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effective ways to reduce greenhouse gases, along with a significant increase in funding. In addition, the Senate may want to consider establishing stable funding for research and development. The Senate may also want to consider increasing the emphasis on publicprivate partnerships, which have yielded some of the greatest federal R&D successes in years past.

Third, under the Byrd-Stevens bill, the Climate Change Response Strategy will be required to incorporate mitigation approaches to reduce, avoid, and sequester greenhouse gas emissions. This is an extremely important provision, and will force us to take a hard look at our policy choices.

We believe that it will be extraordinary difficult, if not impossible, to muster the kind of sustained effort needed to reduce, avoid and sequester greenhouse gas emissions without the force of legally binding commitments. There is little incentive for any company to undertake real action unless, ultimately, all do, and are in some manner held accountable. Markets, of course, will be instrumental in mobilizing the necessary resources and know-how; market-based strategies such as emissions trading will also help deliver emissions reductions at the lowest possible cost. But markets can move us in the right direction only if they are given the right signals. In the United States, those signals have been neither fully given nor fully accepted.

Three decades of experience fighting pollution in the United States have taught us a great deal about what works best. In general, the most cost-effective approaches allow emitters flexibility to decide how best to meet a given, binding emissions limit; provide early direction so targets can be anticipated and factored into major capital and investment decisions; and employ market mechanisms, such as emissions trading, to achieve reductions where they cost least. To ease the transition from established ways of doing business, targets should be realistic and achievable. What is important is that they be strong enough to spur real action and to encourage investment in development of the technology and infrastructure needed to achieve the long-term objective.

A good first step is to get our house in order by immediately requiring accurate measurement, tracking and reporting of greenhouse gas emissions. In addition, the government could enter into voluntary enforceable agreements with companies or sectors willing to commit to significant reductions.

While such efforts can help get the United States on track, the long-term emission reductions needed can be achieved only with a far more comprehensive—and bindingstrategy. Alternative approaches should be closely studied, and the results publicly debated. But much of the analysis thus far suggests that a "cap-and-trade" systemwhich sets an overall cap on emissions and establishes a market in carbon credits--can provide the private sector the certainty they need coupled with the flexibility and incentive to achieve emission reductions at the least possible cost.

An effective Climate Change Response Strategy will incorporate these and other mitigation measures.

As a side note, I should point out that congressional debate over the mitigation measures should start now, and not await completion of the strategy - especially since the debate will take some time to resolve. As Senator Byrd said when he introduced his bill, "[t]his legislation is intended to supplement, rather than replace, other complementary proposals to deal with climate change in the near term on both a national and international level."

In closing, Mr. Chairman, the Byrd-Stevens Climate Change Strategy and Technology Innovation Act of 2001, if enacted quickly and implemented in a serious manner, will provide an excellent foundation for climate change policy in this country. Thank you for the opportunity to testify in support of it.

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The Role of Energy Technology in
Stabilizing Greenhouse Gas Concentrations

Statement to the
Senate Committee on
Governmental Affairs

James Edmonds
Senior Staff Scientist

Pacific Northwest National Laboratory
Battelle Memorial Institute

July 18, 2001

Thank you Mr. Chairman and members of the Committee for the opportunity to testify here this morning on the potential contribution of energy technology to addressing the issue of global climate change. My presence here today is possible because the US Department of Energy, EPRI and numerous other organizations in both the public and private sectors have provided me and my team at the Pacific Northwest National Laboratory (PNNL) long-term research support. Without that support much of the knowledge base upon which I draw today would not exist. That having been said, I come here today to speak as a researcher and the views I express are mine alone. They do not necessarily reflect those of any organization.

My observations today draw upon the work that was conducted under the Global Energy Technology Strategy Program to Address Climate Change, an international, public/private sector collaboration' advised by an eminent Steering Group2. Analysis

1 Sponsors of the program were: Battelle Memorial Institute, BP, EPRI, ExxonMobil, Kansai Electric Power, National Institute for Environmental Studies (Japan), New Economic and Development Organization (Japan), North American Free Trade Agreement-Commission for Environmental Cooperation, PEMEX (Mexico), Tokyo Electric Power, Toyota Motor Company, and the US Department of Energy. Collaborating research institutions were: The Autonomous National University of Mexico, Centre International de Recherche sur l'Environnment et le Developpement (France), China Energy Research Institute, Council on Agricultural Science and Technology, Council on Energy and Environment (Korea), Council on Foreign Relations, Indian Institute of Management, International Institute for Applied Systems Analysis (Austria), Japan Science and Technology Corporation, National Renewable Energy Laboratory, Potsdam Institute for Climate Impact Research (Germany), Stanford China Project, Stanford Energy Modeling Forum, and Tata Energy Research Institute (India).

2 Richard Balzhiser, President Emeritus, EPRI; Richard Benedick, Former US Ambassador to the Montreal Protocol; Ralph Cavanagh, Co-director, Energy Program, Natural Resources Defense Council; Charles Curtis, Executive Vice President, United Nations Foundation; Zhou Dadi, Director, China Energy Research Institute; E. Linn Draper, Chairman, President and CEO, American Electric Power; Daniel Dudek, Senior Economist, Environmental Defense Fund; John H. Gibbons, Former Director, Office of Science and Technology Policy, Executive Office of the President; José Goldemberg, Former Environment Minister, Brazil; Jim Katzer, Strategic Planning and Programs Manager, ExxonMobil; Yoichi Kaya, Director, Research Institute of Innovative Technology for the Earth, Government of Japan; Hoesung Lee, President, Korean Council on Energy and Environment; Robert McNamara, Former President, World Bank; John

conducted at the Pacific Northwest National Laboratory as well as in collaborating institutions around the world during the first phase of research supports four general conclusions:

1. It's concentrations of greenhouse gases that matter. For CO2, it is cumulative, emissions by all countries, over all time that determines the concentration-not emission by any individual country, no matter how great, or any individual year; Technology is the key to controlling the cost of stabilizing the concentration of greenhouse gases;

2.

3.

4.

There's No "Silver Bullet.” That is, no single technology controls the cost of stabilizing CO2 concentrations under all circumstances. Managing the cost of stabilizing the concentration of greenhouse gases, at any level, requires a portfolio of energy R&D investments across a wide spectrum of technology classes-from conservation to renewables to nuclear to fossil fuels, to hydrogen systems and fuel cells to biotechnology, to natural and engineered carbon capture and sequestration and advanced fossil fuel energy systems, and undertaken by both the public and private sectors.

Energy Technology Development Is One Part of a Larger Comprehensive Strategy. While technology is pivotal when it comes to controlling the cost of stabilizing the concentration of greenhouse gases, it is only one of four major elements that are needed in a comprehensive program to address climate change. including:

1.

2.

3.

4.

Reduction of scientific uncertainties,
Adaptation to climate change, and

A credible, global commitment that greenhouse gas concentrations
will be limited, as well as

Energy technology R&D.

1. It's Concentrations of Greenhouse Gases That Matter. The United States is a party to the Framework Convention on Climate Change (FCCC). The FCCC has as its objective the "stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system." (Article 2) This is not the same as stabilizing emissions. Because emissions accumulate in the atmosphere, the concentration of carbon dioxide will continue to rise indefinitely even if emissions are held at current levels or even at some reduced level. Limiting the concentration of CO2, the most important greenhouse gas, means that the global energy system must be fundamentally transformed by the end of the 21" century. Given the long life of energy infrastructure, preparations for that transformation must start today.

Mogford, Group Vice President, Health, Safety and Environment BP; Granger Morgan, Professor, Carnegie-Mellon University; Hazel O'Leary, Former Secretary, US Department of Energy; Rajendra K. Pachauri, Director, Tata Energy Research Institute; Thomas Schelling, Distinguished University Professor of Economics, University of Maryland; Hans-Joachim Schellnhuber, Director, Potsdam Institute for Climate Impact Research; Pryadarshi R. Shukla, Professor, Indian Institute of Management; Gerald Stokes, Assistant Laboratory Director, Pacific Northwest National Laboratory; John Weyant, Director, Stanford Energy Modeling Forum; and Robe White, Former Director, National Academy of Engineering.

A popular myth is that the world is running out of fossil fuels and will therefore make a natural transition to an energy system based on renewables and conservation during this century, thus leading to a natural limit on cumulative carbon emissions. The reality is that while the most attractive grades of fossil fuel resources may be limited, fossil fuels as a class are abundant and hold the potential of remaining the core of the global energy system throughout the century ahead.

Growth in population and incomes can be expected to require a concurrent growth in the demand for energy services. It is this growth in demand for energy services coupled with the abundance and usefulness of fossil fuels that is anticipated to lead a continued growth in cumulative global emissions of carbon to the atmosphere throughout the 21st century. Given these two facts, research designed to enable the continued use of fossil fuels while simultaneously addressing the climate issue is particularly attractive.

Limiting cumulative global emissions implies that the global energy system, not just the United States energy system, must undergo a transition from one in which cmissions continue to grow throughout this century into one in which emissions peak and then decline. Coupled with significant global population and economic growth, this transition represents a daunting task even if an atmospheric CO2 concentration as high as 750 ppmv is eventually determined to meet the goal of the Framework Convention— though the concentration that will prevent "dangerous" interference with the climate system is not yet known.

2. Technology is the key to controlling the cost of stabilizing the concentration of greenhouse gases. Stabilizing the concentration of greenhouse gases in the atmosphere will require a credible commitment to limit cumulative global emissions of CO2. Such a limit is unlikely to be achieved without cost but that cost will in large measure be shaped by the character of the energy technology options available to limit cumulative global emissions of CO2.

It is not well recognized that most long-term future projections of global energy and greenhouse gas emissions and hence, most estimates of the cost of emission reductions, assume dramatic successes in the development and deployment of advanced energy technologies that occur for free. For example, the Intergovernmental Panel on Climate Change developed a set of scenarios based on the assumption that no actions were implemented to mitigate greenhouse gas emissions. The central reference case that assumes "technological change as usual" is called IS92a. This central reference scenario assumes that by the year 2100 three-quarters of all electric power would be generated by non-carbon emitting energy technologies such as nuclear, solar, wind, and hydro, and that the growth of crops for energy (commercial biomass) would account for more energy than the entire world's oil and gas production in 1985. Yet with all these assumptions of technological success, the need to provide for the growth in population and living standards around the world drive fossil fuel emissions well beyond 1997 levels of 6.6 billion metric tons of carbon per year to approximately 20 billion metric tons of carbon per year. Subsequent analysis by the IPCC as well as independent researchers serves to

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