moving target, and it is that in so many different ways, so together figure out how better to pin that down. Mr. SCHAEFER. I think that has been very enlightening for the committee, just so we know a little more about what is happening out there. And you are right, it gives us a better opportunity to work together in the future, and thank you very much. Mr. WIRTH. Thank you. Mr. SCHAEFER. The subcommittee is now adjourned. PREPARED STATEMENT OF THE BUSINESS COUNCIL FOR A SUSTAINABLE ENERGY FUTURE INTRODUCTION The Business Council for a Sustainable Energy Future is pleased to submit testimony to the Subcommittee on Energy and Power of the House Commerce Committee concerning the status of international global climate change negotiations. The Business Council, formed in December 1992, is comprised of business leaders from the energy efficiency, renewable energy, natural gas and power generation industries who share a commitment to pursue a new energy strategy designed to realize the Nation's economic, environmental and national security goals through the rapid deployment of sustainable energy technologies and services that is, technologies that are economical, efficient, and low-polluting. Members of the Business Council support the objectives of the international Framework Convention on Climate Change (Climate Treaty), including the longterm goal of stabilizing the concentration of greenhouse gases in the atmosphere. The Business Council believes that the opportunity costs of delaying actions to achieve this goal are substantial. Furthermore, we believe there are cost-effective solutions available today to mitigate the growth in the concentration of greenhouse gases in the earth's atmosphere. Pursuit of cost-effective solutions will allow the US and other countries to achieve sustained economic growth while reducing the global emission of greenhouse gases. Indeed, the Climate Convention recognizes that policies and measures to address climate change should be cost-effective. The Convention further states that economic development is a necessary prerequisite for nations if they are to adopt measures to reduce greenhouse gas emissions. Although science does not allow us to predict with absolute accuracy the many possible adverse impacts of global warming, no one disagrees that human activity contributes to the accumulation of greenhouse gases in the Earth's atmosphere. More to the point, signatories to the Convention have recognized that increased concentrations "may adversely affect natural ecosystems and humankind." Under these circumstances, it seems only prudent to pursue policies that insure stable economic growth while reducing emissions of greenhouse gases. Recent investment decisions of the US electric utility industry confirm the significant role sustainable energy will play in meeting our Nation's future power needs. In 1992, for example, over seventy percent of the electric industry's capacity additions were natural gas and renewable power plants. The US government's Climate Change Action Plan (CCAP) which relies heavily on voluntary public/private partnerships aims to accelerate the introduction and deployment of economical, clean technologies. POSITIONS ON CLIMATE CHANGE At the August meeting of the United Nations' Intergovernmental Negotiating Committee, the Business Council recommended that governments adopt six principles when addressing global warming issues. (1) Policies Should be Market-Based To minimize economic distortion and to energize the financial resources and the organizational assets of the private sector, policies targeted to remedy global climate change, to the extent possible, should be market-based, taking into account the environmental externalities of energy use. Policy instruments should be used that provide economic incentives to deploy and to adopt clean, efficient energy technologies and practices. A number of Business Council member companies, in fact, are participants in the government's public/private partnership programs to reduce greenhouse gas emis sions. CCAP initiatives such as Climate Wise, the Motor Challenge, and Natural Gas Star have engendered broad support from Business Council members. The Business Council urges the Administration and members of Congress to continue supporting these important public/private initiatives. (2) Clean-Energy Alternatives Should be Recognized Technologies and services which have the potential to replace higher emitting technologies should be explicitly recognized. Demand-side and supply-side energy management should be key components of national action plans. Cost-effective, clean-energy technologies and practices deserve priority. Current activities of Business Council members demonstrate the economic and environmental value of these technologies and services. For example, Business Council member SYCOM Enterprises recently has completed a high-efficiency lighting conservation project at the Meadowlands Racetrack in New Jersey that is expected to reduce costs by $5 million and energy use by 4.5 million kWh per year over the course of its ten year life. The Sacramento Municipal Utility District (SMUD) has used greater reliance on renewables and efficiency to dramatically improve its ability to serve its customers. Today, SMUD gets nearly half of its energy from renewables and efficiency sources. By the turn of the century-just five years from now-SMUD expects to get 75 percent of its power from efficiency and clean-energy sources. CCAP recognizes that the US government must also play a role in the commercialization of clean-energy alternatives. It promotes the commercialization of highefficiency natural gas technologies such as fuel cells. It also establishes a renewable energy collaborative and encourages renewables technology demonstrations to enhance renewable energy commercialization. Further, CCAP promotes greater energy efficiency through initiatives such as the Motor Challenge, Green Lights, Energy Star Buildings, and various Golden Carrot market pull programs. Of course, the effectiveness of these programs depends in large part on the support they receive from Congress. This year the Business Council testified before Congress urging that these programs receive adequate funding to accomplish their greenhouse gas emissions reductions goals. (3) Energy and Environmental Planning Must be Coordinated Energy and environmental planning cannot be separated. The planning of energy projects in support of economic growth must explicitly recognize the relative environmental consequences of alternative actions, including their impacts on global climate change. Business Council members like the New York Power Authority (NYPA) and United Solar Systems Corporation (USSC) are demonstrating the importance of accounting for environmental costs when developing energy projects. NYPA is using a cutting-edge photovoltaic array manufactured by USSC to test photovoltaic performance in a utility interconnected system. Environmentally sustainable solar-powered photovoltaics hold great promise for cost-effectively meeting a significant portion of US energy needs. NYPA's evaluation will serve as model for energy planning that seeks cost-effective, environmentally benign alternatives to traditional fuel sources. CCAP recognizes the need for this kind of effort. CCAP encourages the utility industry to use integrated resource planning to identify their best cost resource needs. Another initiative in the Plan calls for Federal regulatory reform to promote natural gas use as an environmentally preferable fuel. Finally, CCAP promotes increased reliance on renewable power sources such as wind, photovoltaics, and geothermal in grid-connected utility applications. Each of these programs can make important contributions to reducing US greenhouse gas emissions. (4) Progress Must be Measured and Adjustments Made Implementation of global climate change mitigation strategies must be built on good monitoring systems. If strategies for reducing greenhouse gas emissions are not achieving desired results, policies must be modified and results monitored. In this regard, the US Congress should be prepared to demonstrate leadership on climate matters. Congressional hearings on climate-related topics are an important component in increasing public understanding of climate issues. Members of Congress and the Administration should work together to ensure that key provisions of CCAP receive adequate support. (5) Technology-Transfer Should be Encouraged A coordinated effort to deploy clean-energy technologies throughout the developing world could substantially lower global greenhouse gas emissions while promoting sustainable economic development. Business Council members are working in Central and Eastern Europe, the Middle East, Asia, and Central and South America to ensure that clean-energy technologies and services are available to meet the growing energy needs of developing countries. Many specific examples come to mind. Through a USAID program, Honeywell Inc. is upgrading the district heating system in Krakow, Poland, reducing Krakow's air pollution and energy costs. Enron Corporation is constructing a natural gas pipeline system in Argentina, adding significant natural gas capacity to an economy that relies on natural gas for over 40 percent of its energy requirement. Bergey Windpower is providing wind turbines for distributed power applications— such as water pumping-and hybrid electrification systems in countries such as Indonesia and Mexico. Kenetech Windpower has begun a joint venture 500 MW wind project in the Ukraine. Energy Conversion Devices is promoting a joint venture defense conversion project in Russia that will bring state-of-the-art photovoltaics production to that country. In the Philippines, Magma Power is constructing a geothermal power plant to provide the country an environmentally benign, domestically available source of power. These projects illustrate the kinds of US clean-energy international business activities that can meet developing countries' energy needs in an environmentally responsible manner. Much more remains to be done if we are to successfully decouple the energy used to fuel ecor.omic growth from environmental degradation. The US Government must take a leadership role in ensuring that clean-energy technologies and services are available to meet the developing world's growing energy needs. Members of Congress, the Administration and the US private sector must work together to devise appropriate measures for bringing state-of-the-art clean-energy technologies and services to developing world markets. (6) Development Assistance Should Support Economic and Environmental Objectives Private capital ultimately will determine what type of energy investments will be made over the long term. However, public support, especially in emerging economies now making crucial decisions about their development path, can provide important incentives for pursuing sustainable economic growth. The Business Council urges the US government to ensure that its bilateral aid policies support the goals of the Climate Treaty. The Business Council also urges the US government to make its support for multilateral lending institutions contingent on their adherence to the objectives set out in the climate treat and in CCAP. JOINT IMPLEMENTATION AND CLIMATE CHANGE Joint implementation promises to be an important vehicle for promoting clean-energy technology transfer from developed countries to the developing world. However, standardized measurement, monitoring, certification, and administrative procedures for joint implementation projects must be developed. Likewise, liability rules and responsibilities must be defined. The Business Council welcomes the Administration's efforts to gain a better understanding of this issue through the US Initiative on Joint Implementation (USIJI). The USIJI pilot program will educate not only US participants about the economic opportunities of JI, but it will help overcome suspicion of developing countries regarding the benefit of JI in their development plans. CONCLUSION The Business Council and its members will continue to work with the government officials and other interested stakeholders in achieving the emissions reductions goals of the Climate Treaty. Specifically, we stand ready to participate with other interested stakeholders to demonstrate the economic viability and environmental benefits of clean-energy technologies and practices. Members of the Business Council believe an environmentally and economically sustainable energy future lies within our grasp. We urge the Administration, the US Congress, and stakeholders in the climate debate to work to make that future a reality. O 90-098 (192) |