Question 12. Under the current rules governing the Climate Treaty negotiations, the negotiations are conducted by consensus, and the declarations that are made are made by consensus. (a) How was a ministerial declaration made when there were Parties that objected to it? Answer. The Geneva Declaration, which received extremely broad endorsement from ministers and other heads of delegations that took part in the ministerial portion of the Second Conference of the Parties, was not adopted as a "decision" of the Conference of the Parties. The few countries which opposed the declaration were given ample opportunity to state their views on the record, as were those few countries which expressed concern with some aspects of the declaration. Question (b). Why was this declaration given an "L" document designation? Answer. An "L" designation signifies a document that has been tabled officially at a session of the Conference of the Parties or at a session of one of the Convention subsidiary bodies. Because the Geneva Declaration was officially tabled, it was given an “L” document designation. RESPONSES TO QUESTIONS FROM SENATOR JOHNSTON Question 1. What role do you think Joint Implementation-particularly where credits are earned by countries like the United States for work in developing countries-should play in the framework that is being negotiated? Do you feel confident that we will succeed in achieving international emissions trading through mechanisms such as Joint Implementation in the next negotiating phase? Answer. The United States has strongly and consistently supported joint implementation and continues to do so. We were the first country to develop a pilot program for joint implementation-the U.S. Initiative on Joint Implementation (USIJI) in 1994-and the U.S. pilot program strongly influenced the decision taken at the First Conference of the Parties in April 1995, to initiate an international pilot phase for "Activities Implemented Jointly." Under the international pilot program, there is no credit for the greenhouse gas emissions reduced or sequestered during the pilot phase, although projects begun during the pilot phase whose benefits extend beyond it presumably would still be eligible for credit thereafter. In our view, emissions trading and joint implementation for credit should play a key role in the framework now being developed under the Group on the Berlin Mandate. We will need to ensure projects undertaken have the support of the governments involved, and that emissions reduced or sequestered are credible and additional to those that might otherwise have occurred in the absence of specific measures to reduce or sequester greenhouse gas emissions. We are confident that interest in emissions trading and joint implementation is growing, as is international understanding of the benefits both hold for the future, and that both will feature in the agreement to be adopted by the Third Conference of the Parties next year. Question 2. Will the economic analyses now underway consider different timeframes for policies to reduce greenhouse gas emissions? Specifically, a provocative claim from one economic analysis of potential climate change strategies is that we might meet reduced CO2 concentration targets in a more cost-effective manner by allowing emissions to rise until 2020 and focusing our climate change strategy on achieving larger reductions thereafter by replacing carbon dioxide emitting capital equipment at the end of its normal life cycle, rather than prematurely. Is such a strategy being evaluated in the analysis and assessment phase? Answer. Yes. Our analysis and assessment effort will be evaluating a broad range of alternatives. Hon. FRANK H. MURKOWSKI, CHARLES RIVER ASSOCIATES, INC., Chairman, Committee on Energy and Natural Resources, Dirksen Senate Building, Washington, DC. DEAR SENATOR MURKOWSKI: I am pleased to respond to the follow-up questions from Senator Johnston regarding the September 17, 1996 hearing on climate change. Question 1. Your testimony states that, "Until a great deal more of the Administration's analysis is released for peer review, it will be difficult to be comfortable with the state of analysis of potential consequences for the United States." What specific parts of the Administration's analysis of climate change policy do you believe are most important to have released for peer review immediately? Answer. Several presentations at the Springfield Workshop on Climate Change Analysis dealt with conclusions from studies being undertaken by EPA on the economic impacts of emission targets and on technological developments that could reduce those costs. No further information on studies addressing these topics has been released. Peer review of these findings is most important. To make this possible, detailed descriptions of the results, models, and assumptions used in these studies, including contractor reports, model documentation, statistical analysis, and other supporting materials should be released for peer review. I also believe that the analysis process being led by the Commerce Department would benefit from the professional judgments of independent mainstream economists while it is underway. Ideally, all briefing materials, reports by contractors and government agencies, and results and documentation from models being considered in that process should be released for peer review as they are generated. At a minimum, the plans and procedures that will be used in making decisions about which approaches to accept and which to reject should be subjected to peer review. Question 2. If the United States were to propose a "medium-term" and a "longterm" target for greenhouse gas concentrations, what do you believe would be the most appropriate timeframes to consider as "medium-term" and "long-term"? Answer. Short-, medium-, and long-term are flexible designations that take their meaning from the context in which they are used. To an economist, the "short term” refers to a period in which capital equipment is fixed, so that changes in energy use are limited to those that can be accomplished with the current capital stock. The "medium term" is not a term commonly used by economists, though it may refer to a period in which a significant turnover of the capital stock is possible, but new technologies may or may not have time to appear. The "long term" would be far enough in the future that new technologies can be developed and deployed on a large scale. In the context of climate change issues, the long term should be a period far enough in the future to be comparable to the time scales on which climate change processes occur, Assigning a specific period of years depends on the speed of capital turnover, the pace of technology development and deployment, and the time scale of the greenhouse effect. The short term could be in the range of 1 to 5 years. Something less than half of the U.S. automobile fleet will turn over in that period, and very little of the stock of generating equipment at electric utilities. The medium term is in the range of 5 to 20 years, allowing significant capital stock turnover but limited deployment of new technologies. This was also the forecast period in the Energy Information Administration's medium term forecasting system." The long term ranges from 25 years to several hundred years. Since the effective life of carbon dioxide in the atmosphere is on the order of 100 years, long-term concentration goals should be focused on the year 2100 and beyond. Question 3. What might be the most appropriate form for medium-term and longterm targets? For example, are atmospheric concentrations of greenhouse gases a type of target that would be equally suitable for both medium-term and long-term time-frames? Would other types of targets be more suitable than greenhouse gas emission levels or atmospheric concentrations as a medium-term target or a longterm target? Answer. Concentrations of greenhouse gases in the atmosphere are clearly the most appropriate form for long-term targets. Concentrations determine effects on global temperature, and concentrations change only slowly in response to changes in emissions. Moreover, there are processes that remove greenhouse gases from the atmosphere, so that the effects are in principle reversible. For example, negotiations could address setting a goal for greenhouse gas concentrations in 2100 in terms of parts per billion of carbon dioxide equivalent. In the medium term, a cost-effective climate policy would concentrate on developing new, lower-cost technologies and changing the nature of very long lived investments. The most appropriate form for medium-term targets would be in terms of the effort put into technology development and the results of that effort, and the way in which long-term investments are evaluated. For example, the medium-term countries might agree on a coordinated approach to programs for technology development, improvements in the efficiency of new electric-generating equipment being installed in developing countries, and efforts to halt deforestation. In addition to being more cost-effective, concentrating on coordinated action for the medium term, rather than emissions targets, has the additional virtue of being verifiable and enforceable. It is virtually impossible to prove that a country is or is not on track for a target 20 years hence, but much simpler to tell if promised programs have in fact been enacted and effective. This is not to say that the current European Union proposal for mandatory, coordinated tax and regulatory measures is a good idea, because the nature of the coordinated actions must also be evaluated to choose a set of actions that are cost-effective and consistent with U.S. national interests. Sincerely yours, W. DAVID MONTGOMERY, Vice President. RESPONSES OF DR. JOHN P. WEYANT TO QUESTIONS FROM SENATOR JOHNSTON Question 1. What is "integrated assessment” and what is its likely contribution to global climate change policy in the near to medium-term? Answer. Integrated assessment refers to any comprehensive attempt to analyze the balance between the impacts of climate change and the costs of mitigating or adapting to it. Climate impacts may be projected either by individual impact category (e.g., impacts on agricultural productivity, ecosystem function and composition, sea level rise, health impacts, etc.) or in aggregate dollar terms (e.g., percent change in world resulting from a given projected increase in global mean temperature). Because climate impacts research is an extremely difficult and relatively new field, and because of all the difficulties involved in projecting demographic economic, climate and biosphere conditions over many decades, it will take a number of years before such efforts will provide information on the best climate change policies to adopt. On the other hand, such models have already produced a number of extremely useful insights for those involved in climate change policy development like the "where" and "when" flexibility analysis described in my testimony. In addition, these analytic efforts are increasingly being used to frame the climate debate as described in the Intergovernmental Panel on Climate Change's Climate Change 1995 report (volume 3, chapter 11). Question 2. If the United States were to propose a "medium-term” and a “longterm" target for greenhouse gas concentrations, what do you believe would be the most appropriate time-frames to consider as "medium term" and "long term?" Answer. The impacts of climate change are directly related to the concentration of greenhouse gases (GHGs) in the atmosphere (which is one of several factors that drives the climate system), which changes very slowly because of the large stock of gags that is naturally present in the atmosphere and the long residence times (as long as 100 years) of many gags which are introduced into the atmosphere. Thus, it makes sense for global policy on climate change to focus on limiting GHG concentrations as a surrogate for climate change impacts. Since no one country has much direct control over the concentration of GHGs in the atmosphere, an international agreement would ultimately be required to set the limit and adjust it as subsequently deemed appropriate. In addition some agreed upon calculation will be required to approximate the emissions that will lead to the agreed upon concentration target and the allocation of emissions among nations. Although climate change impacts are uncertain, they are not expected to be significant for a number of decades, and the allocation of emissions rights could take many years to negotiate. Thus, a reasonable time frame for which an intermediate concentration target might be specified could be say 2050, with a longer-term goal specified for the latter part of the next century. Almost all analyses of very short-term targets for GHGs emissions reductions. say those that would limit emissions in 2000, 2005, and 2010 have shown that they are probably expensive and unnecessary. They represent a shortterm solution to a long-term problem. On the other hand, a concentration target for 2050 will be much less costly if the long lead time available for addressing the intermediate-term GHG concentration target can be exploited through well designed, high leverage R&D on GHG-free energy supply and higher efficiency energy use technologies, as well as additional research on climate science, and on climate impacts research. In fact, over the net 10-20 years, it would probably more productive to negotiate cooperative R&D and technology transfer agreements than short-term year-by-year emissions targets. These societal investments would be far less costly than sharp short-term reductions in GHG emissions and would put the U.S. and other countries concerned about climate change in a position to respond to whatever the climate and impacts research suggests is a prudent level of GHG emissions in the future. In addition, GHGs concentrations and emissions should be monitored and international agreements for technology transfer, and ultimately the allocation of emissions rights worked out carefully over the neat couple of decades. Question 3. What might be the most appropriate form for mid-term and long-term targets? Answer. Given that individual countries cannot control GHG concentrations on their own, GHGs emissions will ultimately need to be controlled in some way. However, since climate damages are directly related to GHG concentrations which are very closely related to cumulative GHGs emissions over time. I would favor a mutually agreed upon limits on GHGs emissions over a period of decades. For example. U.Š. GHGs emissions could be limited to their year 2000 level on average from 2000 to 2050. Thus. GHGs emissions could rise substantially above their year 2000 level for a couple of decades, and then reduced over the next few decades after that, leaving the climate system in virtually the same state that it would have been if emissions were held at 1990 levels each year between 2000 and 2050. The cumulative constraint would, however, allow adequate time for the existing stock of fossil fuel using capital to be replaced, and for new GHG-free technologies to be developed and spread globally. RESPONSES OF DR. V. RamanATHAN TO QUESTIONS FROM SENATOR JOHNSTON Question 1. Does the IPCC report, in your view, adequately discuss the uncertainties and data gaps in our knowledge of global climate? Answer. The uncertainties are discussed adequately. However, the document does not give any guidance for how to reduce the uncertainties nor does it prioritize the uncertainties. Issues related to data gaps are discussed only in broad terms, with very little attention to important details. For example, there are practically no data for the surface evaporation and the solar radiation reaching the sea surface for most of the world oceans including the Indian and the southern Pacific oceans; yet these components are needed to validate coupled ocean-atmosphere models. In addition, the surface solar radiation over the oceans is needed to estimate the sulfate radiative forcing effects. Question 2. Your research indicates that there may be a much larger absorption of incoming solar radiation by the atmosphere than we may have previously thought, and that is reflected in current global change models. Answer. In addition to my research, independent research by 6 different groups (SUNY, Stony Brook; Johns Hopkins University; NASA-Ames; Swiss Federal Institute of Technology; Max-Planck Institute at Hamburg; and Prof. Kondratiev's group in Russia) have obtained similar results. Question. What might be some of the implications of this research finding for climate change models? Answer. It is bound to have an important effect on the hydrological cycle (including precipitation) simulation by the models used for climate change studies, as suggested by a recent model study conducted at the National science Foundation-National Center for Atmospheric Research. It is possible that the global average evaporation and precipitation (for present day climate) may decrease by about 15 to 30%. The precise nature of such effects must await further research on the source for this excess solar absorption. Currently scientists are eagerly awaiting the results of an aircraft experiment conducted by the Department of Energy over Oklahoma. Question. If the models were changed to take this effect into account, do you think that they would still qualitatively show the same impacts on climate of green house gas emissions? Answer. This effect will not change the qualitative predictions for global warming, i.e., inclusion of this effect, will not change the global warming to global cooling. However, regionally (for example, the entire US) or locally (say the east coast of US) it is difficult to answer this question because we do not, yet, understand the cause of this excess solar absorption. We need more field and laboratory studies and surface solar flux observations over tropical oceans and land areas. APPENDIX II Additional Material Submitted for the Record A STATEMENT ON BEHALF OF THE AMERICAN IRON AND STEEL INSTITUTE During the Second Conference of the Parties (COP) of signatories of the Climate Change Treaty held this past July in Geneva, the U.S. delegation revealed some significant policy shifts in the U.S. position on global climate change. The implications of these shifts, and the possibility of more specific, binding policy changes to be developed prior to the Third Conference of the Parties scheduled for December 1997, are of great concern to AISI's U.S. member companies, who represent about 70% of the nation's steelmaking capacity. The U.S. delegation indicated support for a number of measures that would not only damage the American economy on the whole, but would also force the American steel industry to bear an enormous economic burden-putting one of the nation's building block industries at a competitive disadvantage in the global marketplace. SCIENCE SHOULD BE THE BASIS FOR ANY POLICY DEVELOPMENT At the July conference, the U.S. delegation took the position that human-induced climate change is a significant problem that requires immediate, international attention. Such interpretation of "scientific" evidence has served as the foundation for the building of possible binding, international agreements. There are, however, differing views on attributing cause to changes in global climate. Last December the IPCC's own scientific assessment stated: "(A)ny claims of . . . attribution of significant climate change are likely to remain controversial until uncertainties in. natural variability of the climate system are reduced." The AISI urges Congress to refrain from ratification and implementation of any international protocols governing reductions in emission levels or fuel consumption levels without taking all scientific views and evidence into account. Such binding agreements as those proposed at the COP in Geneva would force the steel industry and its many customers and suppliers to bear an unfair economic burden resulting in a loss of international competitiveness, increased costs to U.S. consumers and, as a result, a reduction in overall employment levels. ECONOMIC IMPACT OF PROPOSED POLICY AGREEMENTS The U.S. delegation to the COP, headed by Undersecretary of State Timothy E. Wirth, seemed to reverse previous government policy and move toward the establishment of legally binding "mid-term" commitments for specific greenhouse gas emission reductions. The most disturbing of the proposed policy shifts is the suggested movement toward a 10% reduction in emissions below 1990 levels by the year 2010. The American steel industry has invested massive amounts of capital in new technology to improve energy efficiency and thereby reduce carbon dioxide emissions. Over the past 20 years, the steel industry has reduced energy consumption levels by approximately 45%-with a corresponding drop in emission levels. The steel industry continues to implement cleaner and more productive and efficient technology. However, any international agreement establishing emission reduction levels leading to the imposition of fuel usage mandates or carbon taxes would severely harm the industry, placing it at an unfair, competitive disadvantage. In a paper presented to the "Climate Change Analysis Workshop" in June 1996 Oxford Economic Forecasting indicated that the U.S., taking into account anticipated growth, would have to achieve an overall reduction in emissions of nearly 22%, whereas countries such as Germany and the UK would only need to realize less than a 10% reduction. Because the steel industry is a major user of carbonbased materials, forced reductions through taxation would result in severe economic hardship for the American steel industry. Coal is a necessary ingredient in basic steel making, needed to produce coke, an essential material in the conversion of iron |