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Chairman CALVERT. Thank you.

Mr. Gardiner. TESTIMONY OF THE HONORABLE DAVID M. GARDINER, AS

SISTANT ADMINISTRATOR FOR POLICY, U.S. ENVIRONMENTAL PROTECTION AGENCY

Mr. GARDINER. Thank you, Mr. Chairman; and thank you, members of the Committee, for having me here today to give EPA's perspective on the budget for the President's Climate Change Technology Initiative and the newly-proposed Clean Air Partnership Fund.

EPA plays a key role in the Climate Change Technology Initiative through several different programs that are already helping to improve environmental conditions as well as the national economy. And with the funds that are requested in the President's budget, we can do even more.

The driving force behind the Climate Change Technology Initiative is the serious and growing threat posed by global warming. Last year, 1998, was the warmest on record globally, replacing 1997 as the previous record-holder. Each of the last 20 years has been hotter than the global average. Increasing average temperatures worldwide and rising sea levels can pose very serious and widespread problems, particularly for coast lands, estuaries, and drinking water aquifers. As the Washington Post reported on Monday, two ice shelves in Antarctica shrunk by 1,100 square miles over the past year, almost certainly due to regional warming.

Moreover, as the leading scientific institution in this matter has said—the Intergovernmental Panel on Climate Change and I quote, “Climate change is likely to have wide-ranging and mostly adverse impacts on human health with significant loss of life.'

Given the potentially high costs of global warming, the President's initiative is both prudent and sensible, but the benefits of the initiative, particularly EPA's programs, are not limited to global warming. Our experience, to date, with these programs shows that EPA's voluntary, common-sense efforts in this area also help to bolster the economy, protect public health from a variety of pollutants, improve productivity, and strengthen national security, as they reduce our demand for imported energy.

Let me emphasize some important aspects of EPA's climate change programs that help characterize their inherent strengths. They are completely voluntary; each of our 7,000 partners in private companies, non-profit organizations, and state and local governments has chosen to participate. Our programs are conducted without regulations. Our programs help our partners save money, thus making them more profitable and more competitive. Our pro grams provide no financial subsidies; rather, they elicit the involvement of our partners simply because they make so much economic and environmental sense.

These programs help, energy efficient technologies penetrate the market more quickly, both inside and outside the United States. Indeed, some of the technological improvements which we have supported—like the "sleep" feature on new computers are now standard throughout the world. Exports of these technologies by American companies generate additional benefits for our economy.

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Perhaps the most important quality of these programs is that their benefits are immediate. When an investment is made today in energy-efficient technology, energy use drops immediately; money is saved immediately. Air pollutants, including greenhouse gases, are reduced immediately. All those savings resulting from new technology deployment continue to accrue for decades to come, resulting in enormous aggregate benefits.

EPA-sponsored technology deployment programs already have helped American businesses and communities generate huge savings, while making sizable reductions in a number of pollutants. For example, schools nationwide that have joined EPA's Energy Star Buildings and Green Lights programs have increased the quality of their classroom lighting, while achieving large reductions in their energy bills. Since 1995, EPA's programs have helped schools and universities save more than $200 million-enough money to buy 4 million books or to hire 4,000 new teachers.

Hundreds of businesses, large and small, are protecting the environment while saving money through their participation in initiative programs.

In Irvine, California, the Allergan Company has installed a number of energy-efficiency technologies including improved lighting, motion detectors, high-efficiency motors, variable-speed drives, and upgraded cooling systems in order to reduce annual carbon dioxide emissions by almost 20 million pounds and saved $1.8 million per year.

A company-wide energy-efficiency campaign by the Boeing Company has saved $15.7 million, while avoiding almost 150,000 metric tons of carbon dioxide.

In 1998, alone, greenhouse gas reductions due to EPA's programs, were equivalent to the emissions for more than 22 million cars, and we saved enough energy to light 35 million homes for the entire year. By the year 2000, EPA's programs will reduce greenhouse gases by 58 million metric tons of carbon equivalent about as much as is emitted by 15 percent of our motor vehicle fleetwhile providing $8 billion in energy savings to U.S. businesses and consumers.

We need to accelerate our investment of these programs because the next 10 years are critical to our future environmental and economic health. By the year 2010, about 60 percent of U.S. greenhouse gas emissions will be generated by manufacturing plants, equipment, and products that will be purchased between now and then.

If we are concerned about air quality in 2010 and beyond, if we are concerned about the effects of global warming in 2010 and beyond, we can address those concerns today in our decisions to purchase new capital stock. EPA's climate change programs already are helping make better capital stock purchasing decisions, and through the hard work and innovative thinking of our corporate and community partners, we have consistently surpassed our annual programmatic targets for greenhouse gas emissions.

But we think we can do even more, which is why the Administration is requesting a $107 million increase for its Climate Change Technology Initiative programs at EPA. We want to target even more cost-effective, environment-protecting opportunities. If the

proven results of current programs continue into the future, we expect these results to be expanded even much more greatly over the course of the next decade. What is more, we expect overall program effectiveness to improve as EPA's programs mature and more energy-efficient technologies become available.

As Jay Hakes will note in his testimony later this morning, the early market penetration of energy-efficient technologies, the kind of early penetration accelerated by EPA's programs, may reduce future costs through the learning and establishment of infrastructure and increasing familiarity with new technology.

I mention EIA's testimony because, while it recognizes some of the positive aspects of EPA's programs, it is strikingly incomplete. It focuses largely on the tax incentives, underestimates their effects, and ignores the larger context in which the tax incentives operate. Tax incentives are only one part of the Climate Change Technology Initiative's balanced and integrated approach. The initiative uses tax incentives, research and development, and technology deployment programs, in tandem, to accelerate the introduction and market penetration of new energy-efficient technology. By analyzing only one element of that effort, the EIA's conclusions are misleading, and the Climate Change Technology Initiative's potential of across-the-board benefits to the economy and to the environment are overlooked.

Mr. Chairman, we look forward to working with you as we move forward in our efforts to try to expand the very good results which we have had ith our programs for both the economy and the environment, and look forward to your questions.

Thank you.

[The statement and biography of Mr. Gardiner follow:)

TESTIMONY OF

DAVID M. GARDINER
ASSISTANT ADMINISTRATOR FOR POLICY
U.S. ENVIRONMENTAL PROTECTION AGENCY

BEFORE THE
SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

OF THE
COMMITTEE ON SCIENCE
U.S. HOUSE OF REPRESENTATIVES

April 14, 1999

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I want to thank Chairman Calvert and Members of the Subcommittee for inviting me here today to give EPA's perspective on the FY 2000 Budget for the President's Climate Change Technology Initiative (CCTI). EPA plays a key role in CCTI through several different programs that already have produced concrete environmental and economic benefits and improved the lives of many Americans. The President's budget proposals will allow us to multiply those benefits in the future, saving the American people billions of dollars per year in unnecessary energy costs, and avoiding millions of tons of air pollutants and greenhouse gases.

The driving force behind CCTI is the serious and growing threat posed by global warming. The basic scientific facts are virtually beyond dispute. Manmade emissions of carbon dioxide and other greenhouse gases undoubtedly are changing the composition of the earth's atmosphere. Since pre-industrial times, carbon dioxide concentrations are up about 30 percent, methane concentrations have doubled, and nitrous oxide is up about 15 percent.

Since these gases help trap the sun's radiation, over the past century the average temperature on earth has increased between a half and one degree Fahrenheit. Sea levels have risen 4 - 10 inches over the past century. The frequency of extreme rainfall events has increased throughout much of the

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Our view of the future is less certain, of course, but the possible -- and indeed likely – consequences of steadily increasing greenhouse gas emissions, with attendant rises in average temperatures and sea levels worldwide, would be widespread and very serious. The best available science suggests that over the next century a worsening greenhouse effect could impose high costs on natural habitat, certain species of wildlife, coastlands, estuaries, drinking water aquifers, and human health.

The benefits of CCTI are not limited to global warming. Our experience to date shows that EPA's voluntary, common-sense efforts in this area also help bolster the economy, protect public health from a variety of pollutants, improve productivity, and strengthen national security as they reduce our demand for imported energy. In my opinion, they are among the best investments made in our country today through the federal budget, returning $70 to the American people for every dollar spent.

The CCTI represents a balanced three-part approach to achieve these benefits:

R&D, to develop promising technologies, demonstrate their capabilities,
and lower their costs;
Targeted tax credits, to support the initial stages of accelerated
deployment of innovative technologies;
Voluntary programs, to accelerate market penetration in subsequent
years.

EPA's climate change efforts are almost exclusively voluntary government-industry partnerships. They are designed to overcome marketplace barriers that block other cost-effective investments in energy-efficient and environmentally-clean technologies. These market barriers include the lack of accurate, reliable consumer information on the environmental and economic benefits of different products, low incentives for private-sector research and development, and a lack of corporate data on energy use and pollutant emissions. EPA's technology deployment programs minimize or remove these

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