Thank you, Mr. Chairman. I look forward to Secretary Eizenstat's opening statement.

Senator HAGEL. Senator Robb, thank you. Senator Grams.

Senator GRAMS. Thank you very much, Mr. Chairman. I would like to recognize your outstanding efforts. You have spoken with authority and conviction on behalf not only of the U.S. Senate but also, I believe, for the American workers, for families and for taxpayers as well.

First I would like to point out to the members of this committee and to Mr. Eizenstat that the Clinton Administration and the Department of Energy just 11 days ago missed their legal and contractual deadline to begin taking possession of spent nuclear fuel from commercial nuclear plants across the country.

Now what does this mean and how does it apply to today's hearing?

The DOE's failure to take spent nuclear fuel means that nuclear power plants across our country will have to begin shutting down permanently because of inadequate storage space for the spent fuel. And as you may know, nuclear power has been responsible for 90 percent of all the cuts in carbon dioxide emissions from U.S. electricity production since 1973.

As more and more nuclear plants shut down in the United States, more and more are being built all across Europe. France is leading the way, and developing nations, such as China, are about to significantly increase their use of nuclear power as well as Japan.

Meanwhile, here at home, due to the rhetoric of extremists and also the lack of a clear energy policy, we are hamstrung, unable to act because of politics and not because of science or technology. I cannot stress enough how important it is to recognize that the failure of this administration to address nuclear waste storage will lead to even greater economic hardship as a result of this treaty.

Now we simply cannot meet our energy needs into the next century by signing on to treaties which legally bind us to unreasonable reductions in energy output while at the same time we eliminate cleaner energy by closing down nuclear power plants.

Europe recognizes this, as do many other nations with whom we have to compete for jobs, and industry, and markets. They know we agreed to a treaty which works for them and hurts us. But who does it really hurt? Not Bill Clinton and certainly not Al Gore. It puts off any real political problem for them until well after they are out of office.

This treaty hurts moms and dads, grandmas and grandpas. It significantly will impact senior citizens on a fixed income. It takes an enormous swipe at miners, loggers, truckers, farmers, anyone who has any work in energy intensive professions. It means less income for families that are struggling to survive and educate their children. It means Americans may have to face a challenge to their way of life and their standard of living.

If that is what this treaty holds for Americans, it cannot and will not be supported by this committee or the U.S. Senate.

I think this body made that point very clearly when we voted unanimously last summer on the Byrd-Hagel Resolution. I only regret that this administration saw that vote as a mere suggestion,

rather than acknowledging the clear and unambiguous message that it contained.

I am going to be listening very closely today to hear what direction was given to the Kyoto negotiators by Vice President Gore. I want to know how the administration intends to meet the demands of this treaty. I would like to know how you will pursue developing nations' participation later this year in Argentina.

I also would like to know today, as does everyone else on this committee, when this treaty will be presented to the Senate for ratification.

So, again, thank you, Mr. Chairman, for your efforts in holding today's hearing. I am looking forward to the discussion and for the quick delivery of this treaty to the Senate for ratification procedures.

Senator HAGEL. Senator Grams, thank you. Mr. Secretary, welcome again. Please proceed.

STATEMENT OF HON. STUART E. EIZENSTAT, UNDER SECRETARY OF STATE FOR ECONOMIC, BUSINESS, AND AGRICULTURAL AFFAIRS

Ambassador EIZENSTAT. Thank you, Mr. Chairman. It is a pleasure to be here with you and with Senator Robb and Senator Grams. I appreciate the participation you personally made in going to Kyoto and the amount of time you, Senators Baucus, Chafee, Enzi, Kerry and Lieberman spent on this issue.

Rarely has there been an environmental issue more complex or important, and rarely has there been a greater need for the executive branch and Congress to work closely together.

I will divide the summary of my testimony-and I assume the full version can be submitted into the record-into four parts: first, a short discussion of the science; second, the key features of the protocol; third, efforts to correct misperceptions; and, fourth, a brief review of the President's own Climate Change Technology Initiative.

First, on the science, human beings are changing the climate by increasing the global concentration of greenhouse gases. Over the last century, greenhouse gases have been released to the atmosphere far faster than natural processes can remove them. There is no ambiguity in the data.

In this first chart (indicating) the actual data is shown in blue from ice cores taken by scientists. The orange part indicates also actual data taken from the atmosphere in Hawaii.

What this dramatizes quite clearly is that the concentrations of greenhouse gases have grown by some 30 percent and especially since 1960. You can see the increasing slope of these concentrations in the orange from 1960 to the present date. That slope will increase and continue to increase dramatically.

The authoritative intergovernmental panel on climate change, representing the work of more than 2,000 of the world's leading climate change scientists from more than 50 countries and representing the best synthesis of the science on climate change, made a number of important conclusions.

Under a business as usual environment, concentrations of greenhouse gases could exceed levels not seen on the planet for 50 mil

lion years. The projected temperature increases of 2 to 6.5 percent over the next 100 years could exceed rates of change not seen for the last 10,000 years.

The chart which we have over here (indicating) indicates both the increase in the concentration levels and in temperature. It indicates the dramatic connection between concentrations of CO2 and other greenhouse gases and the dramatic increase in temperatures which would occur if those are left unabated.

Increased temperatures are expected to speed up the global warming cycle. It will lead to a drying of soils and, in some areas, increased drought. Overall, there will be an increase in precipita

tion.

Sea levels are expected to rise between 6 and 37 inches over the next century. A 20 inch sea level rise could double the global population at risk from storm surges and low lying areas are particularly vulnerable-much, for example, of coastal Louisiana and the Florida Everglades as well as other parts of the world.

This would also affect human health. It would exacerbate air quality problems and diseases that thrive in warmer climates, including malaria, and yellow fever would increase. It is estimated that by the end of the next century there would be an additional 50 million to 80 million cases of malaria each year if this climate change continues unabated.

It would also lead to a dramatic change in the geographic distribution of a third of the earth's forests. Nine of the last 11 years are among the warmest ever recorded. Increases in floods and droughts are expected as global warming occurs.

Some have argued that we should wait. Science tells us that this is a recipe for disaster for the concentrations of greenhouse gases in the atmosphere will continue to rise each year.

This is a problem that has developed over the course of a century and it will take many decades to solve.

We should look, Mr. Chairman and members of the committee, at Kyoto as an insurance policy against the potentially devastating and irreversible impacts of global warming. If we act now, the premium on this insurance policy will be far more reasonable and less costly than if we delay and hope that the problem created by greenhouse gases will somehow go away. Indeed, it is like a life insurance policy whose costs grow significantly if we delay year after year in insuring ourselves.

In the case of global warming, we will not have a second chance. Failure to act could lead to irreversible consequences and we will be committing ourselves, our children, and our grandchildren to a very different planet, and they will never forgive us.

Second is the actual conference and protocol itself. It represents an important achievement. But it is a framework for action, not a finished product yet ready for Senate consideration.

President Clinton and Vice President Gore established three major objectives for us to negotiate and, as a result of the negotiations, we achieved the first two and have made some progress, though not enough, on the third.

Our first objective was developing realistic targets and timetables among the developed countries. These had to be credible in terms of beginning to reduce the dangerous buildup of greenhouse

gases and yet measured enough to safeguard U.S. prosperity at home and competitiveness abroad.

In the end, we secured the key elements of the President's proposal. The U.S. concept of multi-year timeframes for emission reductions was selected rather than a fixed, single year target. This will allow our industries greater flexibility to meet those targets. In addition, the timeframe 2008 to 2012 was the U.S. timeframe, not the earlier periods preferred by the European Union, Japan, and others. This will help cushion the transition and the effect on businesses and workers.

We also got the concept of differentiated targets for key industrial powers ranging from 6 to 8 percent below baseline levels so that our competitors are taking on similar, and in some cases with respect to the European Union, deeper obligations than we are.

When changes in the accounting rules for certain gases and offsets for so-called "sinks" that absorb carbon dioxide are factored in, the level of effort required of the United States is very close to the President's original proposal to return emissions to 1990 levels by 2008 to 2012, representing at most a 3 percent real reduction below that proposal and perhaps less.

An innovative proposal shaped in part by the United States allows certain activity, like planting trees and good forest practices, that absorb carbon dioxides, called "sinks," to be used to offset emission requirements that industry will have. This will be a significant way of reducing costs and burdens and will be a particular benefit to the United States.

Also, as proposed by the U.S., the Kyoto Protocol covers all six significant greenhouse gases, even though the European Union and Japan fought until the last moment to cover only three.

Our second Presidential objective was to make sure that countries could meet their obligations by flexible market mechanisms, rather than mandatory policies and measures, like carbon taxes, favored by the European Union and many other developed countries. The Kyoto Protocol enshrines a centerpiece of this U.S. market based approach, the opportunity for companies and countries to trade emissions permits. In this way, companies or countries can purchase less expensive emissions permits from companies or countries that have more permits than they need. This is not only economically sensible but environmentally sound.

We have had a very positive experience with permit trading in our own acid rain program, which has reduced costs by 50 percent from what was expected. This has been confirmed by a number of experts in a recent Wall Street Journal article.

So the inclusion of these market based mechanisms and the right to trade in the open market was a signal victory for the United States. Indeed, we went even further by achieving a conceptual understanding with several countries, including Australia, Canada, Japan, New Zealand, Russia, and the Ukraine, to trade emissions rights with each other. This umbrella group could further reduce compliance costs.

Let me be very clear. The commitment we made in Kyoto would not have been made, could not have been made, were it not for the flexibility that these mechanisms give us that were also agreed to.

Until we are satisfied with the rules and procedures yet to be established, the promise of Kyoto will never be realized.

Our third objective was the one that you, Senator Grams, Senator Robb, and others alluded to, which is to secure meaningful participation of key developing countries. This is obviously a concern that the Senate shares, as evidenced by last summer's HagelByrd Resolution.

Global warming is, after all, a global problem. It requires a global solution, not only for the developed but also for the key developing countries. By 2025, the developed world will be emitting less greenhouse gases and the developing world will be emitting more than the total of the developed world.

We encountered significant resistance in Kyoto by some developing countries to meaningful participation in solving the global warming problem. Still, developing countries may, as a prerequisite for engaging in emissions trading, which will be very valuable to them, voluntarily assume binding emissions targets through amendment to the annex of the protocol that lists countries with targets.

Some developing countries seem to believe, wrongly, that the developed world was asking them to limit their capacity to industrialize. We have made it clear that we support an approach under which developing countries would continue to grow but in a more environmentally sound and economically sustainable way.

Let me be very clear. The Kyoto agreement does not meet our requirements for developing country participation. Nevertheless, a significant down payment was made in the form of a provision advanced by Brazil and strongly backed by the United States. This defines a Clean Development Mechanism which fully embraces the U.S. backed concept of joint implementation with credits. This will build a bridge with incentives between the developed countries and developing nations and will allow companies in the United States and elsewhere in the developed world to invest in projects abroad and get credit for it against their emissions targets, again lowering the burden on U.S. industry by allowing this kind of participation. They can either invest or they can simply purchase the permits. In determining what developing countries ought to do, we, of course, need to be aware that the circumstances of developing countries may vary. Any one size fits all approach to meaningful participation of developing countries is unlikely to prevail.

I would like, Mr. Chairman and members of the committee, to deal very briefly with some misperceptions. The first is that the Kyoto Protocol will imperil the ability of our military to meet its worldwide responsibilities. This is absolutely untrue.

We took special pains, working with the Defense Department and with our uniformed military, both before and in Kyoto, to fully protect the unique position of the United States as the world's only super power with global military responsibilities. We achieved everything they outlined as necessary to protect military operations and our national security.

At Kyoto, the parties, for example, took a decision to exempt key overseas military activities from any emissions targets, including exemptions for bunker fuels used in international aviation and maritime transport and from emissions resulting from multilateral