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utility programs and will send clear and consistent signals to equipment manufacturers, distributors and retailers. In the future, the Consortium for Energy Efficiency will facilitate information exchange and coordinated purchasing of super efficient equipment.

EPA has identified a large number of opportunities for future "Golden Carrots", including heat pumps, clothes washers, clothes dryers and solar water heaters.

Another area in which EPA programs are enhancing markets for efficient products is office equipment. Computer equipment is the fastest growing electricity load in the fastest growing electricity-using sector: commercial. EPA's Green Computers program is a voluntary effort just underway with manufacturers of computer equipment to produce and market energy-efficient desktop computers. EPA will provide the manufacturers with a label indicating that this equipment uses less electricity. Manufacturers can use this label to indicate to consumers that their computer is energy-efficient. We believe that this concept

can also be extended to office copiers, fax machines, and other energy-using consumer products. By amplifying market signals for efficient products, these programs can stimulate real savings both in terms of energy and reduced greenhouse gas emissions.

Regulatory and Legal Reforms

Step three of

EPA's strategy is to help ensure that corporations are not penalized for efficient use of energy.



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programs I have just outlined will not function effectively if utilities lose money their customers become more energyefficient. As long as utilities have a regulatory structure which provides incentives to sell kilowatt hours and disincentives to save kilowatt hours, national efforts toward energy efficiency will be at odds with the shareholder objectives currently in place in most utility jurisdictions. For federal policies to be effective, they must not be inconsistent with the objectives of utilities around the country.

Since the mid-1980's, the Department of Energy has had a program of working with the National Association of Regulatory Utility Commissioners and individual utilities in support of Integrated Resource Planning, an approach that seeks to ensure that both supply and demand options are evaluated and rewarded similarly. This effort, together with pioneering work in Massachusetts and California by utilities and State commissions, has led to a sea change in State regulatory treatment of energy efficiency investments by utilities.

During the past eight months, EPA has engaged in a widespread outreach effort that complements what is already underway. EPA is meeting with State utility commissions and governments to discuss the environmental and economic benefits of regulatory reforms. Relevant issues include de-coupling profits from sales and "shared

[blocks in formation]

the acid rain provisions of the Clean Air Act amendments. EPA hopes to continue this positive working relationship with members of the State regulatory community.

Methane Initiative

While not based on products or corporate purchasing per se, profitable options identified by EPA for reducing emissions of methane to the atmosphere also fit into the strategy. Methane is an attractive focus for reducing greenhouse gas emissions because it is more effective at trapping heat than carbon dioxide (CO2) and because it has energy value--so profitable systems can be designed to recover or better utilize this methane. This is possible with methane from landfills, methane from the management of animals (dairy and swine farming) and methane from coal mining. EPA is working to enhance market opportunities for methane recovery in these areas. This includes demonstrating profitable "on-site" energy generation for farms (while solving non-point source runoff problems) and working to remove barriers to energy recovery at landfills and coal mines. For example, property rights issues currently limit the recovery of "pipeline quality gas" emitted during coal mining in Appalachia. The underlying issues need to be examined with a view toward finding a solution.

Development and Demonstration

EPA is involved in three commercial-scale demonstrations to control methane and recover energy. Two of these are the world's

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first applications of a fuel cell for this purpose on landfill gas and also on anaerobic digester gas. A third demonstration is directed toward advanced pregasification for deep coal mines.

Expanded International Markets

Finally, EPA is helping develop international markets for efficient American technologies. At present, we have projects underway in China (refrigerators and coalbed methane), Russia (natural gas pipelines) and Poland (coalbed methane). These technology cooperation projects will contribute significantly to global environmental improvement, and potentially create large markets for domestic goods and services and will thereby decrease prices for these goods and services, both abroad and within our own borders.


Voluntary programs--following the model of EPA's green lights program--have demonstrated that they can reduce greenhouse gas emissions in a cost-effective way. We believe that by improving information dissemination about efficiency and continuing technology development and demonstration, cost-effective reductions in emissions of greenhouse gases can be achieved while promoting economic growth.

Mr. SHARP. Thank you, Ms. Claussen.

I just want to strongly compliment the efforts of you and others at the Agency on this, because I think it is very clear, you have demonstrated there is enormous potential for action, and also if people are willing to commit themselves and take action, there are many things that can be done. You don't always have to wait for the U.S. Congress or always have to wait for the President of the United States or always have to wait for the bureaucracy of one of the great American corporations in order to act, and I think you folks are to be complimented on what you are doing.

It also suggests to me that this ain't so hard; we could do an awful lot and make a lot of improvements environmentally and on global warming and everything else without a lot of expense and without a lot of effort. Now the next step may be a lot more expensive, but—well, I did mean to get all the testimony before I started making speeches.

Let's see. I think Mr. Volcansek is next.


Mr. VOLCANSEK. Thank you, Mr. Chairman. I'm pleased to be here this morning, and I want to thank you for the opportunity to comment on the implications of global climate change policy alternatives on the international competitiveness of U.S. industry, and, with your permission, I would like to submit my complete statement for the record.

The Department of Commerce is involved in the formulation of U.S. climate change policy through participation in U.S. Government and intergovernmental working groups on climate change in consultation with the private sector, and in conducting scientific and economic research. The Department of Commerce is carrying out a number of studies on the international competitiveness aspects of the climate change issue, including the effects on U.S. industry of measures to limit CO2 emissions and the opportunities which may arise for U.S. business.

The results of these studies are being made available to the other agencies involved in the climate change issue as well as to the public. The climate change actions that the United States can commit to that are cost effective, given the current state of scientific knowledge of climate change, are those that have been included in the climate change action plan and the National Energy Strategy. To go beyond these actions by imposing, for example, onerous restrictions on fossil fuel use or carbon taxes would be economically harmful. Moreover, unless restrictive actions were taken worldwide, they would not succeed in stabilizing greenhouse gas emissions.

The studies completed by the economic consulting firm of DRI/ McGraw-Hill for the Department conclude that it would be more difficult and costly for the United States to reduce its emissions of carbon dioxide, one of the principal anthropogenic greenhouse gases, than would be the case with a number of our major trading partners. A principal reason for this is that the United States is projected to have a higher rate of population growth in the future than many of the other industrialized countries. The United States

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