Biography of Constance D. Holmes Mrs. Holmes is Senior Vice President, Policy Analysis, at the National Mining Association, Washington, D.C. She heads the NMA Policy Analysis Department which is responsible for providing analytical and economic support for NMA policy positions, for market/production forecasts; for special analytical studies, the international activity of NMA (including the NMA affiliate, the Coal Exporters Association of the United States), technology transfer and R&D activities, the statistical publications of the association and development of industry databases. Mrs. Holmes joined NMA's predecessor, the National Coal Association (NCA) in 1969, was appointed Director of Economics and International Trade in 1976, Vice President, International Trade in 1981 and Senior Vice President, Policy, in 1988. She was Executive Director of NCA's affiliate, the Coal Exporters Association, from 1976 to 1988. Mrs. Holmes attended Iowa State University, Ames, Iowa and received a B.S., with highest distinction, in Business Administration from George Mason University in Fairfax, Virginia. She has done graduate work in economics and business at Virginia Polytechnic and State University, Blacksburg, Virginia and at George Washington University in Washington, D.C. Honorary society memberships include Beta Sigma Phi and Alpha Epsilon. She is an associate of the IEA's Coal Industry Advisory Board, and a member of the Board's Global Climate Committee. She has represented U.S. business on government delegations to the meetings of the International Negotiating Committee for a Framework Convention on Climate Change and the coal industry at all INC meetings, at the first Meeting of the Conference of the Parties to the Framework Convention and at subsequent climate negotiating meetings. Mrs. Holmes is Chairman of the Board of the Global Climate Coalition and is past Chairman of both the GCC's Operating Committee and International Committee. Mrs. Holmes is a past Treasurer of the International Association of Energy Economiststhe Washington Coal Club. Neither the National Mining Association (my employer) nor the Global Climate Coalition (the coalition represented at the Science Committee hearing on February 4, 1998) have received any federal funds for climate activities during the past three years. Cinder oxbe Constance D. Holmes Senior Vice President, Policy Chairman SENSENBRENNER. Thank you, Ms. Holmes. And, finally, Mr. Michael Marvin, Executive Director of the Business Council for Sustainable Energy. Mr. Marvin? STATEMENT OF MR. MICHAEL MARVIN, EXECUTIVE DIRECTOR, THE BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT, WASHINGTON, DC Mr. MARVIN. Thank you, Mr. Chairman, Mr. Brown, members of the Committee. Just for background, the Business Council for Sustainable Energy was created in 1992 and is comprised of companies and energy industry trade associations who are concerned about the economic, environmental, and national security ramifications of our energy production and use. The Business Council for Sustainable Energy believes that we have sufficient information about the science of global science change to merit a response by policymakers. The Council has supported early action on CO2 reduction, if those efforts focus on technology substitution and market-based responses. There are right ways and there are wrong ways to reduce CO2 emissions. Having begun with that, I want to say that the Council as a whole believes that the agreement reached in Kyoto could be a first step. I say "could be" because, as has been made clear this morning, there remain enough questions about the treaty's provisions that it is prudent to withhold a final verdict until some of those more critical holes are filled. I'll talk a little bit more about that later. I also want to tell this Committee that there actually is more agreement within the business community than there might first appear. For example, let me read you this quote from just last October: "We recognize that there has been an increase in CO2. It is cause for concern, and we feel very strongly that there needs to be a significant effort to improve the technology that will reduce CO2 emissions." That statement was made by Jack Smith, Chairman of the Board for General Motors. Now our only difference with that is that we believe many of the answers to reducing our carbon emissions are here and available today, sometimes as close as your local hardware store, in the form of insulation, high-efficiency lighting, energy-efficient appliances, heat pumps, chillers, and so on. We know combined cycle natural gas plants emit 60 percent less CO2 per unit energy than a conventional power plant. We know that wind-energy contracts in Minnesota and in Texas have been signed for 4 cents a kilowatt hour, and we know that the million solar roof program that is now continuing to grow will help bring down the already lowering costs of photovoltaic panels. The key here is that we are not waiting for some black box to come from a national laboratory to reduce CO2 emissions. Together, renewable energy, energy efficiency, and natural gas can form an energy triad that, combined with a market-based emissions trading program and sequestration, will enable this country to meet reasonable international emissions reduction targets. As has been said before, we concur with the concept that the most efficient method to reduce CO2 emissions is through marketbased mechanisms that move away from traditional command-and control regulation. As the Senior Vice President from Enron Corporation from Houston, Texas, had said earlier, late last year, "We need two things from this Government: Set a target and time table and get out of the way." The Kyoto treaty did include the concept of emissions trading, but we know that details remain to be determined, and The Business Council will be working aggressively to see that that momentum continues to make international emissions trading a reality. Kyoto was also important for what it failed to address as well, and again, we talk about the lack of clarity with, in particular, the role of sequestration, who would run the Clean Development Mechanism, how it might be funded, the role of joint implementation within the clean development mechanism, and of course the all important role of developing countries. However, we do believe that each of these can be addressed, and many in ways that are conducive to an efficient market. They also can be addressed inefficiently. We remain convinced that when American business focuses on solving a problem, a problem gets solved. Let me offer an example. American Electric Power, one of the Nation's largest electric utilities, has developed sequestration projects that are projected to remove 53 million tons of carbon from the atmosphere. That's 53 million tons, one company, 10 percent of the 550 million tons that we've heard. Average cost for those credits estimated by AEP: 37 cents, zero dollars and 37 cents. That's 53 million carbon credits. And as we've talked and have heard earlier about the Clean Air Act Amendments and how the estimates for the sulfur allowance credits are running at about 90 percent off; they're about 10 percent the cost that was estimated, which was between $700 and $1,500 back in 1989 and 1990. That figure, the transaction cost for you to purchase one allowance of sulfur credit, the transaction costs are higher than the 37-cent figure. Before concluding, I also want to clear up a misconception that continues to persist. When one hears about a 31 or a 34 or a 40 percent reduction in emissions, we are not automatically talking about reductions in energy use. Switching to a less-polluting fuel does not impact energy production and simply reduces CO2 emissions. Many of the programs that this Committee oversees directly within the Department of Energy, those highlighted in the Climate Change Initiative that we saw pieces of earlier this week from the Administration, are living proof that cost-effective fuel-switching remains a viable option. I know my time is short. So let me summarize the Council's position, Mr. Chairman. First, voluntary programs have helped greatly reduce emissions from business-as-usual levels, but they're not enough. Domestic programs that encourage the increased use of cleaner, more efficient technologies are a reasonable and appropriate response to the threat of climate change, regardless of whether you believe that climate change is an absolute certainty or that it may be unlikely. Second, we believe the costs of compliance are again being severely overstated. In many cases, consumers spurred to action as a result of the threat of climate change can find energy savings to be a financial benefit. Finally, if we believe climate change could be a threat, which I believe most of us in this room do, as we consider the possible costs of action, it's important that we give equal consideration to the other side of that coin, the cost of inaction, and those costs, Mr. Chairman, could simply be too heavy to bear. Thank you again for the opportunity to testify this morning. [The prepared statement and attachments of Mr. Marvin follow:] |