Second, we believe that the solution to global climate warming can be dealt with in a very economical and efficient way. It doesn't require loss of jobs and major dislocations. In fact, we believe that solutions to global warming can also provide a net plus in those areas. In fact, a study called An Alternate Energy Future, sponsored by the Alliance to Save Energy, the American Gas Association, and the Solar Energy Industries Association, shows that aggressive deployment of these technologies could reduce CO2 emissions by the year 2000 by 10 percent, compared to 1990. But to achieve this result, the plan would have to include actions in the transportation sector.

This brings me to my third point. The current plan virtually ignores the transportation sector of our economy. The transportation sector accounts for 27 percent of our primary energy use, of which virtually all is petroleum. We believe that the revised plan needs to include actions in this area. Those actions could include expanded use of alternate fuel vehicles, increased vehicle efficiency standards, and improved mass transit systems.

Fourth, we believe that the plan put too much emphasis on adaptive strategies rather than on mitigation strategies. Preventative measures that make both economic and environmental sense, taken now, we believe will be less costly and more sustainable than adaptive measures taken in the future. Unfortunately, we don't think the plan provides a balance in that regard. We think greater emphasis on global climate change mitigation would better underscore the country's commitment to address this issue.

Fifth, the Business Council recognizes that increased energy efficiency will be the foundation for a sustainable energy future. The current version of the National Action Plan recognizes the importance of energy efficiency, but we are concerned that it fails to recognize the importance of achieving greater efficiency over the full cycle of energy use. It is essential to consider the emissions from the point of extraction to end-use. Considering only end-use efficiencies could produce mistaken results. It is critical we think, that the energy molecules be traced from the mine mouth to the point of consumption and that emissions also be counted from beginning to end.

And finally, we think that the Action Plan needs to look at joint implementation opportunities with other countries. We believe that there are actions, especially in Eastern European and in developing countries, where the government, working in partnership with businesses, could develop joint programs for exploiting U.S. products and technologies to aid in the solution, the global solution to this problem.

I will conclude by stating that the Business Council stands ready to work with government to achieve this end. Thank you.

Mr. GEJDENSON. Thank you.

[The prepared statement of Mr. Hemphill appears in the appendix.]

Mr. Barrody, now we will let you clean up. That is what this is all about.

STATEMENT OF MICHAEL BARRODY, SENIOR VICE PRESIDENT OF POLICY AND COMMUNICATIONS, NATIONAL ASSOCIATION OF MANUFACTURERS, AND CHAIRMAN, GLOBAL CLIMATE COALITION

Mr. BARRODY. Thank you, Mr. Chairman.

In response to the opening discussion between the Members of this committee, I would like to say that I am here primarily in my role as chairman of the Global Climate Coalition, and attached to my written testimony are the members of that coalition. And we are here, I suppose, to make sure that what is developing as the common wisdom of this presentation doesn't take hold unchallenged.

We take a different view of the National Action Plan than you have heard from the witnesses so far, and I would like to take just a couple minutes, if I may-maybe more than a couple-explaining why that is the case.

The Global Climate Coalition believes that it is essential that the climate change issue be framed in the context of industrial competitiveness in the global economic environment. Ill-considered policy responses to issues such as climate change, especially those that adversely affect the competitiveness of our Nation's industries would ultimately hamstring our ability to respond to pressing energy and environmental challenges. So we are pleased to provide our comments on the National Action Plan.

In December 1991 at the fourth session of the INC-the Intergovernmental Negotiating Committee for a Framework Convention on Climate Change in Geneva, Switzerland, the United States announced that it would put forward a national climate action plan for public consideration within 1 year of signing a climate convention. In concluding negotiations of the convention in its fifth session. in New York in May of 1992, the INC announced a "prompt start" resolution addressing "Organizational Matters: Future Work."

When President Bush signed the convention itself at Rio last June, he announced that the United States would present a national climate change action plan by the end of the year, and proposed that countries meet by January of 1993 to present and review their plans.

This announcement was confirmed by the head of the U.S. delegation at Rio. The U.S. National Action Plan for Global Climate Change was then prepared prior to the INC session in Geneva last December and was communicated and discussed at that session.

At the same time it was communicated to the INC Secretariat, the National Action Plan was made available for public review and comment. The Global Climate Coalition plans to file detailed comments on the National Action Plan by the March 8 deadline next week.

Furthermore, the United States, we believe, is not obligated under the Convention to communicate any reports until 6 months after the treaty enters into force. The format for this and other formal communications will be considered by the INC as part of the preparation for the first session of the Conference of the Parties. Certainly, the National Action Plan could be modified at some future date, but there is no obligation to do so until 6 months after the Convention enters into force and the INC has specified the for

mat for communication required under Articles 4 and 12. As of February 8, only 11 countries had ratified the Convention; 39 more are needed before it enters into force, and that is not expected to occur until perhaps the end of this year or, more likely, 1994.

At that time, the National Action Plan could be changed to reflect policies and measures then being taken by the United States to reduce greenhouse gas emissions.

In view of the Convention timetable and the desirability of allowing the Energy Policy Act and other laws and initiatives to be implemented, there is neither an obligation nor a compelling reason for the administration to restructure the Action Plan at this time. However, the action plan could be updated to reflect changes in U.S. laws and policies, as I will explain in a moment.

Despite the enactment of the Energy Policy Act in October last year, the National Action Plan in December 1992 did not attempt to reflect the full implications of the new law. Granted, the act incorporates to a large extent the programs of the National Energy Strategy which began to be implemented in 1991, and some of the numbers for the strategy are subsumed in the act. However, there was no systematic attempt made in the National Action Plan to adjust the numbers specifically to reflect the effects of the new law.

It should be clear that the implementation of the act will have a significant impact on greenhouse gas emissions in the years and decades ahead. There are notably 14 titles of the national Energy Policy Act that relate to global climate change, 11 of them identified in the Action Plan.

The Action Plan notes a number of other laws that should serve to reduce greenhouse gas emissions. The impacts of these laws on reducing such emissions do not appear to be taken into consideration and otherwise discussed in any detail in the Action Plan, for example, the Clean Air Act Amendments of 1990.

Other government initiatives, primarily in the carbon uptake or sequestration area should also offset carbon emissions and should be considered in the calculation of net emissions. Title XVI of the Energy Policy Act, the so-called "global climate title," sets forth a twofold approach to the global climate change issue: Number one, voluntary actions for emission reductions should be encouraged; and, two, the government should analyze the important technical and policy issues that will enable the United States to make wiser decisions on more dramatic and possibly higher-cost actions which should only be undertaken in the context of concerted international action.

Section 1605 lists a number of emission reduction and carbon fixation measures that companies can undertake voluntarily: fuel switching, forest management practices, tree planting, use of renewables, manufacture or use of vehicles with reduced greenhouse gas emissions, appliance efficiency standards, methane recovery, cogeneration, capture and recovery of CFC's and power plant heat rate improvement. This is a list of voluntary actions that is by no meanings exhaustive.

EPA has been pursuing a number of voluntary approaches. Its Green Lights and Energy Star Computers programs are well documented. These programs are generally characterized in the Action Plan as "market pull" programs, where mass-purchase initiatives

and industry program coordination aimed at new technologies can help get products off the drawing board and into the marketplace. The act also encourages Federal voluntary incentives programs in the section 1604 study provision.

We believe that the National Action Plan should include several key concepts. The Global Climate Coalition supports a flexible, balanced, comprehensive, and international approach in responding to concerns related to the global climate change issue. Such an approach should be based on cost-effective, scientifically sound policies that are independently justifiable on their own grounds.

Moreover, both internationally and nationally, governments should further enhance scientific and economic research to help resolve the remaining uncertainties of global climate issues. As summarized in the 1990 First Assessment Report of the Intergovernmental Panel on Climate Change, these major uncertainties still include the magnitude, the timing, rate and regional impacts of potential climate change. They also include the effectiveness of specific response options in actually averting potential climate change; and the costs, effects on economic growth and other socioeconomic implications of specific response options. Furthermore, there is time to resolve the major scientific and economic uncertainties before taking actions that go beyond those that are cost effective, scientifically sound, and independently justifiable on their own grounds.

Importantly, a comprehensive international approach to the global climate change issue is called for because greenhouse gas emissions are a global phenomenon and must be addressed by all countries. Rising levels of emissions from developing countries will soon exceed emissions from industrial countries. In the next century, the major emitters of greenhouse gases will be the emerging economies of the Commonwealth of Independent States and Eastern Europe, China, and centrally planned Asia and other developing countries. By the year 2050, these emerging economies will generate nearly 77 percent of the world's total anthropogenic greenhouse emissions. Thus, any administration action on the global climate change issue must take into account further negotiation of the INC and the work of the IPCC.

The Global Climate Coalition supports the longstanding position of the United States in the INC negotiations, which is based on a comprehensive approach to addressing all greenhouse gases and their net emissions, taking into account all sources and sinks, and flexible responses on a country-by-country basis. We do not believe that setting specific targets and timetables that specify emission. reductions or caps for a specific greenhouse gas from a specific industry would be appropriate policy.

In addition, U.S. industry firmly believes that a crucial element, not only of any international agreement on global climate change, but also this country's response to that issue, must be technology cooperation in the international community.

The Global Climate Coalition has long supported a Technology Cooperation Corps initiative. This program, we believe, holds the potential for significant environmental benefits due to U.S. industry involvement in the efforts of developing countries to constrain the growth of their greenhouse gas emissions.

Finally, impacts on international competitiveness must be considered by the government in any debate on national policy options. The National Action Plan has appropriately focused its attention on the policies and measures already under way in the United States to reduce greenhouse gas emissions. The reductions that will result from implementation of the Energy Policy Act and the Clean Air Act Amendments of 1990, as well as voluntary actions and other measures based on market conditions, should lead to economic efficiency and lower levels of emissions.

What the National Action Plan does not include is a detailed evaluation of the costs of these policies and measures and their impacts on the economy against the worst case excuse me, against the base case. Such analyses are important to the American public. The costs will have very real economic impacts. According to several recent studies, restricting greenhouse gas emissions to 1988 levels could by the year 2010 reduce Gross Domestic Product by 1.5 to 2 percent, cause the loss of half a million jobs, and increase the fuel prices of electricity by 50 to 60 percent in the industrial sector of the U.S. economy.

Mr. Chairman, that concludes my statement. Thank you.

Mr. GEJDENSON. Thank you.

[The prepared statement of Mr. Barrody appears in the appendix.]

Mr. Mintzer.

STATEMENT OF DR. IRVING M. MINTZER, CENTER FOR GLOBAL CHANGE, UNIVERSITY OF MARYLAND AND STOCKHOLM ENVIRONMENT INSTITUTE

Mr. MINTZER. Yes, thank you, Mr. Chairman. My name is Irving Mintzer, and I am a senior research scholar at the Center for Global Change at the University of Maryland. I currently sit-participate as a member of Working Group I of the IPCC on Science and Working Group III on Cross-cutting Issues, and have been participating for the last 2 years and was an invited observer in the deliberations of the Intergovernmental Negotiating Committee on Climate Change.

I fully agree with Mr. Barrody that consideration of the issue of global climate change of the National Action Plan needs to be framed in the context of considering its effects on the U.S. economy and, especially, on its effects on global competitiveness. But as I look at the data that is available to us now and the options that are open to us in the country, I draw a somewhat different conclusion. In my remarks to you today, I would like to focus on five specific issues.

First, do we know enough today to act wisely with respect to the risks of rapid climate change? Secondly, what are the implications of the remaining uncertainties, the nonlinearities in the climate system and the potential for surprises? Third, do we have the opportunity to buy any insurance against the potential damages associated with these risks? Fourth, can we revise the current original Bush administration National Action Plan and use it as a tool for planning for a stronger America? And finally, can we use the climate issue as a foundation for building new partnerships that will strengthen American business, that will return America to a posi