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Ultimately, the content of the Plan will depend on the emissions reduction impact of available options and their costs, to the Government, directly affected parties, and society at large. The administration will be developing emission reductions and associated cost estimates for the actions that it will be proposing in the Plan that is expected to be announced this August. At this time, however, it is premature to speculate about how easy or difficult and how cheap or expensive it might be to achieve the President's goals.

The administration's mitigation plan will contain a number of actions that improve energy efficiency and reduce greenhouse gas emissions in the economy through support for increased use of environmentally beneficial resources and energy efficient equipment. In electricity supply, DOE has active programs in both the renewable energy and clean coal technology areas, which offer opportunities for substantial reduction in the carbon intensity of electricity production. The Department recently selected five additional clean coal technology projects which will result in high efficiency, environmentally clean electric power generation from coal.

Integrated resource planning in the utility encourages both innovative supply technologies and reduction in electricity demand growth. The administration is committed to supporting such efforts, as directed by the Energy Policy Act. DOE is also pursuing increased energy efficiency in buildings, industrial, and transportation activities, through standards and labeling requirements, and through initiatives in materials processing and electric motor drives, as well as alternative fuels, electric and hybrid vehicles, and fuel cell research and development.

Programs that combine the development of new energy efficient technologies with information programs that allow consumers to choose the energy technologies that are best for them will help accelerate the trend of improving energy efficiency in our economy. This Administration recognizes the value of encouraging emission reductions through voluntary programs to increase the market penetration of economically viable technologies that reduce greenhouse gas emissions in the energy sector and elsewhere. Programs such as EPA's "Green Lights”, DOE's outreach and deployment support efforts, and the Energy Information Administration's (EIA) database for recording voluntary emission reductions pursuant to Section 1605 of the Energy Policy Act will be key components of the administration's efforts to reduce greenhouse gas emissions.

These voluntary action programs will work in conjunction with utility demandside management (DSM) activities, funded by electric utilities at $1.8 billion in 1991, and energy efficiency research and development to reduce energy consumption. Although it is desirable to disaggregate the costs and benefits of each of these components, it is analytically impossible to do so credibly, since the results of these programs are intricately tied together. For example, research and development of more energy efficient devices leads to new technologies which require less energy. Utilities then target these technologies for adoption. Utility DSM programs, supported by voluntary action programs, identify these technologies and accelerate their penetration in the market.

Other Energy Policy Act provisions also have significant potential for reducing worldwide greenhouse gas emissions. As noted in your invitation letter, the Act authorizes the establishment of three global technology transfer programs covering innovative renewable energy (section 1211); innovative clean coal (section 1332); and innovative environmental technologies (section 1608). These programs are to be developed in conjunction with the Agency for International Development (AID) and in consultation with other members of the Committee on Renewable Energy Commerce and Trade (CORECT), the Committee on Energy Efficiency Commerce and Trade (COEECT), and the Clean Coal Technology (CCT) Subgroup.

The Department is proceeding with a number of "presolicitation" activities. We have recently completed negotiations for an umbrella Memorandum of Understanding with the Agency for International Development (AID) that it is currently making its way through the Department's final review process. We would hope to be able to sign this agreement soon.

Other ongoing “pre-solicitation” activities conducted by the Offices of Fossil Energy (FE) and Ěnergy Efficiency and Renewable Energy (EE), the program offices responsible for implementation of these provisions, include developing a list of eligible technologies and potential projects, investigating different solicitation mechanisms, and considering forms of financial assistance (loans, advanced payments, and insurance) that would serve to maximize the export potential of each program. Our efforts have included discussions with the EXIMBANK, the Overseas Private Investment Corporation (OPIC), AID, industry trade groups, corporations, and CORECT. In conjunction with this activity, a public forum will be held in early Fiscal Year 1994 to gather comments on a proposed solicitation structure and financing mechanisms.

These two offices have also organized a working group which meets regularly to review and coordinate what each is pursuing and has learned through their respective studies. It is important to note, however, that due to the different technologies, market applications, customers, barriers, and risks, it may be necessary to use specially tailored implementation approaches to maximize the export promotion benefits of each program.

It is a little early to tell which, if any of these programs, will be part of the mitigation plan. As part of its participation in the CCMG, the Department is currently reviewing all of its programs for possible inclusion into the plan. These programs will be assessed along with a host of other programs. Until the CCMG has completed its assessment, it would be premature for me to comment further.

Your invitation letter also asked about “joint implementation”—an approach under which a country could implement policies and measures called for in the Climate Convention jointly with other countries. Joint implementation of greenhouse gas emission reductions and sink enhancements is provided for in the Convention, and establishment of international criteria for instituting this approach has been identified as a task for the very first meeting of the Conference Parties to the Climate Convention.

Joint implementation appears to be a very cost-effective approach to greenhouse gas mitigation. Because GHGs mix globally in the atmosphere, emissions reductions achieved anywhere on the planet are of global significance. Yet because the cost of such reductions varies widely, the United States may be able to do more to protect the climate, at lower cost, by investing abroad than by regulating here. The costeffectiveness gains may be dramatic, cutting costs by a factor of two or more. Congress included several provisions that support joint implementation in last year's Energy Policy Act, and U.S. companies are already proceeding with several joint implementation projects. The offshore forest management activities of New England Electric System, "part of a larger “NEESPlan” strategy that meets both environmental and economic needs, is one very interesting joint implementation project with which I am familiar from my recent experience in Massachusetts State government.

The United States, through its approach to joint implementation in the context of programs uch as the mitigation plan we are discussing today and the EIA database for voluntary emissions reductions to be established pursuant to Section 1605 of the Energy Policy Act, can take a pro-active role in establishing a framework for credible, verifiable, joint implementation actions that explicitly recognize the key role of the private sector in contracting for, and achieving, verifiable net emissions reductions, the administration is committed to taking the lead in developing measurement and verification methods in support of these efforts. In this regard, approaches adopted in the context of our domestic programs can serve as the starting point for international deliberations regarding joint implementation.

One activity that may be utilized under both a joint implementation scheme and in a purely domestic setting involves initiatives to increase forest carbon sinks. Tree planting and forest conservation programs have a strong potential for reducing atmospheric greenhouse gas concentrations in a cost-effective manner. Based on all recent analyses that incorporate the option of carbon dioxide removal and sequestration from the atmosphere, increases in permanent biomass through tree planting and improved forest conservation practices appear to be highly cost effective. Although the process for determining the exact components of the mitigation plan is just now getting underway, it is clear that the President's charge-to use American ingenuity and creativity to produce a cost-effective plan-would suggest that tree planting and forest conservation programs will receive careful consideration as costeffective options for inclusion in the national mitigation strategy for greenhouse gases.

Mr. Chairman and members of the subcommittee, I have provided you with a summary of the issues the administration is seeking to address in the global climate change area and shared with you some of our latest thinking on approaches to mitigate emissions of greenhouse gases. I hope you agree with me that the administration has taken a great step forward in this important area. The Department will work closely with other Federal agencies, the legislative branch, State and local governments, outside stakeholders and, through the State Department, other nations, in crafting a new, pro-active, approach to mitigate greenhouse gas emissions.

Thank you for the opportunity to share with you our views on this very important topic. I would be happy to answer any questions the Subconunittee may have.

Mr. SHARP. Thank you very much.

Mr. Sussman, we will hear from you now. My colleague Mr. Synar has gone over to vote and is going to try to get back, so that when we have to take the break for the vote here that is under way, we can help reduce the time. So I may have to call you to a halt at some point here before we get through your statement, but we will try to proceed.

STATEMENT OF ROBERT M. SUSSMAN Mr. SUSSMAN. Good morning, Mr. Chairman. I am pleased to be here today to discuss the administration's new policy on global climate change.

I thought it would be instructive at the outset to review the reasons why we should be concerned about greenhouse gas emissions. Enough is known regarding the general impacts of global climate change to have persuaded the world's scientific community that there is a need to start acting to curb the buildup of greenhouse gases.

The atmospheric concentrations of greenhouse gases are increasing year by year, due to human activities. The world scientific community agrees that, all else being equal, continuation of this trend could have significant environmental effects.

For example, over time, global warming could result in the following consequences: Agricultural yields could be reduced and agricultural productivity could shift northward. Sea level rise could lead to the loss of many coastal wetlands and estuaries may enlarge and become more saline. Water quality in many basins could change, and water use conflicts could increase. Finally, the range of trees may be reduced and changes in forest composition are likely to occur.

In his Earth Day speech this year, President Clinton pledged U.S. leadership to address the challenge of climate change. He committed this administration to reducing U.S. emissions of greenhouse gases to their 1990 levels by the year 2000.

The words the President used in issuing this challenge I think are quite significant. The President delivered a "clarion call not for more bureaucracy or regulation or unnecessary costs, but, instead, for American ingenuity and creativity, to produce the best and most energy-efficient technology."

To develop, implement and sustain the actions necessary to reduce our greenhouse gas emissions to 1990 levels by the year 2000 will require a cooperative effort on everybody's part. The administration is looking for the active participation of the American people. We intend to bring together important stakeholders and involve them creatively in the development of an action plan to meet the President's goals. We hope this plan will be grounded in sound analysis and, most importantly, formulated through an interactive process, with widespread participation.

Mr. Chairman, I would like to direct your attention to the display chart over on my left. This chart represents the process that the administration has set in motion to develop an effective and environmentally and economically efficient mitigation plan.

First, to bring together all the stakeholders in climate change policy within the Government, the administration has formed interagency working groups comprised of representatives from key White House offices and Executive Branch agencies. You will see that the range of Government entities participating in this effort is quite extensive. Just looking at the departments—EPA, Energy, Transportation, Agriculture, Treasury, Commerce and State will all be involved.

Six working groups have been formed to address different aspects of the development of a national plan, and there is broad Agency participation in each of these work groups. The work groups will examine specific economic sectors and greenhouse gas reduction opportunities, and, significantly, the work groups will convene workshops to help identify options and evaluate policies. We are looking for broad public participation in these workshops. We hope that they will be comprised of representatives from industry, State, local government, labor groups, environmental organizations, universities and other vital constituencies. We hope that these workshops will provide us with the input and feedback that we need to develop policy options which reflect real world experience in greenhouse gas reduction efforts.

Again, I want to stress the importance of these workshops. We are looking for active public participation. And as Sue Tierney indicated, we are going to be listening very hard to the suggestions and recommendations we get from the people who know the energy business and know the other areas that are going to be involved in this effort.

The working groups and the workshops, as you see, will feed into an interagency analysis team, which will be staffed by technical experts of the Council of Economic Advisors, the Department of Energy, EPA, Treasury and other key agencies. The analysis team will synthesize information into a common analytical framework and integrate options into alternative policy packages for senior administration decision makers.

In your letter of invitation, Mr. Chairman, you mentioned a number of specific mitigation strategies. Without prejudging the results of the working groups, let me briefly discuss some of those strategies in which EPA plays a key role.

First, let me emphasize that we anticipate that the action plan developed by the President will include a very important role for voluntary programs. Voluntary programs will enable the U.S. economy to not only reduce emissions, but we think to increase growth in productivity. Our experience over the last few years has proven that there is a catalytic role for the Government in providing sig. nificant assistance, technical support and motivation to organizations in the public and private sector to install energy-efficient technologies.

I should emphasize that EPA's Green Programs will be a major component of the voluntary effort that we envision. The Green Programs are voluntary partnerships with both public and private organizations to encourage profitable investments in energy efficiency.

EPA's flagship voluntary program Green Lights currently has over 890 participants, including businesses, State and local governments and nonprofit organizations. These participants have committed to improving lighting efficiency in more than 3 billion square feet of U.S. commercial-industrial space or 5 percent of the U.S. total.

The Green Lights program has served as a model for other voluntary programs that save energy and reduce air pollution. To mention an outstanding example, Energy Star Computers is forming partnerships with over 60 percent of all computer manufacturers and over 80 percent of all printer manufacturers to develop and introduce energy-efficient computer products—the fastest growing electrical load in commercial buildings-machines that will go to sleep when not being used.

Let me turn from these voluntary programs to another aspect of our climate change strategy. Any effective and efficient strategy must include a strong economic component. Although the United States now contributes over one-fifth of global human-related emissions of CO2, the vast majority of future growth in CO2 emissions likely will come from developing countries and economies in transition.

Thus, our long-term objective must be to limit the growth of greenhouse gas emissions internationally. Without doing so, even the most strenuous efforts in the United States would not mitigate climate change effectively.

Moreover, many greenhouse gas reductions will be available in other countries at a lower cost than some options in the United States. Joint implementation activities, therefore, should be considered for a significant role in our cost-effective overall strategy.

Mr. Chairman, thank you for the invitation to present testimony today. This has been a welcome opportunity to discuss the administration's climate change policy. I would be pleased to answer any questions you may have.

[The prepared statement of Mr. Sussman follows:) STATEMENT OF ROBERT M. SUSSMAN, DEPUTY ADMINISTRATOR, ENVIRONMENTAL

PROTECTION AGENCY Good morning. I am Bob Sussman, Deputy Administrator of the U.S. Environmental Protection Agency (EPA). I am pleased to be here today to discuss the administration's new policy on global climate change.

Enough is known regarding the general impacts of global climate change, and there is sufficient scientific conern, to have persuaded the world community to start acting to curb the buildup of greenhouse gases. The atmospheric concentrations of greenhouse gases are increasing year by year due to human activities. The world scienfific community agrees that, all else being equal, the continued addition of greenhouse gases to the atmosphere will increase average temperature and has the potential to alter global climate, rainfall, and other weather patterns, causing highly uncertain but potentially devastating effects on human societies and ecological systems. The Intergovernmental Panel on Climate Change (IPCC) has concluded that based on current model results and business as usual trends, global mean temperatures during the next century will increase 0.3°C per decade. This is greater than the rate of increase seen over the past 10,000 years, and will likely result in an increase in global mean temperature of about 1C by the year 2025, and 3°C before the end of the next century.

The United States is currently the world's largest contributor of greenhouse gas emissions. To reduce world emissions and, hence, atmospheric concentrations, the United States must play a leadership role.

The impacts of climate change, as projected by the IPCC and other scientific bodies, could have significant implications for mankind and the environment. In 1989, the EPA published a Report to Congress entitled, The Potential Effects of Global Climate Change on the United States. The “Effects Report" came to several major conclusions. For example, it concluded that as a result of climate change, all other things being equal, agricultural yields could be reduced, agricultural productivity could shift northward, and shifts in agriculture may cause harm to the environment in some areas. The introduction of a full range of new technologies could modify the results of these studies. Sea level rise could lead to the loss of many coastal wet

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