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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


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

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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.

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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

as their customers become

more energy

efficient. 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

the Department of Energy has had a

program of working with the National Association of Regulatory

Utility Commissioners and individual utilities


support of

Integrated Resource Planning, an approach that seeks to ensure that

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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

savings" plans,

in which


have positive


incentives to aggressively pursue efficiency improvements. Conservation is also emphasized as a strategy for complying with

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the acid rain provisions of the Clean Air Act amendments.


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 - 10

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

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



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


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.

STATEMENT OF FREDERICK W. VOLCANSEK 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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