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Q9.

What is the actual reduction in emissions within the borders of the United States would have to be to meet the U.S. obligation as outlined in the treaty and what data uncertainties still exist with respect to calculating this number?

A9.

It is impossible to state what percentage of reductions will be required or met within the United States. The inclusion of emissions trading, joint implementation, and the Clean Development Mechanism in the Protocol allows U.S. companies to seek out the lowest cost reductions regardless of their location. Enactment of the President's recent budget and tax proposals will also provide a significant down payment on eventual U.S. obligations, and could further lower reduction requirements.

Q10. Article 6.1(d) of the Kyoto Protocol states that “The acquisition of emission

reduction units shall be supplemental to domestic actions for the purposed of meeting the commitments under Article 3 (of the Protocol)"

Q10.1 What does this mean?

A10.1 The term supplemental is not defined in the Protocol. We have interpreted it to

mean that reductions from trading can be added to those from domestic actions in meeting the Protocol's commitments.

Q10.2 Since Russia and the Ukraine will be substantially below their emission

targets in the Protocol, they can sell large amounts of emissions credits. Why should the American public be willing to underwrite the transfer of what could be billions of dollars to those nations so the United States could reach its emissions reduction targets?

A10.2 Nobody in the United States is in any way required to buy CO2 reductions from

Russia or anywhere else. The market-based mechanisms provided in the Protocol are purely voluntary and available as a means of reducing costs consistent with the targets set by the Protocol.

Q10.3 What is the Administration assuming about the proportion of our reductions

that can be met through these means, and what is the limit acceptable within the terms of the Protocol?

A10.3 We have not made any assumption about the proportion of reductions that will be

met through emissions trading. The Protocol does not set any limits on this aspect of achieving reductions.

International Emissions Trading and the Costs of Kyoto Protocol Compliance

Q11. On page 4 of your written testimony, you state:

"A number of studies have suggested that the costs of compliance can be significantly reduced if flexible implementation is permitted."

Please provide for the record a copy of each of the studies referred to in your statement

All. An excellent summary of a number of economic studies is contained in a report by Repetto

and Austin, The Costs of Climate Protection: A Guide for the Perplexed (attached). This report was issued by the World Resources Institute in 1997.

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Carollyne Hutter
Acting Publications Director

Hyacinth Billings
Procluction Manager

Designed by:
Lomangino Studio Inc., Washington, DC

Each World Resources Institute Report represents a timely, scholarly treatment of a subject of public concern.
W'RI takes responsibility for choosing the study topies and guaranteeing its authors and researchers freedom of inquiry.

It also solicits and responds to the guidance of advisory panels and expert reviewers.
Uuless otherwise stated, however, all the interpretation and findings set forth in WRI publications are those of the authors.

Copyright © 1997 World Resources Institute. All rights reserved.

ISBN 1-56973-222-1
Library of Congress Catalog Card No. 97-60932
Printed in the United States of America on Recycled Paper.

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