaining table for over eighteen months and have agreed to a December 1997
deadline for finalizing this far-reaching treaty or protocol; now, therefore, be it
RESOLVED BY THE HOUSE OF REPRESENTATIVES (the Senate concurring), That we urge the President of the United States to reject any
agreement, in Kyoto in December 1997 or later, on limiting greenhouse gas emissions that apply restrictions only to developed nations and exempt other
nations, or that adversely affect the people, prosperity, or employment stability of the United States or any region or sector; and be it further
RESOLVED. That a copy of this resolution be transmitted to the office of the President of the United States and the members of the Michigan
congressional delegation.
Adopted by the House of Representatives, October 29, 1997
Adopted by the Senate, November 13, 1997
Carol Morey Viventi
Secretary of the Senate
Clerk of the House of Representatives
STATE OF MICHIGANS
HOUSE OF REPRESENTATIVES
House Resolution No. 214
Offered by Representatives Alley, Middaugh, Callahan, Schemesser, Birkhotz,
Wetters, Küpatrick, Bodem, Walberg. DeVuyst, McNutt, Skkema, Dalman, Mane and Perricone
A RESOLUTION TO URGE THE ENVIRONMENTAL PROTECTION AGENCY
TO REVISE ITS TIMETABLE FOR PROPOSED RULE MAKING ON OZONE TRANSPORT
TO PROVIDE OPPORTUNITIES FOR REFINED MODELING TO IDENTIFY BOTH BENEFICIAL AND ADVERSE IMPACTS
ON AIR QUALITY IN UPWIND AREAS FROM EMISSIONS CONTROLS INTENDED TO BENEFIT DOWNWIND AREAS
WHEREAS, On November 7. 1997, the Environmental Protection Agency (EPA) released B proposed rule calling on twenty-bve states to revise their State Implementation
Plans to address azone transport and meet specific limits on emissions, The limits will require equal levels of control in the twenty-two states, ignoring studies showing that these
twenty-two states have different impacts on dowmwind sites: and
WHEREAS, Michigan recognizes the challenges presented by transported pollutants. This is a problem that has been especially vexing to the western portions of our
Lower Perinsula. Michigan also believes that, due to variables in climate, topography. and stracepheric chemistry, the adent to which transport causes any given area's 02008
problems can be Quite different from one locale to another, and
WHEREAS, All upwind areas do not contribute equally to poor air quality in downwind areas; and
WHEREAS, EPA relied on different emissions Inventories and modeling assumptions than those used by the Ozone Transport Assessment Group (OTAG) In reaching
their recommendations after two years of study. The EPA disregarded OTAG recommendations cating for the states to conduct additional local and subregional modating over
a twelve-month period. This modeling is essential to better understanding "disbenefits" on upwind areas of some emissions controls compared to the minimal benefits to
downwind areas of those same controls; and
WHEREAS, Other differences between the OTAG recommendations and the EPA's proposed call for State Implementation Plan revisions include OTAG's
recommendations for a wider range of controls, variability for geographic areas, using a one-hour rether than an eight-hour standard, and using an emissions base of 1990
instead of 1995; and
WHEREAS, Given the disagreement over the timelable and means of addressing the transport of 020na, il is prudent to reconsider our response and the expectations
and requirements placed upon the states; DOW, therefore, be it
RESOLVED BY THE HOUSE OF REPRESENTATIVES, That WD urge the Environmental Protection Agency to reconsider is timetable for proposed revisions to State
Implementation Plans and to work with other states and groups of states to 833866 the compatibility of measures to address transport and local air quality in an integrated manner;
and be a further
RESOLVED, That we urge that the EPA's tinal action be based on consideration of all of the following:
1. Michigan's proportional contribution to a specifically identified problem in other states,
2. The ozone benefits and diabenefits that would result from reducing emissions in Michigan and upwind states,
3. The comparative cost of achieving those ozone reductions from controlling emissions in Michigan versus controlling emissions in the downwind states and nearby
states, and
4. An assessment using appropriate modeling
: and be 1 further
RESOLVED, That copies of this resolution be transmitted to the United States Environmental Protection Agency, to the members of the Michigan congressional delegation,
and to the office of the President of the United States.
Adopted by the House of Representatives, March 4, 1998
Clerk of the House of Representatives
STATEMENT OF CONGRESSMAN BOB WISE OF WEST VIRGINIA
BEFORE
THE HOUSE GOVERNMENT REFORM AND OVERSIGHT
SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH, NATURAL
RESOURCES AND REGULATORY AFFAIRS
"CLEAN AIR COMMON SENSE ACT"
APRIL 23, 1998
Mr. Chairman, Members of the Subcommittee, I want to thank you for the
opportunity to testify before you today about global warming and how it is
affecting America.
Global warming is an phenomenon which influences all American's lives
both directly and indirectly. It is the rise in the earth's average climate temperature
due to the build-up of greenhouse gases in the atmosphere. It is argued that in the
future rising levels of greenhouse gases could pose serious threats like flooding,
drought and disease.
Indeed, the earth's atmosphere today is not the same as it was 100 years ago.
The world climate is changing and the United States must do its part to control its
emission of greenhouse gases. But we must approach this in a sound and rational
manner. That is why I have introduced legislation which addresses one of the
contributors to greenhouse gases, Nitrogen Oxide (NOx).
Mr. Chairman, Members of the Subcommittee, as you know, the
Environmental Protection Agency (EPA) is one of the major government agencies
whose mission is to help protect American citizens and interests from
environmental dangers. Recently, the EPA proposed a plan to reduce the amount
of NOx that the United States releases. I commend the EPA for "stepping up to
bat" and taking the initiative to propose such an action. However, I strongly
disagree with the way in which the EPA intends to reach its goal of NOx emission
reduction.
The EPA has decided to target my state, West Virginia, and 21 other states
and the District of Columbia as predominant sources of NOx emissions.
Additionally, the EPA is claiming that we are the reason many Northeast states
can't reach current emissions compliance levels. The EPA's proposal would
require West Virginia to reduce NOx emissions by an additional 44 percent from
reductions already mandated by law. West Virginia would be the single hardest-hit
state by the proposal if it is put in place as written. One estimate says that my state
could lose more than 11,400 manufacturing jobs. Other states face the prospect of
similar consequences.
In reaching its proposals, the EPA ignored recommendations by the Ozone
Transport Assessment Group (OTAG) -- a partnership between the EPA, the
Environmental Council of the States and various industry and environmental
groups. Endorsed by the EPA, OTAG was convened to study how NOx and other
chemicals that affect ozone in the United States travel from one place to another.
It found that NOx emissions only affect locations within a 150 mile radius of their
source. The group said that a community's air quality is not affected by emissions
from locations 500 miles or more away. Translation: emissions from West
Virginia, the mid-west or the south do not affect air quality in Hartford,
Connecticut, 527 miles away, in Portland, Maine, 691 miles away or in Boston,
Massachusetts, 621 miles away.
My legislation, would require the EPA to rewrite its proposed changes in air
quality standards, not eliminate them. It seeks to balance the security of West
Virginia and other state's jobs with a continued clean environment. My bill
requires the EPA to give the states one year to develop new modeling and collect
further data to share with the EPA. This is consistent with the EPA's June 1997
promise that the states participating in OTAG would have up to 12 months to
conduct their own modeling and provide comments to EPA. Lastly, my bill will
set the compliance date five years after the final rule is promulgated. This to is
consistent with EPA's proposed compliance deadline.
Mr. Chairman, Members of the Subcommittee, I am not opposed to emissions
reductions. There is a global climate change taking place and we need to reduce
emissions in this country and around the world. Much needs to be done to reduce
the effects of global warming. However, we need to be cautious when determining
the sources of global warming and placing blame. The greatest tragedy would be
if we did all that the EPA is currently asking and after all the job losses, the air in
the northeast states was no cleaner than it is today. We need a common-sense
approach to reducing emissions and greenhouse gases that are based on science --
not speculation.
###
NEWS
UNITED
STATES
CONGRESSMAN
FROM
71
GEORGE MILLER
4
is
7th District, Calif. Committee on Resources.
CONGRESS
Committee on Education and the Workforce.
2205 Rayburn Building, Washington, D.C. 20515
Statement of the Honorable George Miller
(D-California) Senior Democrat, House Resources Committee
Hearing on Global Warming
Government Oversight Subcommittee on National Economic Growth,
Natural Resources and Regulatory Affairs
April 23, 1998
Mr. Chairman and Mr. Tierney, thank you for the opportunity to testify today on
U.S. efforts to slow global warming.
"The truth is,
steps necessary
long with other Members on today's panel, I had the privilege to be in Kyoto
to curb global
with Chairman Sensenbrenner for the global warming negotiations and I
witnessed the U.S. delegation's diligence in forging a treaty that both protects
warming present
U.S. interests and at the same time sets important goals for slowing global
an enormous
warming.
economic
opportunity for
I believe the United States has the authority and the obligation to lead the way in
the people of the
curbing what is probably the greatest threat to our environment, health and
United States."
economy -- global warming.
And the world is looking for U.S. leadership on this issue. While clearly the solution must include
participation from developed and developing nations, there is much the United States has done and can still
do to reduce greenhouse gas emissions that cause global warming -- emissions that cause immediate health
effects on our children and the elderly, that contaminate our water, air and land, and that cost taxpayers
dearly to clean up.
The truth is, steps necessary to curb global warming present an enormous economic opportunity for the
people of the United States.
The scientific evidence about global warming compels strong action, not a head-in-the-sand approach that
characterizes the organized opposition to the Kyoto protocol and U.S. energy efficiency measures.
Regrettably, opponents of the Kyoto protocol - the same political interests that have opposed most
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Rep. George Miller - page 2
significant environmental legislation this century -- are not only opposing the global warming treaty but
also important existing and new Administration policy initiatives to cut greenhouse gases. These interests
oppose President Clinton's measures to use federal tax dollars to spur public and private research and
development in energy efficiency as a key step to slowing global warming.
They argue that any action that reduces greenhouse gases should be opposed
because it is really a backdoor attempt to implement the Kyoto protocol. The
critics of Kyoto may "charge" the President with trying to reduce greenhouse
"The critics of
gases, but the real crime would be in stopping America from acting in its own
Kyoto may
self-interest by making our economy even more efficient while protecting our
'charge' the
health and the environment.
President with
The American people overwhelmingly support actions to curb global warming.
trying to reduce
In my congressional district, slowing the warming of Earth is considered very
greenhouse gases,
important. In fact, 71 percent of my constituents recently answered in a
but the real crime
questionnaire that they thought the U.S. should take strong steps against global
would be in
warming even if it costs taxpayers more in the beginning to do so.
stopping America
In January, Ohio State University conducted a national survey on American
from acting in its
Public Opinion on Global Warming, finding that 77% of Americans believed
own self-
that global warming has been happening, 67% believe steps should be taken to
combat global warming and that reducing air pollution will be an effective way
interest."
to do so. 88% thought that the US government should limit air pollution from
businesses, and 77% said they were willing to pay more for electricity, gas and
oil to reduce the amount of air pollution.
I am deeply concerned about opposition to steps that will make us more energy efficient. After all, that is
the end result of most efforts to combat global warming.
"Efficiency" has been the drumbeat of this century, and it is astounding what American ingenuity has
achieved. We are always trying to do more with less.
Thanks to American ingenuity we have fiber optic cables that can carry 600,000 simultaneous calls from
Asia to Europe.
The U.S. space program invested tens, probably hundreds of millions of dollars in increasing computing
power and miniaturization technologies. According to Lucent Technology, the first computer had 18,000
vacuum tubes, took up 1,800 square feet, and weighed 30 tons. Today, that same amount of technology
exists in your wristwatch.
Refrigerators today use on average only one-third the energy they did just fifteen years ago because of
improvements in compressors.
Investments in biotechnology have led to breakthroughs that now allow us to produce insulin and other
bio-pharmaceuticals orders of magnitude faster and cheaper than ever before.
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Rep. George Miller - page 3
nd we are already working on a new Internet that will would operate up to a thousand times faster than
oday's does.
I'm sure that critics of the Kyoto protocol support these innovations. And
"How much of this
why not? They have meant thousands more jobs and more money into the
new global market
economy.
will be controlled
But when it comes to raw energy, the global warming critics do not want
by American
efficiency.
companies if
Congress cuts back
Efficiency represents positive change. The opposite of efficiency is waste.
on investments in
And while this change will mean a shift from the energy sector to the
energy efficiency
technology sector, it brings with it far more jobs than would be lost, and it
programs?"
will produce real savings to the average consumer.
The evidence of the benefits of energy efficiency are overwhelming. Numerous studies suggest that a
substantial portion of the reductions necessary to meet the Kyoto protocol can be achieved through energy
efficiency measures. We should embrace that opportunity.
The global market for energy efficiency products and services is $80 billion per year and is expected to
reach $125 billion a year by the year 2015. Several studies estimate that job growth from energy efficiency
and technology innovation will exceed 800,000 new jobs over the next 15 years.
How much of this new global market will be controlled by American companies if Congress cuts back on
investments in energy efficiency programs?
Later today, you will hear testimony from the Wisconsin Bureau of Air Quality on how its efforts to reduce
carbon emissions will create thousands of jobs and increase state residents' incomes. A Denver-based
energy management executive will testify that home and building energy efficiency steps provide stunning
20 percent to 26 percent returns on investment.
The reality is that many of the states with the toughest environmental laws, including my state of
California, are also those with the strongest economies.
It should not be a point of pride to preserve our per capita energy usage, which is the highest in the world
here in the United States. The fact is, while the price of oil and gas are at historic lows today, energy is
expensive and its production and usage are frequently harmful to our health and the environment. All
levels of government and the private sector spend billions cleaning up pollution and dealing with human
health impacts directly or indirectly associated with our dependence on fossil fuels.
It is irrational to object to spending money now to reduce our usage when we can derive the same benefits
using less energy. This kind of investment has always more than paid for itself in the past and there is no
reason to think that it won't continue to do so in the future. But the critics of Kyoto are using global
warming as an excuse to fight cars with higher gas mileage, renewable energy development, and energy
fficiency.
(more)
Rep. George Miller - page 4
Let's remember that it is the same corporate interests that have opposed nearly every energy efficiency and
environmental protection effort this century that have aligned to fight these new efforts. They are, frankly,
Luddites. And they should not be allowed to slow the progress we are making toward a healthier, more
efficient, and more sustainable economy.
On a positive note, I am pleased to see that at least one major corporation, Shell
Oil, USA, recently announced it was dropping out of the corporate coalition
"Contributions
fighting the Kyoto protocol.
from the oil,
coal and auto
And while today's hearing is intended to cause Americans to fear the costs of
industries will
fighting global warming, you will hear from witnesses today about the serious
keep Congress
costs of inaction.
frozen in time,
The worldwide spread of infectious disease, a rise in sea level, more drought and
while the earth
more floods. Worldwide agricultural catastrophe. More mud slides like those in
heats up."
California, or heat wave deaths like those in Chicago.
Instead of pretending the scientists are all wrong, and instead of hiding from the reality that we need to
seek energy alternatives and increase efficiency because of the real threat of global warming and the real
costs of energy, let's view this as an economic opportunity and technological challenge.
This type of challenge has always brought out the best in America. We have the world's cutting-edge
environmental technology and there's plenty more innovation where that came from. The world is moving
forward on greenhouse gas emissions reduction with or without U.S. participation, so let's get in the
business of selling the technology needed to do it.
For those that complain of the cost, there are numerous examples in our history of large investments in
technology that have paid us back in spades.
If we do not continue to support the Administration's greenhouse gas reduction program and work to seek
meaningful participation of all parties in the Kyoto protocol, then the alternative is inaction because of the
politics.
Contributions from the oil, coal and auto industries will keep Congress frozen in time, while the earth
heats up.
###
TESTIMONY OF THE HON. FRANK PALLONE, JR.
BEFORE THE HOUSE COMMITTEE ON
GOVERNMENT REFORM AND OVERSIGHT
APRIL 23, 1998
MR. CHAIRMAN, I APPRECIATE THE OPPORTUNITY TO TESTIFY
BEFORE YOUR COMMITTEE TODAY.
FOR YEARS, I HAVE HEARD MANY MEMBERS OF THIS BODY
AND ELSEWHERE ADOPT A "GLOOM AND DOOM" ATTITUDE ABOUT
THE ECONOMIC DISASTER THAT WILL BEFALL US IF WE IMPLEMENT
ENVIRONMENTAL SAFEGUARDS. HOWEVER, NOT ONLY HAVE WE
NOT SUFFERED ECONOMICALLY FROM WORKING TO PROTECT OUR
ENVIRONMENT, BUT WE HAVE EXPERIENCED AND CONTINUE TO
EXPERIENCE SIGNIFICANT ECONOMIC GROWTH.
IT IS APPROPRIATE TO BE SPEAKING ABOUT ENVIRONMENTAL
STEWARDSHIP ON THE DAY AFTER EARTH DAY 1998;
UNFORTUNATELY, THE PREMISE OF THIS HEARING OBVIOUSLY RUNS
CONTRARY TO A TRIBUTE TO EARTH DAY AND THE GLOBAL
RECOGNITION THAT ENVIRONMENTAL PROTECTION IS CRITICAL. I
WAS VERY DISTURBED TO LEARN THAT SOME KEY PROPONENTS OF
THE KYOTO PROTOCOL FROM THE STATE DEPARTMENT AND OTHER
AGENCIES WERE NOT INVITED TO PARTICIPATE IN THIS HEARING.
THESE EXPERTS WOULD HAVE BEEN ABLE TO HELP THIS COMMITTEE
ANALYZE THESE IMPORTANT ISSUES MORE COMPLETELY AND
ACCURATELY.
SEVERAL REPUBLICAN REPRESENTATIVES YESTERDAY EVEN
RECOGNIZED EARTH DAY AND THE IMPORTANCE OF
ENVIRONMENTAL PROTECTION ON THE HOUSE FLOOR. WE HAVE A
RESPONSIBILITY TO PROTECT OUR NATURAL RESOURCES AND
MAINTAIN THE BIODIVERSITY OF OUR ECOSYSTEMS FOR THE
CURRENT GENERATION AND FOR OUR CHILDREN. I, FOR ONE, HAVE
THREE CHILDREN UNDER THE AGE OF FIVE AND HAVE BEEN
INVOLVED IN ENVIRONMENTAL PROTECTION, ESPECIALLY COASTAL
STEWARDSHIP EFFORTS FOR YEARS, HAVING GROWN UP NEAR THE
NEW JERSEY COAST. MITIGATION OF GLOBAL CLIMATE CHANGE IS
ALSO OUR RESPONSIBILITY FOR OUR GENERATION AND FOR OUR
CHILDREN. FURTHER, THE SCIENCE IS PRETTY CLEAR THAT HUMAN
ACTIVITY IS AFFECTING OUR GLOBAL CLIMATE. TO WHAT EXTENT,
WE'RE NOT SURE. BUT ENOUGH TO WARRANT PRACTICAL ACTIONS
NOW. REGRETTABLY, THE POLICY DEVELOPMENT IS FAR BEHIND
THE SCIENTIFIC EVIDENCE ON GLOBAL CLIMATE CHANGE. I LOOK
FORWARD TO WORKING CONSTRUCTIVELY WITH THE
ADMINISTRATION AND MEMBERS OF CONGRESS THROUGH THE
APPROPRIATE CHANNELS IN THE COMING MONTHS ON THESE ISSUES.
DURING THE PAST QUARTER CENTURY, PEOPLE COMPLAINED
OFF AND ON ABOUT THE HARDSHIPS THAT ENVIRONMENTAL
REGULATION AND PROTECTION WOULD CAUSE. THESE SAME
PEOPLE ARE COMPLAINING ABOUT THE POTENTIAL NEGATIVE
ECONOMIC IMPACTS THAT MIGHT OCCUR IF WE WORK TO SLOW THE
RATE OF GLOBAL CLIMATE CHANGE. BUT ADDRESSING CLIMATE
CHANGE CAN BE VIEWED JUST AS EASILY IN A POSITIVE LIGHT. IT
PROVIDES AN OPPORTUNITY FOR ECONOMIC GROWTH,
TECHNOLOGICAL INNOVATION, JOB CREATION, AND IMPROVING
OUR NATION'S EFFICIENCY. ACTIONS NOW ALSO COULD PREVENT
LARGER ECONOMIC LOSSES IN THE FUTURE.
MITIGATING GLOBAL CLIMATE CHANGE WILL INVOLVE
INCREASING THE EFFICIENCY OF OUR TRANSPORTATION, UTILITY,
BUILDING AND INDUSTRIAL SECTORS. EFFICIENCY SAVES ENERGY
AND MONEY WHILE SIMULTANEOUSLY REDUCING GREENHOUSE GAS
EMISSIONS. IN OTHER WORDS, EFFICIENCY MEASURES PROVIDE A
WIN-WIN SITUATION FOR EVERYONE. ACCORDING TO ENERGY
EXPERT, AMORY LOVINS, THE U.S. HAS ACHIEVED ONLY ABOUT 2%
OF ITS POTENTIAL IN ENERGY EFFICIENCY, AND WE WASTE NEARLY
$300 BILLION IN ENERGY EVERY YEAR -- MORE THAN THE DEFENSE
BUDGET AND FEDERAL DEFICIT COMBINED.
YESTERDAY, IN A TRIBUTE TO EARTH DAY, TOYOTA MOTOR
SALES, U.S.A., ANNOUNCED THAT IT WILL SOON BECOME THE
LARGEST SINGLE USER WORLDWIDE OF 100% RENEWABLE POWER AS
AN INVESTMENT IN THE ENVIRONMENT. THE COMPANY ESTIMATES
AN ANNUAL USAGE OF 38 MILLION KILOWATT HOURS IN
RENEWABLE ENERGY, WHICH DEMONSTRATES ITS LEADERSHIP IN
CLEAN AIR INITIATIVES.
PREVENTION AND MITIGATION MEASURES WILL HELP
PRESERVE THE HEALTH OF OUR ENVIRONMENT FOR FUTURE
GENERATIONS AND REDUCE THE NEED FOR POTENTIALLY MORE
SEVERE ACTIONS AND MORE SUBSTANTIAL LOSSES AT A LATER
DATE IF WE DO NOT ACT NOW. SECRETARY OF STATE MADELEINE
ALBRIGHT MADE A SIMILAR STATEMENT IN AN EARTH DAY
ADDRESS EARLIER THIS WEEK. SHE SPOKE OF THE RESPONSIBILITY
AND RESPECT WE NEED TO DEMONSTRATE TO
OURSELVES, THOSE IN OTHER COUNTRIES, AND FUTURE
GENERATIONS BY PROTECTING OUR RESOURCES AND OUR GLOBAL
CLIMATE.
FORTUNATELY, MANY U.S. COMPANIES ARE RECOGNIZING THE
FINANCIAL BENEFITS OF OPERATING IN AN ENVIRONMENTALLY
SUSTAINABLE MANNER. FIRMS ARE USING THE INNOVATION THAT
HAS EVOLVED IN OUR COUNTRY OVER MANY DECADES TO DEVELOP
AND EXPORT MORE EFFICIENT AND ALTERNATIVE ENERGY
TECHNOLOGIES. IN FACT, MANY COMPANIES ARE EXPRESSING THE
DESIRE TO BE INDUSTRY LEADERS AS THESE CHANGES EVOLVE. IN
NEW JERSEY, ONE GROUP OF COMPANIES HAS IMPLEMENTED
ENERGY EFFICIENCY PROJECTS THAT ALREADY HAVE RESULTED IN
NEARLY $20 MILLION IN SAVINGS AS WELL AS A REDUCTION IN CO2
EMISSIONS BY AN ESTIMATED 23,000 TONS, SULFUR DIOXIDE BY TWO
TONS AND NOX BY MORE THAN 120,000 POUNDS.
FURTHER, IF WE DO NOT CONTINUE TO DEVELOP ENERGY
EFFICIENT AND RENEWABLE ENERGY TECHNOLOGIES, AND EXPORT
THESE TECHNOLOGIES, WE WILL LOSE OUR COMPETITIVE EDGE IN
THESE MARKETS. MANY OTHER NATIONS RECOGNIZE THE VALUE
AND NEED FOR SUCH TECHNOLOGIES, AND ARE EXPORTING TO
DEVELOPING NATIONS AS WE SPEAK.
FOR THE ABOVE REASONS, I AM DISTURBED TO LEARN THAT
MANY MEMBERS ARE SPEAKING OUT AGAINST THE PRESIDENTS
CLIMATE CHANGE TECHNOLOGY INITIATIVE. THIS INITIATIVE
ENCOMPASSES MANY VALUABLE PROGRAMS, MOST OF WHICH ARE
NOT NEW. MANY OF THESE VOLUNTARY PUBLIC-PRIVATE
PARTNERSHIPS, SUCH AS THE ENERGY STAR PROGRAMS, HAVE
EXISTED FOR SEVERAL YEARS AND HAVE FOSTERED INNOVATION
AND RESULTED IN SAVINGS TO INDUSTRY AND CONSUMERS IN
ENERGY, MONEY, AND REDUCTIONS IN GREENHOUSE GAS
EMISSIONS. THUS, I WOULD URGE SUPPORT FOR BOTH R&D FUNDING
AND TAX CREDITS TO DEVELOP AND IMPLEMENT ENERGY
EFFICIENCY MEASURES, THAT SAVE BOTH ENERGY AND MONEY,
PROMOTE TECHNOLOGICAL DEVELOPMENT FOR DOMESTIC AND
INTERNATIONAL USE, AND REDUCE GREENHOUSE GAS EMISSIONS.
AS I BRIEFLY MENTIONED, WE ARE LIKELY ALREADY
EXPERIENCING THE EFFECTS OF CLIMATE CHANGE, BECAUSE SMALL
CHANGES IN MEAN TEMPERATURE CAN RESULT IN LARGER
CHANGES IN SEVERE WEATHER EVENTS. DR. JAMES BAKER OF NOAA
REITERATED THIS POINT JUST THIS WEEK. MORE SEVERE WEATHER
EVENTS WILL MEAN THAT WE HAVE LESS TIME TO ADAPT, WHICH
COULD RESULT IN SUBSTANTIAL SOCIOECONOMIC AND OTHER
IMPACTS.
AND, INDUSTRY AND GOVERNMENT OFFICIALS OFTEN FAIL TO
ACCOUNT FOR THE COSTS THE U.S. WOULD INCUR IF WE DID NOT
ACT IN THE NEAR TERM TO MITIGATE AND PREVENT FURTHER
BUILDUP OF GREENHOUSE GAS CONCENTRATIONS. COSTS MUST
INCLUDE WEATHER-RELATED, HEALTH, AND SOCIOECONOMIC
IMPACTS.
THE RESIDENTS OF NEW JERSEY'S SIXTH DISTRICT, MYSELF
INCLUDED, HAVE EXPERIENCED THIS FIRST-HAND: PRECIPITATION
IN PARTS OF NEW JERSEY HAS INCREASED BY 5-10% OVER THE LAST
CENTURY AND IS EXPECTED TO INCREASE. THE OCEANFRONT
PROPERTY IN THE DISTRICT ALREADY HAS EXPERIENCED THE
EFFECTS OF RECENT STORMS. FORTUNATELY, WE BENEFITED FROM
AN ARMY CORPS BEACH REPLENISHMENT PROJECT THAT
PREVENTED AND MITIGATED THE ADVERSE EFFECTS OF THESE
STORMS. AS A RESULT, MY DISTRICT EXPERIENCED LESS DAMAGE.
WHILE NEAR-TERM MEASURES WILL NOT ELIMINATE CLIMATE
CHANGE IMPACTS, NOR THE COSTS THEREOF, THEY WILL MITIGATE
THE POTENTIAL LONGER-TERM IMPACTS. HOWEVER, SEVERE
WEATHER EVENTS THAT USED TO OCCUR OVER CENTURIES, NOW
ARE OCCURRING OVER DECADES.
THE U.S. HAS AGREED TO A SEVEN PERCENT REDUCTION IN
GREENHOUSE GAS EMISSIONS BELOW 1990 LEVELS, WHICH MAY NOT
EVEN SUFFICIENTLY REDUCE THESE TYPES OF IMPACTS.
MOREOVER, THE BURDEN ON OUR ECONOMY IS BEING REDUCED,
BECAUSE CARBON SINKS (E.G., FORESTS) ARE BEING USED IN
ACCOUNTING FOR THIS PERCENTAGE REDUCTION. A NUMBER OF
FLEXIBLE MECHANISMS ALSO HAVE BEEN INCORPORATED INTO THE
PROTOCOL, SUCH AS EMISSIONS TRADING, TO FACILITATE MEETING
THIS TARGET.
I ALSO WOULD LIKE TO BRIEFLY ADDRESS THE DEVELOPING
COUNTRY ISSUE. BOTH THE ADMINISTRATION AND CONGRESS
CONCUR THAT MORE MEANINGFUL PARTICIPATION BY DEVELOPING
COUNTRIES IS NECESSARY. THE KYOTO PROTOCOL WILL NOT BE
SUBMITTED TO THE SENATE WITHOUT "MEANINGFUL
PARTICIPATION" BY THESE NATIONS. TO STATE THAT THE KYOTO
PROTOCOL DOES NOT CONTAIN ANY PROVISIONS FOR DEVELOPING
COUNTRY PARTICIPATION IS SIMPLY NOT TRUE. THERE ARE
PROVISIONS FOR DEVELOPING COUNTRIES TO DEVELOP NATIONAL
EMISSION REDUCTION PLANS. THE CLEAN DEVELOPMENT
MECHANISM ALSO IS DESIGNED TO INCORPORATE DEVELOPING
COUNTRY PARTICIPATION.
WE SHOULD BOLSTER THESE OPPORTUNITIES. AND, EFFORTS
AT OUR HIGHEST DIPLOMATIC LEVELS ARE UNDERWAY TO
ACCOMPLISH THESE GOALS. HOWEVER, WE SHOULD NOT USE THIS
AS AN EXCUSE FOR U.S. INACTION IN THE GLOBAL CLIMATE CHANGE
ARENA. THE U.S., AS A WORLD LEADER, HAS SHOWN LEADERSHIP ON
MANY ENVIRONMENTAL ISSUES IN THE PAST. IN KYOTO, 160
NATIONS AGREED TO COOPERATE TO REDUCE GLOBAL GREENHOUSE
GAS EMISSIONS. ONLY THE U.S. CONGRESS IS PROTESTING
PROACTIVE ATTEMPTS TO ACHIEVE THIS GOAL. AS THE NATION
RESPONSIBLE FOR 22% OF GLOBAL EMISSIONS, FAILURE ON OUR
NATION'S PART TO ACT WOULD BE UNACCEPTABLE. IT WOULD
SHOW A LACK OF LEADERSHIP, AND WOULD ABDICATE OUR
RESPONSIBILITY FOR THE EFFORTS WE UNDERTOOK AT THE RIO
SUMMIT TO REDUCE OUR GREENHOUSE GAS EMISSIONS IN ORDER TO
STABILIZE GREENHOUSE GAS CONCENTRATIONS IN THE
ATMOSPHERE.
I HOPE THIS COMMITTEE AND ALL OF CONGRESS WILL TAKE A
MORE POSITIVE AND PROACTIVE APPROACH TOWARD THIS
PROBLEM AS WE CONTINUE TO ADDRESS CLIMATE CHANGE IN
BUENOS AIRES AND BEYOND.
Written Testimony of Donald Crawford
Automobile Worker from Pendleton, Indiana
U.S. House of Representatives
Committee on Government Reform and Oversight
Subcommittee on National Economic Growth,
Natural Resources and Regulatory Affairs
April 23, 1998
Mr. Chairman, and members of the subcommittee, my
name is Don Crawford and I come here today
representing myself, and to testify because of my
concerns over the Global Climate Change Treaty that
was recently negotiated in Kyoto, Japan. I work as
a model-maker in the automotive parts division of
Guide Lamp, a company that designs and manufactures
automobile lighting for General Motors. I am also a
member of the United Auto Workers union.
I have a wife and 3 children, and I live in
Pendleton, Indiana. Pendleton is a small community
whose economy is mostly based on agriculture and
the auto industry.
After reviewing the projected changes the Global
Warming Treaty will bring about in America, I feel
this treaty could destroy many industries, but none
more so than agriculture and the automobile
industry.
The energy crisis of the seventies caused Anderson
to be the unemployment capital of the United
States. It devastated the factories and they will
never recover. Delco Remy went from 16,000
employees in 1972, to 8,000 employees in 1980, then
to 2,500 employees today. Guide Lamp, where I am
employed, went from 4,500 employee in 1972, to
3,500 employees in 1980, down to 2,800 employees
today.
Many of these jobs went overseas and to Mexico,
because of treaties such
as The Kyoto Protocol, which are unfair to American
workers.
Another sad consequence of this trend, which is too
often overlooked, is the loss of jobs for our young
people. Before the energy crisis, young people in
the Pendleton area were secure in staying in
central Indiana because of good factory jobs.
Today, the average age of factory workers in this
part of the country is 43. My own 3 children are
moving out of Indiana because of the lack of decent
job opportunities.
Because of higher fuel prices, many of the farmers
in Indiana went deeply in debt to buy newer, more
fuel efficient equipment. The farmers from my state
just can't take another drastic regulatory hit and
continue to stay in business.
Today we are being told we are not just citizens of
the United States, but also citizens of the world.
I can accept the thinking behind that, and as a
citizen of the world, I am concerned about global
pollution. This treaty just encourages us to export
our fossil fuel emmissions to Third World
countries, along with our jobs. It does not make
sense.
It is well-known that there are factories located
north and south on the Rio Grande River, which are
owned by the same company. The factory on the
north side of the river must be clean, and has
standards for pollution that are strictly enforced.
The factory on the south side is filthy, and has
loose pollution standards that are not enforced.
All the Kyoto Protocol seems to do is encourage
those companies to move their entire operation out
of the U.S.
As a world citizen I am also concerned about our
food supply. If the proposed pollution restrictions
drive more of my farming neighbors out of business,
who will feed the world. Can these emerging
nations begin producing the tens of billions of
bushels of grain the farmers in the
Midwest grow for the world each year? Can they do
it in a less polluting manner than we do?
I believe we need treaties that make all countries
meet the same standards. The so-called emerging
nations need to develop as non-polluters. The Kyoto
Protocol as written, encourages just the opposite.
Higher fuel prices; higher food costs; higher
prices for all goods produced in the United States,
will hit no one in our society harder than the
young, the old and the poor. Fewer jobs
opportunities caused by factories moving to
countries not covered by this treaty, will hurt our
young just coming into the work force. The elderly
living on fixed incomes will be paying more for
goods, food, energy and transportation. The poor
will just have to do with less.
I want a pollution-free world for my children and
their children, but what we need are treaties that
cause all polluting nations to have the same
standards. I don't see that happening with this
treaty. I hope that it will not be adopted by our
government in its current form.
I appreciate the fact that I could come here and be
heard on this important issue. Also, I have not
received any federal grants or contracts in the
fiscal year 1998.
Mr. Chairman, and members of this subcommittee, I
want to thank you for taking the time to hear my
concerns regarding the Kyoto Protocol.
TESTIMONY
REPRESENTATIVE KEN CALVERT
SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS
COMMITEE ON GOVERNMENT REFORM AND OVERSIGHT
April 23, 1998
Mr. Chairman, thank you for inviting me to testify today and
let me commend you for holding this timely hearing. At a time of
unparalleled prosperity, the American people need to know if they
should put the nation's economy at risk over a theory on what the
world's climate will be 100 years from now.
By shedding light on the potential impact of the Kyoto
Protocol on "real people," as you have ably described it, you can
help pierce the "fog machine" set up by Vice President Gore and
others on this issue.
At the outset, I should point out that the Energy and
Environment Subcommittee, which I chair, has given strong
bipartisan support to climate change research by the National
Oceanic and Atmospheric Administration. This research has
produced great advances in forecasting weather phenomena such
as El Nino. No one should confuse skepticism about the Kyoto
Protocol with support for long term climate change research.
As you know, our Subcommittee held three "Countdown to
Kyoto" hearings before the December conference. I attended the
conference as a member of the House delegation.
2
Following the conference, Science Committee Chairman Jim
Sensenbrenner, who had led the delegation, held three "Road
From Kyoto" hearings.
I would like to share with you a little of what we learned at
those hearings, in particular as it bears on the topic before you
today.
First, as to the science, it is clear there is no consensus on
precisely how or if increases in greenhouse gas emissions will
affect the world's climate.
Scientists continue to speak out despite severe pressure
from the Administration to tow the line. For example, the
Secretary of the Interior implied recently that any scientist who
disagreed with him on global warming was "un-American."
Nevertheless, just two weeks ago, at the National Hurricane
Conference in Virginia, Neil Frank, a familiar face from his days as
Director of the National Hurricane Center in Miami, said that
"climate change has nothing to do with carbon dioxide," that "the
atmosphere is too complex and the computers too slow to make
long-term climate forecasts."
Next, as to the economic effects. David Montgomery of
Charles River Associates, a recognized expert on the economics
of energy policy, told us he found the Administration claim that
technologies will be deployed between now and 2010 that would
reduce emissions sufficiently to meet the Kyoto mandate at no
cost to be "extremely implausible."
3
We heard Michael Buckner of the United Mine Workers say
that independent economic studies they commissioned from
DRI/McGraw Hill and the Economic Policy Institute showed
reductions in greenhouse gases of the magnitude called for in the
Protocol would result in "lost jobs, lost wages, higher energy
prices and higher trade deficits that would create a perverse
economic incentive for American companies to relocate their
operations abroad."
Dr. Jay Hakes, the Administrator of the Department of
Energy's own Energy Information Administration, testified the
Kyoto Protocol would require a 31 percent reduction in carbon
emissions from what could be expected around 2010. In a
remarkably candid statement for an Administration official, Dr.
Hakes went on to say that "it is unlikely the adjustments can be
achieved without a significant price mechanism" and that any
price mechanism selected would "slow somewhat the rate of
economic growth." Now, translating that into plain English,
Hakes is saying that no matter how you look at it, implementing
the Kyoto Protocol means higher energy prices that will hurt the
economy.
Finally, let's look at the end result. Even if you accept the
Gore "apocalypse" theory of global warming, and even if you
believe that the threat is so serious it is worth sacrificing our hard-
won prosperity to meet it, we have an agreement that won't
work.
4
Again, just yesterday, the Energy Information
Administration, in its 1998 International Energy Outlook, stated
that "even if the parties to the Kyoto Protocol were able to
achieve the proposed target reductions, worldwide emissions
levels would continue to rise by 32 percent between 1990 and
2010."
The Protocol does not include some of the fastest-growing
countries in the world, including China. Domestically, it excludes
whole groups of emissions, including Defense Department
equipment and aircraft, which we now know to be one of the
biggest emitters of greenhouse gases.
So, Mr. Chairman, who will the burden fall on? Why, our
constituents, of course. Yours in Muncie and mine in Riverside. It
is the Administration's hope that resistance from the American
people to imposing these burdens can be overcome by doomsday
scenarios of apocalyptic floods and diseases and tactics designed
to demonize the opposition.
So it is all the more important that hearings like this one
continue to be held throughout the process and I look forward to
learning more from the testimony today.
Again, thank you for the opportunity to appear here today.
"Kyoto Protocol: Is the Clinton-Gore Administration Selling out
America"
Committee on Government Reform and Oversight
Subcommittee on National Economic Growth, Natural Resources, and
Regulatory Affairs
Statement by Representative Ralph M. Hall
April 23, 1998
MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE, I am pleased to
join with my colleagues today to again express my interest and
concern about the Global Climate Change deliberations and
specifically the economic impact of the Kyoto Protocol proposals.
Economic Concerns
In our society that has become so dependent on energy from
fossil fuels, whether it be in the form of electricity or
automobiles, mandated reductions in greenhouse gas emissions as
proposed in Kyoto, could have devastating effects on our economy
and our way of life. The estimates for the cost of the
reductions range from a low of $14-$23 per ton of emissions, up
to $95 per ton. This could mean a price increase in the cost of
gasoline by as much as 26 cents per gallon as well as a drastic
increase in the cost of natural gas, coal, and electricity. As
the President of the U.S. Chamber of Commerce Thomas Donohue
said, "Economic chaos could ensue." This would be another layer
of emission reductions on top of the Clean Air Act's mandated
reductions that U.S. companies would be required to shoulder.
There is a breaking point to this bull economy, and if we
continue like this, we may reach that point. How we will pay for
these reductions has yet to be laid out. Whether this will come
in the form of higher taxes on gas and oil or higher electricity
prices, we don't know, but that there will be a cost is
unmistakeble.
So much of this treaty is based on unknowns. There is still
tremendous controversy within the scientific community as to
whether or not human caused emissions of greenhouse gases are
even affecting the climate. If the world's leading
climatologists cannot agree on this issue, how can we blindly
charge down a path that may destroy our economy? Obviously, we
need to continue to support good scientific study on the issue as
we move forward.
The other unknowns deal with how the administration will pay
for these new research and tax incentive programs that it has
outlined in the budget agreement. The funding is primarily based
on our anticipated budget surpluses and tax changes which are yet
to be agreed to by this Congress, and may not materialize.
If our reasoning for emission reductions are in doubt, and
our funding for meeting those reductions is in doubt, something
is amiss. The treaty sets forth, but does not define,
International Emissions Trading, whereby a company or nation
could trade with another nation or company in order to meet its
emission requirements. The treaty also allows for the Clean
Development Mechanism, that allows companies to receive credit
for development projects that reduce emissions in other
countries. We are lead to believe that both of these programs
could help tremendously in the implementation of the treaty, but
we have no idea how these programs will function. Obviously, we
need to know more about this developing initiative. Even so,
many companies have already begun projects that would give them
emission credits under a trading program or under the clean
development program. For example, BP America has signed a deal
with the government of Bolivia and the Nature Conservancy to
protect 2.1 million acres of forest land, and Royal Dutch Shell
will spend $500 million over the next five years planting trees
in New Zealand and Chile. They are to be commended for this
futuristic commitment. Hopefully by this summer we will have a
better idea as to how the trading and credit programs will
operate under the treaty.
Ratification by the Senate
Currently the Administration has not said when or if it will
submit the treaty for ratification to the Senate, but has
repeatedly stated in hearings in the Subcommittee on Energy and
Power that it will not submit the treaty unless it can gain
meaningful participation by developing countries, and I urge the
Administration to hold fast to this principle. The Secretary of
State backed up that statement this week in her announcement of a
"full court press" to achieve this participation, and that is
indeed reassuring news. It is widely believed that there can be
no progress in reducing emissions unless the developing nations
agree to reduce their emissions as well.
Currently the developing nations account for only 27% of the
world wide total of carbon emissions, while the developed world
accounts for 73%. However, by 2035 the developing world will be
responsible for 50% of carbon emissions, and the single largest
contributor will be China. This means that when the necessity
for reducing emissions is highest, the countries contributing the
most to global carbon emissions, will be outside the realm of
this treaty. Without the participation of countries like China,
Brazil and India, this treaty is almost a useless and expensive
exercise. Unfortunately, developing nations see mandatory
reductions as a way in which the developed nations can hold back
the economic development of the developing nations rather than a
way to protect the global environment for our children. Gaining
"meaningful participation" is a must before this treaty can even
be considered viable, and this is something the Administration
has committed to do at the next negotiations in Buenos Aires in
November of this year. The President tried to drum up support for
this at the Summit of the Americas in Santiago, Chile over the
past few days, but we have not heard whether or not he was
successful.
The current budget includes many proposals and programs that
deal with climate change and emission reductions which are mainly
focused on R&D. I commend the Administration for its focus on
R&D, but I must say that it is imperative that we not by-pass the
Senate on this issue. The Senate should have a chance to say yea
or nay to the treaty before we seek to pass implementation
legislation. This is not an anti-environmental position; it is
not an anti -Administration position; it is a pro-Constitution and
a pro-balanced budget amendment position. We have set up a
system of checks and balances that must be followed, especially
on an issue as contentious as the one before us now.
Our challenge is how we all move forward in addressing our
global environmental issues while maintaining our strong and
vibrant companies in America and abroad.
Thank you.
JOSEPH K. KNOLLENBERG
COMMITTEE ON APPROPRIATIONS
11TH DISTRICT. MICHIGAN
SUBCOMMITTEES:
ENERGY AND WATER
1511 LONGWORTH HOUSE OFFICE BUILDING
FOREIGN OPERATIONS
WASHINGTON, DC 20515
Congress of the United States
VA-HUD
202-225-5802
COMMITTEE ON EDUCATION AND THE
DISTRICT OFFICES:
30833 NORTHWESTERN HIGHWAY
house of Representatibes
WORKFORCE
SUITE 100
SUBCOMMITTEE
FARMINGTON HILLS, MI 48334
Washington, DC 20515-2211
VICE-CHAIRMAN
248-851-1366
EMPLOYER-EMPLOYEE RELATIONS
15439 MIDDLEBELT
COMMITTEE ON STANDARDS OF
LIVONIA, MI 48154
OFFICIAL CONDUCT
734-425-7557
Paul F. Welday
April 23, 1998
CHIEF OF STAFF
TESTIMONY ON THE KYOTO CLIMATE CHANGE TREATY
BY
REPRESENTATIVE JOE KNOLLENBERG
BEFORE THE SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS
Mr. Chairman, I appreciate having the opportunity to testify today about the
UN treaty on climate change that was recently negotiated in Kyoto, Japan.
As a member of the congressional delegation that monitored the negotiations of
this treaty last December, I was outraged by the final agreement.
This treaty is a terrible deal for the United States: As members of Congress, we
have an obligation to ensure that its provisions are not implemented.
The Kyoto treaty requires the United States to reduce its emissions of
greenhouse gases by 7% below 1990 levels by the years 2008-2012. To meet this
stringent requirement, the United States would have to dramatically reduce its use of
energy.
PRINTED ON RECYCLED PAPER
What does this mean to the average American? Simply put, if the Kyoto treaty
is ratified by the U.S. Senate, the American people will see their standard of living
decline.
The Wharton Econometric Forecasting Associates (WEFA); a well-respected
economic firm, has estimated that the Kyoto treaty would result in Americans paying
almost 50 cents more for a gallon of gasoline and 600 dollars more a year for household
utilities. WEFA also estimates that this treaty could result in the United States losing
over a million jobs a year over a 15-year period.
Mr. Chairman, the drastic impact the Kyoto treaty would have on the U.S.
economy is reason enough to oppose this misguided treaty, but there are several other
reasons.
Allow me to offer two of them:
First, the Kyoto treaty is unfair. This treaty exempts 132 of the world's 166
nations from making any reductions in their emissions of greenhouse gases. This is
problematic because nations like China, India, Mexico, and Brazil, which are exempted
from the treaty are projected to be the largest emitters of greenhouse gases in the next
century.
Therefore, even if global warming was a problem that could be addressed by
reducing the emissions of greenhouse gases, this treaty wouldn't get the job done.
Second, the scientific community is divided on the issue of whether or not the
emissions of greenhouse gases are causing the earth's temperature to warm. Global
warming is only a theory. It is not a fact.
Mr. Chairman, given the lack of sound science on this issue, I believe it would
be foolish to inflict the severe economic pain this treaty would cause on the American
people.
Fortunately, there is strong opposition to this treaty in the Senate. That said, I
believe it's important to continue monitoring this issue. I am concerned that the
Clinton Administration, lacking the votes to win ratification in the Senate, will
attempt to accomplish the goals of the Kyoto treaty through regulatory fiat.
Congress must ensure that this doesn't happen. We have an obligation to
protect the integrity of the legislative process and to defend the economic interests of
our nation against the over-reaching UN treaty on climate change.
Mr. Chairman, thank you once again for allowing me to testify today. I look
forward to working with you and the other members of the committee on this very
important issue.
Jun-08-98 03:02P Climate Change Task Force
P.01
To: Joe AUDY
5-6958
FR: MARTHA WORFORD
10 PAGES
DEAR COURAGUE $ TESTIMONY RE: WISCONSIN Sinoy
Jun-08-98 03:02P Climate Change Task Force
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SCOTT KLUG
APR 30 1998
COMMERCE COMMITTEE
3000NB WISCONSIN
NNANCE AND HAZAHOOUS MATERIALS
HEALTH AND THE ENVIRONMENT
Congress of the United States
TELECOMMUNICATIONS. IRAUE
AND CONSUMER PROTECTION
CHAIR.
House of Representatives
MEPUBI ICAN TASK FORCE ON
PRIVATIZATION
Mashington, BC 20515-4902
April 30, 1998
Dear Colleague:
As you probably know, states are being asked to develop strategies to help reduce the
amount of greenhousc gases that are emitted into the atmosphere. Wisconsin, like many
other states, has played an active role in researching, developing and implementing
mitigation strategies to reduce greenhouse gas emissions. Most of the research has focused
on the direct costs and benefits of implementing these strategies, with little Information for
decision makers regarding how these strategies might affect the regional economy.
A team of individuals, including representatives from the Wisconsin Department of
Natural Resources, the University of Wisconsin, the Consortium for Integrated Resource
Planning. and the Leonardo Academy, under the auspices of the Department of Energy's
Energy Fitness Program, collaborated in a study to determine regional effects. The study
also identified low cost strategies for reducing greenhouse gas emissions in Wisconsin. It is
intended to serve as the foundation for a Wisconsin Climate Change Action Plan.
Among other findings, the study concluded that:
* Low cost measure are available to reduce greenhouse gas emissions.
Implementing emission reduction measures that are cost effective would reduce
greenhouse gas emissions in 2010 by 24%, with nct savings.
* Implementing emission reduction measures costing up to $30 per ton and
would reduce greenhouse gas emissions in 2010 to approximately 1990 levels and
could have an overall net cost of about zero.
I encourage you to take a look at the report, a copy of which can be obtained by
calling Katherine Hahn in my office. If you have any questions or would like to discuss the
results of the study, please contact Michael Amy, director of the Leonardo Academy at (608)
255-0988.
Sincerely,
Scoul L. Klug
PLEASE RESPOND TO.
2331 RAYEVAN House DAFE BUILDING
16 NORTH CARROLI STATES
WASHINGTON, nc 20515-1302
Room 600
(202) 215-2806
MADISON, W 53703
THIS MAILING WAS PREPARED, PUBLISHED. AND MAILED AT TAXPAYER EXPENSE
180%) 267-$200
THIS STATIONERY PRINTED ON PAPER MADE OF RECYCLED FIBERS
Jun-08-98 03:02P Climate Change Task Force
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Climate Change and Wisconsin
Testimony by Lloyd L. Eagan
Director, Bureau of Air Management
Wisconsin Department of Natural Resources
to the
House Subcommittee on National Economic Growth, Natural Resources and Regulatory
Affairs
April 23, 1998
The Wisconsin Department of Natural Resources considers global climate change to be a
potentially serious threat to the natural resources of Wisconsin with significant economic
ramifications. In light of the duality of the nature of the Global Climate Change problem, it is
particularly appropriate that it is being considered by this subcommittee which has
responsibilities for both economic and natural resources concerns. I feel very privileged to
have the opportunity to share some of the climate change work we have done in Wisconsin
with you today. My testimony summarizes the work of four studies which we have completed
in Wisconsin over the past six years. Because of the potential threat of climate change. we
believe that greenhouse gas emissions in Wisconsin should be reduced through actions which
have other significant economic and environmental benefits. This testimony summarizes how
climate change could affect Wisconsin and highlights reduction measures the state is
considering.
There are many potential negative impacts of climate change on Wisconsin. We identified
potential impacts based on studies which assume that Wisconsin's average temperature will
increase by several degrees over the next 50 to 100 years. These impacts may or may not
occur, or may partially occur, depending on the extent of the warming and how the existing
climate reacts to these changes.
Expected Impacts of Global Climate Change on Wisconsin's Weather
Wisconsin's climate under climate change is expected to generally be warmer and dryer.
Precipitation may increase or decrease, but the warmer conditions and increased evaporation
will lead to dryer conditions. We expect more heat waves and more frequent droughts. We
expect that there will be less snow cover and that more precipitation will fall as rain during
winter. Scientists expect to see more frequent severe storms than we presently get due to
warmer conditions and more moisture in the air.
These changes in Wisconsin's weather and climate will, if they occur, significantly affect
Wisconsin's environment and natural resources.
Jun-08-98 03:03P Climate Change Task Force
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Potential Impacts on Wisconsin Water Resources
All of Wisconsin's water resources could be affected, including the great lakes - Superior and
Michigan, our inland lakes, rivers and streams, and our groundwater. Under a global climate
change scenario, we expect higher water temperatures, longer thermal stratification of lakes,
including the great lakes, shorter ice cover duration, and lower water levels.
Scientists have estimated that water levels in the great lakes could decrease by several feet.
This could affect great lakes shipping, and require significant expenditures for dredging and, in
some cases, the rebuilding of port and docking facilities. If these environmental impacts
occur, the would result in extremely negative economic impacts. In addition, lower water
levels in lakes and streams could lead to increased concentrations of pollutants in the water and
wasteload allocation problems. There could be less water available for irrigation and other
uses, and wetlands could dry up or experience fluctuating water levels.
These changes in water resources, if they occur, would affect other natural resources. For
instance, some fish would find it more difficult to live in Wisconsin's waters. Cold water
species, such as trout, may be driven north and be replaced with warm water species.
Agricultural Impacts
Agriculture is one of Wisconsin's top three economic sectors. It supports $790 million in
agricultural economic activity in the state annually (Wisconsin Blue Book 97-98). Agriculture
is very dependent on climate and weather patterns. If Wisconsin becomes warmer and dryer.
agriculture could be significantly affected. Some crops would have difficulty dealing with
dryer conditions and more frequent droughts. The crops traditionally grown in Wisconsin
(such as corn and soybeans) may have to be replaced with more heat and drought resistant
crops like wheat. Some scientists expect a post-giobally-warmed Wisconsin to look more like
Kansas. More irrigation may be necessary, if water is available. Livestock may be stressed by
heat. Warmer winters could produce more insect pests, thus requiring increased use of
pesticides. There may be increased runoff and soil erosion because of more frequent severe
storms and more rain in winter. These storms could also cause flooding.
It is also possible that increased carbon dioxide concentrations in the atmosphere and a longer
growing season could improve crop yields in Wisconsin. However, the dryer conditions, more
frequent droughts, and heat waves could negate this potential benefit of climate change.
Global warming could benefit agriculture in northern regions such as Canada and Russia, but
is more likely to harm agriculture in Wisconsin.
Potential Effects of Climate Change on Wisconsin Ecosystems
Many plant species require fairly narrow temperature ranges for their survival. As a result of
temperature and precipitation changes, some plant and animal species could experience
population declines, or be forced to shift their ranges to adapt to climate change. One fear is
2
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that some plant species may not be able to shift their ranges and move north fast enough to
keep up with the climate change. These species could disappear. Endangered species may
also be sensitive to climate change. The northern boreal forest may disappear from Wisconsin
completely as it shifts its range northward.
The warmer and dryer conditions and the increased frequency of lightning storms could
produce more forest fires and/or more severe forest fires. This in turn could increase the
number of species that depend on fire for reproduction and decrease others.
Likely Air Quality and Human Impacts
Concentrations of ground level ozone and smog, which are very dependent on temperatures for
their formation, could increase, making it difficult to attain mandated air quality standards.
The warm and dry conditions could produce more airborne dust.
If they occur, these changes are likely to make it more difficult for Wisconsin to attain and
maintain the new standards for ozone and fine particulates to prevent human health problems.
Warmer conditions and increased heat waves could also cause increases in heat-related illness
and increases in mosquito borne diseases such as malaria and dengue fever.
Potential Impacts on Recreation
The milder winters, lack of snow cover, and lack of ice cover expected to accompany climate
change would reduce opportunities for skiing, snowmobiling, and ice fishing. Also, lower
water levels in lakes and streams could affect boating and could require docks, piers, and
boathouses to be rebuilt. All of these are currently major winter activities in Wisconsin and are
important contributors to Wisconsin's $6.7 billion dollar tourism industry (Personal
Communication Wisconsin Department of Tourism - 4/98).
Evaluation of Climate Change Issues in Wisconsin
While we do not know the exact extent of the changes Wisconsin may face because of global
climate change, the potential changes are substantial. We believe it is necessary to evaluate the
issue to determine what we can do to protect our valuable natural resources. To meet this need,
the Wisconsin Department of Natural Resources has conducted greenhouse gas studies for the
past six years. We have completed four studies:
- An inventory of 1990 greenhouse gas emissions
- Projections of greenhouse gas emissions to 2000 and 2010
- The Wisconsin Greenhouse Gas Emission Reduction Cost Study, and
- A study of the impacts on Wisconsin's economy of investments in energy efficiency
measures to reduce greenhouse gases.
3
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Through these studies, we have determined that Wisconsin can significantly reduce its
greenhouse gas emissions while saving money.
For example, through the use of end-use electric energy efficiency measures alone, Wisconsin
can reduce greenhouse gas emissions by 8.4 million tons per year by 2010 while saving $490
million through energy savings. The 8.4 million ton per year reduction represents about a 5%
reduction of the projected 2010 emissions or about 23% of the emission reduction required to
reduce 2010 emissions to 1990 levels. These measures would also create 8,500 jobs in 2010,
increase disposable income by $490 million and increase gross state product by $41 million.
So, in Wisconsin, we have found that reducing greenhouse gas emissions serves a double
benefit; it is good for the environment and good for the economy.
Future Wisconsin Work on Climate Change
Currently, we are working with a group of stakeholders and other state agencies to develop a
climate change action plan for Wisconsin. We acknowledge there is a fair level of uncertainty
surrounding the issue of climate change and our group of internal and external stakeholders
has insisted on developing a plan of action that takes uncertainty into account. As a result,
Wisconsin's proposed climate change action plan is using a two phased approach.
The first phase focuses on greenhouse gas emission reduction measures which are voluntary
and have zero net cost. These include primarily energy efficiency measures. The second
phase will be developed later based on the evaluation of actions and measures undertaken in
Phase 1, national and international policies on reducing greenhouse gas emissions, and
technological, economic, and institutional developments.
As proposed, the first phase of Wisconsin's Climate Change Action Plan consists of seven
main action areas:
1. Implement actions that will result in businesses, governments, and citizens adopting energy
efficiency measures, with an emphasis on education and voluntary participation.
2. Implement actions that will result in businesses, governments and citizens adopting
measures that will shift the mix of fuel sources toward a higher proportion of cleaner
energy sources, with an emphasis on voluntary participation.
3. Adopt state policies which promote reductions of greenhouse gas emissions.
4. Implement measures which reduce emissions of other greenhouse gases.
5. Monitor, document, and evaluate Wisconsin's progress in reducing greenhouse gas
emissions.
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6. Participate in national policy formulation in a manner consistent with Wisconsin's long
term needs.
7. Develop the next phase of the climate change action plan, using the experience gained in
Phase 1.
The remainder of this testimony provides more detail on the first three actions contained in
Phase One of Wisconsin's proposed Climate Change Action Plan.
The first major focus of the proposed action plan is to implement actions that will result in
businesses, governments, and citizens adopting energy efficiency measures. We are looking at
four different categories of actions to accomplish this.
la. We are recommending that Wisconsin state government lead by example through
purchasing energy efficient office equipment and installing energy efficient lighting in state
office buildings, purchasing fuel efficient vehicles for the state fleet, offering incentives to
reduce single occupancy vehicle driving by state employees, locating new state office
buildings in areas served by mass transit, and other similar measures.
1b. We propose to vigorously promote private sector-led initiatives to adopt energy efficiency
measures. To do this we propose establishing five task forces, one for each of the five
greenhouse gas emitting sectors (residential, industrial, commercial/institutional,
agricultural, and transportation). Task force members would be from key trade
associations, environmental and other citizen groups, local governments and state agencies.
Each task force would establish emission reduction goals and develop a strategy to
maximize emission reductions through voluntary measures. Each task force would also
establish a system for tracking progress toward their goals.
1c. Develop financial incentives to encourage the adoption of cost-effective energy efficiency
measures, such as through a public benefits fund, and
1d. Revise or update state building codes to support energy efficiency improvements.
The second major focus of the proposed action plan is to implement actions that will result in
businesses, governments, and individuals adopting measures that will shift the mix of energy
sources toward a higher proportion of cleaner energy sources. This is proposed to be done
through four actions which are very similar to the actions proposed for implementing energy
efficiency measures.
2a. We propose that Wisconsin state government lead by example, this time through
purchasing alternatively fueled vehicles, purchasing electricity generated from cleaner
sources, and having state run heating and power plants use more renewable fuels.
2b. The state will vigorously promote private sector initiatives to move toward cleaner energy
sources and technologies through energy sector task forces similar to the sector task forces
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for energy efficiency presented under step one. These task forces will develop ways to
generate and market cleaner energy.
2c. Develop financial incentives to increase renewable energy use, and
2d. Support research and development projects designed to reduce emissions per unit of energy
generated.
The third major focus of the draft action plan is on the adoption of state policies which
promote greenhouse gas emission reductions. Again, four action areas are proposed.
3a. Credit for early greenhouse gas emission reductions. Our industries have emphasized
many times that they will not reduce greenhouse gas emissions at this time unless they are
assured that they will receive credit for the reductions which will count toward any
emission reductions mandated in the future. This is a critical point which will be one of
the first items we will try to accomplish, because emission reductions will be difficult to
get without it. We will work with U.S. EPA and others to ensure early credit and to
develop an accepted emission reduction reporting and tracking system.
3b. Include energy efficiency as part of state strategies and plans for meeting emission
reduction requirements for other pollutants. The U.S. EPA is requiring Wisconsin and
other states to reduce NOx emissions in order to control ozone and smog formation. Since
the major source of NOx and greenhouse gas emissions is fuel combustion, this is a
tremendous opportunity to integrate NOx and greenhouse gas emission reduction efforts.
Wisconsin, along with several other states, is participating on an EPA-led workgroup to
develop guidance for states on how to include energy efficiency measures in NOx emission
reduction plans. Wisconsin can achieve ten percent of the NOx emission reductions needed
to meet the 2007 ozone season NOx budget through energy efficiency measures which will
also reduce greenhouse gas emissions by 5% in 2010. This could also work for other air
pollutants which are controlled or might be controlled in the future. This integrated
approach to air pollution control could provide cost savings compared to the usual one-
pollutant-at-a-time piecemeal approach.
3c. Incorporate greenhouse gas emission reduction and other air quality considerations in the
decision making process regarding electric utility restructuring and deregulation. This falls
within the economic and environmental interests of energy producers and their regulators.
3d. State government should enhance its assessment of the carbon emission impacts of major
highway projects and overall transportation system proposals, and, wherever possible. the
state should choose the alternative for a transportation project or plan which would produce
the lowest carbon emissions. In Wisconsin, transportation was responsible for about 45
million tons of greenhouse gas emissions in 1990, or about one-third of those emissions.
We need to explore ways to reduce greenhouse gas emissions from the transportation
sector.
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Conclusion
In conclusion, I would like to emphasize that through work done in Wisconsin on climate
change, we have found an opportunity to significantly reduce greenhouse gas emissions while
saving money and boosting our economy. In Wisconsin we believe we can:
- Reduce our greenhouse gas emissions in 2010 by 8.4 million tons through electricity end
use energy efficiency measures alone. This represents about 23% of the amount needed to
reduce Wisconsin's greenhouse gas emissions to 1990 levels. And, in the process of doing
this, we can:
- Save 10 million megawatt hours of electricity,
(10 million MWh is approximately the annual output of three 500 MW power plants
and represents about 13% of projected electricity use in Wisconsin in 2010. It is
enough power to run about 1.15 million households for one year.)
- Create 8,500 jobs,
- Increase gross state product by $41 million, and
(Gross state product is the value of all goods and services produced in the state minus
the value of imports and exports)
-
Increase real disposable income by $490 million.
This can all be done through:
- voluntary measures rather than regulations which mandate emission reductions, and
- an integrated approach to reducing emissions. By implementing voluntary energy
efficiency measures to reduce greenhouse gas emissions we can also reduce NOx emissions
by about 7,000 tons per year in 2007, which is about 10% of the EPA-mandated NOx
emission reductions.
Reducing greenhouse gas emissions through energy efficiency measures is good for the
environment and good for Wisconsin's economy. I would encourage other parts of the country
to seriously consider actions they can take to reduce greenhouse gas emissions and strengthen
their economies at the same time. Thank you.
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For more information on Global Climate Change Activities in Wisconsin, please contact any of
the following individuals:
Ms. Lloyd L Eagan
Director, Bureau of Air Management
Wisconsin Department of Natural Resources
AM/7 - P.O. Box 7921
Madison, WI 53707-7921
608-266-0603
FAX 608-267-0560
E-Mail: [email protected]
Ms. Caroline Garber
Chief, Environmental Studies Section
Bureau of Air Management
Wisconsin Department of Natural Resources
AM/7 - P.O. Box 7921
Madison, WI 53707-7921
608-264-9218
E-MAIL: [email protected]
Mr. Eric Mosher
Bureau of Air Management
Wisconsin Department of Natural Resources
AM/7 - P.O. Box 7921
Madison, WI 53707-7921
608-266-3010
E-MAIL: [email protected]
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FAX
To:
Todd Stern/Jonathan
6-2215
Michele Jolin
5-6958
Bill Antholis
6-
From:
Martha Wofford
Re:
Wisconsin economic impact study
Total # of pages: 9
This is the executive summary of the study. Michele and anybody else that is
interested we will get the full report to you. In addition, we have Congressional
testimony re: the study by a Gubernatorial-appointed Wisconsin official.
Apparently, Rep. Tom Barrett (D-WI) would welcome the opportunity to speak
about his state's findings.
Jun-08-98 12:34P Climate Change Task Force
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PROGRAM FITNESS ENERGY
PAPARTMENT ONERGY
0F
THE economic and greenhouse GAS
EMISSION impacts OF electric energy
EFFICIENCY INVESTMENTS
A WISCONSIN case STUDY
Prepared for
The Energy Fitness Program of the U.S. Department of Energy and
Oak Ridge National Laboratory
by
Project Authors
Steve Clemmer, Stephen Olson, and Michael Arny
Project Manager
Michael Arny
The Consortium for Integrated Resource Planning
Engineering Professional Development
University of Wisconsin
The Wisconsin Department of Natural Resources
Leonardo Academy Ind.
February 1998
UNITED STATES OF ENERGY
energy
OF
Rebulld America
SAVING THE EARTH SWING Your MONEY
Jun-08-98 12:35P Climate Change Task Force
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energy FITNESS
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work
executive Summary
The international debate about the potential impacts of global climate change is
increasingly moving beyond the science into the economics of emission reduction
strategies and the policies that are needed to best mitigate potential impacts. The
1992 Rio Earth Summit initiated international efforts to reduce greenhouse gas
emissions. As a result of the Rio Earth Summit, the United States Climate Change
Action Plan was developed with the goal of reducing greenhouse gas (GHG) emissions
to their 1990 levels by the year 2000. The 1997 Kyoto Conference on Climate Change
has shifted the goals to reducing emissions 3 to 7 percent below 1990 levels in the
2010 time frame. Most climate change experts agree that significant actions will need
to be taken to achieve these reductions. Between 1990 and 1996 GHG emissions rose
8 percent in the U.S., as strong economic growth and declining energy prices have
increased energy use.
While ultimately an international issue, states have become increasingly active in
climate change discussions. One of the main reasons for this involvement is that the
federal government has looked to the states to implement initiatives to reduce
greenhouse gases and other emissions. Wisconsin, like many other states, has played
an active role in researching, developing and implementing mitigation strategies to
reduce GHG emissions. Most of the research has focused on the direct costs and
benefits of implementing these strategies with little information for decision makers
on how these strategies affect the regional economy.
The purpose of this report is to examine the macroeconomic impacts of consumer
and business investments in end use efficiency and end use fuel switching measures
that reduce electricity use in Wisconsin. It does not analyze the economic impacts of
investments in cleaner electric supply technologies or cleaner transportation measures.
Wherever this report refers to efficiency and fuel switching measures it is referring to
end use efficiency and end use fuel switching measures.
This study used as an input, the ranking of end use efficiency and end use fuel
switching measures from the 1998 Greenhouse Gas Emission Reduction Cost Study
prepared by the Wisconsin Department of Natural Resources, University of Wisconsin,
Consortium for Integrated Resource Planning, and the Leonardo Academy Inc. (WDNR,
1998) with support from other state agencies and private organizations. The WDNR,
1998 report developed several GHG emission reduction scenarios based on screening
the full range of emission reduction measures from a utility cost perspective.
The analysis of broader economic impacts of GHG emission reductions described in
the current report investigates some of the emission reduction measures identified in
the WDNR (1998) report, yet is different in three important aspects:
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executive summary
This analysis includes only end use electric energy efficiency and end use fuel
switching measures installed in the residential, commercial, industrial, and
agricultural sectors, because these comprised the majority of the low cost emission
reduction measures identified in the DNR report.
This analysis examines the impacts of implementing these measures from the
consumer's perspective instead of the utilities' perspective, using retail electricity
prices to calculate customer savings instead of utility avoided costs.
This analysis uses a 53-industry dynamic economic forecasting and policy simulation
model of Wisconsin's economy, developed by Regional Economic Models, Inc.
(REMI) to measure economic impacts of energy efficiency investments. The REMI
model captures the economic ripple effects that occur as money is respent by
industries that are linked in Wisconsin's economy. The model is dynamic because
it incorporates changes in prices, wage rates, demographics, regional productivity
and other economic variables and tracks the impacts these variables have on
employment, personal income and gross state product. This model is also used
by the Wisconsin Department of Transportation (DOT) to carry out economic
impact analyses of transportation projects.
This analysis investigates the economic impacts of two scenarios for investment in
energy efficiency and fuel switching measures. The first scenario includes
implementation of only cost effective measures. The second scenario includes
implementation of all the measures that cost up to $100 per ton of CO₂ emission
reduced.
The results show that the cost-effective scenario with investments of $1.75 billion in
energy efficient technologies by Wisconsin residents, businesses and farmers would:
Create 8,500 new jobs, $490 million in disposable income and $41 million in
gross state product by 2010 (see Table 1).
Reduce Wisconsin's greenhouse gas emissions by 7.7 million tons in 2010, which
is 21 percent of the amount needed to reduce greenhouse gas emissions to their
1990 level.
Reduce projected statewide electricity use in Wisconsin by more than 9 million
megawatt hours in 2010. This is equivalent to displacing the electricity generated
from five 265 megawatt power plants or consumed annually by over one million
households.
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executive Summary
Reduce the need for electric generation capacity additions by more than 1300
megawatts.
Decrease energy and operating expenditures by $4.44 billion between 1997 and
2010. Given the investment of $1.75 billion needed to install the more efficient
technologies for consumers and businesses during the same period, this amounts
to a total net savings of $2.69 billion or a benefit-cost ratio of 2.7.
Figure 1 shows the overall impact on Wisconsin's economy of implementing the cost
effective energy efficiency scenario relative to a business as usual scenario. The
overall impacts are relatively small due to the level of investment considered in this
analysis. In proportion to the rest of the economy, employment and income, are
expected to grow by only 0.1 percent to 0.4 percent in 2010. Real disposable income
increases steadily throughout the forecast period.
This occurs as cumulative energy savings exceed the higher capital cost consumers
pay for more efficient technologies, which increases consumer purchasing power.
1.005
1.004
1.003
Proportion of Baseline
1.002
1.001
1
0.999
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Real Disposable Income
Population
Emp loyment
Relative Profitability Mfg
Selling Prices
Gross State Product
Fig. 1. Impacts on the Wisconsin economy of
implementing the cost effective energy efficiency
scenario relative to baseline of business as usual (relative
changes in selected economic variables).
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executive summary
Real disposable income per capita (not shown) also increases throughout the forecast
period as the income growth exceeds population growth and inward migration.
Energy savings in the residential and commercial sectors are the biggest drivers of
employment and income growth. Energy savings in the residential sector increases
disposable income, which leads to growth in employment as most of the income is
spent locally on consumption of goods and services other than electricity. Energy
savings in the commercial and industrial sectors lower the cost of doing business and
can increase the competitiveness, productivity, and profitability of Wisconsin
businesses. If other states do not capture the benefits of increased energy efficiency
and all other factors affecting the cost of business remain the same, Wisconsin industry
will increase their competitive advantage.
If businesses in other states also capture the benefits of increased energy efficiency
and all other factors affecting the cost of business remain the same, Wisconsin
businesses will retain their competitive position.
For industries that sell primarily in regional markets, energy savings are passed on to
consumers through lower selling prices of goods and services. This stimulates further
consumption and demand for intermediate inputs both locally and outside the region,
which creates additional jobs and income. Furthermore, it causes exports and the
percentage of goods supplied locally to increase while imports decline. For regional
industries that sell primarily in national markets, electricity savings result in increased
profitability.
Increased investments in energy efficient technologies would create jobs in nearly all
Wisconsin's industries. This is because money would be shifted away from the capital
intensive electric industry which exports a significant portion of its revenue to other
regions to pay for fossil fuels, and toward more labor-intensive industries and greater
local consumption of goods and services.
The service and retail trade industries would realize the greatest employment increase
as consumers spend energy savings on consumption and service related activities
(such as health care, lodging, amusements, restaurants, business services, auto repair,
etc.). The local sale of energy efficient appliances and technologies generates job
growth in retail and wholesale trade. The utility sector realizes a net loss in employment
as electricity savings reduce the amount of electricity needed by consumers relative
to the base case. The combined impact on jobs in the various sectors determines the
overall impacts on employment in Wisconsin of the two scenarios which are shown
in Table 1. Employment, real disposable income, and gross state product net of the
utility sector increase in both scenarios. Gross state product rises by $41 million in
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executive Summary
Table 1. Economic impacts of Wisconsin electric energy
efficiency and fuel switching investments in 2010
All measures with a
net cost per ton of
CO₂ reduced up to
Impact
$0/ton
$100/ton
Employment
8,526
7,255
Real disposable income (mil. 92$)
490
428
Gross state product (mil. 92$)
41
-42
GSP net of utility sector (mil. 92$)
323
266
the up to zero cost per ton case and declines by $42 million in the up to $100 per ton
scenario.
Figure 2 shows that for the measures analyzed, the majority of the emission reductions
identified (about 7.7 million tons or 89 percent of the total emission reductions) can
be achieved at a net saving (at a net cost below $0 per ton) to Wisconsin's electricity
consumers. A net savings means that the cumulative energy savings over the life of
an energy efficient measure exceed the incremental investment and operating costs.
Only 0.9 million tons of additional emission savings would be achieved by
implementing the measures with net costs between $0 and $100 per ton of CO₂
reduced.
Implementation Issues: This study assumes that the increased investment in the
more efficient technologies for consumers and businesses would be achieved at no
extra cost to consumers beyond the higher capital cost for purchasing the more
efficient technologies. This means that no program costs for causing the implementation
of higher efficiency and fuel switching end use measures were included in this analysis.
An implementation program will be needed to stimulate the increased investment in
the more efficient technologies, but the actual program costs will depend on the
approach used for implementation of measures. Approaches to implementation are
available that are effective and have low program costs. Such approaches would
closely match to the assumptions used in this report.
For example, using increased equipment energy efficiency standards and increased
building energy efficiency standards in building codes has low program costs, and
high penetration rates that could deliver the emission reductions identified in this
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CHIGRAN
energy FITNESS
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executive Summary
$150
$100
$50
$0
dollars per ton of CO₂
1
2
3
4
6
7
8
9
10
-$50
million tons
-$100
of CO₂ reduced
-$150
-$200
-$250
-$300
Fig. 2. The net cost of reducing greenhouse gas emissions. Each diamond
represents one of 176 specific energy efficiency and end use fuel switching measures
installed in the residential, commercial, industrial or agricultural sectors. See Appendix
B for a list of specific measures, ranked by their net cost of reducing GHG emissions.
Net cost is equal to the incremental investment and operating costs of an energy
efficient measure compared to a standard efficiency measure minus avoided energy
and capacity savings divided by emission reductions over the operating life of the
measure. In this figure, the energy cost savings are taken from WDNR (1998) where
they were calculated using a utility cost perspective.
study. Other approaches to implementation can have higher program costs that
significantly diverge from the assumptions used in this report and could affect the
results of this study.
There is some room for covering program costs, given the direct cost savings between
1990 and 2010 and the increase in annual disposable income cost savings by 2010.
Installing all the cost effective measures evaluated in this report would result in a
cumulative net savings of $2.7 billion and a cumulative increase in disposable income
of $3.3 billion between 1997 and 2010. Installing all measures costing up to $100 per
ton of CO₂ reduced would result in cumulative net savings of $2.2 billion and a
cumulative increase in disposable income of $2.5 billion between 1997 and 2010.
Alternative approaches to implementation are not considered in this report but will
be considered in the development of a climate change action plan that reduces
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executive Summary
greenhouse gas emissions in Wisconsin. In this next phase, choosing approaches to
implementation that are effective and low cost will provide the greatest economic
benefits.
Possible Effects of Use of Generation Capacity Freed Up by the Efficiency
Measures to Supply Loads Outside the State: Generation capacity freed up by the
efficiency measures could be used to generate electricity to serve out of state loads.
It is possible that the net generation freed up could be used to generate electricity for
sale outside of the state. If this occurred it would increase the emissions from the
generation plants in Wisconsin but decrease the emissions from the generation that
would have otherwise served those out of state loads. This means that the electricity
end use reduction measures decrease emissions somewhere, and the out of state
electricity sales would simply change where these emission reductions occur. Since
climate change is global in scope, the specific location of greenhouse gas emission
reductions does not diminish the effectiveness of these emission reductions.
In summary: This study shows that installing cost-effective electric energy efficiency
measures in Wisconsin's, homes, businesses and farms will lower greenhouse gas
emissions produced from fossil fuel combustion while delivering employment and
income benefits for Wisconsin. Installing these measures will produce net savings
that increase disposable income for residents to spend on goods and services other
than electricity. In addition, by lowering the cost of producing goods and delivering
services, they increase the competitiveness, productivity and profitability of Wisconsin
businesses. Furthermore, these technologies use less energy to deliver a similar or
improved level of service (heating, cooling, lighting and drive power), comfort and
convenience. Thus, these investments deliver overall benefits to individual residents
and businesses as well as society.
Public policy decisions of what actions should be taken to reduce greenhouse gas
emissions will need to balance the full range of costs and benefits of various levels of
possible actions. This report was developed to contribute to the foundation for these
public policy decisions.
Statement of Chairman James M. Talent
Committee on Small Business
Kyoto Protocol: The Undermining of American Prosperity?
June 4, 1998
Good Morning. Today, the Committee on Small Business will be
examining the impact of the Kyoto Protocol on the backbone of the
U.S. economy- Small Businesses. Small businesses account
for 99.7% of the nation's employers, employ 53% of the private work
force, contribute 47% of all sales in the country, and are responsible for 50%
of the private gross domestic product; and any treaty that hurts the small
business sector poses a threat to the jobs, goods and services available to the
American people. The Kyoto Protocol, often referred to as the climate
change agreement, was agreed to in negotiations which were completed on
December 11, 1997. The Protocol commits the United States to a target of
reducing "greenhouse gasses", mainly carbon dioxide, by 7% below 1990
levels during a "commitment period" between the years 2008-2012.
Moreover, while the protocol mandates that America reduce its carbon
dioxide emission reductions to 1979 levels by 2012, it exempts huge
emissions producers such as China, India, South Korea, Brazil, and Mexico,
as well as other developing nations. As a result, according to the U.S.
Energy Information Agency, the developing countries will surpass the
industrialized countries in carbon output by 2010 under this protocol. All of
this is important because, in plain terms, greenhouse gases are emitted by the
production and use of energy, so the Kyoto Protocol is a substantial,
comprehensive, and unprecedented restriction on the use of energy by the
American economy, both in absolute terms and relative to the rest of the
world. It is vital that we understand the impact of this kind of new order on
the real lives of real people in the communities of America. The Committee
will hear testimony from a number of different witnesses on this issue.
As an example, according to the Wharton Economic Forecasting
Associates (WEFA), ratification of Kyoto would mean that:
Residual fuel oil prices for industrial facilities would increase by roughly
140%
Natural gas prices for industry would increase by 90%
the United States GDP would decline by more than 2.5% per year
a million good, high-paying jobs would be lost and the U.S. trade deficit
would jump sharply.
What would the protocol mean to the small business community across the
country? Small energy intensive industries such as bakeries, dry cleaners,
auto repair shops, small manufacturers, and, ironically, recycling businesses
would be hit immediately upon ratification of the Kyoto Protocol. Many
other small business that sell to large industries such as steel, aluminum,
chemical manufacturers, paper, and cement would find that they have packed
their bags and moved to countries with no such emission
restrictions such as Mexico. Moreover, small exporting companies would be
forced to raise their prices due to increased energy prices and would not be
able to compete with companies in developing countries such as China and
Mexico. As a result, U.S. exports would become relatively more expensive
on the world market and the trade deficit would skyrocket. Ultimately under
this protocol, small businesses would be forced to pay higher utility bills, pay
higher gas taxes, operate much smaller less useful vehicles and, unfortunately
for some small entrepreneurs, be run out of business.
These kinds of concerns are the reason I have called the Kyoto
agreement the selling out of American jobs, American enterprise, and
American prosperity.
We have two panels of witnesses who have consented to agree to
appear before the Committee today, including the Chair of the Council of
Economic Advisers, Doctor Janet Yellen. Before we turn to those witnesses,
I will recognize the distinguished ranking member for any statement she may
wish to make.
American Council for an Energy-Efficient Economy
WASHINGTON, DC
TESTIMONY OF HOWARD GELLER, EXECUTIVE DIRECTOR
THE AMERICAN COUNCIL FOR AN ENERGY-EFFICIENT ECONOMY
BEFORE THE COMMITTEE ON SMALL BUSINESS
U.S. HOUSE OF REPRESENTATIVES
ON THE KYOTO PROTOCOL TO THE UNITED NATIONS
FRAMEWORK CONVENTION ON CLIMATE CHANGE
June 4, 1998
The American Council for an Energy-Efficient Economy (ACEEE) is a non-profit
research organization dedicated to advancing energy efficiency as a means of promoting both
economic prosperity and environmental protection. We conduct studies, advise
policymakers, assist with energy efficiency program design and evaluation, work
collaboratively with business, disseminate information, and inform consumers. I appreciate
the opportunity to appear before the Committee.
In my testimony, I would like to make three main points:
1) Reducing greenhouse gas emissions and achieving the targets in the Kyoto Protocol
can yield economic benefits for the United States as a whole.
2) Reducing greenhouse gas emissions offers enormous growth opportunities for small
businesses.
3) Federal energy efficiency and renewable energy programs can help small businesses to
profit and grow while cutting greenhouse gas emissions.
Reducing Greenhouse Gas Emissions Can Benefit the Economy.
A strong commitment to cut U.S. emissions of carbon dioxide and other greenhouse
gases (GHGs) does not need to be a drain on the U.S. economy, as some critics of the Kyoto
Protocol have claimed. For example, over 2000 economists issued a statement last year
which says in part, "Economic studies have found that there are many potential policies to
reduce greenhouse gas emissions for which the total benefits outweigh the total costs."
Relying on better technologies such as more efficient appliances, lighting, vehicles,
and industrial processes as well as renewable energy sources, rather than onerous taxes or
heavy-handed regulations, is the key to cutting GHG emissions without harming the
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economy. By taking a technology-oriented approach, the United States and other nations can
create new industries and jobs, save consumers money, and greatly reduce GHG emissions.
Many of these new technologies and jobs will come from small businesses since small
businesses tend to be more innovative and entrepreneurial than large "Fortune 500"
companies.
An innovation-led strategy for achieving the target adopted in Kyoto can produce a
net increase in jobs by improving energy productivity, reducing expenditures on oil imports,
and expanding sectors of the economy that result in the most employment per dollar of
expenditure. A study conducted by ACEEE along with four other public interest
organizations, called Energy Innovations, shows that the US can reduce its carbon dioxide
emissions 10 percent below 1990 levels by the year 2010, while boosting economic
performance. The Energy Innovations study found that by following an innovation path, the
economy would support 800,000 additional jobs by 2010 compared to business-as-usual
growth in the economy. Consumers would realize net savings of $530 per household per
year by 2010 due to energy bill savings exceeding the cost of energy efficiency and
renewable energy measures.
Other studies, such as report prepared by five national laboratories for the U.S.
Department of Energy titled Scenarios of U.S. Carbon Reductions reached a similar
conclusion as Energy Innovations namely that it is possible to greatly reduce our GHG
emissions without harming the economy if the emphasis is on a technological response rather
than onerous taxes that depress economic growth.
It is important to keep these results (and competing claims of economic losses) in
perspective. In an economy that creates 250,000 new jobs per month, the job gains forecast
by Energy Innovations amount to a little less than one-half of one percent of baseline
employment forecast for 2010. Also, it is important to recognize that there will be some
shift in employment within the economy as a whole. Job gains in technology manufacturing,
construction, and services will be partially offset by lower employment in the fossil fuel and
utility industries. Steps should be taken to ensure that displaced workers are retrained and
given employment opportunities in the growing energy efficiency and renewable energy
industries.
Note that these results are based on achieving emission reductions entirely through
domestic action in the energy sector. The U.S. can and should plan to achieve a substantial
majority of the emission reductions called for in the Kyoto Protocol through domestic action.
Nonetheless, the additional flexibility built into the Kyoto Protocol ensures that marginal
emission control costs will remain low, even if some approaches are not as successful as we
expect.
If it is possible to greatly reduce GHG emissions with net economic benefits, it is fair
to ask why some studies claim that reducing GHG emissions will harm our economy. First
it should be noted that many of these studies are funded by producers and major consumers
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of the fossil fuels that cause global warming. Second, the studies use worst case assumptions
that lead to loss of economic output, such as imposition of a carbon tax without recycling the
revenue, no consideration of technological response or the cost savings from energy
efficiency improvements, no economic benefits from pollution abatement, and no
international joint implementation. The studies are thoroughly critiqued in a recent World
Resources Institute report by Repetto and Austin titled The Costs of Climate Protection: A
Guide for the Perplexed.
Putting economic modeling aside, history tells us that every time we have faced an
environmental challenge--from getting the lead out of gasoline, to protecting the ozone layer,
to controlling acid rain--there have been those in affected businesses that have said that it
won't work and it will wreck the economy. They have never been right. In fact, once the
decision was made, each time industry rose to the challenge and American ingenuity found
ways to address these problems cheaper and faster than had been anticipated. To take one
example, industry predicted that controlling acid rain would cost as much as $1500 per ton of
sulfur removed. Sulfur allowances are now trading at about $100 per ton--less than one-tenth
the prior estimate.
Reducing Greenhouse Gas Emissions Provides Economic Growth Opportunities for
Small and Medium-Size Businesses.
A shift away from fossil fuels such as coal and petroleum and towards greater energy
efficiency and renewable energy technologies presents enormous opportunities for small and
medium-size businesses to grow and thrive. These businesses can manufacture, sell, and
install energy-efficient appliances, lighting products, control systems, solar and wind power
systems, advanced industrial processes, etc. Farmers can grow bioenergy crops and operate
bioenergy facilities as well as produce food. Home builders can construct more efficient,
higher value-added buildings, thereby increasing their revenues. And insulation and HVAC
contractors can increase their business as they make our existing homes and commercial
buildings more energy-efficient. All of this means more output and revenues for small and
medium-size businesses, and less output and revenue for the Exxon's and Commonwealth
Edison's of the world.
I would like to present some real world examples of small and medium-size
businesses that are already profiting and growing by serving energy efficiency and renewable
energy markets, or installing state-of-the-art industrial process equipment in their own
operations.
AstraLite
AstraLite, based in Annandale, NJ, is a division of Computer Power, Inc. In the
words of Les Listwa, one of its senior staff, Computer Power was a dying business
five years ago since it was unable to compete with large manufacturers of inverters
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and uninterruptible power supplies. In 1993, Computer Power formed the AstraLite
division to manufacture and market light-emitting diode (LED) exit sign kits. An
LED exit sign consumes just 2 Watts of power, compared to 12 Watts for a typical
compact fluorescent exit sign or 40 Watts for an incandescent-based sign. The U.S.
EPA Energy Star light fixtures program is promoting this technology, and the market
is growing about 50 percent a year. AstraLite, which now employs about 80
workers, saved its parent company.
AstroPower Inc.
AstroPower, based in Newark, DE, is the second largest U.S.-owned manufacturer of
photovoltaic cells and modules. AstroPower currently has about 185 employees and
$25 million in annual sales revenues. Sales revenue grew at a compound annual
growth rate of 65% over the past five years. The company just went public.
Bergey Windpower Co.
Bergey Windpower Co. of Norman, OK was founded in 1977 and is currently the
world's leading supplier of small wind turbines. BWC wind turbines have been
installed in all 50 states and more than 80 countries. The company employs 25
workers and has annual revenues over $4 million, compared to $1.5 million five years
ago. Earlier this year BWC established a Chinese joint venture to better serve this
fast growing market for its products.
Broin and Associates, Inc.
Broin and Associates of Sioux Falls, SD builds medium-size fuel ethanol plants
throughout the Midwest. These plants produce fuel ethanol and cattle feed using corn
or milo as the feedstock. All of the plants are either cooperatively owned by farmers
or co-owned by Broin and farmers. Broin and Associates currently employ and
manage over 150 workers, up from about 50 workers four years ago. The company
is profitable and growing.
Comfortex, Inc.
Comfortex, based in Cohoes and Watervliet, NY, manufactures energy-efficient
insulating window treatments. Their window shades more then double the insulating
value of a typical double pane window. Comfortex started out in 1990. They now
have about 400 employees with plants in New York, Arizona, Florida, Nevada, and
Pennsylvania. Sales of the insulating shades are increasing about 20-30 percent per
year. The company got help in developing its window insulation technology from the
New York State Energy Research and Development Authority (NYSERDA).
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Decatur Foundry, Inc.
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Decature/Foundry, located in Decatur, IL, produces iron castings for motor and pump
components. Decatur has invested in new infrared heating equipment and
computerized controls which enabled it to significantly cut energy use, reduce
pollutant emissions, increase output and productivity, and create a safer workplace.
Annual sales revenue grew from about $6 million to $10 million after these
investments were made, with employment growing to 75 workers. Decatur received
help from the Electric Power Research Institute and its local utility in implementing
these innovations. It is participating in the U.S. EPA Climate Wise program.
A. Finkl and Sons Co.
A. Finkl and Sons, located in Chicago, is a large custom die steel forger. The
company has $80 million in revenues and 400 employees. Finkl was a thriving
company in the 60s and 70s, but like many Midwestern iron and steel companies was
hit hard by the recession of the early 1980s. Finkl responded by making capital
improvements including installing state-of-the-art energy-efficient furnaces,
computerized controls, and maximizing reuse of solid waste. As a result, Finkl has
bounced back and is now one of the most efficient companies in its business. It is
producing twice what it did in the early 70s, while consuming 60% less energy per
pound of output.
Southwall Technologies
Southwall Technologies, based in Palo Alto, Ca, specializes in making low-emissivity
coatings and films that are used in energy-efficient windows. Southwall developed its
initial products with financial and technical support from the U.S. Department of
Energy and Lawrence Berkeley National Laboratory. The company now has 250
employees and production facilities in California and Tempe, AZ. Sales revenue
grew from $18 million in 1993 to $50 million in 1997.
Trigen Energy Corp.
Trigen, based in White Plains, New York, owns and operates cogeneration facilities
and district heating and cooling systems in 22 locations throughout North America.
For example, Trigen purchased the old district heating system in downtown St. Louis
and is upgrading and expanding it. New customers served by the system include the
Trans World Dome and the Morgan Street Brewery. By generating electricity and
using the "waste heat" for supplying heating and cooling to buildings, Trigen greatly
reduces fuel use and pollutant emissions while helping to revive urban core areas.
The company has grown rapidly in the past decade, with 760 employees today
compared to 200 in 1992.
Other examples:
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EPA case studies! Energy Star Small Business program;
Climate Wise program
reports of web site
These are not isolated examples -- there are thousands of small and medium-size
businesses that are manufacturing, selling, or using energy efficiency and renew 400energy
technologies and, in doing so, are profiting from reducing GHG emissions and helping to
slow global warming. The lesson from these examples is that by encouraging technological
innovation, we can address the threat posed by global climate change while growing the
economy and strengthening our nation's small businesses.
It is also important to note that international markets for energy efficiency and
renewable energy technologies are expanding very rapidly. For example, worldwide
windpower capacity tripled, solar photovoltaic cells shipments more than doubled, and
compact fluorescent lamp sales increased by over a factor of 2.5 between 1992 and 1997.
Some of the small businesses mentioned above, such as Bergey Windpower and Southwall
Technologies, are thriving in large part because of exports. Promoting greater energy
efficiency and renewable energy in the United States will help our companies prosper and
better compete internationally.
Federal Programs Help Small Businesses Cut GHG Emissions Profitably.
Small businesses are usually not able carry out R&D on their own. They often lack
technical expertise or dedicated energy and environmental managers. They often do not have
information on or access to the latest energy efficiency and pollution prevention technologies.
Nor are they well-equipped to compete in international markets.
A variety of federal programs are helping small businesses overcome these barriers
and develop and implement state-of-the-art energy efficiency and renewable energy
technologies. These programs are saving businesses and consumers money while cutting
pollution of all types. And they are helping small businesses access international markets.
These programs include:
EPA Energy Star and Green Lights programs
The Energy Star and Green Lights programs are assisting thousands of small
businesses that are either manufacturing energy-efficient products or installing energy
efficiency measures. These companies receive information, software, training, and
recognition from the EPA. Nationwide, EPA estimates that program participants
invested $1.8 billion in efficiency measures and saved $5.3 billion on their energy
bills during 1991-97, and cut their carbon emissions by 25 million metric tons. Small
businesses and institutions that are actively participating in the program in the St.
Louis area include Venture Stores, Dazor Manufacturing Corp., Starbeam Supply
Co., St. Louis Children's Hospital, and Washington University.
DOE Industrial Assessment Centers program
The Industrial Assessment Centers are located at 30 universities throughout the
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country The Centers, provide free energy, waste, and productivity audits specifically
for smalls and medium-size manufacturers. The Centers have conducted over 8,000
audits since the program was started and have generated about $375 million in cost
savingsifor the participating companies. About 300 assessments have been performed
for manufacturers in Missouri by Centers located at the University of Missouri at
Rolla and the University of Kansas.
DOE Building America and EPA Energy Star Homes programs
The Building America and Energy Star Homes programs are helping home builders
upgrade the energy efficiency of new homes thereby improving housing quality,
lowering energy bills, and making home ownership more affordable. Major builders
like Pulte and Ryan Homes as well as smaller builders all over the country are
participating in these programs. DOE and EPA are providing training and technical
assistance to show these builders how they can significantly upgrade energy efficiency
while minimizing any increase in construction costs.
CORECT and COEECT
The Department of Energy runs two programs, the Committee on Renewable Energy
Commerce and Trade (CORECT) and the Committee on Energy Efficiency Export
and Trade (COEECT) that are helping U.S. small businesses access and compete in
rapidly growing worldwide markets. These programs are providing valuable support
to American companies through market assessments, trade missions, facilitating
export financing, etc.
The voluntary programs mentioned above are helping small businesses innovate, save
money, increase sales, and cut pollutant emissions. They are justified even if the climate
change problem didn't exist. They are not "premature implementation of the Kyoto treaty"
as some have suggested.
President Clinton has proposed expanding existing Federal energy efficiency and
renewable energy programs as part of his Climate Change Technology Initiative. While it's
outside the purview of this Committee, I urge friends of small business in the Congress to
approve this funding independent of opinions concerning the Kyoto Protocol. Put simply,
these programs are good for business. If these technology-oriented programs are a success,
we won't needito adopt onerous new taxes or burdensome regulations in order to meet our
nation's environmental goals, whether it be goals of the Clean Air Act today or the Kyoto
Protocol to the Framework Convention on Climate Change tomorrow.
Thank you for considering these views.
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