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reform, and enhanced research and development. A wide range of energy efficiency initiatives such as additional equipment standards, building codes, industrial efficiency grants and alternative fuels actions will promote more energy efficient and environmentally beneficial opportunities in homes, business, and vehicles. By the year 2000, these Energy Policy Act programs, depending upon the assumptions, will reduce annual, emissions of greenhouse gases by the equivalent of 20-40 million metric tons of carbon from the otherwise expected baselíne levels. Research and development on clean and efficient energy supply technologies and end-use equipment can continue providing reductions in emissions well into the next century as products are commercialized and market penetration grows.

These projections reflect a number of factors. Among the most important are:
• economic growth rates,
• changes in energy prices, and
• market diffusion rates for innovative, energy-efficient technologies.

Because future values for these variables are difficult to predict, actual emissions may differ significantly from these projections.


In addition to supporting the Energy Policy Act, the President's economic program proposed a broad-based energy tax. Besides providing revenue, the tax would promote energy conservation, provide environmental benefits and enhance energy security. As proposed, by 2000, the tax would achieve greenhouse gas emissions reductions of 20-25 million metric tons (carbon equivalent). While the original formulation of the broad-based energy tax may not be enacted, I believe that the emission reduction implications of all alternative energy tax proposals should be recognized. If a broad-based energy tax achieving equivalent reductions is not enacted, the President's plan may require other, potentially more costly and less efficient policy mechanisms for needed greenhouse gas emissions reductions. If there is a broad based energy tax that results in a year 2000 reduction of 25 million metric tons, the shortfall for returning to 1990 levels would still be 70-100 million metric tons.


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Other provisions of the President's economic package will also reduce greenhouse gas emissions. These proposals include:

voluntary "green" energy efficiency programs, • weatherization assistance, • increased purchases of alternative fuel vehicles, • enhanced Federal building energy efficiency, • accelerated renewable energy and energy efficiency commercialization, and • increased natural gas utilization. DOE PROGRAMS WILL CONTRIBUTE TO THE NEW FOUNDATION FOR MEETING THE

NATIONAL COMMITMENT The Department is implementing a wide range of programs that reduce greenhouse gas emissions. For example, they: • encourage the development and deployment of energy efficient technologies and

practices through industry-government partnerships, • encourage voluntary and market-based emissions reductions, and • encourage technology transfer and cooperation with developing countries.

INDUSTRY-GOVERNMENT PARTNERSHIPS Cooperation between industry and government to achieve emissions reductions is the hallmark of several DOE programs.

The Department recently selected five clean coal technology projects that are expected to achieve highly efficient, environmentally clean electric power generation from coal. An exciting result of the Clean Coal partnerships is last week's commercial sale of one of the technologies demonstrated in an earlier clean coal project.

Major cooperative projects in wind, solar, geothermal and biomass are currently underway that will lead to expanded use of renewables by the year 2000, and substantial carbon reductions by 2010. These include:

A cooperative effort with utilities, the Electric Power Research Institute and industry to validate advanced wind turbines in utility settings, and

A cooperative effort with Pacific Gas and Electric Co., Electric Power Research Institute, the California Energy Commission and other utilities to demonstrate large-scale use of photovoltaic systems. The Department is teaming with utilities and the Electric Power Research Institute to develop systems for power transmission and electrical energy storage.

The Department of Energy is providing strong support for integrated resource planning by utilities to encourage both innovative supply -technologies and the reduction in electricity demand growth.

USE OF VOLUNTARY AND MARKET-BASED ENERGY PROGRAMS Emission reductions through voluntary and market-based programs are generally recognized as being choices that increase cost-effectiveness. Key components of the Administration's efforts to reduce greenhouse gas emissions will include:

the Department's energy efficiency and renewable energy deployment support

efforts, • the Environmental Protection Agency's "Green Lights”, and • the Department's development of guidelines and the associated database for

recording voluntary emission reductions pursuant to Section 1605 of the Energy Policy Act.

DOE INTERNATIONAL TECHNOLOGY TRANSFER AND COOPERATION PROGRAMS International technology transfer has significant potential for reducing worldwide greenhouse gas emissions. The Energy Policy Act authorizes the establishment of three such programs: innovative renewable energy (section 1211); innovative clean coal (section 1332); and innovative environmental technologies (section 1608). These programs could form the building blocks of a policy response to internationally agreed-upon joint implementation principles. The programs are being developed in conjunction with the Agency for International Development (AID) and in consultation with other members of the Committee on Renewable Energy Commerce and Trade (CORECT), the Committee on Energy Efficiency Commerce and Trade (COEECT), and the Clean Coal Technology (CCT) Subgroup.

Recognizing the significant fiscal constraints on new program budgets, we are limiting our activity on these programs to proceeding with a number of “presolicitation" activities.

We have recently completed negotiations at the staff level for an umbrella Memorandum of Understanding with the Agency for International Development (AID).

The Department is developing a list of eligible technologies and potential projects, investigating different solicitation mechanisms, and considering forms of financial assistance loans, advanced payments, and insurance) to maximize the export potential of each program.

In addition to discussions with the EXIMBANK, the Overseas Private Investment Corporation (OPIC), AID, industry trade groups, corporations, and CORECT, a public forum will be held in early FY 1994 to gather comments on a proposed solicitation structure and financing mechanisms.

The Department also has two new programs to improve technology know-how in developing countries to strengthen their capacities to effectively put in place improved technologies: the U.S. Country Studies program (with the Environmental Protection Agency and the Agency for International Development) and the Assisting Deployment of Energy Practices and Technologies (ADEPT) program. The ADEPT program will provide assistance in the selection and application of new energy technologies by promoting cooperative efforts in energy technology information and training, host country capacity building, and technology adaptation demonstrations.

CONCLUSION Mr. Chairman and members of the Committee, I again thank you for the opportunity to present the Department's views. I hope you agree that the President's commitment represents a strong assertion of U.S. leadership for addressing global climate change. The President's commitment is also my commitment and I will ensure that the DOE will continue to make a strong contribution toward meeting the challenge of developing a diversified, cost-effective plan and fully exploiting the opportunity to advance the Administration's energy, environmental, and economic policy objectives.

The mitigation plan development will demonstrate again the strength of approaches that: • involve all of our interest groups, • set criteria to assure that development and protection are both fully considered, • look for cost-effective opportunities that will motivate our private interests—the

engines of our functioning society, and • exploit our technical and social creativity and ingenuity. I see the payoffs of a well developed plan as being

multidimensional: • beginning an adequate, prudent and diversified response to global climate

concerns, • assisting our—and other countries'-economic development by recognizing new

opportunities, • leading our industrial partners to layout early, specific action plans

and then to implement them, and • building the ultimate cooperative process that best assists developing

countries—fostering conditions for expanded and stable private technology

markets. I look forward to responding to any questions or comments members of the Committee may have.

The CHAIRMAN. All right. Mr. Sussman, we are delighted to have you accompanied by a bearded stranger.



Mr. SUSSMAN. Mr. Chairman, it is a pleasure to be here. Let me introduce not to you, but perhaps to others my colleague. He is Dr. Karl Hausker. Karl is our Deputy Assistant Administrator for Policy, Planning and Evaluation and, as it happens, former member of the staff of this committee.

The CHAIRMAN. Well, we do welcome Karl back. He did really excellent work here, and I am sure you have found the same degree of excellence at EPA.

Mr. SUSSMAN. Absolutely.

Mr. Chairman, I am very pleased to be here today to discuss the administration's new initiative on global climate change. I want to start by saying a few words about why this initiative was launched and what problems it is designed to address.

Enough is known regarding the general impacts of global climate change to have persuaded the world community to start acting to curb the buildup of greenhouse gases. The atmospheric concentrations of greenhouse gases are increasing year by year due to human activities. The world scientific community agrees, all else being equal, that the continuation of this trend will have serious climatic and ecological effects.

The impacts of climate change, as defined by leading scientific bodies, could have significant implications to the environment and also for the long-term health of our economy.

In his Earth Day speech this year, the President pledged U.S. leadership to address the challenge of climate change. He committed his administration to reducing. U.S. emissions of greenhouse gases to their 1990 levels by the year 2000. In issuing this challenge, the President used some very important words. He delivered a clarion call, not for more bureaucracy or regulation or unnecessary costs, but instead, for American ingenuity and creativity, to produce the best and most

energy-efficient technology."

The United States is currently the world's largest contributor of greenhouse gas emissions. For that reason, to reduce world emissions and hence atmospheric concentrations, the United States must play a leadership role.

As the first step in the process of developing an action plan, the White House Conference on Global Climate Change on June 10 and 11 brought together nearly 800 concerned citizens for an extraordinary discussion of proposals for reducing our greenhouse gas emissions in a set of concurrent workshops. Working group members heard participants describe innovative and effective strategies for reducing emissions. The participants also described many of the challenges that lay before us. I want to stress that we will continue to consult with participants at the White House Conference, as well as representatives from industry, State and local government, labor, environmental groups, universities, and other vital constituencies so that we may continue to benefit from the wide range of expertise and experience that is available.

The displayed chart on my left depicts the process that the administration will use to develop an environmentally effective and economically sustainable mitigation plan. First let me mention that to bring together all the stakeholders within the Government in climate change policy, the administration has formed interagency working groups. These working groups are shown here in the chart, and as you will see, they are comprised of representatives from key White House offices, as well as a number of executive branch agencies. EPA, along with DOE and other agencies, is playing a very active role in these working groups, and we are very pleased to be involved and very pleased by the progress which has been made to date.

The working groups, as you know, convened a series of workshops in early June to tap into the views of a diverse set of constituencies who have the expertise necessary to help the administration develop policy options by relating real world experience in greenhouse gas reduction efforts. We think that these workshops were very positive and very useful, as Secretary O'Leary indicated, and we do plan to have some additional workshops early in July.

Now, the working groups that we have addressing a range of issues will feed into an interagency analysis team. You see the team displayed here. This team will be staffed by technical experts from the Council of Economic Advisors, the Department of Energy, EPA, Treasury, and other key agencies. The role of this analysis team is to synthesize information into a common analytical framework and to integrate options into alternative policy packages which can then be reviewed and evaluated by senior decisionmakers.

The senior decision-makers will come together in the Interagency Climate Change Mitigation Group. This group is headed by the White House Office of Environmental Policy, and its goal is to bring senior decisionmakers together to review the activities of the working group, to receive information and analysis from the interagency analysis team, and then finally to review the options which have been identified and developed and to make in the end the appropriate policy decisions.

As you know, our goal is to produce a plan in August and we expect that in the coming weeks the Interagency Climate Change Mitigation Group will be actively at work reviewing options, receiving information, and as the process proceeds, making some decisions.

Now, I know that there is a lot of interest in the options that are under consideration and the mitigation strategies that may or may not be adopted. A large number of options and strategies have been put on the table as a result of the workshops which were held earlier this month and as a result of the working group meetings which have been held. I want to stress that we have not yet begun to sift through these options. That process will be going forward very quickly. I do not want to prejudge the results of that process, but let me discuss some of the options in which EPA plays a key role and which undoubtedly will in the end play an important role in our mitigation strategy.

First I want to reiterate, as Secretary O'Leary emphasized, that the President's commitment to return U.S. emissions to 1990 levels by the year 2000 relies on the success of cost-effective methods of implementation, and as a result, we expect that the new action plan will include an important role for voluntary programs.

EPA does have what we believe is a very successful group of voluntary programs to encourage energy efficiency. These are our Green Programs. We expect that these and other voluntary programs will enable the U.S. economy not only to reduce emissions, but also to continue to increase growth and productivity. Two years of real experience with our Green Programs have proven to us that there is a catalytic role for the Government to play in providing significant assistance, technical support, and motivation to organizations in the public and private sector to install energyefficient technologies, improve productive processes, and take other appropriate measures to lessen their emissions of greenhouse gases.

As a complement to the Green Programs, EPA is working closely with DOE to leverage section 1605 of the Energy Policy Act into an effective greenhouse gas reduction program which we are calling the Green Companies Program. This program we hope will build on the mandates in section 1605 by enabling us to establish a process by which firms can voluntarily report greenhouse gas emissions and reductions achieved through various actions. The Green Companies Programs will entail setting up an accounting methodology, establishing goals, and providing outreach and technical services to participating organizations.

Mr. Chairman, with those comments, let me stop and allow the committee to ask questions. I want to thank you again for inviting the agency to present testimony, and we look forward to working with you on this important issue. [The prepared statement of Mr. Sussman follows:] PREPARED STATEMENT OF ROBERT SUSSMAN, DEPUTY ADMINISTRATOR,

ENVIRONMENTAL PROTECTION AGENCY Good morning. I am Bob Sussman, Deputy Administrator of the U.S. Environmental Protection Agency (EPA). I am pleased to be here today to discuss the Administration's new policy on global climate change.

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