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what the impact of each of these measures are in precise quantitative terms and being able to bench mark consequently what these terms all add up to.

I don't know how you quite do it, having done a lot of work like this is my career. It's very tough and represents still another uncertainty. The more information the administration can come forward with, sharing in a dialogue with the business community and others so that we can go back and say no, that's an unrealistic assumption, we really ought to suggest such and such, the better off we will all be.

I would come back, Mr. Chairman, to conclude my remarks by saying I think the administration did a good job in terms of balancing growth, environmental, greenhouse and technical considerations in an environment where there is a high degree of uncertainty.

At this point, the thing we most need from the administration is additional information so that we can work with them even more closely. To, on the other hand, suggest that we should mandate or will more definitive actions I think fly in the face of the uncertainty I have talked about. Thank you, Mr. Chairman.

[The prepared statement of Mr. Jasinowski follows. The reports of the Global Climate Coalition are retained in the subcommittee files.]

WRITTEN STATEMENT OF THE GLOBAL CLIMATE COALITION

before the

SUBCOMMITTEE ON ENERGY AND POWER
COMMITTEE ON ENERGY AND COMMERCE
UNITED STATES HOUSE OF REPRESENTATIVES

NOVEMBER 16, 1993

Mr. Chairman, Members of the Subcommittee

The Global Climate Coalition (GCC), the leading business voice on climate change, is a broad-based organization of business trade associations and companies representing virtually all elements of United States industry, including the energy-producing and energyconsuming sectors. The Coalition was established in 1989 to coordinate business participation in the scientific and policy debate on the global climate change issue. The members of the GCC have been very active on the issue, and have participated in the Rio Conference, legislative debates in the Congress, the United Nations Framework Convention on Climate Change deliberations, and in the development of the U.S. National Action Plan. A list of our members is attached (Attachment 1).

President Clinton's Climate Change Action Plan to reduce greenhouse gas emissions to 1990 levels by 2000 is a balanced approach that acknowledges the importance of economic growth and employment and relies primarily on voluntary business/government partnerships and initiatives to reduce greenhouse gas emissions. While the GCC does not believe that rigid targets and timetables for greenhouse gas reductions are called for, the approach taken in the Action Plan is clearly superior to economically harmful government command and control policies. Despite the rhetoric to the contrary, there is no scientific consensus on whether man-made greenhouse gas emissions will lead to dangerous changes in the global climate. The greatest environmental and societal benefits will come from the combination of a robust economy and American ingenuity in developing the technology to reduce these emissions where and when it makes economic sense to do so. The President's approach follows this general policy and builds on the strengths of America's leadership role in energy efficiency and environmental protection technology.

The GCC is also encouraged by the Action Plan's support of the concept of Joint Implementation. To be effective, any climate change program must recognize that the issue is global in nature and that most of the future growth in man-made emissions will come from the developing countries. While the details of the Joint Implementation portions of the Plan have not been developed, it makes sense to recognize actions taken by U.S. entities to reduce greenhouse gas emissions in other countries, thereby providing a critical and cost effective mechanism to encourage the introduction of cleaner, more modern technology where it is most needed. It should be a "win-win" policy for the U.S. to promote technology cooperation and expertise to help the developing nations increase their economic growth while minimizing their greenhouse gas emissions. The GCC looks forward to working with the Administration to develop the details of a positive program on Joint Implementation that will avoid a costly new bureaucracy both within the U.S. government and the United Nations.

While the Action Plan's approach of relying on voluntary business/government partnerships and actions is the preferable approach, the Coalition would be remiss if we did not point out some concerns with the Plan and how it will fit with the U.S. National Action Plan required under the United Nations Framework Convention on Climate Change, and which may be due in approximately one year.

SCIENTIFIC UNCERTAINTY

One caveated sentence in the Preface is the only reference in the Action Plan stating that the science of greenhouse gas emissions and climate change is uncertain at best. There is no disagreement 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 have increased as a result of man's activities. In fact, while many scientists agree that continued accumulation of greenhouse gases means that some changes in global temperatures are possible, there is substantial uncertainty within the scientific community regarding the timing, magnitude, rate, and regional impacts of any such changes. Many scientists have pointed out that we do not have enough understanding to explain climate variability over the last century, and therefore question our ability to predict climate change over the next century. It is difficult to justify major and costly actions based on this uncertain science.

The dire predictions of elevated temperatures, rising sea levels, increased storm activity and agricultural dislocation that are made by some are primarily based on the general circulation models (GCMs). These computer models, as sophisticated as they are, remain inadequate for setting national and international policy regarding future climate change. One example to prove this point is the timing of any "global warming". The Intergovernmental Panel on Climate Change (IPCC) indicated in 1992 that a doubling of total Co, in the atmosphere may indicate (based on the GCMs) a potential warming of 1.5° C to 4.5° C by the year 2100, almost 50 years later than the estimate reported in 1990. Indeed, current models that have not been able to replicate the past climate changes cannot be relied on for forecasting temperatures 50 to 100 years from now.

Future research on and incorporation into the GCMs of the role of water vapor, clouds, oceans, polar ice caps, solar activity and a host of other variables is vital to improving the capability of the models. The Administration should acknowledge that it will approach the need to resolve scientific uncertainty with the same level of urgency as it does its plans to monitor and evaluate progress on the Action Plan. Long term strategies for reducing greenhouse gas emissions, and particularly policies which contemplate legislative or regulatory mandated actions with adverse economic consequences to the U.S. and the world, cannot be prudently fashioned until this uncertainty is substantially reduced.

ECONOMIC UNCERTAINTY

While the Plan recognizes in Appendix I that forecasting future emissions is an uncertain undertaking that can be impacted by changes in economic growth, energy prices, cost and performance of technologies used, the details on the assumptions used in developing the Plan are not provided. These assumptions could be unrealistic. We do not know. Access to such data for the overall plan and for each of the 50 action items is essential for business to judge whether the actions are feasible, cost effective and do not put U.S. industry at a competitive disadvantage with industries in other developed countries whose National Action Plans and assumptions may be different than ours.

The Plan states that the measures outlined are "cost effective" and therefore business and industry will participate out of their own self interest. We can only hope that it is true that most, if not all, of the measures are "cost effective" as that term is conimonly understood - i.e., a reasonable rate of return on capital invested, within a reasonable time period. As capital is scarce, these programs will have to compete with other uses such as quality improvements and bringing new products to market. The Plan contemplates $60 billion in new private spending over the next six years and, by anybody's reckoning, that is a lot of money. The economy is fragile as evidenced by continuing layoffs at many companies. If $60 billion is spent on energy efficiency, most of these funds will not be available to manufacturers to expand capacity, improve quality and develop new product and other activities vital to the creation of jobs in a competitive world economy. Again, more details of the individual measures will allow the business community and the Congress to help determine their workability.

The economic concerns expressed above should be viewed from the perspective that American industry has decreased its energy intensity (i.e. amount of energy used per unit of output) over the last 15-20 years by 50%. A recent study by EOP Group, Inc. finds that U.S. manufacturing has led the world in reducing energy intensity (See Attachment II). To the extent that the measures in the Action Plan will generate true cost-effective energy savings, we believe that American industry will respond positively to the program.

GLOBAL CONCERNS

The Administration has correctly acknowledged that the President's "commitment" to return greenhouse gas emissions to their 1990 levels by the year 2000 is a "political commitment" as opposed to a legally binding requirement of the Framework Convention. Nevertheless, the GCC is concerned that this important distinction will be overlooked or forgotten when, as early as one year from now, the U.S. must submit its National Action Plan under the Framework Convention. The Climate Change Action Plan states that the Plan, or an "updated version", will be the cornerstone of the U.S. National Action Plan. If the targets and timetables of the "political commitment" become incorporated into the National Action Plan, the United States runs the risk of unilaterally placing U.S. industry at a competitive disadvantage in world markets.

It is less than clear that the other developed countries and their industries, especially in the European Community and Japan, will respond to the Framework Convention with definitive actions comparable to U.S. There have been statements made that the Action Plan will "reestablish" the U.S. as the environmental leader. The U.S, in fact, has never lost its leadership. As noted in the EOP Group study of August 1993, (Attachment III) the U.S. allocates more of its Gross Domestic Product to environmental protection than the European Community, and our environmental laws are generally more stringent. U.S. industry has achieved greater improvements in energy efficiency than other industrialized countries (Attachment IV) while being subject to stricter environmental standards that often require more energy intensive processes. Any command and control actions "voluntary" actions that are not truly "cost-effective", will jeopardize U.S. competitiveness in the world markets and could result in further job losses.

or even

TIMING OF PLAN REVISIONS AND LONG TERM ACTIONS

The GCC is concerned that many of the programs will have barely begun and some will not yet be underway when the plan is reviewed next fall for incorporation into the National Action Plan to be submitted to the Conference of the Parties. For example, two of the more important programs, the Motor Challenge and voluntary reporting under section 1605(b) of the Energy Policy Act, will not even get started until the spring of 1994 at the earliest. Progress between now and 2000 will not be linear, with the greatest progress achieved toward the end of the period. Therefore, it is vitally important that the Administration develop realistically attainable benchmarks for measuring progress. Otherwise, critics of the partnership approach will be encouraged unrealistically to renew their call for "command and control" mandates when the Plan is reviewed one year, three years, and five years from now.

Another fundamental concern is the Plan's requirement that a White House led task force make initial recommendations by the end of 1994 for a long term strategy to reduce greenhouse gas emissions after the year 2000. Such unilateral action is clearly premature and beyond the requirements of the Framework Convention. The science of climate change will still be extremely uncertain (the next full IPCC science report is not even due until 1995), and the GCC will oppose any regulatory or legislative initiatives that would impose unreasonable costs and loss of jobs, or would make U.S. industry less competitive in world markets. It is premature to determine a post 2000 strategy before the science and economic implications are better understood.

CONCLUSION

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