we need to account for all of its consequences not just the ones that bolster our case. INDUSTRY SUPPORT OF ACTIONS TO REDUCE GREENHOUSE GASES Ms. RIVERS. Okay. Ms. Holmes, I would ask a similar question to you in that, in your statement, your testimony, you really implied that you recognized that there was a problem, but that you didn't feel Kyoto addressed the problem very well. What actions to reduce greenhouse gasses could your organization support? Ms. HOLMES. Well, a couple of things. We indicated that we believe that this is an issue that we have to consider very seriously. We're not quite we haven't quite gone over the line yet to say that this is such a problem that we have to, that we have to take measures such as would be required by the Kyoto Protocol, which, as has been explained by other panelists, would require us to reduce our energy use fairly significantly, by approximately one-third. Our companies are already involved in a number of measures that increase energy efficiencies. In fact, the companies in your own area, the automobile companies that are located in Detroit and in the Michigan area, are involved in developing low-emission vehicles that will be on the market, I have read, at about 2003, 2005 or so. A number of our other companies, our eclectic utility companies are engaged in projects here and abroad Ms. RIVERS. What Ms. HOLMES [continuing]. However, we believe, in the future, we need to continue those efforts, we need to continue to work with R&D, and develop and put in place new technologies, but we need to do it at the pace at which our economy can afford. Ms. RIVERS. So that nothing other than what is currently being pursued should be done? Ms. HOLMES. Currently being pursued, and there is more, when we look at more, additional R&D. Ms. RIVERS. So no new initiatives or no attempt to push ourselves harder? Ms. HOLMES. We think that the attempts that are being made now really do push ourselves quite hard, to be very honest with you. We are COST EFFECTIVENESS AND CURRENT U.S. ENVIRONMENTAL REGULATIONS Ms. RIVERS. The last question that I have for you, is, if, as you say, the investors and business managers of the world are looking for the most cost-effective place to put their operations, wouldn't that argue for a repeal of our current environmental regulations? Ms. HOLMES. No, absolutely not, I think all of our companiesMs. RIVERS. It wouldn't? Ms. HOLMES. No, I don't think so. All of our companies are very environmentally-conscience. When I mentioned that they were at the most cost-effective-and remember, good environmentalism is good business-it always is looking Ms. RIVERS. So, your coalition would argue that the current environmental laws and regulations in this country don't hurt business at all? Ms. HOLMES. I don't think we would probably argue that. I wouldn't go into all of the details, but we certain-what I was mentioning was that when you look at the total cost, and you can see that you do not have to buy a credit for CO2 reduction, for example, in another country, and that cost would be considerable, and enough to make uncompetitive in the global market, you would have to seriously consider moving your plant. Ms. RIVERS. Thank you. Thank you, Mr. Chairman. Chairman SENSENBRENNER. The gentlewoman's time has expired. The gentleman from Texas, Mr. Hall. Mr. HALL. Mr. Chairman, thank you, very much. I would ask unanimous consent to put my statement in the record. Chairman SENSENBRENNER. Without objection. Mr. HALL. I was almost sure you'd insist on me reading it, here, but [Laughter.] Chairman SENSENBRENNER. The Chair has absolute confidence in the ability of the gentleman from Texas to do what's right. [Laughter.] PRESIDENT'S FY 1999 BUDGET REQUEST FOR CLIMATE CHANGE R&D Mr. HALL. As you know, Mr. Chairman and members, I've been fairly vocal on what a good climate control treaty ought to require of the American businesses. I see, from the testimony today, that from the Kyoto documents, that we have some good things to examine and report, and that's heartening to me. I guess I was pleased on Monday that the President's budget included the $2.7 billion in new R&D. And I suppose to Ms. McGinty, my question would be how these are to be divided between the private and the public sectors. And, if you would cover, during my 5 minutes, whether any specific research programs would be earmarked for grants and, if so, what. And I think to start off with, you might tell us what the current level of R&D-I think Mr. Doyle got into this, but didn't cover these aspects-what is the current level of R&D spent by government on clean energy issues? If you'd just kick that off, to start with, if you know. Ms. MCGINTY. I can tell, Congressman, right off the bat, that these are some of the details we'll have to provide for you for the record. The one piece that I would address, though, your comments about the R&D portion of the initiative the President is proposing, some of it is basic research and development on energy technologies, on clean coal technologies, in fact, also on nuclear technologies in that proposal. But, a large portion of it is aimed at trying to encourage partnerships between the private sector and our national laboratories, which are doing all of this good work and have developed a lot of technologies, but those technologies haven't moved out into the market place. The automobiles that Mrs. Holmes was speaking about, that, those emanate from our Partnership for a New Generation of Vehicles, where we are investing our resources in partnership with the big-three to develop cars now that promise to achieve 80 miles-tothe-gallon. So, it's a partnership, private-public partnership kind of approach. COSTS OF IMPLEMENTING THE KYOTO PROTOCOL Mr. HALL. Because I have real problems with, and I think I've signed a letter to the negotiators, that you may have seen, in opposition to any agreement that didn't include the developing nations and I don't have to name them because they're well-known and important. And I've heard some of the testimony today, and read other bits of the testimony minimizing some of the costs of the goals that we seek. I will have some questions, Mr. Chairman, to submit, along that line, as to what those costs are, and how you arrive at the small amount that you attribute to the cost, if, I suppose and I hope I'm wrong-but I suppose you're talking about, if we go it alone, and go it without these other emerging nations, which I hope you don't do. Ms. MCGINTY. Right. Shall I respond? Ms. MCGINTY. Yes, Congressman, I think you put your finger on one of the very key points of this. There are all kinds of economic models out there. Without exception, they do not model reality. They don't model the reality of the elements that we have fought hard for, and insisted upon in this agreement. One of the primary ones, that you're pointing to, is that there will be opportunity to work not only here in the United States, but in developing countries as well. The flexibilities we've talked about, whether it's joint implementation, emissions trading, being able to use sinks as well as sources. In addition to other movements in the economy, electricity restructuring being a primary one, all of these things, if not included in the economic models, you'll get your doomsday scenario that some of these models provide because you put doomsday scenario assumptions in. But if you model the reality in these very important provisions we're talking about, you get a very different picture of how this environmental challenge is, in fact, an economic opportunity for us. Mr. HALL. I thank you. And, Mr. Chairman, I will have questions, basically, well, to most of those. And I thank you for the time in preparing to come here, and for the time you've given us. I yield back my time. Chairman SENSENBRENNER. The questions and the replies will be placed in the hearing record. [The information referred to is contained in Appendix 2.] Chairman SENSENBRENNER. The gentleman from Indiana, Mr. Roemer. Mr. ROEMER. I, too, want to join in thanking the panel for their expertise and their help in assisting us in understanding a very complicated issue in a complicated negotiation in complicated treaty. GLOBAL CLIMATE COALITION'S ROLE IN MEDIA CAMPAIGN AGAINST THE TREATY Mr. ROEMER. Mrs. Holmes, I would want to start by just asking you a question. Is your organization, the Global Climate Coalition, responsible for a commercial that has currently been playing Ms. HOLMES. The campaign that was conducted before the December meeting was sponsored by a number of concerned groups, including ours, including many of, of our labor groups, agricultural groups, senior citizens' groups, and a very broad spectrum of, of companies and concerned organizations throughout the United States. I'd like to say one thing, if I could, about economic models, though. A lot Mr. ROEMER. Excuse me, one second. Ms. HOLMES. Surely. Mr. ROEMER. So you have sponsored this commercial. Ms. HOLMES. We were one of many. Mr. ROEMER. One of many. And do you have any idea how much has been spent on the commercial? Ms. HOLMES. Well, I'm not the treasurer of that particular organization, I, it was somewhere in the vicinity of $10 to 12 million. I couldn't give you an exact figure; we probably can, for the record. Mr. ROEMER. Okay, I would appreciate that, for the record. My only caution on that, and I certainly am not an expert in this business, nor am I an expert on consulting with TV commercials, I happen to share your concern about this treaty, I applaud the Administration for their initial position on this treaty. I thought it was an excellent position to go into Kyoto on; I share their concerns coming out of Kyoto, I, however, think that when you get into the advertising, the way that could-this is a very personal opinion, and this is only mine that sometimes the way these commercials are portrayed, they make it appear to the American public that this is a trade agreement rather than an environmental agreement, and it makes it exceedingly difficult for us to communicate with our constituents on important trade matters as well, too. I happen to be a strong proponent of MFN and GATT, and I was against the Fast Track proposal, but I think that that is something that your agricultural and business interests, you know, might, might be concerned about. But, I'm not-again, this is a very personal comment. SANCTIONS AND PENALTIES FOR NOT MEETING KYOTO PROTOCOL REQUIREMENTS Mr. ROEMER. Ms. McGinty, in terms of the Administration's proposal on this, I just have two very quick comments which are hopefully questions for you. One is, these are binding agreements; what are the sanctions and penalties that come out of this kind of agreement if we do not reach the targeted goal? Ms. MCGINTY. The enforcement mechanisms that are in the treaty, as it stands, involve only, each country is required to report both on its emissions and the policy measures it has put in place to reduce those emissions, and the United States would be involved in having experts serve on a panel that would review those reports when they come in. MONITORING AND ENFORCEMENT OF THE KYOTO PROTOCOL Mr. ROEMER. And how about in terms of some of the things that we may look at on monitoring and enforcement of the treaty? There have been some criticisms that this brings the United Nations into this realm; how do we make sure that we trust other countries, but verify what they've been able to agree to. Ms. MCGINTY. Yes, Congressman, I think you paint the poles of a balance that needs to be struck. One is, our industries, the United States, when it signs up to a treaty means it, and does it, and our industries, we have confidence, will comply. So, it's in our interest to have an enforcement mechanism so that we can be sure everyone else is complying. But, we'll want to be very much involved in what the details are because we wouldn't want, for example, there to be any issue about confidential business information. from our industries in any way having to be disclosed. So while we want an enforcement mechanism, the details are going to be very important, and we'll watch that very closely. Mr. ROEMER. Well, again, in conclusion-I thank the panel again for your time-I want to tell you, Ms. McGinty, that I hope the administration and get back to their original position. I think that was a balanced proposal, trying to get developing countries involved in the reduction of gases. I think that you looked at trading credits, and now you've come forward with an investment and tax credits for enhanced cooperation on the technology side. I hope that you get back to that particular position, and that if you can't get back to that position, that you assess this thing very, very carefully and don't agree to a bad treaty. Ms. MCGINTY. Thanks, Congressman. Chairman SENSENBRENNER. The gentlewoman from Texas, Ms. Jackson Lee. Ms. JACKSON LEE. Thank you very much, Mr. Chairman. This is certainly an important meeting and hearing, and I thank you for the opportunity. DATES WHEN THE KYOTO PROTOCOL IS OPEN FOR SIGNATURE Ms. JACKSON LEE. If I can ask Ms. McGinty the status of the procedural posture we find ourselves in, there is word that there is supposed to be a signing in March. What opportunities for input from Congress, and what will you convey back to the Administration in terms of wanting to have input with some of the many issues that we've raised today? Ms. MCGINTY. Thanks, Congresswoman. Yes, the treaty itself becomes open for possible signature in March; I think it's March 15 or 18. It remains open, however, for a year, and even after that year, any country that wishes to can accede to the treaty. The March timeframe is only dictated by the degree of time it takes to translate the document and that kind of thing. It's very much our intention, and I think this is a good start, in terms of having dialogue as we move forward and plan a strategy for how we should move forward. Ms. JACKSON LEE. I wanted to make sure I got you on the record for the openness that I hope the Administration will show in terms of hearing many of the concerns that may be raised. Let me, Mr. Chairman, ask that I might have unanimous consent to submit my statement into the record. Chairman SENSENBRENNER. Without objection. |