Sea level rise is not only an issue for Small Island States and deltaic areas in developing countries, but poses a threat to many low-lying areas in the USA, in particular, the East coast and Gulf coast. IPCC noted that sea level has been rising relative to the land along most of the coast of North America, and falling in a few areas, for thousands of years. During the next century, a 50-cm rise in sea level from climate change alone could inundate 8,500 to 19,000 square kms of dry land, expand the 100 year flood plain by more than 23,000 square kms, and eliminate as much as 50% of North America's coastal wetlands. The projected changes in sea level due to climate change alone would under-estimate the total change in sea level from all causes along the eastern seaboard and Gulf coast of North America.

Human Health

Human health is sensitive to changes in climate because of changes in food security, water supply and quality, and the distribution of ecological systems. These impacts would be mostly adverse, and in many cases would cause some loss of life. Direct health effects would include increases in heat-related mortality and illness resulting from an anticipated increase in heatwaves. Indirect effects would include extensions of the range and season for vector organisms, thus increasing the transmission of vector-borne infectious diseases (e.g., malaria, dengue, yellow fever and encephalitis). Projected changes in climate under doubled carbon dioxide equilibrium conditions could lead to potential increases in malaria incidence of the order of 50-80 million additional cases annually, primarily in tropical, subtropical, and less well-protected temperatezone populations. Some increases in non-vector-borne infectious diseases such as salmonellosis, cholera and other food- and water-related infections could also occur, particularly in tropical and subtropical regions, because of climatic impacts on water distribution and temperature, and on micro-organism proliferation.

Social Costs of Climate Change

The range of estimates of economic damages caused by changes in climate are quite uncertain. Taking into account both market and non-market costs, IPCC reported a reduction in world GDP of 1.5-2.0% for a doubled carbon dioxide environment. This value was obtained by summing widely varying estimates of damages by sector, including socio-economic sectors (e.g., agriculture, forestry, fisheries), ecological systems, and human health. Nordhaus, conducted an "expert" survey which resulted in a range from 0 to 21% for loss of world GDP, with a mean value of 3.6% and a median value of 1.9%.

Losses in developing countries are estimated to be much higher than the world average, ranging from 5% to 9%. Alternate assumptions about the value of a statistical life could increase the estimate of economic damages in developing countries.

IPCC reported values for the marginal damage of one extra ton of carbon emitted ranging from $5 to $125. A value of $5 to $12 per ton of carbon is obtained using a 5% social rate of

ame preference (discount rate). Lower discount rates increase this estimate, e.g. a 2% discount rate would increase this estimate by an order of magnitude.

Approaches to Reduce Emissions and Enhance Sinks

Significant reductions in net greenhouse gas emissions are technically, and often economically, feasible and can be achieved by utilizing an extensive array of technologies and policy measures that accelerate technology diffusion in the energy supply (more efficient conversion of fossil fuels; switching from high to low carbon fossil fuels; decarbonization of flue gases and fuels, coupled with carbon dioxide storage; increasing the use of nuclear energy; and increased use of modern renewable sources of energy (e.g., plantation biomass, micro-hydro, and solar), energy demand (industry, transportation, and residential/commercial buildings) and agricultural/forestry sectors (altered management of agricultural soils and rangelands, restoration of degraded agricultural lands and rangelands, slowing deforestation, natural forest generation, establishment of tree plantations, promoting agroforestry, and improving the quality of the diet of ruminants). By the year 2100, the world's commercial energy system will be replaced at least twice offering opportunities to change the energy system without premature retirement of capital stock. However, full technical potential is rarely achieved because of a lack of information and cultural, institutional, legal and economic barriers.

Policy instruments can be used to facilitate the penetration of lower carbon intensive technologies and modified consumption patterns. These policies include: energy pricing strategies (e.g., carbon taxes and reduced energy subsidies); reducing or removing other subsidies that increase greenhouse gas emissions (e.g., agricultural and transport subsidies); incentives such as provisions for accelerated depreciation and reduced costs for the consumer; tradable emissions permits (and joint implementation); voluntary programs and negotiated agreements with industry; utility demand-side management programs; regulatory programs including minimum energy efficiency standards; market pull and demonstration programs that stimulate the development and application of advanced technologies; and product labeling. The optimum mix of policies will vary from country to country; policies need to be tailored for local situations and developed through consultation with stakeholders.

Estimates of the costs of mitigating climate change should take into account secondary benefits of switching from a fossil fuel based economy to a lower-carbon intensity energy system. Secondary benefits include lower levels of local and regional pollution, including particulates, ozone and acid rain.

The Challenge of Stabilization

It is important to recognize what emissions limitations are required in order to stabilize the atmospheric concentrations of carbon dioxide at different levels. Figure 2 shows time-dependent emissions profiles for stabilization at different levels (350 to 750 ppmv) - these profiles represent the so-called "delayed action" scenarios, i.e., the ones which some economists believe to be more economically efficient. It is instructive to note that: (i) global emissions will have to depart from IPCC IS 92a (classically referred to as business-as-usual) within the next few decades to achieve any of these stabilization levels, and (ii) independent of the eventual stabilization level, global emissions in the long-term will have to be well below today's level. Examination of the 550ppmv profile, a stabilization level suggested by European governments, shows that global emissions will have to depart from business-as-usual between 2010 and 2015, and peak between 2030 and 2035. In order to deviate from business-as-usual by 2010 to 2015 would require actions to be taken now.

One of the questions most frequently asked since Kyoto is: Will the emission reduction proposals agreed in Kyoto for industrialized countries lead to a stabilization of greenhouse gas concentrations, and if so, at what level? The answer is clearly no. Stabilization of carbon dioxide, the major anthropogenic greenhouse gas, will require global emissions reductions. Stabilization will eventually require global emissions to be reduced to between 2 and 3 billion tons of Carbon per year, in contrast to today's global emissions from energy use alone of about 6 billion tons of Carbon per year.

Summary

Policymakers are faced with responding to the risks posed by anthropogenic emissions of greenhouse gases in the face of significant scientific uncertainties. They should consider these uncertainties in the context that climate-induced environmental changes cannot be reversed quickly, if at all, due to the long time scales (decades to millennia) associated with the climate system. Decisions taken during the next few years may limit the range of possible policy options in the future because high near-term emissions would require deeper reductions in the future to meet any given target concentration. Delaying action might reduce the overall costs of mitigation because of potential technological advances but could increase both the rate and the eventual magnitude of climate change, and hence the adaptation and damage costs.

Policymakers will have to decide to what degree they want to take precautionary measures by mitigating greenhouse gas emissions and enhancing the resilience of vulnerable systems by means of adaptation. Uncertainty does not mean that a nation or the world community cannot position itself better to cope with the broad range of possible climate changes or protect against potentially costly future outcomes. Delaying such measures may leave nation or the world poorly prepared to deal with adverse changes and may increase the possibility of irreversible or very costly consequences. Options for adapting to change or mitigating change that can be

justified for other reasons today (e.g., abatement of air and water pollution) and make society more flexible or resilient to anticipated adverse effects of climate change appear particularly desirable.

If, actions are not taken to reduce the projected increase in greenhouse gas emissions, the Earth's climate is projected to change at an unprecedented rate with adverse consequences for society, undermining the very foundation of sustainable development. Adaptive strategies to deal with this issue need to be developed, recognizing issues of equity and cost-effectiveness.

While there is no debate that protection of the climate system will eventually need all countries to limit their greenhouse gas emissions, the Framework Convention on Climate Change recognizes the principle of differentiated responsibilities, and also recognizes that developed countries and countries with economies in transition should take the lead in limiting their greenhouse gas emissions given the historical and current emissions of greenhouse gases, and their financial, technical and institutional capabilities. Current and historical emissions of greenhouse gases arise mainly from developed countries and countries with economies in transition, i.e., emissions in developing countries are much lower, both in absolute and per capita terms. Even though it is well recognized that emissions from developing countries are increasing rapidly due to increases in population and economic growth, and are likely to surpass those from developed countries within a few decades (absolute terms, not per-capita), their contribution to global warming will not equal that of developed countries until nearly 2100 because the climate system responds to the cumulative emissions of greenhouse gases over time not the instantaneous annual emissions.

It is also quite clear that increased energy services in developing countries are critical in order to alleviate poverty and underdevelopment, where 1.3 billion people live on less than $1 per day, 3 billion people live on less than $2 per day, and 2 billion people are without electricity. Hence the challenge is to assist developing countries expand their production and consumption of energy in the most efficient and environmentally benign manner. The agreement in Kyoto by Annex I countries, coupled with an increased commitment to energy R&D, should stimulate the market for energy efficient technologies and low-carbon emitting technologies, thus allowing the U.S. to meet it's energy needs in a more climate friendly manner, but also providing a large market in developing countries for U.S. exports. Financial instruments such as the Global Environment Facility and promoting market mechanisms such as emissions trading (Article 17 of the Kyoto Protocol) and joint implementation (Articles 6 and 12 of the Kyoto Protocol) can assist in this endeavor--trading can be a win for the environment, reduce costs for developed countries, and provide a transfer of cleaner technologies and a share of the cost-savings to developing countries and countries with economies in transition.

Mr. Chairman, members of the Committee, I appreciate the opportunity you have provided me to be able to discuss these issues with you today. Thank-you.