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The global warming threat demands no less. The greenhouse gas emissions of the rich and powerful nations of the world pose a serious threat to the very survival of many of the world's small island states, along with the well-being of natural ecosystems and human communities over the whole world. Yet because this injury takes place slowly, over years, even decades, and because of the industrialized world's addiction to fossil fuels, no emergency sessions are held, no firm response is organized.

This inactivity must now end. It is unacceptable to the people of the world that these negotiations now teeter at the edge of collapse. Urgent consultations must be held, at the highest levels of government, within and between nations (particularly the OECD nations, whose disunity has brought us to this point), over the next two months. A substantial shift in the U.S. negotiating stance is particularly critical. When these negotiations resume later this spring, it must be with a new spirit of determination and cooperation that will enable agreement to be reached on an effective climate change treaty in time for signature in Rio.

A weak treaty will not do. Neither will postponement beyond Rio of these tough decisions so urgently needed.

I thank you for your attention, and wish you well in your efforts over the weeks ahead. Mr. Chairman, distinguished delegates, we are, all of us, quite literally in your hands.

Mr. SHARP. Mr. Baroody, we are happy to have you with us now.

STATEMENT OF MICHAEL E. BAROODY Mr. BAROODY. Thank you, Mr. Chairman.

I am testifying today, as you know, on behalf of the Global Climate Coalition, which is a broad-based organization of business, trade associations, and companies representing virtually all elements of U.S. industry, including the energy producing and energy consuming sectors.

Mr. Chairman, I congratulate you for framing the climate change issue in the context of industrial competitiveness. Ill-considered policy responses to issues such as climate change that adversely impact the competitiveness of our Nation's industries would ultimately hamstring our ability to respond to other pressing energy and environmental challenges.

There is no question that measures to sharply reduce greenhouse gas emissions would impose massive costs on the U.S. economy. The GNP would fall by over $95 billion a year, 600,000 jobs per year would be lost, and the United States would suffer economic losses greater than its European and Japanese competitors. Science, not emotional or political reaction, must serve as the foundation for global climate policy decisions. Policy decisions made without the benefit of adequate scientific understanding of the complex global change phenomena could have far reaching and detrimental social and economic impacts.

The coalition supports a comprehensive and international approach to global climate change based on cost effective, scientifically sound policies that are independently justifiable in their own right. In addition, U.S. industry firmly believes that a crucial element not only of any international agreement on global climate change but also of this country's response to the issue must be technology cooperation in the international community.

Although many countries have announced substantial commitments to curb CO2, very few, if any, of the statements have been supported by binding obligations under the laws and regulations of those countries. As such, these so-called commitments are not particularly meaningful. However, any commitments made by the United States in the context of a treaty are binding under implementing laws and regulations that would be vigorously enforced by our regulatory authorities.

Many of the lesser developed countries have not made commitments to reduce their emissions of carbon dioxide or greenhouse gases. Because these developing countries have expanding populations and indigenous fossil fuel resources and they are planning significant economic growth in the future, they will be responsible for a majority of the greenhouse gas emissions growth in the near future. For example, China, with approximately 20 percent of the world's population, plans to double its electricity generation in the next 10 years and about 75 percent of that will be coal fired.

The effect of artificial carbon restrictions necessary to achieve the stabilization or reduction of greenhouse gas emissions would be devastating to the U.S. economy. A recent study conducted by Charles River Associates and endorsed by the coalition found that stabilizing carbon dioxide emissions at 20 percent below current levels would produce a loss in GNP of up to $95 billion a year.

For the past two decades, the United States has been at the forefront among the nations of the world on environmental policy and technology development and implementation. This gives us the edge in providing technology, training, operation, maintenance, and management assistance to developing countries and to economies in transition, including Eastern Europe, as those countries focus on the dual objectives of environmental improvement and economic development.

Specifically, the Federal Government could assist U.S. technology transfer activities by first helping countries prepare accurate and detailed needs assessments; second, by providing additional analysis and information on environmental technology needs and market opportunities to U.S. business; third, by identifying and eliminating impediments to technology transfer; fourth, by facilitating the entry and acceptance of new technologies where appropriate; fifth, by promoting U.S. businesses as sources of environmental technology to meet the needs of developing countries and their industries; and, sixth, by supporting research, development, demonstration, and commercialization programs.

The Global Climate Coalition believes that any policy response to the climate change issue must take into account impacts on industrial competitiveness. Ill-considered policy responses to issues such as climate change that adversely impact that competitiveness would ultimately hamstring our ability to respond to this and other pressing energy and environmental challenges.

Thank you, Mr. Chairman. I would be happy to take your questions.

[Testimony resumes on p. 184.]

[The prepared statements of Mr. Baroody and the Global Climate Coalition follow:]

TESTIMONY OF THE GLOBAL CLIMATE COALITION

before the
ENERGY AND POWER SUBCOMMITTEE

of the
COMMITTEE ON ENERGY AND COMMERCE
UNITED STATES HOUSE OF REPRESENTATIVES

March 3, 1992

Mr. Chairman, Members of the Subcommittee:

I am Michael E. Baroody, Senior Vice-President of the National Association of Manufacturers and Chairman of the Board of the Global Climate Coalition. The Global Climate Coalition is a broad-based organization of business trade associations and companies representing virtually all elements of U.S. industry including the energy producing and energy consuming sectors. A list of our members is attached. We are pleased to provide our comments on the implications for the international competitiveness of U.S. industry in setting domestic and international climate change policy.

Mr. Chairman I congratulate you for framing the climate change issue in the context of industrial competitiveness. A strong and growing economy and a robust industrial sector are prerequisites to addressing domestic and international environmental challenges. Ilconsidered policy responses to issues such as climate change that adversely impact the competitiveness of our nation's industries would ultimately hamstring our ability to respond to other pressing energy and environmental challenges.

With a strong and growing economy, United States industry can continue to develop and produce technologies that will make the U.S. economy more efficient, and through technology cooperation make it possible for developing nations and those with economies in transition to expand their economies in an environmentally sound manner.

The Coalition believes that proposed climate change response strategies must be thoroughly analyzed to assess their competitive impacts on our economy. There is no question that measures to sharply reduce greenhouse gas emissions would impose massive costs on the U.S. economy.

GNP would fall by over $95 billion a year, according to a study
by Charles River Associates. A 1990 Congressional Budget Office
study reached similar conclusions.

Testimony of Michael E. Baroody
March 3, 1992
Page 2

600,000 jobs per year would be lost, according to a recently
released Department of Commerce study.

And the U.S. would suffer economic losses greater than its
European and Japanese competitors, according to the same study.

SCIENCE

Science -- not emotional or political reactions -- must serve as the foundation for global climate policy decisions. Rational decision-making requires that we first understand the nature and extent of whatever problems we are trying to address and then formulate our responses based on this understanding. For science to properly provide the basis for critical policy decisions, enhanced scientific research must be the first priority as it is in the United States. Policy decisions made without the benefit of adequate scientific understanding of the complex global change phenomena could have far-reaching and detrimental social and economic impacts.

There is no disagreement over the theory that there is a natural "greenhouse effect" which keeps the Earth warmer than it would otherwise be, and that atmospheric accumulations of several greenhouse gases are increasing. However, there is still substantial uncertainty about the importance of human-induced global warming. While some minor global climate changes have been suggested, it has yet to be determined whether that is a result of natural forces (which account for the overwhelming share of the greenhouse gas concentrations and emissions each year), human activity or a combination of both. While many scientists agree that continued accumulation of greenhouse gases means that some changes in global temperatures and climate are possible, there is substantial uncertainty within the scientific community. The timing, magnitude, rate, and regional impacts -- and, hence, the costs and benefits, of those changes remain unclear. These effects may well be small relative to the range of natural variation.

To remove as much of this kind of uncertainty as possible, the Coalition strongly supports a coordinated international research program. The Coalition also recommends that the U.S. continue its substantial investment in this area (over $1 billion invested in FY 1991, $1.1 billion committed in FY 1992 and $1.4 billion requested in FY 1993) with future research focused on: improving our understanding of the carbon cycle, determining the roles of clouds, oceans, polar ice caps, soil and forests and their interactions; identifying regional impacts of possible climate changes; differentiating between climate change arising from natural causes and changes attributable to manmade emissions; understanding the role of CFC's and their substitutes; understanding the role of solar activity in climate change; and testing and improving "general circulation models" -- the computer models used to predict complex interactions of the

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