Attachment 2 21 THINGS THE CLINTON ADMINISTRATION SHOULD DO ABOUT CLIMATE CHANGE In his Earth Day speech, President Clinton pledged in reduce US. emissions of greenhouse gases to 1990 levels by the year 2000, and directed his Administration to produce u revised Action Plan which would continue the trend" of reduced emissions. If implemented, the Administration's energy tax proposal could contribute to reaching these goals, but further steps will be necessary. The actions below are some of the many cost-effective steps that can be taken to achieve these commitments. They are representative of the types of activities that government and the private sector would pursue under a comprehensive framework of emissions mandates and incentives, which the US. will have to adopt in order to cut greenhouse gas emissions over the long term. Several of these policies are under consideration by, or are supported by the Administration. Adequate funding, and in some cases additional legislative authority, are essential to implement these proposals effectively. REFORM THE ECONOMICS OF ENERGY USE 1. Decouple Utility Profits from Electricity Sales and Include Externalities in Energy Planning. In the vast majority of states, utilities' profits depend upon their sales of electricity, creating a disincentive for the utilities to undertake aggressive energy efficiency programs. The Department of Energy (DOE) and other federal agencies involved in energy regulation should develop an aggressive, proactive strategy to promote this reform in wholesale power transactions and at the state level allowing utilities to profit from costeffective investments to improve the efficiency of electricity generation, transmission, and end use. The U.S. should also estimate and incorporate the cost of environmental and national security externalities in its energy planning activities. 2. Remove Subsidies for Mature, Conventional Energy Resources. The current pattern of federal tax and program subsidies encourages the use of conventional energy resources which pollute the environment, such as fossil fuels and nuclear energy. The US. should eliminate tax and other subsidies for these fuels, and increase the fees charged for extraction of energy resources on federal lands. IMPROVE THE ENERGY EFFICIENCY OF HOMES 3. Promote Energy Efficient Mortgages. The Administration should implement a uniform Energy Efficient Mortgage (EEM) program linked to technically credible performance ratings, and designed to significantly upgrade the energy efficiency of at least 6 million homes by 2000. EEMs allow homeowners to finance cost-effective efficiency improvements as part of their normal home mortgages. 4. Expand Federal Assistance for Low-Income Home Weatherization and Retrofits of Public Housing. The Administration should increase funding for DOE's Low-Income Weatherization Program in order to expand the number of homes the program is able to reach. In addition, new quality control measures should be put into place which ensure that weatherization programs capture all cost-effective efficiency improvements in participating homes. Utilities accepting federal support for low-income household energy use should be required to invest in efficiency and weatherization in these homes. Finally, the Dept. of Housing and Urban Development should provide much greater funding for retrofits in public housing. IMPROVE THE ENERGY EFFICIENCY OF MOTOR VEHICLES 5. Increase Fuel Economy Standards to 45 Miles Per Gallon. It is critical that the Administration propose tough new fuel economy standards immediately to ensure ongoing, substantial carbon emissions reductions. A 45 mpg standard for cars phased in by 2003 (with similar increases for light trucks) would reduce U.S. carbon emissions by 70 million metric tons of carbon annually in 2005, with greater annual reductions in later years. The U.S. should also reform its auto fuel economy testing procedures, to ensure that economy ratings accurately reflect on-road performance. 6. Establish Market Incentives for Energy Efficient Vehicles at the State and Federal Levels. The US. should reverse a Bush Administration position challenging the ability of states to adopt market incentive programs to improve automobile fuel economy, such as "feebales" and gas guzzler taxes. It should also develop innovative efficiency incentives for heavy trucks and other vehicles. 7. Develop Advanced Automobiles. In addition to market incentives and efficiency standards, a public-private partnership with input from public interest groups to develop truly visionary, zero-emission, "super" efficient vehicles, coupled with aggressive mandatory and voluntary fleet procurement programs to develop markets for these vehicles, would help lay the foundation for longer-term CO, reductions. PURSUE OVERLOOKED OPPORTUNITIES TO SAVE ENERGY 8. Reduce Cooling Needs in Urban Areas. Planting trees and painting roofs and pavement with lighter colors are cost-effective strategies for reducing the heat island effect, which raises cooling requirements in urban areas. Together with communities and electric utilities, the Administration should undertake a major campaign to promote heat island mitigation. 9. Boost Recycling and Source Reduction. To promote energy conservation, the Administration should discourage the unnecessary use of raw materials. It should provide incentives for greater use of recycled materials, since this would reduce solid waste while avoi ding the energy- and pollution-intensive processes necessary to process new steel, aluminum, paper, plastics, and glass from raw materials. ACCELERATE Development AND ADOPTION OF CRITICAL NEW TECHNOLOGIES 10. Prioritize Renewable Energy. The US. should develop a National Renewables Strategy to work with the private sector accelerate research and development of advanced renewable (solar, wind, geothermal and biomass) energy technologies, and to expedite the deployment of these technologies. It should provide federal grants to states and localities to help implement policies that help commercialize renewables (e.g. "green energy pricing," in which customers pay voluntary premiums to receive energy from renewable sources). It should also include market aggregation initiatives and directives to federal agencies to utilize renewables whenever possible. 11. Develop Energy Efficient Technologies for Industry. The Administration should work closely with the private sector to develop key advanced, energy-efficient technologies for industrial use, such as in steel-making and motor systems. Coincident with this effort should be development of a strategy to encourage the rapid deployment of these technologies, by expanding DOE's small but successful technical assistance programs, and by co-funding state low-interest loan programs for efficiency projects in small businesses. DOE should also extend minimum efficiency standards to pumps, fans, compressors, belts, and other widely used industrial technologies. REDOUBLE EFFORTS UNDER EXISting programs AND MANDATES 12. Accelerate Implementation of Efficiency and Renewables Provisions of the Energy Policy Act and Other Laws. The Administration should seek full funding for the Department of Energy to implement all energy efficiency and renewable energy provisions of the Energy Policy Act of 1992 and other laws. DOE should use these funds to accelerate its development of relevant rules and standards as required by the Act, including aggressive new efficiency standards for new buildings and appliances. DOE should also promote and support the voluntary adoption of the Federal Model Code by state governments. 13. Target Specific Opportunities For Advanced Technology Commercialization. The U.S. should do far more to promote the development and extensive use of advanced new technologies for lighung, heating and cooling systems, office equipment, motor systems, and residential appliances, all of which promise large potential emissions reductions while saving consumers money. These efforts can huild on the existing voluntary "Green Programs of the Environmental Protection Agency (EPA), as well as utility demand-side management programs. RECTIFY THE ECONOMICS OF DRIVING 14. Encourage a Switch to Pay-As-You-Drive Insurance. The Administration should provide concrete incentives to state governments to implement "Pay-As-You-Drive" automobile insurance, whereby insurance payments are collected through a surcharge on fuel consumption. This initiative would reduce the initial cost of automobile ownership, help to make the cost of driving more accurately reflect its true social costs, and reduce overall vehicle miles travelled. It would also improve the efficiency of the insurance industry, hy making fees proportional to miles driven, and by reducing injures and fatalities. This could be accomplished without diminishing accident victims' rights. 15. Levelize Tax Benefits for Commuters. Employer-provided parking receives a massive federal subsidy of $17 billion each year. encouraging millions of Americans to drive alone to work. For the average commute, this subsidy is several times larger than the federal gasoline tax collected for the same trip. This subsidy, which receives unique treatment in the U.S. tax code, should be cashed out, or else reduced to levels comparable with the $60/month tax exemption provided to employer-provided transit benefits. REVAMP TRANSPORTATION PLANNING AND INVESTMENT PRIORITIES 16. Implement Existing Federal Mandates With an Eye to Cutting Greenhouse Gas Emissions. The EPA should issue new guidance and regulations under the Clean Air Act (CAA) for judging whether or not regional transportation plans (and hence eligibility for federal funds) are in conformity with the CAA. These rules must be more closely tied to the intent of CAA and lead to real annual reductions in emissions of air pollutants as a result of transportation plans and programs themselves, not counting the effects of flest turnover, enhanced maintenance, fuel changes, or other technology fix strategies. States and municipalities should be required to evaluate alternative scenarios in their long and short range planning, and consider policies which discourage single occupancy vehicle use. 17. Invest in Alternatives to Additional Road Construction. Despite gains made in the 1991 transportation law, the US. still invests far more in road infrastructure than it does in rail and non-motorized alternatives. The Administration should seek full funding for mass transit programs, while avoiding investment in new road capacity. It should also promote non-motorized transport as a genuine alternative to single-occupancy vehicles, by aggressively seeking to integrate bicycle and pedestrian traffic into all new transportation investments. It should also support opening the Airport and Airways Trust Fund for construction of rail access among cities and airports. 18. Champion Land Use/Transportation Planning Reform. As a long-term strategy, the U.S. should seek to revolutionize the way land use is regulated at the local level. Higher-density, mixed-use development clustered around available public transportation modes can reduce the need for motor vehicle travel and the number of miles driven to satisfy basic mobility needs. Land use controls at the urban periphery can discourage the further sprawl of a metropolis, and encourage revitalization of the city's center. 19. Promote Intermodal Freight Shipping. Intermodal freight shipping could provide significant efficiency improvements over longdistance shipping by truck, but shippers must be given incentives and viable options to shift from trucks to less-polluting rail transport. The U.S. should support constructing intermodal terminals and ports, and charging trucks fully for the infrastructure they use. REDUCE GREENHOUSE GAS EMISSIONS FROM FEDERAL ACTIVITIES 20. Extend Environmental Assessment Requirements to Cover Greenhouse Gas Emissions. The President should direct all federal agencies to include an analysis of relative greenhouse gas emissions as part of their environmental assessments and environmental impact statements, as required under the 1969 National Environmental Policy Ad. 21. Make the Federal Government a Model of Energy Efficiency. The Federal Government is the largest energy user in the country. All of its facilities and vehicle fleets should adopt state-of-the-art technology to cut emissions, enhance the market for this equipment, and reduce energy costs borne by taxpayers. By aggressively investing in energy efficiency, the Federal Government could cut its energy bill in 2000 by $1 billion per year. Prepared by the following participants in Climate Action Network-US.: Alliance to Save Energy, American Council for an Energy Efficient Economy, Center for International Environmental Law, Environmental Action, Environmental and Energy Study Institute, Environmental Defense Fund, Friends of the Earth, Natural Resources Defense Council, Physicians for Social Responsibility, Sierra Club, Union of Concerned Scientists, US. Public Interest Research Group, and World Wildlife Fund. Annual spending is given in millions of constant 1990$ (MS/yr). United States Department of State Washington, D.C. 20520 AUG 2 +993 JUL 30 1993 Dear Mr. Stearns: Thank you for your letter of May 26 to Counselor Timothy Wirth. He appreciated having the opportunity to appear before the Subcommittee on Energy and Power in May and is glad to have this opportunity to further expand on the Administration's view on the critical issue of global warming. The Administration takes the issue of climate change extremely seriously. Many of your constituents may have already voiced their concern about sea level rise and other projected coastal impacts of global warming issues and concerns which we are addressing. We are working to develop a policy which at the same time will be environmentally sound and economically cost-effective. In order to assure ourselves that the policy fully recognizes the complexity of climate change, the Administration has created six interagency working groups to examine these issues in detail (including groups on energy supply, energy demand, transportation, methane and other greenhouse gases, sinks of greenhouse gases, and joint implementation). In addition, we have established an interagency analysis team to provide numerical analyses and to help synthesize the work of the other groups. We expect that through the joint efforts of these groups, and with the additional input derived from the private sector (including the business community and environmental and academic organizations), we will be able to meet the President's commitment to reduce our greenhouse gas emissions to their 1990 levels by the year 2000. It is clear, however, that the task will be difficult. As you note in your letter, many questions arise with respect to the development and interpretation of baselines of greenhouse gas emissions, of the specific emissions reductions that can be credited to particular actions, and of the potential need for new regulation or legislation to meet the goals. Let me try to address these concerns in order. The Honorable Cliff Stearns, House of Representatives. |