Is this the way to go? Is this something that would help in terms of maybe eliminating barriers between what developing countries do versus underdeveloped? Mr. HEYDLAUFF. Absolutely, and I must say we deeply applaud the initiative and the leadership of the U.S. delegation on the issue of joint implementation. They have carried the ball from the very beginning and done so, frankly, in the face of some very considerable opposition, particularly by the developing world, which is highly suspicious of the JI Program for reasons that I think are perhaps misguided. There is enormous potential for joint implementation, and the American industry is quite eager to participate in the growing economies of the developing world, and if we are permitted to do that, we believe, and we are today, and we are very active today, but we would like to be able to count that against the total emission reductions that are achieved globally as carbon dioxide emissions-wherever they are emitted is irrelevant, they all end up in the same place, in the atmosphere. The other real benefit to joint implementation is, we are able to facilitate economic growth and return a number of ancillary economic and environmental benefits by transferring more advanced more efficient technologies to developing countries. It is just, so you are aware, a requirement at the first conference of the parties for the parties to consider criteria for joint implementation. It is definitely going to be on the agenda. We are not certain what the outcome will be, but the United States has been in a leadership role in promoting JI, and we expect that leadership will continue. Mr. PALLONE. The reason that some of the developing countries are suspicious is, they basically would rather build a cheaper plant that doesn't have that can create more environmental problems? Mr. HEYDLAUFF. No, not really. They welcome foreign investment today. Our company, along with many others, are active in foreign countries. We are, for example, negotiating with the Chinese right now to build a 1,300-megawatt coal-fired power plant that would replace an 800-megawatt unit that was going to be built by the Russians, and it will be far more efficient than the plant that the Russians would have built. We sort of believe that, yes, China's emissions are going to increase, but they won't increase to the extent that they would have if the Russian boiler had been constructed. What the developing countries fear is that this is the first step towards a commitment to reduce emissions. They are also concerned about cherry picking, about the industrialized world going abroad and picking off the cheap reductions that exist around the globe, and then, should the day come when they have their own requirements or their own commitments, those opportunities will be foregone to them, although I think through negotiation you are going to work that out, frankly. Mr. PALLONE. So in other words, you don't get those problems when you are individually trying to negotiate to put in a new plant or something, it is more at the governmental level. Mr. HEYDLAUFF. It is more at the governmental level, and that is probably where it should remain today. I am not as concerned about some international body giving me credit for a project that I might engage in abroad today because there are no mandates on our industry or really on the country today to reduce emissions. However, the day may come where we do have mandates, and I would like to be able to count it if I can and if it is legitimate, and I understand fully well that we have an obligation to make certain that these investments are carefully monitored, that they are transparent and that they are verifiable. Mr. PALLONE. Thank you. Thank you, Mr. Chairman. Mr. SCHAEFER. The gentleman's time has expired. This is really to all three of you, if you just have a very brief comment on what we can do to make voluntary compliance work. Mr. HEYDLAUFF. I want to join Dr. Lashof in his comments about Federal appropriations, and I realize that may be politically incorrect to do at this period of time with all of the concern about the budget deficit. Mr. BURR. You are not the first to talk to me about it today. Mr. HEYDLAUFF. The fact of the matter is, these voluntary initiatives, or these so-called green programs of the Federal Government, require very modest Federal appropriations that are leveraged many times by investments in the private sector. You are getting a lot of bang for very small bucks, and we frankly think that you ought to look very closely at those programs before you recommend that they be terminated. Mr. LASHOF. I would just like to agree with Mr. Heydlauff on this. It may be one of the few things we agreed on today, but we strongly concur with that view, and, again, as he pointed out, it is very modest amounts of money that are very well spent. So I would hope and urge members, when you are looking for things to cut, it doesn't make sense to cut things that work. We agree that these programs work. We don't happen to agree that they are, by themselves, enough, but we agree that they work. Ms. AULISIO. I guess we have unanimous agreement here within the panel that these programs are very efficient. Most of the programs at EPA and DOE are supported by many of our member companies as well as just Green Lights, and that does need funding. The one issue perhaps that you are driving to is accountability, and within the international negotiations right now there is no way to really instill the accountability factor to make sure that all countries are living up to their commitments, voluntary or mandatory. Mr. BURR. And one step just before that is, can we do it in the United States? I mean if we can't do it at home, how can we expect to do it across the world? MS. AULISIO. Right. Section 1605 of the Energy Policy Act described counting mechanisms. If any of you have seen the forms that must be filled out to comply with that section, just looking at the forms would kind of make you take a deep breath. But there surely are better methods of determining what the real reductions are, what the real rules are, and frankly the voluntary program participation is driven somewhat by the fact that there is a fear of mandatory programs. I think if there were better accountability and better accounting rules, that is, we would have more participation because people would know that they got credit for things that they have already done. Mr. BURR. Let's go to the extreme that Dr. Lashof is right, that we need to go to mandatory regulations to meet or achieve those goals. How do we internationally get people to buy into what we are doing here, given that we can't even come up with a developing versus industrialized-I mean I've got a real problem being the only one. I mean it is sort of like when we talk about budget cuts and we are willing to cut stuff in our own district but somebody else is going to take the available dollars that are there. I'm a little leery about selling out American industry only to know that nobody else in the world is going to comply at the same level. MS. AULISIO. I think that we have all made agreements, for example, to meet in Berlin next week, and many of us are taking many different routes to get there. I think really at the international level we have to look at what the target is. We talked about stabilization in 2000, going back to 1990 levels. It doesn't matter to me really how individual countries get there as long as they live up to it and as long as we are living up to it. Mr. BURR. Well, if I heard Dr. Lashof correctly-and please correct me if I'm wrong-1990 levels are not enough. Mr. LASHOF. That is correct, but the problem that we also see based on the NGO evaluation that the Climate Network coordinated, is precisely the fact that the current commitment in the treaty is not legally binding, is one of the reasons why countries are having difficulty developing the political will to meet that goal, whether it is through voluntary programs or other mechanisms that each country chooses. So each one is sort of looking over its shoulder saying, "Well, are they doing it? I'm not sure they are, so maybe we won't." So rather than building confidence, moving everybody's plan to a higher level, we are concerned that this approach, which has a squishy target-if I can put it in nonlegal terms, inelegantly-has that problem, that we cannot insist that other countries achieve exactly what we achieve because what they are required to achieve in the convention right now is very squishy. In our view the way to solve that problem is to in the next step negotiate a real target that is legally binding at the international level, and the evidence shows that when you do that-and certainly the experience of the Montreal protocol on substances that deplete the ozone layer-compliance with those requirements, which are very specific, has been excellent. Mr. BURR. You stated in your testimony China should not be held to the same standards that we are. Is that accurate? Mr. LASHOF. What I meant by that is, if we are saying countries reduce their emissions to some historical level or 10 percent below 1990 levels, it is unreasonable to say that China should be held to that same level, because if you look on a per capita basis, their emissions are one-tenth of what ours are. They would say, and I think quite rightly, that it is patently unfair if the standard is put in that way. Mr. BURR. If we are to bring some of these developing countries- if they are to buy into where we are trying to get to-and I'm still a lit bit hazy about where we are trying to get to-but if they are to buy into it, should we assume some of the cost of getting them there? Mr. LASHOF. I believe that we should. I believe that if you consider the historical responsibility for increasing the concentrations of these gases in the atmosphere, which is an observed fact, something like 80 percent of that has been the result because these gases stay in the atmosphere for a long time. So the gases we emitted in 1950 as we were growing very rapidly are still up there and are still changing the climate, and we benefited by doing that, and to the extent that there are economic costs associated with limiting emissions of those, I think we do have some responsibility to share in the financial costs. Now that doesn't mean that we pay for all of it in any sense, but I do believe we have a responsibility, yes. Mr. BURR. Mr. Chairman, just one last question if I could. Mr. Heydlauff, are we forcing U.S. manufacturers to look at these developing countries for possible plant sites because of the possibility of mandated regulations here? I mean, is that an economic impact that we are not looking at today? Mr. HEYDLAUFF. No. I would say that there are things that the Federal Government can do to help facilitate foreign investment by American industry; things that would protect the intellectual property rights of the United States inventors; things that would prevent against the expropriation of assets of American companies as they do business in these countries. I think there is a very limited role that government should play in terms of direct subsidies. There is the Global Environment Facility which we haven't touched on. Mr. BURR. But you don't believe that U.S. manufacturers would move because of a potential Mr. HEYDLAUFF. Well, that is a different question. I would point out in your list of developing nations, add Mexico to that list and think about it in the context of NAFTA. Today, no. If you impose mandatory controls on American industry tomorrow and Mexico doesn't have those, then I think it is a distinct possibility. Mr. BURR. So that has got to be on the scope of a U.S. manufacturer if mandatory regulations were imminent. Mr. HEYDLAUFF. Absolutely. Mr. BURR. OK. Let me just end by saying, Mr. Chairman, I thank the panel for being here today, and you have certainly helped to clarify some things that I have found to be very a tough issue to not only talk about but to try to project where our influence and our interests should be. Thank you. Mr. SCHAEFER. The gentleman's time has expired. That will conclude today. Any other questions to any one of the three of you will be submitted in writing. As I said before, we look to hold another hearing some time after the conference in Berlin to try to ascertain what developed, and I thank the lady and the gentleman for being here today. This hearing is adjourned. [Whereupon, at 4:10 p.m., the subcommittee was adjourned, to reconvene at the call of the Chair.] [The following information was received for the record:] UNITED STATES DEPARTMENT OF STATE Washington, DC. Hon. DAN SCHAEFER, Chairman, Subcommittee on Energy and Power, Committee on Commerce, House of Representatives DEAR MR. CHAIRMAN: Thank you for your letter of February 2. We include in our response information developed during the 11th Session of the Intergovernmental Negotiating Committee (INC-11), the final preparatory meeting for the First Conference of Parties to the United Nations Framework Convention on Climate Change, which will take place March 28-April 10, 1995 in Berlin. We look upon our correspondence as a continuation of our dialogue with you and your staff on these matters as we move toward Berlin. The concerns raised in your letter regarding the science of climate change, and the administration position on the Adequacy of Convention Article 4.2(a) and (b) of the Convention, are addressed in the attached document. I hope this information has been helpful to you. Please do not hesitate to contact us if we can be of further assistance. Sincerely, Enclosure: As stated. WENDY R. SHERMAN, Assistant Secretary, Legislative Affairs The State of Scientific Knowledge Regarding Climate Change The great majority of climate scientists think they have enough information and a sufficient analytic framework to state that with continued increasing global greenhouse gas emissions, climate change will occur. Climate change will entail a range of potential effects, including sea level rise, changes in precipitation patterns, and significant effects on ecosystems. Scientists are less satisfied regarding their ability to predict: (1) the exact magnitude of climate change; (2) the regional effects of climate change; (3) the economic, biological, and social impact of climate change; and (4) the cost and effect of strategies to mitigate or avoid climate change. However, the administration believes that there is enough scientific understanding to show that global climate change is, as the President said, "The most important environmental challenge of our time.' First, there is unquestionably a greenhouse effect. Water vapor, carbon dioxide, and ether gases trap some heat as it is re-radiated from the earth. Without this "natural" greenhouse effect, the earth would be some 33 degrees centigrade cooler than is now the case. Second, atmospheric concentrations of gases associated with climate change are increasing. Concentrations of carbon dioxide, the principle "anthropogenic (human-caused) greenhouse gas, have increased from 280 parts per million (ppm) in pre-industrial times to 357 ppm in 1993-an increase of 30 percent in less then 200 years. Concentrations of other greenhouse gases, such as methane and nitrous oxide, have increased also. Scientists predict that increases in greenhouse gases should lead to increases in global temperature, and there is indeed empirical support for this proposition. Global mean surface temperatures have increased by 0.3 to 0.6 degrees in this century. Moreover, all of the 9 warmest years in this century have occurred since 1980. 1994 was the fourth warmest year on record. The attached Climate Change: State of Knowledge, by the White House Office on Science and Technology Policy (OSTP), observes: "Several ancillary pieces of evidence consistent with warming, such as a decrease in Northern Hemisphere snow cover, a simultaneous decrease in Arctic sea ice, continued melting of alpine glaciers, and a rise of sea level have also been corroborated." It should be noted that the temperature rise experienced so far this century, though large, is within fluctuations observed in pre-industrial times. Unequivocal evidence that human-induced warming is indeed taking place will probably require another decade of careful observation. However, the fact that warming is taking place and that the warming observed tallies with scientists' predictions should give us pause. . Scientists are cautious regarding their ability to predict just how much warmer the planet will become. Many factors affect the timing and scope of global warming. |