Prefeasibility Study of Voluntary Energy Efficiency Initiative for Light Vehicles 53,402 39,887 Analysis of Utility Energy-Efficient Motor Programs (subcontractor) $57,964 21,523 21,060 (*) ACEEE operates on a calendar year basis. These figures are from our financial statements for 1997 and additional detail where not explicit in those financial statements. DIFFERENCES BETWEEN EIA AND ADMINISTRATION ANALYSES Chairman SENSENBRENNER. Thank you, Mr. Geller. As I indicated earlier, we will be operating under the 5-minute rule. And I will call on members alternatively on each side, in the order in which they showed up. And the 5-minute rule will be enforced. I just have one question, directed to you, Dr. Hakes. Your study and that which has been released by Dr. Yellen, the Chair of the Council of Economic Advisors, is at great variance in terms of the economic impact of implementation of the Kyoto Protocol. Dr. Montgomery has alluded to some of the reasons for this variance, but I'd like to hear from you. How do you account for the fact that your study comes up with some pretty dramatically opposite conclusions from that which we've heard from the Administration? Dr. HAKES Well, we tried to show the full range of the potential impacts of international trading, so I think you can sort of bracket that out as one issue, and then look at, apart from the trading issue, what other factors would cause there to be differences. One difference is that they assumed lower economic growth than we did. And, as you can see in our study, economic growth has a close correlation to the growth of carbon. So, by starting with lower economic growth, they had less of a barrier to overcome. Second, they had more foresight in their system. Basically, they had the foresight starting in 1990, when people would start to adjust to the Protocol, so this enabled the response to be much more gradual and to take advantage of stock turnover. Another issue is that our model-one of the strengths of our model, I think, over just about all the others is we can look at the transitional effects much more easily because we have a model that works on a year-to-year basis. Some of these models work more on decades and are intended to be used for studies that are 50 or 100 years in nature. Our model is geared to the 10- or 20-year time frame, and we can actually go year by year. And so what we do is pick up the transition effects, and show what I think is likely to be the case in the real world: that you'll have the most severe impacts during the transition of 2008 to 2012, and then somewhat of a rebound. And that gets averaged out in a lot of other models. IMPACT OF NO INTERNATIONAL EMISSION TRADING Dr. HAKES So, there are number of factors like that that you can go down that would, you know, explain these differences. Chairman SENSENBRENNER. Now, as we all know, the details of the trading arrangements were not settled in Kyoto, and are supposed to be settled at the meeting in Buenos Aires that begins in about 3 weeks time. There has been a great deal of difficulty in placing this item on the agenda. So, am I correct in assuming that if the international trading scheme is not approved at Buenos Aires and at subsequent meetings of Conferences of the Party, then the economic impact will be at the high end of your scale rather than at the low end of your scale? Dr. HAKES Well, I think you'd have to have full international trading to get to the plus 24 case, which is the one that's closest IMPACT OF NO JOINT IMPLEMENTATION WITH CREDIT Chairman SENSENBRENNER. What happens if there is no joint implementation with credit? The emissions trading is easier in terms of solving in Argentina than the joint implementations with credit, so where are we at if we get one without the other? Dr. HAKES If you have Annex One trading and the ability to, for instance, to buy credits from the former Soviet Union that's part of Annex One, that would probably take you more to the mid-level cases than the most stringent cases. But it would take off the table the least stringent cases. Chairman SENSENBRENNER. Okay. Thank you very much. Mr. Brown. LINK BETWEEN ENERGY PRICE CHANGES AND ECONOMIC GROWTH Mr. BROWN of California. Thank you, Mr. Chairman. Dr. Hakes, I want to ask you a few questions about some charts that you provided a couple of years ago. Are you looking at the same ones that I have? Dr. HAKES Yes. Mr. BROWN of California. Yes. All right. [The charts referred to follow:] Figure 1. World Oil Price Projections, 1970-2015: AE095 70 Figures from "U.S. Energy Outlook and Implications for Energy R&D; Hearing Before the Subcommittee on Energy and Environment of the Committee on Science; U.S. House of Representatives; 104th Congress; March 14, 1996. Included in the testimony of the Energy Information Administration of the Department of Energy." 3 Figure 7. Natural Gas Wellhead Price Projections, 0 1975 Figure 9. Average Electricity Price Projections, 1975-2015: Figures from "U.S. Energy Outlook and Implications for Energy R&D; Hearing Before the Subcommittee on Energy and Environment of the Committee on Science; U.S. House of Representatives; 104th Congress; March 14, 1996. Included in the testimony of the Energy Information Administration |