questions answered, that would give us a clearer understanding of what exactly they asked for and who asked for it.

Thank you.

[The information referred to appears in the appendix.]

Senator HAGEL. May I go back, Mr. Secretary, to a previous conversation we had on administration implementation of this? You made it pretty clear that the United Nations, that is, it is still unclear as to what exactly their role is, but you made it very clear that they would not be administering or implementing this treaty. That, then leads me to believe that there would be agencies of our government that would be implementing the treaty, I suspect agencies such as the EPA.

If this, in fact, is correct and please direct me in the right area here as to how we comply-what new laws and regulations will be required and how will you move on those new laws and regulations in order for us to be in compliance?

Ambassador EIZENSTAT. That is something that we will be working on in the coming months and we will be able to give you a more precise indication of that.

I can give you one example of something that would require legislation if you ratify the treaty. It is this.

We would want to do not only an international trading regime but we would have to do a domestic trading effort and that would require legislation.

In terms of the enforcement process, I am not immediately aware of anything that would require new legislation. I think it can all be done within existing authorities. But certainly if something arises, we will be working very closely to tell you. But I am not aware in the enforcement area that we require new laws.

Senator HAGEL. And, as you said earlier, we don't need to worry about now because that won't happen, and it will not happen until the President would sign the treaty and the Senate would ratify it, is that correct?

Ambassador EIZENSTAT. That is correct.

Senator HAGEL. Have you any idea on the cost of compliance by industry or by region? Do we have any of those numbers? Have we looked at any of those things?

Ambassador EIZENSTAT. With your permission, again, I am not an economist. I have enough problems being a lawyer and don't have to take that additional burden on. But Janet Yellen will be testifying at the next available opportunity. Again, she would have been able to testify here had we been able to work out the timing with the Economic Report. We will try to give you the best macroeconomic analysis we can.

Senator HAGEL. But surely, Mr. Secretary, as you negotiated this and those prior to your tenure would have had to factor in some costs.

Ambassador EIZENSTAT. Yes, sir, we did. We had with us a representative, John Gruber, from the Treasury Department, who had his handy computer, who at every turn, every time we made any significant proposal or we received one, factored the costs in. He was in constant contact with Washington, with Treasury, and with the Council of Economic Advisors. We did not sneeze without getting an economic analysis of it.

Senator HAGEL. You know, that is all interesting. But I find it even more interesting that you used those numbers and you used some format for modeling. You had to. Certainly there is something available. But yet, we have never been able to get any of that.

Ambassador EIZENSTAT. Well, as the World Resources Institute has indicated, there are scores of models. The models depend on different assumptions.

Senator HAGEL. But I am talking about the ones that you used to negotiate the deal in Kyoto.

Ambassador EIZENSTAT. Yes, sir.

Senator HAGEL. That is the only one I have ever been interested in and I think my colleagues, too, as to how did you then use the economic piece of this and how was that factored in; also what numbers did you use and where did they come from?

Ambassador EIZENSTAT. They came from Treasury and the Council of Economic Advisors, which, in turn, relied on other models, which they will be prepared, which Janet Yellen will be prepared to testify about in great detail.

Senator HAGEL. And we will look forward to that.

Mr. Secretary, we have kept you for a long time. As always, we are grateful for you and the work you do for this country.

Ambassador EIZENSTAT. Thank you, Senator.

Senator HAGEL. Am I supposed to do anything else? I guess I should just remind you that for all comments, additional points, anything for the record, we will keep it open for a couple of days. I will be sending up some additional questions as well. Ambassador EIZENSTAT. Thank you for your courtesy. Senator HAGEL. Mr. Secretary, thank you.

[Whereupon, at 12:20 p.m., the hearing was concluded.]

APPENDIX

Prepared Statement of Chairman Helms

SENATOR HELMS. The Committee meets today to begin consideration of the Agreement reached in Kyoto, Japan, in December regarding global climate change. This is the first time that the Committee will hear an assessment of the Kyoto Agreement by the distinguished Under Secretary of State for Economic Affairs Stuart Eizenstat. Secretary Eizenstat was brought in at the 11th hour to head the U.S. negotiating team in Kyoto.

Mr. Secretary, I think you are aware of my personal respect for you. For that reason, I must be frank: I believe that the Administration's policy on climate change, and the Agreement reached in Kyoto, are wrong-headed and bode ill for the United States.

The United States currently has a treaty commitment to reduce greenhouse gas emissions to 1990 levels by the year 2000. That is under the U.N. Convention on Climate Change. I think we can all agree that the U.S. will not meet that unrealistic goal. So I am at a loss as to why this Administration decided it was a good idea to go ahead and negotiate a follow-on Protocol to that obviously flawed treaty, which contains an even more extensive mandate and even more intrusive enforcement of the greenhouse gas emissions goals?

Why would the Administration-knowing full well that the United States cannot, and will not, meet the goals set in 1992-begin a massive campaign (headed, incidentally, by former Under Secretary for Global Affairs Tim Wirth) to press for a new, legally enforceable, treaty designed to try to force additional action?

Mr. Secretary, despite all their best efforts, the U.N. bureaucrats and the extremist environmental groups could not persuade the Bush Administration to sign onto a legally enforceable climate agreement in 1992. Their agenda in Kyoto was to get this Administration to do what the Bush Administration refused to do that is, set a process in place that would lead to a legally binding international obligation. Apparently they succeeded.

I am, quite frankly, appalled that the Administration is seeking to end run the legislative process, and present the Kyoto Protocol to Congress as a fait accompli. In pushing forward this treaty policy, the Administration is attempting to circumvent Congress and thereby shift decision-making authority over U.S. energy policy to a small group of unelected U.N. bureaucrats and the foreign competitors of the United States.

Mr. Secretary, I cannot and will not let this happen on my watch.

I could detail some of the worst aspects of the Kyoto Protocol, but I will leave that to my distinguished colleague, Senator Hagel. Senator Hagel was in Kyoto during negotiations and I regard him as the Senate's foremost expert on the defects and deficiencies of the Kyoto Protocol.

Let me conclude by saying this: The President ought to slow down and take the time to read the tea leaves-scrap this defective Kyoto Protocol and reject the whole Kyoto negotiating process. Clearly, the developing world has no interest in the process except as a foreign aid cash cow. The Protocol is premised on the faulty idea that global changes can occur only when certain countries are asked to make commitments. In any event, this Kyoto Protocol has practically no chance of being ratified by the Senate, not on my watch.

If the Administration will come clean on its climate policy, and submit specific changes in law it would propose for the United States, it might possibly present an achievable plan to Congress. But not this turkey that took flight at Kyoto.

Let me spell it out: If the Clinton Administration insists on standing by this misguided treaty, then the Administration should submit the Kyoto Protocol immediately to the Senate. We will debate it, and vote up or down on it. Because we have a moral obligation to let American businesses-and the workers whose jobs may (37)

hang in the balance know whether they will be required to take on these enormous economic obligations in the next decade.

Prepared Statement of Senator Hagel

Today, we are conducting the first Senate hearing since the conclusion of the U.N. global climate conference last December in Kyoto, Japan, and we have with us the chief U.S. negotiator of this treaty, Undersecretary of State Stuart Eizenstat.

In the last session of Congress, a number of hearings were held in the Senate in advance of the Kyoto conference, including three in the Foreign Relations Subcommittee on International Economic Policy, Export and Trade Promotion, which I chair. I expect that the focus of today's hearing will be somewhat different, because we now have a finished product: the Kyoto Protocol. This is a document of 27 pages, 24 Articles, and two Annexes. It is a treaty now awaiting the signature and ratification of the participating countries, including the United States.

The Administration refers to the Kyoto Protocol as a "work in progress." This leaves people with the mistaken impression that the treaty remains under negotiation and that objectionable parts of the treaty can be negotiated away before it is submitted to the Senate for Advice and Consent. That is not the case.

This treaty cannot be amended until it goes into force, and even then, only by a three-quarters vote of all countries that have become party to the Protocol. Developing countries, which are not bound by any emissions limits, make up more than three-quarters of the world's nations.

Certainly, later actions of subsequent U.N. conferences might add to the Protocol. It might expand U.N. regulations and interpretations of how the treaty would be carried out. Later actions might define compliance measures and enact U.N. sanctions against countries that do no meet their legally-binding commitments under the treaty. But what is in the Protocol today, including its many objectionable provisions, will not change prior to it coming into force-assuming it ever comes into force.

This treaty requires a reduction in greenhouse gas emissions of seven percent below 1990 levels for the U.S. during the years 2008 to 2012. In real terms that would be a devastating 40 percent reduction in projected emissions for the U.S.! It is inevitable that this extreme cut in energy use would cause serious harm to our economy. Furthermore, developing countries like China, Mexico, India, South Korea and 130 other nations are totally exempt from any of the new restrictions placed on industrial countries. To later change the treaty requires a three-fourths vote after the treaty has already gone into force.

Last July, the Senate provided its advice to the Administration regarding this treaty and went clearly on the record by passing Senate Resolution 98, the ByrdHagel resolution, on a vote of 95 to zero. It is rare that a resolution critical of a major element of an Administration's foreign policy would receive such unanimous support in the United States Senate. Even more significant than the 95-0 vote is that this bipartisan resolution had 65 cosponsors, including 18 of my Democratic colleagues.

The Byrd-Hagel Resolution was very clear.

The resolution called on the President not to sign any Kyoto treaty or agreement unless two minimum conditions were met.

First, the Byrd-Hagel Resolution directed the President not to sign any treaty that placed legally-binding obligations on the United States to limit or reduce greenhouse gas emissions "... unless the protocol or agreement also mandates new specific scheduled commitments to limit or reduce Greenhouse Gas emissions for Developing-Country Parties within the same compliance period." Nowhere does the resolution mention the Administration's nebulous standard of achieving “meaningful commitments by key developing countries." The Byrd-Hagel Resolution was very clear the United States should not sign a any global climate treaty that does not include binding commitments for the developing countries, such as China, Mexico, India, Brazil and South Korea, in the same time frame as the U.S. The Kyoto Protocol does not include a single developing nation.

Second, the Byrd-Hagel Resolution said that the President should not sign any treaty that ".. would result in serious harm to the economy of the United States." The Kyoto Protocol would legally bind the United States to reduce our greenhouse gas emissions to seven percent below 1990 levels by the years 2008 to 2012. It goes much further than President Clinton's own bottom line of last October, where he pledged that he would accept nothing more than returning to a baseline of 1990 levels in greenhouse gas emissions. Independent economic studies of the President's po