A28.4 Steps taken through domestic implementing legislation, which would address domestic allocation of emissions allowances, would not have the effect of changing U.S. obligations under the Protocol. Q28.5 Given the above, why is it not accurate to say that the Kyoto Protocol has "the potential to damage our national security or imperil the ability of our military to meet its worldwide responsibilities”? A28.5 See answers to above questions. Implementing Legislation and/or Appropriations Needed to Carry Out the Terms of the Kyoto Protocol Q29. Taking into consideration that the Administration did not ask for carbon cap-andtrade authority as part of its electricity restructuring proposal, what implementing legislation or appropriations are needed to carry out the terms of the Kyoto Protocol? Please provide an article-by-article analysis explaining why implementing legislation and/or appropriations are either needed or not needed. A29. The kind of article-by-article analysis referred to is normally prepared in conjunction with transmittal of a treaty to the Senate for its advice and consent to ratification. The President has made clear that he will not be submitting the Protocol to the Senate unless certain conditions are met. March 4, 1998, Testimony of Dr. Janet Yellen, Chair, Council of Economic Advisors (CEA), before the House Commerce Subcommittee on Energy and Power on the Economics of the Kyoto Protocol Q30. In your testimony, you made references—in your responses to Representatives Jackson-Lee, Morella, English and Ewing to the testimony of Dr. Janet Yellen, Chair, Council of Economic Advisors (CEA), regarding her estimates of the cost of the Kyoto Protocol. However, I understand that her March 4, 1998, testimony before the House Commerce Subcommittee on Energy and Power is a series of conclusions and that she has not produced an economic analysis for our consideration and review. Also, I understand that her conclusions are based on a number of assumptions about the adoption and success of the Administration's policies and achieving Protocol commitments by 2012. You also said these modest costs will be mitigated by these policies “not even including the $20 billion in savings" from electricity restructuring. Q30.1 Is my understanding as stated above correct, and if not, what is the correct information? A30.1 The Administration has released an economic report describing analysis presented in Dr. Yellen's testimony. For a full discussion of the Administration's economic analysis, please refer to "The Kyoto Protocol and the President's Policies to Address Climate Change: Administration Economic Analysis, July 1998" (hereafter "the AEA"), a copy of which is attached. (See below.) The Kyoto Protocol and the President's Policies to Address Climate Change: Administration Economic Analysis EXECUTIVE SUMMARY The primary purpose of this analysis is to examine costs and benefits of taking action to mitigate the threat of global warming. In particular, we examine costs and benefits of complying with the emissions reduction target for the United States set forth in the Kyoto Protocol on Climate Change, negotiated in December 1997. For reasons discussed at length in this paper, it is our conclusion that, with the flexibility mechanisms included in the treaty, and by pursuing sound domestic policies, the United States can reach its Kyoto target at a relatively modest cost. Moreover, the benefits of mitigating climate change are likely to be substantial. Before considering the economics of taking action, however, we ought to step back and ask the threshold question -- whether taking action to mitigate global climate change is necessary in the first place. The Rationale for Taking Action The great weight of scientific authority suggests that climate change is a serious problem and that prudent steps to mitigate it are in order. In essence, we need to take out an insurance policy with reasonably priced premiums. As long ago as 1992, the National Academy of Sciences, in a study entitled Policy Implications of Greenhouse Warming, concluded that "...even given the considerable uncertainties in our knowledge of the relevant phenomena, greenhouse warming poses a potential threat sufficient to merit prompt responses....Investment in mitigation measures acts as insurance protection against the great uncertainties and the possibility of dramatic surprises" (p. 68). What the science tells us is that greenhouse gases are rapidly building up in the atmosphere as a result of the burning of fossil fuels and deforestation; that the concentration of these gases is 30 percent higher than it was at the beginning of the industrial revolution; and that this concentration is expected to reach almost twice current levels by 2100 -- a level not seen in 50 million years. Theory and computer models suggest that this increased concentration of greenhouse gases could warm the Earth by about 1.8 to 6.3° F by 2100. By way of comparison, the last ice age was only about 9° F colder than today. Moreover, much evidence suggests that warming is already underway. For example, we know from ice cores and other data that we are living in the hottest century since at least 1400, that the nine hottest years since records were first kept in the late 19th century have all occurred since 1987, and that 1997 is the hottest year on record. Scientists predict a range of likely effects from global warming. For example, the rate of evaporation is expected to increase as the climate warms, leading to increasingly frequent and intense floods and droughts. Sea level is projected to rise 6-37 inches by 2100. A 20-inch rise could inundate about 7,000 square miles of U.S. territory. Warmer temperatures would be expected to increase the risk of mortality from heat stress, aggravate respiratory disease, and increase the range and rates of transmission of some infectious diseases. Scientific opinion is not unanimous on these points, but most independent climate scientists believe that global climate change poses real risks. A few scientists contest the notion that increasing concentrations of greenhouse gases will warm the planet, while a few others concede that the earth is indeed getting warmer, but argue that this is a good thing -- “a wonderful...gift from the industrial revolution,” in the words of one. But these are distinctly minority views. The prevailing view is that the risks of climate change warrant prudent and prompt action. Prompt because to wait for greater scientific certainty could have very large costs. Greenhouse gases are longlived and the decisions being made by governments and firms in the next decade with respect, for example, to the kinds of power plants to build or the kinds of energy sources to develop, are likely to have significant consequences for our ability to limit the buildup of greenhouse gases. Consequently, there is a substantial rationale for acting now. Our task is to act in a manner that responds appropriately to the scope of the risk while at the same time being economically sensible. Domestic Policy In October 1997, the President announced a domestic program designed to reduce greenhouse gas emissions. In essence, the program contemplated (a) a set of activities that made sense as good energy and environmental policy irrespective of whether an agreement were reached in Kyoto, and (b) a mandatory domestic emissions trading system that would take effect in the 2008-2012 period if an agreement in Kyoto were reached and approved by the U.S. Senate. The Kyoto Protocol The Kyoto Protocol, which requires the advice and consent of the Senate, commits industrialized nations to take on binding targets for greenhouse gas emissions, and includes three basic kinds of flexibility provisions that were proposed by the United States. These provisions -- commonly referred to as "when", "what", and "where" flexibility -- have great potential to significantly lower the costs of meeting the Kyoto |