Kay Strategies for the United States,' shows how the United States energy efficiency improvements on a large scale. achieve further This study, which I would like to submit for the hearing record, examines five major policy initiatives that would stimulate widespread energy efficiency improvements in all sectors of the American economy. The five policy initiatives are: o New Appliance and Equipment Efficiency Standards and Related Voluntary • Public Benefit Trust Fund as Part of Electric Utility Industry Restructuring The ACEEE study estimates that these five initiatives could cut U.S. carbon emissions in 2010 by 310 million tons per year-17 percent of the emissions expected in 2010 given business-as-usual trends and about 60 percent of the emissions reduction necessary to meet our Kyoto target. Furthermore, the carbon emissions reduction could nearly double by 2020 efficiency improvements continue to be made and more appliances, buildings, vehicles, d power plants are replaced. By increasing energy efficiency on a wide scale, these initiatives yield energy bill savings that exceed the cost of the efficiency measures. The ACEEE study estimates that these five initiatives could yield net savings for consumers and businesses of over $160 billion during the life of efficiency improvements made during 1999-2010. This is equivalent ao saving about $1,600 per household. The ACEEE study shows that if we are smart about the policies and measures used to reduce GHG emissions, we can achieve substantial redactions with a net economic gain, not penalty. Another recent study, sponsored by the U.S. EPA and carried out by Lawrence Berkeley National Laboratory, reaches the same conclusion-relying on improved technologies as the centerpiece of our strategy for Kyoto Protocol compliance would yield net economic benefits as well as environmental benefits.' 2H. Geller, S. Nadel, R.N. Elliott, M. Thomas, and J. DeCicco, "Approaching the Kyoto Targets: Five Key Strategies for the United States", American Council for an Energy-Efficient Economy, Washington, DC, Aug. 1998. 'J.G. Koomey, R.C. Richey, S. Laitner, R.J. Markel, and C. Marnay, 'Technology and Greenhouse Gas Emissions: An Integrated Scenario Analysis Using the LENL-NEMS Model", LBNL-42054 (internal review draft), Lawrence Berkeley National Laboratory, Berkeley, CA, While the Kyoto Protocol provides the flexibility chieve emissions reductions overseas via trading and joint implementation, it would be a mistake for the United States to emphasize this approach. If we emphasize overseas reductions, we will pay our competitors to become more efficient and miss the opportunity to make the U.S. economy more officient and productive. If it is possible to greatly reduce GHG emissions with net economic benefits, it is fair to ask why some studies claim that reducing GHG emissions will harm our economy. First it should be noted that many of these studies are funded by producers and major consumers of the fossil fuels that cause global warming, the parties that have a vested interest in preventing GHG emissions reductions on a large scale. Second, the studies use worst case assumptions that lead to loss of economic output, such as imposition of a carbon tax without recycling the reverme, no consideration of technological response or the cost savings from energy efficiency improvements, no economic benefits from pollution abatement, and no international joint implementation. The studies are thoroughly critiqued in a 1997 World Resources Institute report. Putting economic modeling aside, history tells us that every time we have faced an environmental challenge-from getting the lead out of gasoline, to protecting the stratospheric ozone layer, to controlling acid rain-there have been those in affected businesses that have said that it won't work and it will wreck the economy. They have never been right. In fact, once the decision was made, each time industry rose to the challenge and American ingenuity found ways to address these problems cheaper and faster than had been anticipated. Consider one example-controlling emissions that cause acid rain. Industry predicted during the Clean Air Act debate in the late 1980s that reducing SO, emissions would cost as much as $1500 per ton of SO, removed. ELA notes in this new report that in 1993, the ELA itself projected that SO, emissions allowances (a measure of the marginal pollution control cost) would be selling for over $400 per ton in 2000. In fact SO, emissions allowances are now trading for about $100 per ton-far less than the prior estimates. The reasons for this, as noted by ELA, are 1) carly actions placing downward pressure on emissions allowance costs, 2) emphasis on the most cost-effective control strategies such as switching to lower sulfur coal, and 3) technological improvements in SO, scrubbers and other control techniques. The exact same strategies-carly action, emphasis on the most cost-effective strategies, and technological innovation-will be employed to hold down the cost of GHG emissions reductions once the United States formally accepts GHG emissions limits. It is truly ironic that the ELA acknowledges it was way off in predicting the cost of acid rain control and recognizes the reasons why it erred, yet it repeats the same mistakes in predicting the future *R. Repetto and D. Austin, "The Costs of Climate Protection: A Guide for the Perplexed", cost of GHG en control! The Federal save uation and deploye t of ene ¤ sapport for the de As pointed out in the recent PCAST energy R&D report, "R&D investments in energy efficiency are the most cost-effective way to simultaneously reduce the risks of climate change, oil import interruption and local air pollution, and to improve the productivity of the economy." DOE, working with the private sector, is helping to develop a wide range of highly innovative, energy-efficient technologies. Here are a few examples: ● Hybrid vehicle and fuel cell technologies that could double or triple the fuel ● New housing designs that use 30-60% less energy for heating and air conditioning compared to typical new homes while providing better comfort and improved housing affordability for the occupants. ● New appliances, lighting products, and window technologies that offer twice the energy efficiency and other advantages compared to typical new products sold today. ● New Industrial process technologies for the steel, aluminum, paper and pulp. chemicals, and other heavy industries that promise greatly reduced solid wastes, air emissions, and energy use. • Ceramic and composite materials that improve reliability and quality, reduce On the deployment side, a variety of federal programs such as the Energy Star programs, Green Lights program, and Motor Challenge program educate constimers and businesses and facilitate implementation of state-of-the-art energy efficiency measures. These programs are saving businesses consumers billions of dollars while cutting pollution of all types. But current energy efficiency R&D and deployment programs are underfunded considering the potential benefits – greater energy bill savings, lower criteria pollutant emissions, reduced oil imports, enhanced business competitiveness, and lower GHG emissions. And the private sector, confronted with increasing competitive pressures and uncertain returns from longer-term, higher risk R&D, has significantly reduced its investment $ President's Committee of Advisors on Science and Technology, Panci on Energy Research and Development, "Federal Energy Research and Development for the Challenges of the Twenty-First Century," Executive Office of the President, Nov. 1997. in energy R&D in recent years. Consequently, the PCAST panel recommended doubling funding for energy efficiency programs between FY1998 and FY2003. The panel estimated that this investment could produce a 40 to 1 return for the nation. President Clinton has proposed expanding Federal energy efficiency and renewable energy programs as well as providing tax credits to stimulate the commercialization of advanced technologies (the so-called Climate Change Technology Initiative). I urge members of the Science Committee to support this initiative independent of opinions concerning the Kyoto Protocol. Put simply, these programs are good for innovation, good for U.S. businesses, and good for consumers. If these technology-oriented programs are a success, we won't need to adopt onerous carbon taxes in order to meet our nation's environmental goals. A technology-led strategy is the smart response to the threat posed by global warming, in contrast to the dumb response analyzed by the EIA. Thank you for considering these views. 'PCAST (ibid.); J.J. Dooley, "Unintended Consequences: Energy R&D in a Deregulated American Council for an Energy-Efficient Economy WASHINGTON, DC Howard Geller Howard Geller is the Executive Director of the American Council for an Energy-Efficient Economy (ACEEE) and has been with the organization since 1981 when he established its Washington, DC office. The Council is dedicated to advancing energy efficiency as a means of promoting both economic prosperity and environmental protection. The Council fulfills its mission by conducting technical and policy assessments, advising policy makers, designing and evaluating energy efficiency programs, informing consumers, organizing conferences, and disseminating publications. Mr. Geller has advised and conducted energy conservation studies for utilities, governmental organizations, and international agencies. He frequently testifies before Congress on energy efficiency and has influenced key energy legislation including the National Appliance Energy Conservation Act in 1987 and the Energy Policy Act of 1992. He is author or co-author of three books: Efficient Electricity Use: A Development Strategy for Brazil, Energy Efficiency in Buildings: Progress and Promise, and Energy Efficiency: A New Agenda. In addition to his work in the United States, Mr. Geller has spent for over three years working on energy efficiency issues in Brazil. He helped to start and frequently advises Brazil's National Electricity Conservation Program (PROCEL). Most recently he assisted PROCEL with the preparation of a $200 million energy efficiency initiative involving funding from the World Bank and the Global Environmental Facility. Mr. Geller was awarded the 1998 Leo Szilard Award for Physics in the Public Interest by the American Physical Society in recognition of his contributions to appliance efficiency standards and more efficient energy use. In 1979-80, Mr. Geller worked on rural energy technologies at the Indian Institute of Science in Bangalore, India through a Fulbright-Hays scholarship. Mr. Geller received a Masters degree in Mechanical Engineering from Princeton University in 1979. During and subsequent to his graduate work, he collaborated with faculty and researchers in Princeton's Center for Energy and Environmental Studies including Dr. Robert Williams (a previous Szilard award winner). He received a Bachelors degree in Physics and Science, Technology and Society from Clark University in 1977. Mr. Geller is a member of the environmental advisory board for the Business Council for a Sustainable Energy Future and the editorial advisory board for the journal Energy Policy. 1001 Connecticut Avenue N.W. 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