Mr. SHARP. Mr. Nitze, we will be happy to hear from you now. STATEMENT OF WILLIAM A. NITZE

Mr. NITZE. Thank you, Mr. Chairman. It is a pleasure to testify before this subcommittee, and I would also like to request that my written testimony be introduced into the record.

Mr. SHARP. Without objection.

Mr. NITZE. Just a word of clarification on which organization I am testifying on behalf of. I am the president of the Alliance to Save Energy, but I am also a director and senior adviser to a new business coalition called the Business Council for a Sustainable Energy Future, and the 2 organizations work closely together. The Business Council is really a coalition of the efficiency industry with the natural gas and renewable energy industries plus a number of electric utilities and firms making, if you will, green products and technologies.

The subject of my testimony will be U.S. legal obligations under the Climate Change Convention, which the United States and over 150 other countries signed in Rio de Janeiro at the Earth Summit last June, and then how the United States should proceed to meet those obligations.

Now, the first, and perhaps critical, point that I would like to make is that under the convention the United States does not have a legal obligation of any kind to actually stabilize its CO2 or other greenhouse gas emissions at 1990 levels by the year 2000, or for that matter at any other level by any other date. It does have the obligation to develop policies and measures to address the climate change issue based on a careful inventory of its existing greenhouse gas emissions and accompanied by estimates of the reductions in those emissions resulting from specific policies and measures. And it also has an obligation to put all that into a report which, under the convention, is due within 6 months after the convention coming into effect.

The United States actually exercised some crash leadership in terms of getting a first version of its report in, and on December 8 of last year, well ahead of the convention deadline, the United States did file and deliver to the other parties a document entitled The National Action Plan for Global Climate Change. So, in a sense we have led the world in meeting at least that central obligation of the convention.

However, I think it is important to look beyond the strict legal wording of the convention, which was very carefully drafted to avoid imposing a fixed target or timetable on the United States or other countries, to the broader context; and if we look at that broader context, I believe that the United States does have a moral and a political obligation to do its best to achieve CO2 stabilization at 1990 levels by 2000.

Now, I think there are three major reasons for that. First, the convention establishes a very ambitious overall objective of stabilizing man-made concentrations or the man-made addition to concentrations in the atmosphere at levels which avoid a serious threat to the climate system. And based on the work of scientists like Dr. Albritton, Dr. Edmonds, and many others, and reflected in the IPCC report-that is, the Intergovernmental Panel on Climate

Change report, and updates to that report, if we are serious about meeting that objective as a world community, we will actually have to reduce our CO2 and other greenhouse gases from man-made activities by up to 60 percent during the first half of the next century. And, given the curves that you have just seen reflecting the rapid growth of emissions in countries like China and India, that is a very ambitious objective, indeed. And in that context for the United States simply to curb its emissions in this decade to the relatively modest degree required to achieve stabilization is a very small down-payment, if you will.

So, if we are serious about the risk of climate change, which, in effect, we have said we are by signing the convention, and if we wish to exercise some leadership in the world community in carrying the convention out, I think we have, if you will, a moral and political duty to do our best to get our own emissions down, at least by a modest amount, during the next decade.

Now, second is the question of how easy is it for us to get our emissions down? The convention recognizes that countries cannot be asked to sacrifice economic growth or the quality of life of their citizens in order to address the greenhouse problem. There is clearly a trade-off here, and the convention explicitly recognizes that trade-off. And, in this case it is not just the United States which pushes for the trade-off, but many other countries.

The good news is that a number of reports, including some prepared specifically for the Congress, indicate that at least modest reductions of, say, up to 20 percent in U.S. CO2 and other emissions are achievable at very little or no net economic cost. Now, the Alliance last year joined with the Solar Energy Industries Association and the American Gas Association in doing a study of what might be accomplished under existing policy. That means the basic provisions of the Energy Policy Act, the Clean Air Act, and other things the Congress has done, but not any new taxes or regulatory scheme. We did not include, for example, a Btu tax or any other form of new energy tax.

And we concluded that with aggressive implementation, including such things as EPA's Green Lights Program and efforts at the State and local level, we can actually grow our economy 50 percent between 1990 and 2010 and get our CO2 emissions down almost 10 percent.

The final point is that this is an ongoing process. The obligations in the convention will be reviewed, probably next year, at the first formal meeting of the parties after the convention comes into effect. There is a second review required by the end of 1998, and that may be speeded up depending on circumstances. And there are further reviews built into the convention until the objective is met. So this is an ongoing iterative process where all countries, including the United States, will have to adjust their own policies, if you will, and their own approach to the convention itself in light of emerging circumstances.

Now, given that basic situation as to our legal and, my argument, political and moral obligations, what should we do in the short term in a practical sense to implement our obligations? I suggest four areas where the the Clinton administration should make a start.

The first is to update the National Action Plan by reflecting more realistic rates of economic growth; by reflecting some of the actions built into the President's economic plan including the modest Btu tax; and funding of some of the initiatives under the Energy Policy Act, areas like weatherization, low income energy assistance, research on efficiency and renewables, natural gas vehicles, and so forth.

Third, I think the transportation sector was substantially neglected in the first draft of the National Action Plan. I think under ISTEA and other initiatives we are going to see some very real changes in our transportation system over the decade, and I think if you reflect those in the updated plan they will make a positive difference.

The second thing I think that the administration should do is take joint implementation seriously. As has already been pointed out by Congressman Hastert and by another witness, most of the growth ingreenhouse gas emissions is not going to be in the United States and in the other OECD countries. It will be in the former Soviet Union and the developing world. We have to commit a substantial portion of our resources devoted to this problem to helping them get their emissions down, and we should negotiate a system where we in a sense get a credit for what we do to help them against future obligations on the United States for further reductions.

A third area where I think the new administration needs to act is in presenting a vision for longer term technologies that will really revolutionize our energy infrastructure as we approach the middle of the next century. We have a long leadtime on energy systems. No one, at least no one I know, is proposing that we rip out existing power plants and incur all the disruption that that would involve. But, as you look 20, 30, 40 years down the road, there is an opportunity to make some more fundamental changes, and we should be investing now in the technologies necessary for those changes like advanced fusion or solar hydrogen, and some advanced efficiency technologies, and begin to make estimates as to the contributions that those technologies might make in the longer term.

Another area where it seems to me that the new administration should move is policy harmonization. We have seen a long debate in Europe over a green tax, starting at $3 per barrel of oil equivalent in 1993, this year, and ramping up to $10 a barrel by the end of the decade, divided sort of evenly between a carbon tax and a general energy tax. The Europeans have been paralyzed on this tax because they don't want to move unless we do something and the Japanese do something.

Now, we have begun to do a little something, and there is a real opportunity here, I think, to bring Japan and Europe along in a common phased approach which does not hit economic growth and which spreads the burden of leadership among the rich countries. I would finally like to say that there is a huge opportunity now to really get going with some very specific on-the-ground project work, particularly in the developing countries, and it seems to me we should get some of that underway. We should get them to replan, if you will, their own energy futures and provide them with

the assistance they need for that replanning, and provide some support for private investment, rather than plunging into the negotiation of follow-up agreements and protocols.

Thank you, Mr. Chairman.

Mr. SHARP. Thank you very much.

[The prepared statement of Mr. Nitze follows:]

STATEMENT OF WILLIAM A. NITZ, PRESIDENT OF THE ALLIANCE TO SAVE ENERGY

Mr. Chairman, Members of the Subcommittee, Ladies and Gentlemen: My name is William A. Nitze and I am President of the Alliance to Save Energy, a non-profit coalition of Government, business, environmental and consumer leaders dedicated to supporting policies and programs to promote greater energy efficiency. I appreciate this opportunity to testify before the Subcommittee on U.S. obligations under the Framework Convention on Climate Change (the "convention") signed on behalf of the United States at the United Nations Conference on Environment and Development in Rio de Janiero on June 12, 1993. The Alliance believes that increasing energy efficiency in the United States and elsewhere has a major role to play in reducing manmade emissions of carbon dioxide and other greenhouse gases and thereby reducing the threat of global climate change.

The convention contains a number of substantive and procedural obligations. The most important of these are contained in Article 4 on commitments. Paragraph 1 of Article 4 requires the parties, among other things:

-to prepare, update and make available to the other parties inventories of anthroprogenic greenhouse gas emissions;

-formulate and update national and regional programs to mitigate and, where appropriate, adapt to climate change;

-to take climate change into account in environmental impact assessments; and —to cooperate in technology transfer, research, information exchange and training.

If seriously implemented, these requirements could have a greater long-term impact than any other provisions of the convention. The more immediate and controversial commitments in the convention, however, are contained in Paragraph 2 of Article 4.

Paragraph 2 sets out the specific commitments of the United States and other developed countries. Subparagraph (a) of Paragraph 2 requires each of those countries to "adopt national policies and take corresponding measures on the mitigation of climate change" by reducing its greenhouse gas emissions and enhancing its sinks. It goes on to lay out certain general criteria for determining what measures are appropriate for individual countries. These criteria include:

-the need for developed countries to demonstrate that they are taking the lead in reducing emissions,

-the need to take into account differences in countries' "starting points and approaches, economic structures, and resource bases," and

-the need to maintain "strong and sustainable" economic growth.

The subparagraph "recognizes" that returning emissions of CO2 and other greenhouse gases at the end of the decade to earlier levels would contribute to modifying longer-term emissions trends, but stops well short of establishing a stabilization goal.

The critical language in Paragraph 2 lies in the following subparagraph. Subparagraph (b) requires each developed country party to communicate detailed information about the policies and measures referred to in subparagraph (a) within 6 months of the convention's entry into force "with the aim of returning individually or jointly to their 1990 levels [their] anthroprogenic emissions of carbon dioxide and other greenhouse gases not controlled by the Montreal Protocol." The use of the weak word "aim" and the positioning of this phrase outside of subparagraph (a) dealing with policies and measures was the minimum price necessary to get the Bush administration to sign the convention.

The resulting text falls short of legally obligating the United States to stabilize its CO2 emissions in 2000 at 1990 levels in three critical respects. First, the language does not even purport actually to obligate the United States or any other party to achieve any target for reducing its greenhouse gas emissions. Second, the phrase quoted above avoids even implying an obligation to hold emissions at or below 1990 levels after 2000 by using the word "return" as opposed to "stabilize" or "maintain". Third, the words "individually or jointly" make it clear that the United States does not even have to aim at returning its CO2 emissions in isolation to