RESPONSIBILITY FOR MONITORING OF AND COMPLIANCE WITH THE KYOTO PROTOCOL

Chairman SENSENBRENNER. Now the treaty establishes a bureaucracy within the United Nations relative to the assessment of what the CO2 levels of emission are in certain inspection procedures. How does that get paid for?

Ms. MCGINTY. Well, we've fought against, and were successful in making sure that there would not be, any new U.N. institution set up to oversee or monitor this at all.

Chairman SENSENBRENNER. But this is-you know, these will be who does the inspecting and the compliance and the assessment of whether the nations are meeting their target or not?

Ms. MCGINTY. Well, I assume it would be two things. I'd imagine that there would be a body of experts that would be put together in the United States to participate in that, but I think, more likely, it will be driven just like the financial markets are driven now. There would be certified auditors who are recognized

Chairman SENSENBRENNER. Okay.

Ms. MCGINTY [continuing]. In a new profession that can say whether the reductions are real or not real.

Chairman SENSENBRENNER. Yes, but people don't work for free. Who's going to pay for the certified auditors?

Ms. MCGINTY. Yes. Well, again, since this is purely a private sector, market-driven kind of initiative, just like there is a transaction fee that you pay to the SEC in your various transactionsChairman SENSENBRENNER. Aha.

Ms. MCGINTY [continuing]. With your portfolio, you do that

CLEAN DEVELOPMENT MECHANISM AND IMPACT ON ENERGY

PRICES

Chairman SENSENBRENNER. Now who does the transaction fee get paid to?

Ms. MCGINTY. We have said in regard to the Clean Development Mechanism that we want it to be a self-financing institution, no new body established. It will be a self-financing entity of the private sector, and that's how it would

Chairman SENSENBRENNER. But the bottom line is that, as we use market forces to reduce demands for types of energy that emit greenhouse gases, and the price goes up, and we reduce the demands, how does the price go up if we are not imposing a tax? Ms. MCGINTY. As you

Chairman SENSENBRENNER. The price goes up because the cost of the credits go up?

Ms. MCGINTY. Well, I think, as you indicated before, the price, as the quantity, would be driven by the forces of supply and demand. Just as in the SO2 example, the price has been set by the marketplace, and we've seen that price, of course, come down fairly precipitously.

Chairman SENSENBRENNER. Well, you see, the concern that I have, Ms. McGinty, is that this is going to result in a redistribution of money as our businesses and industry have to buy these credits, and changes are pretty good, because we're under a reduction re

and would be used by the folks offshore to develop their own economies, and that's what I heard from developing nations almost uniformly over in Kyoto.

Now, you know, my concern is that doing it that way, you know, is not going to provide the money to clean up the factories in the United States that cause the problem. I'm not for raising taxes, but at least if we went that route, then we would be recycling that money within the United States to do something that was socially acceptable, whereas this emissions trading business and this credit business means that we will be losing money that we could be using to clean up the problem in the United States by sending it

offshore.

I would hope that the Administration would answer that question because it certainly has not done so at the present time. And my time has expired. The gentleman from Pennsylvania, Mr. Doyle.

EMISSIONS TRADING AND RUSSIA

Mr. DOYLE. Thank you, Mr. Chairman, and maybe I'll follow up on that a little bit.

If this is so confusing to a lot of people-we're trying to understand how these sinks and this trading and clean development mechanisms will work, and once all that's in place, what the burdens will be on our industries, once we've calculated what all that equals. But I'm trying to understand this emission trading. Russia, for instance, we're saying, is going to have a lot of credits. You know, they've gone through this aggressive program of economic collapse.

[Laughter.]

Ms. MCGINTY. Right.

Mr. DOYLE. And as a result

Ms. MCGINTY. Right.

Ms. DOYLE [continuing]. They don't do anything over there anymore, so they're below their 1990 levels, and they're going to have all these credits. And then here we are in this country, we're going to be able to purchase those credits; our country can, if we're over our caps. I mean, am I understanding this correctly? So what we're going to do here, basically, is send a lot of money from this country-for Russia, it's a good deal. I mean, they're sitting there on their butts and saying, well, we're going to get some money from the United States, so that they can stay under their caps, and nothing's getting cleaned. I mean, we've not affected the global warming issue one iota. We haven't cleaned any emissions or CO2 emissions in this country, and we're not doing anything over in Russia. They're just sort of collecting a check from us, so that we can stay under our caps. It's a very confusing situation, if that's how this actually plays out.

RESEARCH AND DEVELOPMENT SPENDING

Mr. DOYLE. And I want to make one more point, too. I notice you nodded your head, Ms. McGinty, when I mentioned the clean coal technology program, and I do see here in the Administration proposal where it does mention innovative coal combustion technologies and nuclear power plant life extensions.

Ms. MCGINTY. Yes.

Mr. DOYLE. I would just say to you that if we're really serious about developing new technologies and addressing this program in the long term, because we're not going to affect this in the short term, $2.7 billion is a pittance of what we should be spending in research and development. That number should be increased maybe tenfold in this year's budget, if we're really serious about aggressively pursuing these technologies, and I would imagine-I don't see the exact breakdown of what's going into coal combustion technologies or the nuclear power plant life extensions, but I would imagine it's quite small at this point, and I would encourage the Administration to show some real commitment toward this. And let's make let's put a couple of zeroes in front of that number, if we're really serious about this.

[Laughter.]

Mr. DOYLE. Thank you, Mr. Chairman.

Chairman SENSENBRENNER. Thank you. The gentleman's time has expired. The gentleman from Maryland, Mr. Bartlett, last and definitely not least.

[Laughter.]

Mr. BARTLETT. Thank you.

Let me return to our questions which were rudely interrupted by a vote on the Floor, which was probably not as important for our country as the discussions that we're having here.

CARBON DIOXIDE EMISSIONS REDUCTIONS AND NUCLEAR POWER Mr. BARTLETT. If the Administration feels that CO2 production is such a menace to our society, why are not they more vigorously proposing an increase in the use of nuclear power production, since that produces zero CO2? I suspect the answer to that is that that's not politically popular, but the President is in a unique position to conduct an education program, so that Americans will support, rather than oppose, an increase in nuclear power production.

I have a couple more questions, and then you may answer as you wish.

GLOBAL WARMING

Mr. BARTLETT. I'd like some statement in the record as to why we feel that this very modest increase over a long number of years in global temperature is, in fact, moving us toward global warming rather than just a small upswing and an overall downswing. Twenty years ago, we were concerned that we were moving into another ice age. The data has not changed. Now we're concerned we're moving into global warming with absolutely disastrous effects. And I'd like to know what the evidence is that we're, in fact, moving to global warming.

Then the next question is: If we're moving to global warming, a modest global warming, so what? Our earth in the past has been very much warmer than it is now, with mastodons up in the tundra, and I'm sure Russia and Canada would not be at all averse to a bit of global warming. There will be winners and losers, but in terms of the globe, so what, if we're having a bit of global warming?

50-343 99-6

And the last question is: Just singling out CO2 alone, as Mrs. Holmes pointed out, it is not a pollutant. It is absolutely essential for plants. You know, if you plant a tree, it uses CO2 only in the summertime. The oceans, as I mentioned previously, are absolutely enormous. There may be something that we could do to enhance the floral use of CO2 in the oceans, since they are an enormous sink for CO2, and they do exactly what trees do, they convert CO2 into oxygen. I just feel that we have nowhere near enough-see, almost all of this discussion has gone from a premise that we've got to do something because we're facing a disaster. As a scientist, I'm not at all sure there is any evidence, any credible evidence, to move us in that direction.

What I would like to see us do is move to more alternative energy use, not because it's a disaster coming from global warming or increased CO2, but simply because we will run out of the fossil fuels. They are not going to last forever, and we need to have some alternatives to that.

Thank you.

Chairman SENSENBRENNER. Who would like to answer that in a minute and 50 seconds?

[Laughter.]

Mr. BARTLETT. I really gave the questions for the record. I know that you can't answer these questions here, but I think that the answers are very important ones, and hope we will

Chairman SENSENBRENNER. Mr. Bartlett is the kindest member of the Committee in not requiring any of you to answer any of his questions.

[Laughter.]

Chairman SENSENBRENNER. I would like to thank all of the witnesses for their patience and for their excellent testimony. I think that we've begun the national debate on the Kyoto treaty on a very good note, and that there are a lot of facts on the table. Certainly more facts and more opinions will be on the table before the Nation and the Senate and the House make up its mind, but the Science Committee started it out.

So, again, thank you, witnesses, and thank you, Committee members.

And the Committee is adjourned.

[Whereupon, at 1:00 p.m., the Committee was adjourned, to reconvene at the call of the Chair.]