gases; and an international effort that includes working to implement the Convention and supporting developing countries and countries with economies in transition in meeting the Convention's goals.

THE NATIONAL EFFORT

To realize the domestic requirements of the President's commitment, the Administration has begun to develop a plan that will identify steps we can take to reduce U.S. greenhouse gas emissions to 1990 levels by the year 2000. As you know, the White House Office of Environmental Policy has established an Interagency Climate Change Mitigation Group to develop the August plan. Let me note that under the Climate Convention's Article 12, developed country parties must report on their actions within six months of the Convention's entry into force, which is expected by late 1994. While the August plan will be the cornerstone of that report, we anticipate that the subsequent full version of the U.S. National Action Plan will be developed after August in time to meet our Convention obligation.

While my colleagues here will describe the details of our national effort more fully, I do want to mention that the State Department is chairing an interagency working group on joint implementation, one of six interagency working groups. In a cooperative effort with representatives from the Departments of Energy, Transportation, Agriculture, Treasury, Commerce, the Environmental Protection Agency and several White House Offices, we are examining how to approach international programs in the context of the August plan.

INTERNATIONAL COOPERATIVE PROGRAMS

Let me emphasize again that this is a global problem. Our domestic actions alone, even as large as we are, will not be enough to reverse the increasing trend in global atmospheric concentrations of greenhouse gases. Just as a private sectorgovernment partnership is required to develop an effective August plan, we must also establish partnerships with other countries. Sources of emissions are spread globally, and actions to reduce emissions undertaken anywhere on the planet have global significance.

In addition, any long-term plan to address global climate change will fail unless it addresses emissions in developing as well as developed countries. Currently, the United States contributes about 20 percent of global net emissions, but our share is declining. Developing countries represent an increasing share of the total emissions, about 40 percent today and perhaps rising to 60 percent by 2030 due to increasing population and higher standards of living.

Cooperative projects will be an important piece of the long-term, global solution to climate change and illustrate how developed and developing countries can work as partners to reduce greenhouse gas emissions. In order to provide an incentive for such partnerships, countries should, under appropriate conditions, be able to include in their national programs to reduce their emissions actions to reduce emissions anywhere in the world. Because emissions of greenhouse gases everywhere contribute to the build-up of atmospheric concentrations, reductions anywhere can diminish the impact of global climate change.

The Framework Convention on Climate Change indeed recognizes the importance of and possibilities for "joint implementation" projects which have the principal advantage of efficiency. International cooperation could allow global emissions reductions to be achieved at the lowest overall cost. In fact, some analysts estimate that the total economic cost reduction could be significant under certain conditions. There could also be more rapid transfer of resources and technology from developed to less developed countries and to countries with economies in transition under a cooperative scheme. Furthermore, because many measures to reduce greenhouse gas emissions have other environmental benefits (e.g., forest conservation or protection of wildlife species), international projects could meet other environmental goals as well.

However, a number of questions about international cooperation need to be addressed, and as yet there is no international consensus on specific guidelines for cooperative projects.

For instance, some view cooperative projects as a means for the developed countries to shift their environmental responsibilities to developing countries. These critics believe that, since the developed countries emit a disproportionate share of greenhouse gases, we should reduce our domestic emissions before turning toward reductions abroad.

The developing countries are also concerned about additional future restrictions on emissions, or a "ratcheting" of the Convention. Some developing countries fear that the low-cost measures to reduce emissions would be the first undertaken

through cooperative programs, leaving them with only more costly options if obligations to reduce emissions under the Convention ultimately apply to them as well.

In addition, many technical details still need to be addressed. For instance, some have recommended creating a system of greenhouse gas emission allowances, similar to those used in sulfur dioxide tradable permits. However, how such "allowances" might be allocated is not at all clear. The need for and role of an international coordinating mechanism also has yet to be considered.

The Administration is currently addressing such issues through an interagency working group chaired by the State Department in preparation for the 8th Plenary session of the Intergovernmental Negotiating Committee of the Convention from August 16-27 in Geneva. In developing the U.S. position for that session, we are consulting with industry, environmental organizations, state officials, and the Congress.

COUNTRY STUDIES

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I want to mention another program which fulfills part of our Convention obligations. Through the Climate Change Country Studies Initiative, we providing $25 million and technical expertise to developing countries and countries in transition to develop analytical and institutional foundations upon which appropriate measures and actions to address climate change can be built. These studies will enable countries to address vulnerabilities to climate change, develop national inventories of greenhouse gases, and identify actions and measures to mitigate_greenhouse gas emissions or to adapt to climate change. The Country Studies Initiative is coordinated by an interagency committee chaired by the State Department and is managed by DOE, EPA and AID. While the Initiative is largely funded through the U.S. Global Change Research Program, it utilizes the technical experience of all of the U.S. agencies. We are now completing the first bilateral discussions with interested developing country partners and hope to begin funding projects within the next few months.

ADVANCING THE CONVENTION

To move forward, I believe that our work under the Convention must focus on the longer term. Once all countries have ratified the Convention, we must evaluate the obstacles to its implementation and work to overcome them. As I noted earlier, the preponderance of future emissions will come from the developing countries. We must therefore begin now to develop appropriate responses to help these countries reduce their emissions while continuing along the path to economic prosperity, a response that is sure to involve the development and commercial exchange of new environmentally sound technologies.

One of the charges that has been leveled in the past against a strong environmental policy-such as the one required to address global warming-is that protecting the environment and promoting economic growth of both developed and less developed countries cannot coexist. I do not agree. As I attended the meetings of the Commission on Sustainable Development, it became even more clear to me that these goals are truly compatible—our support for developing countries will meet everyone's needs: ours, with respect to the strong commitment we have for the preservation of the global environment and for the creation of domestic jobs in environmental technologies; and theirs, both for their own environmental concerns and for environmentally sustainable economic development.

Investment in environmental technology is one way to reach these goals. As President Clinton noted in his Earth Day speech, there will be, by the end of this decade, a $300 billion global market for environmental technologies, and the United States must capture as much of that market-and the tens of thousands of jobs it will create as possible. This in an area in which the United States can and must continue to be a leader. As Secretary O'Leary said, this is a market opportunity we cannot afford to let slip away.

These are the kinds of programs in which this Administration is engaged in our efforts to address climate change.

Thank you for this opportunity. I would be happy to respond to any questions you may have.

The CHAIRMAN. Senator Craig.

STATEMENT OF HON. LARRY E. CRAIG, U.S. SENATOR FROM IDAHO

Senator CRAIG. Mr. Chairman, thank you. I appreciate the opportunity to have the Secretary before us as we discuss this most important issue.

You have stated it well, Mr. Chairman, with the President's statement of April 21 as it relates to 1990 levels by the year 2000 and how those are to be accomplished. Obviously, we are going to hear explanations of the interagency group this morning and what that might mean.

I will tell you at the outset I am frustrated at this moment for a variety of reasons. First of all, I am not sure of the science that we are pursuing or the fact that we are pursuing something that is a fact. So, that is all important, but I think our country has already decided on that. So, we are off, and down that road.

But assuming that we can arrive at these levels and that they are worthy goals and that they will resolve environmental problems in the long term, the thing that frustrates me most I think, Madam Secretary, is, where are the administration's assumptions regarding economic growth and other factors that will be directly affected by policies and implementation plans to arrive at these emission levels? We have a Clean Air Act that is phasing itself in that is going to have tremendous impact. We have a lot of other things going for us that we have done collectively as a Nation we believe are going to be the right things to do. We are all in the pursuit of cleaner air, but it does not appear that we are much in the pursuit of abundant energy. If we are not in the pursuit of abundant forms of reasonably inexpensive energy in concert with all of this, then I am not quite sure that the economic policies that this Nation must adhere to as it relates to growth and future generational opportunities really fit, and that is my concern. I say that in concert with this administration's immediate and I think very knee-jerk reaction to blocking the funding of IFR. That is a future source of abundant energy that is phenomenally clean and that goes about cleaning up other sources of contamination. That fits this scenario phenomenally well, and yet this administration has chosen to deny this country, one of the greatest forms of scientific research and future opportunity that I think we have. I believe that is inconsistent with a policy toward minimizing the greenhouse gas emissions and providing abundant energy opportunity as it relates to future economic growth. I really do want my grandchildren to have a great opportunity in a clean environment in a viable economy that is produced historically and futuristically by abundant sources of energy.

So, I guess I think that challenge for all of us, certainly you, this administration, and this Congress, is to adhere to our policy and try to arrive at those kinds of levels of emission by the year 2000. I think our President's goal is worthy and it might be obtainable, but I hope it is a goal that will cloud our vision as it relates to future energy abundance because without energy abundance, we will have a difficult time enjoying a clean environment because we will all be living at a lesser lifestyle than I think any of us would want to live. I must say and I will repeat I find now a gaping inconsistency between what this administration is proposing on one

hand and lobbying the Congress on another. I would like to have you bring those together into a consistent program that I think speaks well for our future and a clean environment and well for our future in an abundant energy form.

Thank you. Thank you, Mr. Chairman.
The CHAIRMAN. Senator Bingaman.

Senator BINGAMAN. I have no statement, Mr. Chairman. I welcome the Secretary and Mr. Sussman.

The CHAIRMAN. Senator Campbell.

Senator CAMPBELL. I have no statement, Mr. Chairman.

The CHAIRMAN. Madam Secretary, we are pleased to have you.

STATEMENT OF HON. HAZEL R. O'LEARY, SECRETARY,
DEPARTMENT OF ENERGY

Secretary O'LEARY. Thank you, Mr. Chairman and members of the committee. I would ask that my formal testimony be made a part of this record.

The CHAIRMAN. Without objection.

Secretary O'LEARY. I will spare you having to hear me read it. I have a few brief overview comments and will get right at it.

As the Chairman has indicated, our administration has, indeed, affirmed this Nation's commitment to reducing greenhouse gas emissions and stabilizing them to the levels of 1990. I think we need though, to focus on other issues regarding that commitment for the Nation, and how the world now understands commitment.

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At the same time the President was making that commitment, he equally stressed the need for a cost-effective plan and indicated that America's creativity and ingenuity in promoting energyefficient technologies could help us avoid the kinds of command and control methodologies that some might see applying to address this problem. He gave his clear signal, though, of an intention to examine all options and to examine them fully with some public input.

He also clearly stated that he is determined that the assessment of the science, which results in our being able to embrace these goals for the year 2000, simply justifies that we take cost-effective measures, not that we step back and wonder and doubt whether we should go forward. It is so with the recognition that the science drives us, but the science drives us to be cost-effective as we go forward.

I want to focus first of all, Mr. Chairman and members of this committee, on an extraordinary conference that has been reported in the press. That was the White House conference that was called to invite participants and stakeholders to offer suggestions and recommendations with respect to how our plan for global climate mitigation ought to be derived. First of all, you should know that we planned for 300 people. I was present at that meeting and can tell you that 800 people attended. They were sitting on the stairs, going down into a conference area, and standing in the lobby_and on a balcony above. There was that much anticipation, perhaps some anxiety, but clearly a desire to participate in a process that in my view was open and inviting to all points of view.

Many ideas were presented, as has already been indicated, some quite traditional, some difficult to implement, and some brand new, and one is left to ponder what impacts would result. But as I told the group at the time that I spoke to them, all ideas are on the table for consideration. My colleague, Mr. Sussman, will later walk through the process used, but I think the important fact to be left with the committee is that there was an astonishing outpouring of interest and ideas brought to the table and that gives me some sense that we can develop a plan on a very fast track that can make sense to all of us with the clear key that the economics ought to drive our decision.

There are a number of guiding principles that were adopted by the group. One, quite frankly, is that there be diversity of methodology in this plan and the idea there is, as this committee well knows, not to simply be stuck with one portion of a plan that seems to work well and get us there, but that we have diversity so as we move forward, we can judge the efficacy of each and every plan finally implemented.

As you know and as has been indicated, the work on this plan with the six separate groups who have come together is being led by the White House Office of Environmental Policy. We have looked at and will continue to look at areas that really help us to address two principles. One, we do want to involve developed countries, and in my recent meeting with the International Energy Agency, I would want to point out to this committee that while much of that meeting, which lasted for 2 and a half days, took the formal, very standard process where people sit and talk at each other from prepared and written testimony, which is quite necessary because translation is required, when we began to talk about issues involving global climate change, excitement evidenced itself in the group. People went away from prepared statements and began to discuss with a great deal of energy the desire that we should all bring to the table our plans and, most importantly, look at opportunities to focus on how we quantify achievement made toward global climate change. That indicates to me a very high interest not only in the plan's development, but a high interest in exchanging information from country to country with respect to those programs that appear to be working well.

-Another tenet that we have established for ourselves is we want to help to improve markets in developing countries. Everyone in this room knows that the projections over into the 21st century at 2025 lead us all to conclude that most of the emissions will not be coming from the traditional developed countries, but from those countries who are now interested in developing. So, that provides for us both an opportunity, one, to make certain that we have involvement at that level, and two, that we are transferring the very best technology available so that we are not creating additional emissions.

Some of you may know that in a joint effort, the Commerce Department and the Energy Department have just_completed a mission in China, in Southeast Asia, and in Eastern Europe where we had an opportunity to discuss with government officials in those countries clean coal technologies and other energy-efficient technologies and alternative energy. I will tell you that the