to live at the same standard of living that we enjoy? I believe they do. Is it not a proper goal of government to enable more people to live better? I believe it is.

In this context, the world requires utilization of vast amounts of coal, oil, and natural gas to generate electricity. In the U.S. we have a legacy that impedes placement of new technologies. Because of this it could be argued that the rest of the world will turn to new technologies even faster than the U.S.

As you've traveled around our great country, I am sure you have noticed as I do that there is no part of the Nation untouched by economic growth. In the Rocky Mountain West, an area where Western Fuels Association does business, places that 10 years ago were remote today are bustling. New people have moved in, new construction is underway and, yes, installation of fiber optics is underway so that such areas can become part of the World Wide Web. This same phenomenon will happen in parts of the globe where industrial activity has been light. Economic growth attendant with the technology revolution is robust and undeniable and it, too, requires vast quantities of electricity.

As we view what is going on in the world today, it may be said that we live in truly the best of times. Economic growth is beginning to reach parts of the world it never has before. Certainly in the United States our level of economic activity is unprecedented. It amazes each of us in our everyday lives as we observe what goes on around us.

But this growth depends on electricity in the same way we depend upon air to breathe, food to eat, and water to drink. Electricity is a necessity for our brave new world. It is necessary for people in their everyday lives.

Yet, under the Framework Convention on Climate Change (otherwise known as the Rio Treaty) and the Kyoto Protocol, governments of the world are moving toward rationing this essential element of our existence. They do so under the misguided notion that we can somehow change weather by controlling climate.

The leading culprit in their view, of course, is carbon dioxide. Carbon dioxide is a greenhouse gas that humans create everywhere, all the time, in simply living their lives. Burning fossil fuels is humans' greatest contribution of CO2. Well-meaning scientists dependent upon large research grants and sophisticated, but flawed, computer models tell us that by putting more CO2 into the air through our industrial activity we will change the world's climate in ways we will not like. This will lead to apocalyptic global warming.

There is no greater proponent of this perspective than Vice President Albert Gore. He sets it forth in his book "Earth in the Balance." He recently reissued the book and states that he would not change it in any significant way. Chapter Four, entitled "Buddha's Breath," sets forth his views in detail.

Vice President Gore sometimes has a hard time with facts and his misuse of facts gets him into trouble. Interestingly, as has been reported in the media, in his book he relies heavily on ice core data as a measurement of atmospheric CO2 correlated with temperature in eons past. He concludes that more CO2 in the air definitely means much higher temperature and a resulting apocalypse.

The Vice President did not acknowledge when he reissued his book that his factual premise for his belief on global warming has been proven to be in error. A study sponsored by the Scripps Institution for Oceanography last year stated that it is the reverse: it temperature that causes atmospheric CO2 to increase and decrease, not vice versa. Yet, we are all proceeding down this road toward regulating greenhouse gases, and particularly CO2 based on what is, at best, a questionable premise.

The urgency those on the side of the apocalypse feel is driven by computer models. While sophisticated and improved over time, these General Circulation Models are flawed and flux adjusted. They are flawed in that they can't hind cast. They are flux adjusted by their creators in order to reach predetermined outcomes. They are used to make important assumptions in areas of climate science where no real knowledge exists.

I don't challenge the good faith of most of those on the side of the apocalypse, but I do challenge their notion that we should live our lives based on sophisticated speculation.

We know from observations, such as weather balloons and satellites, that there is no current warming in the troposphere. According to greenhouse theory this has to occur before the apocalypse is upon us. We know from observations that more CO2 in the air has been-and is good for plants, agriculture, and forests. Sylvan Wittwer, Professor Emeritus from Michigan State University and an expert who has served on every U.N. and governmental committee that studies such matters, is the dean of the school of thought that more CO2 in the air is a positive good and not bad. He has concluded that we now enjoy a 10 percent, universally free, food premium from increased agricultural productivity as a result of more CO2 in the air.

Based on these observations and our long time involvement in the argument over Vice President Gore's vision of apocalypse, I say in good faith to you today that I am not troubled about putting more CO2 in the air, although I realize that many in our society are. I would include you in that category, Mr. Chairman, because I have read your comments. I understand them and I respect them. But the agenda of those who want to "do something now" about CO2 is one that comes into conflict with the full utilization of our Nation's coal-fired electricity generating base and the installation of new clean coal technology that holds so much promise for our future. New clean coal technologies can create electricity with very little by way of emissions of sulfur dioxide and oxides of nitrogen. Under current regulations, airborne toxics remain. But much less is known in this arena than is portrayed. We know that we live longer and better notwithstanding minute emissions of mercury from burning of coal.

None of the clean coal technologies on the drawing board today do anything about carbon dioxide. Even though efficiency levels are up and are rising, you have to remember that under greenhouse theory going to 7 percent below 1990 levels as called for under the Kyoto Protocol does nothing. Rather, under greenhouse theory, we must go to 60 percent below 1990 levels to avoid the apocalypse predicted by the computer models. The Kyoto goal is not achievable in any event. If implemented, it will only represent a start.

There is no doubt that the agenda of the environmental community and Vice President Gore conflicts with the growth of the world economy that is occurring. That growth is driven by the Internet and the broadband revolution. They are energized by electricity, and most electricity comes from fossil fuel combustion, the greatest source of humans' contribution of carbon dioxide to the atmosphere.

Thus it seems to me, Mr. Chairman, that the prudent approach to take is that embodied in S.882 and S.1776, legislation proposed by Senators Murkowski, Hagel and Craig. It would provide an insurance policy in the highly unlikely event that we learn 10, 20, or 30 years from now that the vision of apocalyptic global warming has some basis in fact. That approach would be to have the Federal Government develop CO2 sequestration technologies so that we can continue to utilize fossil fuels, but at the same time scrub CO2 and sequester it that keep it out of the atmosphere.

This would be a very, very expensive proposition. But in the face of a looming global apocalypse, it obviously is something we would do. I think it equally unlikely that having developed the technology we would ever deploy it because of its expense. Nevertheless, I do support the concept of Federal involvement in this important

area.

Let me say that I also support an activist Federal Government when it comes to energy. It is the United States that owns most of the coal west of the Mississippi River. This is the coal the Nation depends upon for its economic well-being. In the Powder River Basin between Gillette, Wyoming and the Big Horn Mountains sixty miles to the west, it is estimated that the United States owns up to a trillion tons of economically recoverable coal. So the Government must be involved in energy. But the Government should be involved in partnership with its people in the way it was in the 1970s and 1980s when we put in the coal plants, not as a punitive parent the way Vice President Gore approaches the question of Government.

I'm an optimist by nature, Mr. Chairman. I know you are, too. I also know that it is optimists who get things done in the world, not pessimists. Those who would cap, tax, and limit our economic activity out of fear of catastrophic global warming are the ultimate pessimists. Those who would allow Americans and the people of the world to go about their lives as the world becomes "wired," as economies become more robust, freedom becomes more entrenched, wealth creation rises, and more people live longer-they are the people who are the optimists and who will get things done.

So, Mr. Chairman, in your new position of influence and power in Government and policy, I would urge you to lead the forces of optimism to allow a new generation of clean coal technologies to come into being, and to allow current coal-fired generation to be utilized at its full rated capacity for as long as those units continue to provide economic electricity for the American people.

Thank you very much.

References

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Huber, Peter & Mark Mills "Got a Computer? More Power to You," The Wall Street Journal, September 7, 2000.

Idso, Sherwood B., CO2 and the Biosphere: The Incredible Legacy of the Industrial Revolution, Kuehnast Lecture Series, Department of Soil, Water and Climate, University of Minnesota, St. Paul, Minnesota, October 12, 1995.

Idso, Craig D., The Greening of Planet Earth: Its Progression from Hypothesis to Theory, Climatological Publications Scientific Paper #25, Office of Climatology, Arizona State University, Tempe, Arizona, January 1997.

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Mills, Mark P. & Michael E. Ramsey Does Price Matter? The Importance of Cheap Electricity for the Economy, Western Fuels Association, Inc., January 1995.

Wittwer, Sylvan H., Food, Climate, and Carbon Dioxide: The Global Environment and World Food Production, [CRC Press: Boca Raton, FL], 1995.

Wojick, David E., The National Scare: Assessing "The National Assessment of the Potential Impact of Climate Change" http://www.greeingearthsociety.org/Articles/ 2000/fatal1.htm

Wojick, David E., The U.S. Is Still a Developing Nation: A Comparison of Electric Power Trends Among Nations, And Implications for the Kyoto Protocol, September 2000 http://www.greeningearthsociety.org/Articles/2000/developing1.htm

Electricity In Economic Growth. Committee on Electricity in Economic Growth, Energy Engineering Board, Commission on Engineering and Technical Systems, and National Research Council, National Academy of Sciences, 1986.

The CHAIRMAN. Thank you, Mr. Palmer.
Dr. Romm, welcome.

STATEMENT OF DR. JOSEPH J. ROMM, DIRECTOR, CENTER FOR ENERGY AND CLIMATE SOLUTIONS, ANNANDALE, VA Dr. ROMM. Thank you, Mr. Chairman. It is actually "ROME". The CHAIRMAN. "ROME"; I apologize.

Dr. ROMM. I really appreciate you holding this hearing today. I do agree with you that businesses are leading the way now on climate change. I think you heard the fine work that BP is doing. I appreciate the mention, Senator Kerry, of my work and my former boss Amory.

I do want to talk about how businesses are leading the way toward cost effective greenhouse gas solutions. But I feel incumbent upon myself to take a couple of minutes to refute this bizarre myth that the Internet is an energy hog. Mr. Palmer speculates that the digital economy is making us use energy less efficiently and that the Internet makes it harder for the Nation to reduce greenhouse gas emissions. This speculation is the opposite of the facts.

Let me just give you the key chart here. If you cannot see it, I do have it photocopied. You may want to raise that a little bit if you can. What this is, this is a set of bar charts which looks at

really one of the most amazing set of facts to come across the U.S. economy in a very long time.

The left-hand bars are the annual growth rate for electricity, energy, CO2, and GDP for the period 1992 to 1996, which I would call the immediate pre-Internet era. The red bar chart is the same electricity, energy, CO2, and GDP annual growth rates for the 1996 to 2000 period. What is amazing that has happened in the last 4 years is that we have had higher GDP growth, which I think everybody knows and is delighted about. What is particularly amazing is that electricity growth has actually slowed. Energy demand has slowed. This is the growth.

In the first 4-year period energy demand was growing about 2.3 percent per year for 4 years. Now it is growing at 1 percent per year for 4 years. CO2 growth has been almost cut in half and electricity demand growth is down.

Senator KERRY. Energy growth, you are saying all energy growth?

Dr. ROMM. In the United States. I am sorry, this is United States. This is all United States data. What has happened in the last 4 years is the rate of growth of energy demand in this country has slowed by more than a factor of two since the advent of the Internet.

Senator KERRY. But yesterday Secretary Richardson said fuel demand, oil demand, is up 14 percent.

Dr. ROMM. He probably was giving a statistic starting in the year 1990. Fuel demand is certainly not up 14 percent in the last couple of years.

We can have a long discussion about exactly what is going on in the energy economy. These numbers come from the Energy Information Administration. What I think we see here-and I might urge you to have a separate hearing on this specific subject. I have actually labeled this new trend in a paper I did about a year ago, "The New Energy Economy."

Clearly, if this is a trend it is a very big deal, because it suggests that one can have higher GDP growth and lower CO2 emissions growth, and that obviously would be a very big deal.

I know this Committee has played a very important role in accelerating the use of the Internet and I do think it is a shame that Mr. Palmer and his colleagues Mark Mills, Peter Huber have been telling journalists, Members of Congress, and business people that the Internet is bad for the environment when the evidence shows that it is not.

I think there are, by the way, two reasons why the Internet economy allows us to have higher GDP growth and lower greenhouse gas emissions growth. The first is that the information technology sector, which includes computer manufacturing and software, just is not very energy intensive. So you can have growth in this sector that does not use as much energy as growth in areas like steel manufacturing and chemicals.

But the second-and I think this is a critical point that people are just starting to catch on to-the Internet economy makes the overall economy more efficient. As more companies put their supply chain on the Internet and reduce inventories, overproduction, unnecessary capital purchases, and mistaken orders, they achieve

greater output with less energy consumption. I think the Internet is pulling out inefficiency from the macroeconomy of the United States.

As Fed Chairman Alan Greenspan told Congress last year: "Newer technologies and foreshortened lead times have thus apparently made capital investment distinctly more profitable, enabling firms to substitute capital for labor and other inputs"-which from my point of view includes energy-"far more productively than they could have a decade or two ago.'

I do think that the positive impact of the Internet is going to continue in the future, in part because a very new trend-companies are starting to look at how they can manage their buildings remotely over the Internet. Companies like Enron are looking into this. You are probably also hearing about utilities doing experiments in remotely monitoring home energy management so that we can lower consumption when people are not there.

I know that I was invited here to talk about what businesses are doing and I do want to comment on that. I think, Senator, that you are absolutely correct that businesses have really taken a leadership role. Let me just quote from the Wall Street Journal in October 1999: "In major corners of corporate America, it is suddenly becoming cool to fight global warming. Some of the Nation's biggest companies are starting to count greenhouse gases and change business practices to achieve real cuts in emissions. Many of them are finding the exercise is green in more ways than one. Reducing global warming can lead to energy cost savings."

I myself wrote a book that came out last year that you may have seen, "Cool Companies: How the Best Businesses Boost Profits and Productivity by Cutting Greenhouse Gas Emissions," which has about 100 case studies. In fact, the lead case study is Malden Mills. I am sure you have met Aaron Fierstein, a remarkable person. His mill burnt down and, instead of relocating, he kept the employees on the payroll and rebuilt it. That is the well-known story.

What people do not realize is that when he rebuilt he put in onsite generation for combined electricity and heat, he put in very sophisticated day lighting and heat recovery, and he probably now has the greenest, most energy efficient textile mill in the world. I asked him why he did this when he was struggling to rebuild his company and he said: "Over the long term, it is more profitable to do the right thing for the environment than to pollute it."

I would say, however, he has one advantage over many other companies: It is a privately held company, which allows him to think longer term than many other companies.

My Center for Energy and Climate solutions is helping a number of Fortune 100 clients do the same thing. We partnered recently with World Wildlife Fund in a program called Climate Savers, and Johnson and Johnson and IBM have both pledged to make substantial greenhouse gas emissions cuts, really following the lead of John Browne and British Petroleum. Johnson and Johnson pledged to cut greenhouse gas emissions 7 percent below 1990 levels by 2010 even as their business is very booming. IBM has already achieved an estimated 20 percent reduction in carbon dioxide emissions through energy conservation efforts and pledges to continue its remarkable efforts.