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Q24.4. Do current climate models account for such discrepancies?

A24.4. Obviously not. But most climate modellers are working hard to address them.

Q24.5. Can current models replicate the Earth's past climate of say the past 160,000 years, or the past 10,000 years? If so, to what accuracy, and if not, why should one have confidence in the projections of such models?

A24.5. On 160,000 or 10,000 year time frames, my answer is no. For a policy decision now, we should however focus on 100 year time frames. On this time frame, we cannot rule out the possibility of significant warming due to accumulating greenhouse gases. Therefore some action, carefully considered, is needed now.

Relative Impact of Various Greenhouse Gases

Q25. You testified that the earth's greenhouse effect is dominated by water vapor. How much of the greenhouse effect can be attributed to:

A25. The exact answer to this question depends on how you define the greenhouse effect. Measured by the effect of each gas on the upward flows of infrared radiant energy, I would give the following very approximate ranking:

Q25.1. water vapor?

A25.1. water vapor and clouds (96%)

Q25.2. carbon dioxide?

A25.2. carbon dioxide (3.3%)

Q25.3. methane?

A25.3. methane (0.5%)

Q25.4. CFCs?

A25.4. CFCs (offset by ozone they deplete)

Q25.5. other greenhouse gases?

A25.5. Other greenhouse gases (0.2%). For "other" gases, the effects of nitrous oxide are offset by the ozone it depletes, and the effects of stratospheric ozone are offset by the solar radiation it absorbs.

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Q26. Dr. Spencer testified that “if all the atmosphere's carbon dioxide were removed, we would still have over 98 percent of the earth's greenhouse effects." Do you agree with that statement and if not, why not?

A26. Yes, for a century or two after "removal" of the carbon dioxide, but not after that. Water vapor and clouds have residence times in the atmosphere of only days to weeks. After the (ex cathedra) removal of carbon dioxide, the ocean would be able to give up heat and carbon dioxide, to help maintain temperatures and thus sustain the water-driven greenhouse effect for a century or so. After that, the chronic effects of the loss of carbon dioxide forcing would tend to cool the Earth, and thus lower the water-driven greenhouse effect, and thus accelerate a cooling tendency.

Q27. How much would a doubling of carbon dioxide increase the overall greenhouse effect?

A27. By about 4.2 watts per square meter or 2.2%.

Deforestation

Q28. Does logging contribute to increasing CO2 concentrations or can it also reduce CO2 levels?

A28. Provided the logs go into materials which do not burn or decay, and provided the trees are replanted, then logging can be a sink for CO2.

Is Climate Change Underway?

Q29. Did the 1995 report of the Intergovernmental Panel on Climate Change (IPCC) conclude that climate change is already underway, and if so, what specific climate change?

A29. If you read the entire report, not just the summary for policymakers, then climate is changing but it could be due to natural or human causes or a combination of both.

HEARING OF THE SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

COMMITTEE ON SCIENCE

U.S. HOUSE OF REPRESENTATIVES

on

Countdown to Kyoto-Part 2: The Economics of a Global Climate Change Agreement

Thursday, October 9, 1997

Post-Hearing Questions Submitted to

Dr. W. David Montgomery

Vice President

Charles River Associates

Five-Lab Study

Q1.

Al.

Concerning the technology strategy outline in the DOE Five-Lab study, your testimony states that, “A technology strategy has great promise in the long run, but studies suggesting that it could eliminate (or even substantially reduce) costs by 2010 are seriously flawed.” Could you expand on that point?

The studies of optimal timing of emission reductions in which we have participated suggest that development and deployment of new, lower cost technologies for replacing fossil fuels will take 30 to 40 years. For example, the frequently cited article by Wigley, Richels and Edmonds published in Nature last year describes time paths for global emissions that would stabilize concentrations of greenhouse gases. For most realistic concentration goals, emissions continue to rise until 2020 or later, and then start to decline as new technologies become available and are deployed as the capital stock turns over. Emissions under this trajectory would not return to 1990 levels until about the middle of the 21" century. In work presented at the IPCC workshop in Oslo, Norway in August, additional analysis was presented showing that these trajectories can reduce costs by more than 50%, by allowing time for technology development and for the adoption of new technologies as the existing capital stock is replaced. The Five-Lab study admits that its speculations about technological breakthroughs in the next few years will take a great deal of luck. The time scales for research and development and for bringing new vehicle designs into production, for replacement of electric generating equipment, and construction of new buildings make it impossible to count on a technology strategy delivering major changes in energy supply and use in just 10 years.

The Five-Lab study is most seriously flawed by its failure to recognize two key facts. The first is that in order to achieve significant market penetration in 10 years in major energy using sectors like transportation, technology has to be available off the shelf now. The second is that if that technology is ready now to be incorporated in new products, and

Q2.

A2.

truly is cost-effective at today's energy prices, it would already be adopted by businesses and consumers pursuing their own economic interests. Forecasts that carbon emissions will only exceed 1990 levels by 25% in 2010, while GDP exceeds 1990 levels by more than 50% include a large amount of market driven improvement in energy efficiency and cost-effective replacement of fossil fuels. Getting more will be costly.

Do you think the scenarios in the DOE Five-Lab study are realistic, and if not, why not?

I do not think the scenarios in the DOE Five-Lab study are realistic. There are five reasons for this conclusion:

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The study assumes R&D breakthroughs that the study itself characterizes as requiring "luck", and provides no contingency for the normal delays and cost increases associated with crash development of new technologies.

For the most part, the study assumes 100% penetration of the most efficient technologies by 2010, ignoring the diverse ways in which these technologies would be used and the time required for them to be adopted when the capital stock turns over.

Assumptions in the study about how quickly technologies can be put in place ignore the normal pace of R&D, engineering, product design and capital turnover.

The Five-lab study claims that various technologies are available today, cost-effective, but not in widespread use. The fact that these technologies are not in use today is presumptive evidence there are hidden costs and drawbacks to their use (or that the Five-Lab study is just wrong about how those technologies will work).

The Five Labs are probably double-counting a large number of advances that are required just to achieve the 1% per year improvement in energy efficiency built into the EIA baseline.

Argonne Study

Q3.

A3.

One finding of DOE's Argonne study is that, “The assumed fuel price adders would permit developed countries, not subject to the assumed fuel price adders, to capture an increasing share of the world and U.S. markets.” In your view, is it likely that once energy-intensive industries are established in these countries they will be willing to enter into binding agreement to limit greenhouse-gas emissions sometime in the future?

No. One of the great dangers of leaving developing countries out of a current climate agreement is that investment in energy intensive industries will shift to those countries. Once they develop an economic base specializing in energy intensive industry and optimized for cheap energy, the likelihood that they will ever agree to emission limits

Q4.

A4.

becomes even more remote.

A July press release the Department of Energy said that the Argonne study, which showed that energy-intensive industries could suffer under a climate change agreement, reinforced the Administration's commitment to pursue policies that would avoid these negative impacts. I get the impression, reading your testimony, that you would argue that regardless of what policy agreement is reached, as long as it applies to just the industrialized countries, energy-intensive industries in the U.S. such as chemicals, oil refining, and steel will be hit quite hard. Is that your position?

Yes. In order to avoid adverse impacts on energy-intensive industries in the U.S., energy prices must increase by comparable amounts in all countries, including the developing countries. Assuring a level playing field requires very ambitious international policies, that significantly restrict national sovereignty. These would have to be as effective and universal as a fully functioning cap and trade system that includes all developing countries, so that the price of emission permits is the same across all countries, or a harmonized carbon tax across all countries. Neither has been proposed in the current negotiations or included in the Administrations policies, which at best ask for an undertaking from some developing countries to make an unspecified commitment at a future date. If instead of ensuring a level playing field internationally, the Administration tries to protect domestic energy-intensive industries by exempting them from restrictions on emissions limits applied to other sectors or industries, it will just shift the cost to other sectors in the economy and increase the total cost to the U.S. economy of meeting emission limits.

Costs of Reducing CO, Emissions

Q5.

A5.

Dr. Romm claims that your testimony on October 9, in which you said that you had "no uncertainty” that there would be costs associated with reducing CO2 emissions, contradicted a 1996 article you wrote. How would you respond?

My co-author, Mark Jaccard, and I now agree that the paper we wrote two years ago was too generous to the suggestion that emission reductions can be achieved at no cost. The article dealt broadly with studies of costs of reducing energy use in the United States and Canada. Dr. Jaccard was responsible for Canada and I for the United States. After reviewing bottom-up and top-down studies for the United States, I reached the conclusion that all of the studies that concluded that there would be no costs of reducing U.S. emissions were fatally flawed, and provided no reason for believing that costless emission reduction was possible. Each of the studies contained numerous errors and fallacies, many of which are repeated in the Five-Lab study.

As I mentioned in my testimony, it is impossible to find imperfections in U.S. energy markets different or greater than those in any other market in the U.S. economy. As a result, the evidence from market structure is that there will be no significant opportunities for cost-free energy conservation in the United States. Dr. Jaccard reached a somewhat

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