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Chairman SENSENBRENNER. Thank you very much.

The next witness is David Smith, Director of Public Policy Program of the AFL-CIO. Mr. Smith.

STATEMENT OF MR. DAVID A. SMITH, DIRECTOR OF PUBLIC POLICY, AFL-CIO, WASHINGTON, DC

Mr. SMITH. Thank you, Mr. Chairman, Mr. Brown. We're delighted to be here. And on behalf of the almost 13 million members of the AFL-CIO and their 40 million family members, I want to congratulate you for holding this hearing which I think is the first Congressional hearing since the Kyoto negotiations.

Chairman SENSENBRENNER. We're proud of that.

[Laughter.]

Mr. SMITH. Well, you should be. This is important business and we're glad that you've started this ball rolling.

Let me try to summarize my statement which most of you have. Mr. Chairman, I agree with you that the science here is not definitive, but I think it's our view that there is enough information, enough indication, enough that the burden of evidence here is that this is serious business. We ought to pay attention to it; we have an obligation to our children, to our grandchildren to take this seriously; and that the President is right in suggesting that our country both ought to act independently and it ought to lead the way in the international community in an effort to decelerate and stabilize the buildup of greenhouse gasses in the atmosphere. The sooner we begin, the easier the task will be. The task will be difficult under the best of circumstances, but as we delay and as the hurdle gets higher, both the technological problems and the economic consequences multiply and intensify.

Having said that, it seems to me that Kyoto doesn't, in fact, provide us with a very good road map. It indicates the difficulties that we face and is not an agreement which at this point that the President ought to sign. In fact, I think, the colleagues to my right, Dr. Hakes, and Ms. McGinty, have made that argument very well.

There are at least three reasons that the President shouldn't sign the treaty and that the conversation that this Committee has begun ought to continue. The first is the point you made, Mr. Chairman. This is a global problem. It is not sufficient, or even gets us part way toward addressing this question, if the United States succeeds in sharply reducing our emissions, and the People's Republic of China, the Indonesians, the Indians, the Mexicans, and the Brazilians are not bound by an obligation to participate in that effort. In fact, we're concerned that that creates a double perversity. That in an environment where costs are higher here because of the burdens of meeting emissions reduction targets, that we may create a circumstance where there's a bizarre incentive to move both pollution and jobs offshore. American workers would be disadvantaged, the American economy would be weakened, and the environment would not be improved.

The President ought to use this year, as Ms. McGinty said, to redouble his efforts to create a treaty which is truly global, which assures us that at the end of the day our efforts, combined with the efforts of our partners in the world community, will result in

lateral effort may make us feel better, but it does very little to move us toward that goal.

Second, this is an undertaking. Forgetting the specifics, or perhaps more importantly the lack of specifics in the Kyoto Protocol, this is an undertaking of enormous consequence. We're talking about reducing our carbon appetite-the way we heat our buildings, we produce goods, we move ourselves around-by something on the order of 30 or 35 percent below the base case by the second decade of the next century. That's an effort with enormous consequences. Enormous consequences for the way people work, the way people live, the kinds of communities that they have. We need a much more complete conversation with the country, with the Congress, with men and women who work for a living, about what this means and what their stake in these efforts is, and what the consequences for them will be. The President ought to lead us in that conversation. Congress ought to assist the President in that effort. But that conversation needs to be completed before we enter into a binding obligation. Need to be clear about what the economic consequences are; about what the adjustment needs are; about how we're going to pay for those adjustment needs; and how we're going to pay for the large-scale investments in technology and in research and development which I think we all agree will be necessary.

The President made an important step, I think, in the budget that he submitted to you on Monday. He outlined a number of areas about tax, and research and development spending, in the transportation sector, in the building heating sector, which seemed to us to be useful first steps. Six point five billion over several years is clearly, though, only a first step in an undertaking of this magnitude.

Let me review just briefly the order of the economic consequences that we face. There are a lot of studies, and there are competing studies. And as Dr. Hakes' said, this is a very imprecise business. But I think we should take pause-take some caution-in the fact that the orders of magnitude of every study that we're looking at about what the consequences would be in terms of employment, of wages, and of national output, would be moving-and most of these studies were done assuming a return to 1990 levels but by 2010, and also assuming no meaningful participation by the developing world-but these studies suggest that we could be facing job losses in the neighborhood of 900,000 to 1.5 million jobs. A permanent reduction in GDP on the order of 1 percent. These are very, very big numbers. The transition to an economy that accommodates the kind of reduction in our carbon appetite that these studies suggest, will be very difficult. Communities will be disrupted. People's assumptions about their job, about its stability, about their ability to meet their family's obligations, will be thrown into question.

Unfortunately, we are struck by the absence of concern, or the absence of attention, to those transition considerations in the Administration's planning to date. We fear that they are too comfortably content that there is a technological fix in our future that will figure this out; that there will be some wondrous capacity that we don't yet know about; and that at the end of the day, getting from here to there will not be as difficult as some of us anticipate. That may be true, and we welcome the Administration's effort to

invest in carbon suppression technology, in clean vehicle technology, in restoring the energy efficiency of our buildings. But even if they are right, there are people who are making their livings, built their communities, and are supporting their families based on today's technology. They mine coal, they run power plants, they drive large trucks. Our planning has got to take into account their concerns as well. A job that my friend Dr. Hakes may get is cool comfort to me if I've lost mine.

So we have a lot to do. We have a lot to do before we sign this treaty. We think the President's initiatives in his budget are part of getting that work done. We think this hearing is part of getting that work done. We think this is a serious problem. We want to join with you and the Administration in figuring out how we can collectively do our best to address it.

Thank you.

[The prepared statement and attachments of Mr. Smith follow:]

98-3

Thank you

Statement of David A. Smith
Director of Public Policy, AFL-CIO
To the U.S. House Committee on Science
On the Kyoto Protocol
February 4, 1998

Mr. Chairman, my name is David Smith, I am the

Director of the Public Policy Department at the AFL-CIO, and on behalf of our 13 million members and their almost 40 million family members, I am delighted to be here today. I believe that your committee is the first committee to hold hearings on the Kyoto Protocol since the negotiations were completed in mid-December, and I hope that today's hearing will be an opportunity to begin an important national conversation.

Let me begin by making it clear that the American labor movement shares the President's concern and the concern of many of you that the global community must pay attention to, and take steps to limit, the increasing, and in fact, geometrically increasing, concentration of greenhouse gases in our atmosphere. This is a problem that has been building since the beginning of the industrial revolution and as more and more citizens of the globe engage in more and more concentrated

economic activity the buildup will grow at an accelerating rate. It has taken a long time to reach this point of crisis and recognition and it will take us a long time to unwind the current situation, but we do believe that the time to begin is now. The task will be much more difficult if we delay and the economic consequences of delay will grow in intensity and difficulty.

Having said that, it seems to me that we need to recognize that the recently concluded discussions in Kyoto fall far short of charting a path that will solve this problem. Most importantly, the failure to include the entire global community in binding limits with firm timetables leaves us with a very real possibility that regardless of what we do in the United States, concentrations will continue to increase and the global situation will not be repaired.

That difficulty is compounded by the fact that having some

countries obliged to undertake sharp reductions in current carbon

emissions, while other countries have no such commitment creates a

perverse set of economic incentives, which may leave us with the worse of

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