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United States Department of State

Washington, D.C. 20520

AUS 94?

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 Jases, sinks of greenhouse gases, and joint implementation). In aodition, 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.

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Reduction versus Stabilization

As you know, President Clinton made specific reference to this issue in his Earth Day speech, when he said:

"Today, I reaffirm my personal, and announce our nation's
commitment, to reducing our emissions of greenhouse gases
to their 1990 levels by the year 2000 .... I am instructing
my administration to produce a cost-effective plan by
August that can continue the trend of reduced emissions."

The President's statement is a clear announcement of our intentions: to move forward, to the best of our national ability, to reduce our current emissions and to take steps to continue these reductions in the future. The exact measures, policies, and programs that will lead us to meeting the President's commitment are the expected outcome of the development of our national plan. We are confident that American ingenuity and technological creativity will enable us to fulfill this commitment.

U.S. Analyses

Department of Energy Assistant Secretary Tierney provided an extremely clear statement of our present level of understanding of greenhouse gas (GHG) emissions levels in her testimony before your Subcommittee at the May 26 hearing. In her statement, she noted that 1990 emissions of carbon dioxide, methane, and nitrous oxide (the three most significant of the human influenced GHGs) totalled between 1520 and 1617 million metric tons of carbon equivalent (MMTCE), and that by the year 2000, emissions of these three GHGs are projected to grow to between 1716 and 1830 MMTCE. Emissions are reported in a common unit of MMTCE so that the global warming potentials of the various GHGs can be compared. This projection assumed that the Energy Policy Act of 1992 (EPACT) and President Clinton's economic policy proposals had not been enacted. Let me note that these projections are regularly and continually updated as new data become available.

However, full implementation of the Energy Policy Act is expected to reduce emissions by about 40 MMTCE from the projected year 2000 level. These reductions will be achieved through increased efficiency standards, energy market reform, and increased research and development on clean and efficient energy supply and end-use technologies. The Btu tax (at the levels originally proposed by the Administration) was projected to further reduce GHG emissions by 25 MMTCE from the 2000 level.

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Possibilities for New Legislation or Regulation

As mentioned above, many interagency groups are currently working to develop an effective, efficient, and equitable plan to meet the President's commitment. After careful review and fully considering the wide-ranging effects of any activities on the domestic economy, the interagency groups will present a range of options and their recommendations to the President.

Whether additional legislation will be required is dependent on the components of the Administration's recommended programs and measures. We certainly expect that many of the results can be obtained through current legislation such as the Energy Policy Act, the Clean Air Act and its 1990 amendments, and the Intermodal Surface Transportation Act of 1991. Other reductions are likely to result from voluntary actions taken within the private sector. It is possible, of course, that still other options may require either legislation or regulatory action -- but until we have developed the set of proposals, we will not be able to determine this.

Enclosed is a copy of the charts and tables that were developed by the White House for the Conference held in mid-June and provide technical information on emissions and projections for future emissions. If you need additional information about these data and the assumptions inherent in them, I urge that you contact the White House Office of Environmental Policy.

I hope I have answered some of your questions, and I would be happy to assist you further in any way possible.

By his commitment to reduce GHG emissions, President Clinton has launched this nation on a truly historic endeavor. Ву developing a cost-effective plan to fulfill this commitment, the United States will demonstrate strong international leadership in addressing the critical global problem of climate change.

Sincerely,

livind. Shermain

Wendy R. Sherman
Assistant Secretary
Legislative Affairs

Enclosure

As stated.

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Integrated framewoi 's relates U.S. energy demand, production and prices from 1950 - 2030;

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Structural simulatio i approach explicitly represents key energy market mechanisms: energy investments, production, conversion technologies, end-use service demand and conservation.

Track Record:

Subjected to extensive peer review;
Continually improved and updated;
Used for the National Energy Plans since 1979;
Integrating model for the 1991 National Energy Strategy;
Used for numerous energy policy analyses.

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BASE CASE DEVELOPMENT

Purpose

best point estimate of an uncertain future; credible and consistent "point of departure" for option analysis.

Methodology

calibration to EIA's 1993 Annual Energy Outlook;

the Energy Information Agency (EIA) is an independent

statistical agency of DOE;
incorporation of assumptions from CEA, DOE,
and EPA to reflect policies already planned.

Two base cases were created

one with policies in place through FY92;
one including implementation of the 1992 Energy Policy Act,
the Btu tax and the Clinton economic package; this base case
is the starting point for the August plan development.

IDEAS

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