611 Clean Development Mechanism Q12. On page 4 of your written testimony, you also state: "Clean Development Mechanism: Under this innovative provision, developed countries will be able to use certified reductions from project activities in developing countries to contribute to compliance with greenhouse gas reduction targets. This provides both a mechanism to secure low cost reductions throughout the world and a powerful economic incentive to lead developing countries toward more climatefriendly technologies. This represents an important avenue for developing country actions to reduce emissions in cooperation with U.S. private sector firms that have the technology, resources and know-how to make such reductions in ways that save energy, reduce emissions and improve performance. This provision effectively embodies the U.S. proposal for joint implementation with credit for activities in developing countries. It also provides, again at U.S. insistence, an incentive for early action by permitting credit for reductions that occur beginning in the year 2000." Q12.1 Article 12 of the Kyoto Protocol, which establishes the Clean Development A12.1 Article 12 does not call for the creation of any new bureaucracy. It will rely on existing entities to perform functions that fall within their areas of expertise. In developing the rules of the road for implementation of the Clean Development Mechanism we will seek to ensure that procedures are the minimum required for the success of the program. Q12.2 Why is there a need for such an institutional mechanism for joint implementation (JI) projects? A12.2 The Clean Development Mechanism addresses many of the issues raised by countries concerning earlier proposals for joint implementation with credit. The agreement reached in Kyoto clearly allows for credit for such projects while establishing a clear process for certifying such projects. Q12.3 Under the Kyoto Protocol, what would be the status of existing and pending bilateral JI projects promoted by the U.S. Initiative on Joint Implementation? A12.3 Existing projects are likely to be evaluated, as appropriate, under the provisions agreed to in Kyoto for joint implementation or the Clean Development Q12.4 What is the Administration's position on JI going into the November 1998 negotiations with respect to how this Clean Development Mechanism should work? A12.4 Given the fact that credit for reductions can begin in the year 2000, we believe it is important to develop the rules of the road for project approval as quickly as possible. We anticipate that issues related to implementation will be addressed at the Conference of the Parties in November of this year. Q12.5 What criteria would you expect for projects that qualify for Clean Development Mechanism financing? A12.5 The criteria for certifying projects under the Clean Development Mechanism is spelled out in Article 12, paragraph 5 of the Kyoto Protocol. This provision requires that projects be approved by the nations participating, that the project achieve benefits to mitigating climate change, that the reductions be additional to that which would have occurred in the absence of the project, and that the activity may involve public and/or private entities. The Clean Development Mechanism also contains provisions for financing projects with a small percentage set aside. This provision is limited to assisting developing countries that are particularly vulnerable to climate change to meet the costs of adaptation. Q12.6 How would emissions credits under the Clean Development Mechanism be allocated to contributing/investing countries or entities? A12.6 As has been the case under joint implementation, it will be up to the parties involved to negotiate the allocation of credit for projects under the Clean Development Mechanism. Q12.7 Isn't Clean Development Mechanism another form of foreign assistance by another name, only funded by the private sector, and if not, why not? A12.7 No. The Clean Development Mechanism provides a market-based approach to encouraging the use of technology in developing countries that reduces greenhouse gas emissions. It provides an added economic incentive for encouraging a shift in investments in developing countries toward more environmentally friendly technologies while providing opportunities for U.S. industry. 613 Emissions from the Military Q13. On page 4 of your written testimony, you also state: “Emissions from the Military: The U.S. obtained agreement on its proposal for an exemption for emissions from multilateral operations pursuant to the United Nations charter. This decision will ensure that nations do not hold back from participating in humanitarian, peacekeeping and other operations due to concerns about greenhouse gas emissions." Q13.1 Please cite the specific text of the Kyoto Protocol that provides such an exemption. A13.1 This agreement was concluded during the negotiations in Kyoto as a Decision of the Parties. As such, it will be legally binding on the Parties when the Protocol enters into force. Q13.2 Are unilateral operations subject to the terms of the Kyoto Protocol? If your answer is no, please cite the specific Protocol text that provides that unilateral operations are not subject to the Protocol. A13.2 The Kyoto Protocol does not limit emissions from international air or sea transport. Other emissions from unilateral operations are covered by the Protocol. Emissions are counted against the country in which they occur. Q13.3 To be more specific, if the Kyoto Protocol was in force would unilateral military action by the United States against Iraq be subject to its terms? If your answer is no, please cite the specific Protocol text that provides that unilateral military action by the United States against Iraq would not be subject to the Protocol. A13.3 See response to 13.2 Q13.4 If unilateral military action were subject to the terms of the Kyoto Protocol, what would be the national security implications? A13.4 The Department of Defense and Joint Chiefs of Staff fully support the Kyoto Q13.5 Will domestic emissions from military training exercises be counted against the U.S., and if so, what are the implications for our military readiness? A13.5 Domestic emissions from military training are part of our 1990 baseline and would be counted in determining total national emissions during a budget period. It is the policy of this Administration that measures intended to promote reductions in emissions of greenhouse gases shall not impair or adversely affect military operations and training (including tactical aircraft, ships, weapon systems, combat training, and border security). Q13.6 Concerning U.S. troops stationed overseas, will emissions from training and operations be counted against the host country or the U.S.? And if the host country, does that mean that U.S. troops overseas will be subjected to greater control by the host country, and how will this affect readiness? A13.6 The decision adopted in Kyoto leaves it up to the Parties involved to decide how emissions from overseas operations would be counted. President's FY 1999 Budget Tax Credits for Highly Fuel Efficient Vehicles Q14. On page 5 of your written testimony, you state: "Tax credits for highly fuel efficient vehicles: This credit would be $4,000 for each vehicle that gets three times the base fuel economy for its class beginning in 2003. A credit of $3,000 would be available beginning in 2000 for vehicles that get double the base fuel economy for its class. These credits would be available to jump start these markets and would be phased out over time.” Please specify-by year-the greenhouse gas reductions expected to be achieved through the application of the tax credit for highly fuel efficient vehicles. A14. We have not yet developed estimates of emissions reductions that will result from this credit. Several technical details of the proposal were deliberately not finalized at the time of the budget announcement in order to allow for thorough consultation with experts outside the government on some of these technical issues. Resolution of those technical issues will permit a more accurate estimate of greenhouse gas reductions than would be possible today. 615 President's FY 1999 Budget Tax Credits for Energy Efficient Equipment Q15. On page 5 of your written testimony, you also state: “Tax credits for energy efficient equipment: These credits (all of which are subject to caps) would include a 20% credit (subject to a cap) for purchasing certain types of highly efficient building equipment, a 15% credit for the purchase of solar rooftop systems, and a 10% credit for the purchase of highly efficient combined heat and power systems.” Please specify—by year and by tax credit—the greenhouse gas reductions expected to be achieved through the application of the tax credits for energy efficient equipment. A15. See response to Question number 14. President's FY 1999 Budget Proposal for Two New Partnerships for Heavy Trucks and Light Trucks, including Sport-Utility Vehicles Q16. On page 5 of your written testimony, you also state: "Two new partnerships are proposed for heavy trucks and light trucks, including sport-utility vehicles." Please describe these two new partnerships in detail, including funding, duration, participants, and cost-sharing requirements. A16. Please see attached information regarding this subject. |